Green with envy

As many know, Christchurch has been divided into four zones: Red; orange, white and green.

Less well known – but increasingly apparent -there are interesting emotional and social psychological divisions emerging in a way that neatly maps onto that zoning.

The anxieties, daily difficulties and frustrations of those in the red zone and the uncertainty of those in the orange and white zones are most obvious.

But, at least some in the green zone are also going through an emotional experience: Envy.

It might be hard to believe that anyone could experience anticipatory envy for others who have effectively lost their homes, their communities and, very likely, their physical and mental health over the past six months or even a year. Yet, the signs are there that the emotional barometer outside the most affected areas is definitely ‘going green‘.

[Yes, it’s a bit of an ironic twist on the notion of “the politics of envy” – which I’ve written about here – but life, especially politics, is full of such ironies.]

This emotional weather change appears to be over the slight possibility that agitation by those in the red zone (and here) might result in them (red-zoners) being given a better deal than that contained in the government’s 21 June offers

Until recently, criticisms of the complaints emerging from those in the red-zone had been muted. But, no more.

The lead letter to the Editor in The Press on 10 September was headlined “We red  zoners not moaners – we just want our lives back.

That letter was in response to one printed on Friday 9 September that argued, quite bitterly, that people from the poorer areas of Christchurch in the red zone shouldn’t expect to be able to end up with homes in other parts of Christchurch, especially in the “above average” sub-divisions.

Class divisions – and their accompanying aspersions – are coming to the fore, despite the fact that a significant number of affected homes are, or will be once the white zone status is clarified, be in particularly “above average” hillside suburbs.

In Saturday’s paper (10 September) the letter just below the one defending the approach of those in the red zone, chimed in with a very hard nosed message:

Isn’t it about time that the residents of the red zone, and its periphery, came to terms with the fact that any financial assistance they receive over and above their insured entitlement is a privilege, not a right, funded by the rest of New Zealand¹?

While their plight is fully understandable, they should be grateful for the generous help they are receiving².

Sooner or later they, and certain local agitating politicians, need to accept that the buck must stop with them³.

The time has come to harden up, stop complaining, accept what has been offered and get on with the rebuild.

The writer was from Timaru.

That highlights the fact that, in effect, Christchurch’s ‘green zone’ extends to cover the rest of New Zealand. It may well be that many more of those in that extended ‘green zone’ are getting irritated, too, at the ‘lack of gratitude‘ red-zoners are showing at such a ‘generous (and fair) offer‘.

I’ll be dealing with my three superscripted points below but, first, notice how the moral framing is being carefully erected to allow for a backlash.

What’s all this fuss about?

It’s worth remembering what Treasury predicts will be the net cost to the government (i.e., to ‘taxpayers’), in the event that all red zone residents accepted the government offer(s):

Treasury estimated the net cost to the Government would be $485m to $635m once it had received payments from EQC and insurers.

The costs would be met from the $5.5 billion earthquake recovery fund.

So, the net cost is something like one half to one third of the South Canterbury Finance bailout and in the same region as the AMI bailout.

You can come up with your own favourite comparative examples from other government expenditure, but these two relate, respectively, to a Canterbury ‘institution’ and a company directly severely affected by the recent earthquakes. That is, they seem to have some relevance as comparators.

Obviously, the government won’t get all its money back from EQC and insurers at once – and so may also have to bear borrowing costs in the interim – but there’s exactly the same issue in relation to the SCF bailout.

My first point, then, is that the government has, recently, done as much if not more to finance the recovery of assets as it plans to do for affected Christchurch properties. In fact, in the case of SCF, investors had not only their investments covered but the return on those investments. So far as I’m aware, that means the government has covered not only the original ‘at risk’ equity but also the return that that equity was due to make.

Now, that’s what I call ‘generous’.

Which reminds me; let’s go back to those superscripted points.

First point:

any financial assistance they receive over and above their insured entitlement is a privilege, not a right, funded by the rest of New Zealand¹

‘Over and above their insured entitlement’? Here’s some responses from ‘red zoners’ to this point from the same, Saturday 10 September, letters page:

“Those of us in the red zone just want to recive what our homes are worth, whatever value that is. That is why we paid our house insurance premiums, our taxes and our EQC levies.

We thought it was a reasonable expectation after doing what we were asked to do all our lives.

… we don’t expect to receive the values of Brookhaven or Fendalton, just what our houses are worth, not a computer-generated value created to strike a rates value, or a deal cooked up by insurers and reinsurers to maintain their maximum profits.”

No ‘advantage’, then, is being sought – just the desire to be roughly where they were financially (if not in many other ways) prior to the earthquakes. But, is that realistic? I’ll answer that question later. For now, part of the problem has been statements by government ministers.

As another letter in Saturday’s paper notes:

“In the days following the September 4 earthquake, during one fo the many photo opportunities undertaken by the Prime Minister and Mr Brownlee, I remember both of them at various times saying that “no owners of damaged homes would suffer any financial loss due to the earthquake”.”

