Earthquakes, the economy, elections, and the environment dominated the events of New Zealand in 2011. Following Christchurch’s 7.1-magnitude earthquake on Sept. 4, 2010, the city sustained months of aftershocks; the strongest of them (magnitude 6.3) struck on February 22, causing more than 180 fatalities, ravaging the central business district, and rendering thousands of residences uninhabitable. Prime Minister John Key declared a state of national emergency in the quake area. Thousands of additional aftershocks, some exceeding magnitude 5.5, were recorded throughout the year. Authorities determined that 900 buildings in the city centre and up to 10,000 dwellings required demolition. Key’s government committed to buying irreparable houses at their 2007 valuation, offered interest-free loans for temporary business accommodation, facilitated land acquisition for new suburbs, and canceled the planned census. The Reserve Bank of New Zealand estimated the cost to rebuild the city at NZ$20 billion (NZ$1 = U.S.$0.85), equal to 10% of GDP.
Finance Minister Bill English designated NZ$8.8 billion for earthquake recovery in his May budget, projecting a government operating deficit of NZ$16.7 billion for the 2011–12 fiscal year. He also announced policies to stimulate exports, savings, and investment. Taxation on gifts exceeding NZ$27,000 a year was abolished from October 1. The minimum wage was increased by 25 cents per hour to NZ$13.
During the year Key and Australia’s Julia Gillard became their countries’ first prime ministers to address each other’s parliament. In June, Key discussed trade and foreign affairs with Indian Prime Minister Manmohan Singh in New Delhi and did the same with U.S. Pres. Barack Obama at the White House in July.
Two New Zealand soldiers were killed in Afghanistan, where about 200 troops were deployed in a mentoring role. Another 80 troops were serving in the International Stabilisation Force in East Timor. That force was scheduled to be withdrawn in 2012.
The ruling National Party retained office in the November 26 elections, winning 59 seats in the 121-member parliament and maintaining its partnership with the smaller parties in the governing coalition. In a companion referendum, voters retained the mixed-member proportional voting system. Key’s new administration began a process to sell up to 49% of four state-owned energy companies to private investors, a deal expected to yield some NZ$7 billion. The parliament voted to remove New Zealand’s extensive shoreline and seabed from Crown (public) ownership, controversially allowing Maori interests to seek customary title to parts of it through the courts or by negotiation with the government.
The Greek-owned container vessel Rena grounded on a reef near Tauranga on October 5 with 1,700 tons of heavy fuel oil on board. It was expected that the cleanup of some 350 tons of spilled oil and the salvage of 2,100 containers and the remainder of the oil would continue into 2012.
Prosecution by the Serious Fraud Office of financier Allan Hubbard, whose companies constituted New Zealand’s largest corporate collapse—of NZ$1.6 billion—in 2010, was dropped following his death in a car accident in September. In other news, New Zealand’s longest-serving female MP (1967–96), Whetu Tirikatene-Sullivan, died in July at age 79. The country’s first Maori governor-general (1985–90), Sir Paul Reeves, died in August at age 78. In October, New Zealand defeated France 8–7 in the final of the quadrennial Rugby Union World Cup.