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Budget 2012: Christchurch rebuild a priority

Rebuilding quake-stricken Christchurch is a key priority in this year's budget, with new quake-recovery spending of $128 million.

Officially speaking, that comes out of the $5.5 billion earthquake recovery fund, which was established in Budget 2011, but the money will come from savings in other areas or new revenue, in line with other spending announced in the 'zero budget'.

The government expects to spend about $859 million on quake recovery this year, compared to $1.59 billion spent last year.

"The government remains absolutely committed to supporting the rebuilding of Christchurch, our second largest city," Mr English said.

"The total cost of the damage is estimated at more than $20 billion, so it is without doubt the largest – and most complex – economic project in New Zealand’s history.

"I want to pay tribute to the work of my colleague the Honourable Gerry Brownlee and the many public servants, community organisations, and families who have worked so hard to help each other through this disaster. Considerable progress is being made."

English said work on about three-quarters of the 1,000 buildings that needed to be partially or fully demolished in the Christchurch CBD had been completed, while 13,000 repair jobs were underway across the greater region. 

Infrastructure repair projects worth $820 million have been completed or are in the works. 

Nearly $150 million of the $5.5 billion quake fund is earmarked for the government bailout of Canterbury-based insurer AMI.

"The rebuilding of Christchurch will be a key driver of domestic activity and is expected to contribute about one percentage point to annual growth in each calendar year from 2012 to 2016."