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Wednesday, February 23, 2011

New Zealand Earthquake

Australia and New Zealand are good mates and always will be. We share a history of brothers-in-arms in war and we laugh at the way they say 'fersh and cherps". But there is another major difference - while we have been riding high on the demand for our resources from China and India, the Kiwis have been weighed down by high debt and yesterday's earthquake is only going to make matters worse.

Apart from the move in debt markets, the country's currency was hit hard, falling to US75.05c, from US76.04 yesterday. This earthquake could be much worse than last year's quake, which cost an estimated $US3.8 billion in repairs.

Moody's has a Aaa rating on the country with a stable outlook and Fitch has an AA+ rating. Fitch's head of Asia Pacific sovereign debt Andrew Colquhoun said "The ratings are on negative outlook already, which is driven by that economy's imbalances."

As the death toll continues to rise, our hearts go out to our Kiwi friends across the water. Julia Gillard has already sent rescue teams and everything they have asked for is on the way. They requested a contingent of police officers to relieve those working around the clock. It's good to be able to repay the debt we owe these people for the help they have given us over the years, they were there when we needed them, fighting the Black Saturday bushfires and then helping with the cyclone and floods.

Our thoughts and prayers are with them in one of their darkest hours.