How the future resource management system will better enable development outcomes

Address to the Resource Management Infrastructure stakeholders' event
 

Wellington
Tuesday 6 September 2022 

Kia ora everyone. 

Thank you for the opportunity to be here today to update you on reform of the resource management system and, in particular, to explain how the new system will be more efficient and effective, and how it will enable infrastructure and development.

This speech is the fourth in a number I have given in recent months to share some of the key decisions that have been made by the Government about the new system.

The Resource Management Act 1991 (RMA) has not been efficient and effective.  It seems like every day you come across examples of the current system not working as it should.

The RMA has also not enabled the infrastructure and development we need.  The Infrastructure Commission has reported that the costs of consents for medium sized infrastructure projects have increased 150% in the last ten years. Costs are 250% of what they were a decade ago. The report also found that the time taken to consent projects increased by 150% in the same period.

The infrastructure and development sector, along with elected mayors, councillors, private sector interests, ENGOs – all of us – are frustrated with the RMA.

I have a view that cumulative small, but widespread, adverse effects are a greater problem than the adverse effects of infrastructure, and that often infrastructure is necessary to avoid adverse effects.

To address our infrastructure and development challenges we need an efficient and effective system that provides more certainty as well as reduced time frames and costs.

The reforms will enable this, making sure we have the right infrastructure and development in the right place, while protecting and restoring our environment.  

Recap of our progress to date 

Before I go into more detail, let me give you a recap of our progress to date. 

There is broad consensus that, after 30 years as our cornerstone environmental and development legislation, the RMA is not working as intended.     

You may have heard me say the current system takes too long, costs too much and has neither adequately protected the natural environment, nor enabled development where needed. It has delayed growth, which increases the costs of other investments, and implementation has, at times, been poor.  

Reforming the resource management system is a priority for the Government and we are committed to seeing it through by repealing the RMA and enacting the Natural and Built Environments Act (NBA), and Spatial Planning Act (SPA), this parliamentary term.

Inefficiencies in the RMA

Over the last eighteen months we have considered the substantial changes to our resource management system recommended by Tony Randerson QC and the expert panel in their 2020 report.  

The Randerson report involved extensive consultation and built on earlier work by the Productivity Commission, Waitangi Tribunal, Local Government New Zealand, the Environmental Defence Society, the Property Council, Infrastructure New Zealand, and the Employers and Manufacturers Association.

When it looked at major infrastructure projects, the Panel described RMA processes as “…overly cumbersome” and not giving sufficient certainty.

The panel noted that the RMA doesn’t “explicitly set out outcomes to be achieved, other than the high-level goal of sustainable management”. This has made forward planning difficult.  

The RMA was also often silent on infrastructure and development in urban areas, where the vast majority of us live. While 99% of our population growth has occurred here, it wasn’t until recent amendments that there was any reference in the RMA to land supply in urban areas or towns, despite long standing concerns about inflexible and underserved land markets being a major contributor to high house prices.

Parts of the RMA, like protection of amenity values in Part 2, has stopped communities responding to population growth.

And there’s still no recognition in the RMA of the positive benefits of urban development or infrastructure, leaving decision makers with little guidance on how to plan and consider consents, for example for new housing developments. 

Plans don’t strongly enough identify the trade-offs and priorities required to decide, for example, where that new housing development could go.

This creates tension between local authorities’ RMA and Local Government Act responsibilities. Strategic plans, structure plans and long-term plans, prepared by councils to signal their long-term strategic direction, are only ‘matters to have regard to’ within RMA plan change and consenting processes.  

Weak legislative integration has also led to a poor alignment between land-use development and infrastructure planning and funding.  

Responsibility for implementing the RMA has mainly rested with local authorities, and for many years without the central government direction and guidance that the architects of the system imagined. The 100-odd regional and district plans often reflect a bias towards the status quo, protecting established activities from changes to plan rules and standards designed to promote better outcomes.

The number and diversity of district and regional plans is also problematic for national infrastructure providers such as Transpower or Chorus and large developers. The myriad of zones, overlays, rules and conditions has resulted in significant and unnecessary cost and uncertainty. In many cases they have had to take an active role preparing submissions and appealing individual council decisions to ensure consistency across council boundaries.  

What we have ended up with is a resource management system that is unnecessarily slow, costly and complex. Processes are difficult, litigious and uncertain. In many cases the processes are disproportionate to the decision being sought, or its associated risks.   

A recent study prepared for the Infrastructure Commission found this country’s infrastructure developers collectively spend $1.29 billion each year getting their projects consented, or, on average, 5.5% of the total project budget. International benchmarking indicates we are at the upper end of approval costs with equivalent costs in the UK and EU between 0.1% and 5%. Nearly 70% of consent-related expenditure is spent on legal, planning and technical specialists.  

