Labour has said it is prepared to enter the insurance market itself to help quake affected residents and business rebuild their Canterbury properties.
The party has released the earthquake recovery policy it would introduce if it wins the next election, which features a number of promises likely to prove popular with those worst affected by the quake.
They include a commitment to resolving the stand off with insurers reluctant to take the risk with properties in the area.
Labour leader Phil Goff said the party would be prepared, as a last resort, to enter the insurance market itself on a short term basis to "get the market functioning again."
Other proposals include buying 1500 sections and selling them to red-zone homeowners at cost, and paying each red zone homeowner up to $50,000 for recent renovations.
"Everything in this package is designed to kick-start the rebuild and give residents and businesses the certainty they need to get the Canterbury region and economy moving again," Goff said.
"These are extraordinary times for Canterbury and the Government must respond accordingly. Business as usual won't cut it."
The money for the extra payout to homeowners would come from $100 million ringfenced from the charitable donations made to the Canterbury Earthquake Fund.
Earthquake Recovery Spokesperson Clayton Cosgrove said Labour would also make its money back from its proposal to sell new land to Red Zone residents.
"Under Labour's plan to acquire 1500 sections, the cost of buying and readying the land for rebuilding will be recovered when it is on-sold to Red Zone residents who have been paid out from the Canterbury Recovery Fund," he said.
"We will not rule out using the Canterbury Earthquake Recovery Act to purchase land in the face of any evidence of price gouging by developers if that is needed to ensure a fair price is sought and paid."
Goff said the plan will kick-start the rebuild and provide certainty for residents and businesses.
He said there will be some people who will still lose out, but the losses will not be as great as under National's plans.
But Prime Minister John Key says Labour's policy raises
questions about who would get sections and who would lose out,
because far more than 1500 people are looking for new sites.
The cost of buying and developing the sections has been put at about $230 million and Key says Labour is promising to write out some very large cheques.
"And as for talking about walking into the insurance market ... I'd be surprised if they've had the depth of advice they need to make that decision," he says.
"My view is that the insurance market is working in some parts and is dysfunctional in others.
"We should be trying to find a public sector solution, the holdup is because there's still seismic activity in Christchurch."
Brent and Shirley Cairns' Home in the red zone in Kaiapoi is set to be demolished.
They feel their payout will leave them few options.
"At $150,000 that means that we can't buy the smallest section here in Kaiapoi and we want to stay in Kaiapoi," Brent Cairns said.
"We definitely want to stay here, we love living here in Kaipoi."
Labour's quake recovery plan:
- Acquire 1500 sections and on-sell them at cost to Red Zone
- Ring-fence a maximum of $100 million from the Canterbury Earthquake Fund to ensure home improvements to houses in the Red Zone are reimbursed up to a maximum of $50,000
- Resolve the insurance standoff and, as a last resort, be prepared to intervene in the insurance market on a short-term basis to get the market functioning again
- Establish an independent insurance commissioner to protect consumers and resolve disputes
- Immediately release all geotechnical information with a plain English guide
- Take action to fill critical skilled worker shortages, firstly from within Christchurch and New Zealand, and provide training - including converting dole payments to apprenticeship subsidies.