The New Zealand Government will spend about $NZ8.5 billion ($6.4 billion) in coming years on rebuilding Christchurch, according to Finance Minister Bill English.

He says the NZ Treasury has estimated the direct cost of the two earthquakes at around $NZ5.5 billion ($4.1 billion), which will be provided for in the budget next month.

About $NZ3 billion ($2.3 billion) of this will be for local government infrastructure, roads, insurance excesses on schools and hospitals, temporary housing, land remediation, demolition costs, business support and the costs of the Accident Compensation Corporation, which operates the national personal injury scheme.

“The remaining $NZ2.5 billion ($1.9 billion) will cover expected costs of decisions we have yet to make,” he said. “The biggest cost is likely to be remediation of land damage from the February quake.”

The direct cost to the Earthquake Commission of reimbursing victims of residential property damage will be at least $NZ3 billion.

Mr English says the Treasury has revised down its estimate of the loss to tax revenue from the earthquake and lower economic growth. This has fallen to less than $NZ3 billion, compared with an initial estimate of between $NZ3-$NZ5 billion ($2.3-$3.8 billion) over the next five years.