As I pointed out in another post, these commitments made repeatedly by the government on behalf of all New Zealand taxpayers must carry some weight (whether or not those commitments were wise to make). It is unsurprising that some in the red zone are reminding us all of those commitments now.

Second:

should be grateful for the generous help they are receiving.

As I mentioned, I thought the offer to SCF investors was pretty generous. Not only was it compensation of ‘at risk’ capital (even capital placed into the company after the government renewed SCF membership of the scheme despite knowing its difficulties);not only was it compensation of ‘at risk’ capital plus some average rate of return on that capital that might have been gained from a ‘safe’ bank term deposit; it was compensation of ‘at risk’ capital at the, above the market average, rate of return specified originally for the investment.

Generous indeed.

And that generosity conforms with most definitions:

“generosity

noun

1. liberalitycharitybountymunificencebeneficencelargesse or largess There are many stories of his generosity.
2. magnanimitygoodnesskindnessbenevolenceselflessnesscharityunselfishnesshigh-mindednessnobleness his moral decency and generosity of spirit
Quotations
Generosity knows how to count, but refrains” [Mason Cooley City Aphorisms]”

Generosity, that is, is exemplified by going beyond what could be expected. This brings us to the third point – do the present government offers go well beyond what could be expected? I guess that depends on what kind of a society you think we all live in, here in New Zealand.

Third:

need to accept that the buck must stop with them.

Some of those in the red zone will be out of pocket by something like $100, 000 to $150, 000. The ‘buck’ – or lack of them – must, it seems, stop with them. In many cases, that may well mean inability to get back into a family home that they own.

Providing – via the government/taxpayer – options such as land swaps, long-term leasehold on land, government insurance for house and land, etc. it seems would not just be ‘generous’ but, instead, overly generous. A step too far and one those in the red zone should not expect. They should, as one of the quoted letters above put it, “harden up, stop complaining, accept what has been offered“.

Some New Zealanders in the (extended) ‘green zone’, it seems, believe it is better that many should lose considerable amounts of equity from an immense natural disaster rather than risk the possibility that some – under more truly generous schemes – might benefit, financially (and perhaps get ahead of others not fortunate enough to have been devastated by an earthquake).

There’s also the hint that this is part of being a real New Zealander – taking the blows, not complaining, getting on with it.

In an unpleasant way, this confluence of stoic ‘New Zealandness’ and the competitive need to keep those who haven’t ‘succeeded’ in their rightful place produces a small-mindedness and mean-ness that does not bode well for the future.

One response to the complaints of those who find they are faced with offers they can’t refuse that will severely affect their lives has been to say “Well, they have to realise, there’s been a massive natural disaster.”

It never seems to occur to people who respond in this way that it is in relation to natural disasters of just that magnitude that societies worthy of the name take the full hit collectively – not individually.

Those in the red zone are not “them” – they are “us”. Let’s put them fully back on their feet – which was the admirable reflex response from government ministers last September.

Let’s not act like a bunch of competitive self-interested ‘taxpayers’ – all lemon-lipped as we sit back in the green zone of envy in the face of others’ bad fortune.

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4 Responses to Green with envy

  1. Douglas says:

    What has been missing from these discussions is the recognition that home owners insured for replacement in good faith. It is not the insurance companies that are refusing to replace these people’s homes – it is the government. Those whose RV will not cover the cost of a replacement home have been hung out to dry.

    • Puddleglum says:

      You’re exactly right Douglas (not for the first time!!). My main ‘issue’ in all of this is that ‘we’ look after each other in times like this.

      I’ve lived in Christchurch since 1967. No-one has ever expected that large parts of the city would be devastated in this way by an earthquake. As you say, people were going about their ‘business’ in good faith, often taking out full replacement insurance. Then the earthquake hit. Then they have, in effect, been told to leave.

      All I would like to see is those people in a home somewhere around these parts – a home within which they feel as secure in their occupancy as they previously did.

      There are many ways to achieve this: Giving people a notional sum of money based on 2007 RV just doesn’t achieve that, in far too many cases.

  2. Campbell Larsen says:

    Good points – interesting also are the recent calls from red zoners who are being told that they must move off their land for gaurentees that the seized land will be turned into parks and public space and not redeveloped by the Govt (or onsold and then redeveloped. Totally understandable, if I was being booted off my land and out of my home I would insist upon it. To date there has been no response from the Govt.
    I have never felt comfortable with the zoning and inspection regime employed post quake – the geo tech info must be released now so that landowners can have faith in a process which continues to be authoritarian rather than inclusive.

    • Puddleglum says:

      Hi Campbell,

      Yes, it must ‘rub salt into the wound’ a bit to think that in something like 5-10 years time someone else – presumably with the money to buy a section on a fully remediated, riverfront development – could be occupying the very same land you were forced to abandon. Particularly galling if your property (and its land) was not too badly affected but happened to be in amongst affected properties.

      At the very least, you’d think the government would state that, in the eventuality that the land is remediated for residential occupation then previous occupants would have first right of refusal at repurchase and that the purchase price should be calculated at 2007 rating valuations plus inflation on the sections (for similar amounts of land). That would set a few cats amongst a few pigeons I suspect!

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