One of the key shifts in the new resource management system will be to actively look for ways to achieve desired outcomes rather than managing adverse effects.

Good quality infrastructure provided in the right places at the right times will play a key role in this. It is necessary for good urban development; green infrastructure and renewable energy investment can help us reduce our emissions and planning for resilience can ensure our infrastructure helps us manage risks associated with natural hazards and climate change.

Efficiency and effectiveness

The expert panel also had a lot to say on efficiency and effectiveness, or the lack thereof, under the RMA.  Its diagnosis of the current system was that it is excessively complex, uncertain and costly, across the system. 

We have encapsulated their concerns in one of the reform objectives - to improve system efficiency and effectiveness, and reduce complexity, while retaining appropriate local democratic input. 

How the new system will help

This is one of two objectives I’d like focus on today to show how the reforms are intended to fix the issues I have just outlined. The other is: To better enable development within environmental biophysical limits, including a significant improvement in housing supply, affordability and choice, and timely provision of appropriate infrastructure, including social infrastructure like hospitals or schools.

The reforms have five objectives. The others are to protect and restore the natural environment, give effect to the principles of Te Tiriti o Waitangi and prepare for adapting to climate change and risks from natural hazards.

To get it right, we are making sure that the reform objectives are clearly articulated, providing no room for doubt that development occurs within environmental limits and associated targets.

A new spatial planning function in the system

The Spatial Planning Act, for the first time, provides for a mandatory spatial function across all regions in New Zealand.

Regional Spatial Strategies will provide long-term, high level, strategic direction for integrated planning in a region, focusing on the big issues and opportunities it faces.

They will set out a vision and objectives to guide the region over the next 30 plus years, accompanied by a set of priority actions that will help to turn the vision into reality.

The content of Regional Spatial Strategies will reflect regional circumstances identifying:

• Areas appropriate for development.
• Areas where significant land use change is required (for example, to meet growth needs or comply with limits) and
• Indicative locations for future infrastructure corridors and strategic sites.
• Areas to protect or enhance.
• Areas subject to constraints (for example, natural hazards).

The Natural and Built Environments Act

The Natural and Built Environments Act, or NBA, will be the primary piece of legislation to replace the RMA. Like the RMA, the NBA will be an integrated statute for land use and environmental protection. We did consider separate development and environment acts but concluded that would not resolve the tension between the two objects.

A key part of this legislation is the National Planning Framework (the NPF) through which the Government will give nationally consistent direction, allowing potentially conflicting outcomes to be resolved at the national level.

The NPF will set a new direction for decision-makers in the resource management system, including to plan for, and enable, infrastructure within limits. The Ministry for the Environment and the Infrastructure Commission are working on new national direction for infrastructure as part of the development of the NPF. The infrastructure provisions of the NPF will include direction for planning instruments, such as Regional Spatial Strategies, and in time will establish a suite of nationally consistent planning and technical standards for infrastructure to be applied to a range of infrastructure activities and effects. There are a number of ways to implement standards, but they could, for example, set out good practice conditions for common activities that remove the need for consent applications, or the need to develop bespoke conditions.

This work will build on the Government’s other moves to accelerate housing provision, and the required infrastructure.

The National Planning Framework and Regional Spatial Strategies will also give direction to local and regional decision-makers writing plans under the NBA. These will replace current RMA plans and cover both resource allocation and land use for a region.

As with the RMA, Part Two of the NBA will include its purpose and principles, guiding how decisions should be made under the new legislation.  

The first part of the purpose is to provide for ‘Te Oranga o Te Taiao’, a te ao Māori concept defined as the health and wellbeing of the environment.  The second part is to enable people and communities to use the environment in a way that supports the well-being of present generations without compromising the well-being of future generations.

A critical element in our move to create a more supportive resource management system for infrastructure and development is the shift in the legislation’s purpose from merely managing adverse effects to promoting positive outcomes for both natural and built environments.  

Under the NBA, the Government, along with local and regional decision-makers, will have to focus squarely on the long-term outcomes they want.

I will talk more about the outcomes in a moment, in particular ones for infrastructure and development, but first I’d like to quickly go over how the reforms will work on the ground.

How it works

The new legislation will set up Regional Planning Committees which will make decisions on the Regional Spatial Strategies and NBA Plans for each region. The committees will include regional representatives from all local authorities and representatives of Māori groups. The Government is not proposing 50-50 co-governance.

When making decisions on Regional Spatial Strategies, the Regional Planning Committees will include a representative from central government. The role of the central government representative will be to corral the multitude of central government agencies (for example, NZTA and Kāinga Ora) to engage in the process.

Broad participation and engagement, including with the private sector, will be essential to the success of the Regional Spatial Strategies. Because the strategies will set out a shared vision about how each region will grow and change over the next 30 plus years, there is an opportunity for greater alignment of public and private sector investment.  

Regional decision-makers will create their own processes to engage with their communities when writing their strategies, but they will have to include early engagement with interested parties as well as a formal consultation process.

We know there is significant variation across the regions of New Zealand and a key design consideration for the reforms was providing as much flexibility as possible to allow regions to work out arrangements that suit them best. Each region must however have a Regional Spatial Strategy in place by a certain date.

How the NPF provisions on infrastructure will work  

The NPF will give direction to the Regional Planning Committees developing Regional Spatial Strategies to, for example, actively plan for additional infrastructure capacity to support urban development.  It may also provide direction on how the strategies should, along with NBA plans and designations, provide for matters such as infrastructure corridors, or the integration of infrastructure with land use.  

The NPF will include good practice planning and technical standards for infrastructure. This should improve consenting processes for infrastructure and reduce timeframes and associated process costs.   

There are hundreds of issues that can be standardised – we are looking at what to prioritise for the first NPF. We are also considering whether we need an ongoing work programme on infrastructure standards which could be implemented as transitional national direction under the RMA, rather than waiting for NBA plans to be finalised.  

Existing national direction on infrastructure, like those covering renewable energy generation, electricity transmission and telecommunication facilities, will be transitioned into the first NPF.

The NPF will also carry over the medium density residential standards

In December 2021 the Government, with support from National, Greens and Te Pati Māori passed the Resource Management (Enabling Housing and Other Matters) Amendment Act (RMEHA). The RMEHA was passed in response to a significant lack of affordable housing and development capacity across New Zealand. The medium density residential standards (MDRS) enabled by the RMEHA enable three storey residential building to be built without the need for a consent in tier 1 authorities.

The RMEHA broke open restrictive planning laws that have been holding back urban development.

I have been advised by the Ministry for the Environment (MfE) that the implementation of the MDRS is broadly as expected with a few issues in the application of the MDRS in areas of Auckland.

The MDRS will be transitioned into the NPF.

Designations

Designations will continue as the primary ‘land use’ tool for public infrastructure under the NBA.  However, the ‘scope’ of matters that designations are required to address will be narrowed by higher-order instruments.

The National Planning Framework will establish the high-level policy and rule framework for infrastructure (including nationally consistent standards), while Regional Spatial Strategies will guide decision-making on designations by spatially identifying existing and future infrastructure locations to align with long-term regional growth.

Inclusion of infrastructure in the RSS will ensure strategic alignment by protecting existing infrastructure from inconsistent growth patterns and by guiding Regional Planning Committees when considering the delivery of future infrastructure.  This could take the form of infrastructure corridors that are set aside for future, co-located, infrastructure, or it could spatially identify strategic infrastructure locations that must be protected against reverse sensitivity. Infrastructure that is identified in the RSS will be considered against narrower ‘tests’ at the time a designation is sought.

Designation powers will be available to a wider range of infrastructure providers, including providers of site-specific infrastructure. 

Procedural changes will enable land for infrastructure to be secured early through ‘footprint’ designations.  These changes allow designations for proposed infrastructure to be separated into two stages - a standalone notice of requirement (NOR), that addresses the need for the infrastructure and its spatial location, and the Construction and Implementation Plans (CIPs) that address environmental management measures. 

This approach enables requiring authorities to secure land for future infrastructure earlier, and to protect that land from conflicting land use, without needing to provide detailed information about how the effects of (future) construction and operation will be managed.  In conjunction with increased lapse dates, this approach enables better strategic planning and more cost-effective delivery of infrastructure.

Construction and Implementation Plans (CIPs) will be the planning mechanism that identify and authorise the works required to construct the designated infrastructure, and that outline the measures to manage the impacts of construction and operation of the infrastructure in its physical surroundings. 

These changes provide better direction to requiring authorities and planning committees about the information requirements prior to commencing physical works.  They also provide flexibility to allow ongoing development in a staged manner and over long periods of time.

Regional Planning Committees will have the discretion to determine whether or not to notify a new designation, and whether or not a hearing is required. These provisions in the NBA allow for faster decisions on designations while ensuring that there is independent oversight of the process.

MfE has worked closely with the Infrastructure Commission and other key agencies to develop this framework, striving to strike a balance between more efficient delivery of infrastructure and maintaining appropriate checks and balances for participants and the environment.

Outcomes

A number of specific outcomes for our natural and built environments will be added to the decision-makers’ mix in the new system. These are missing in the RMA.

They will include enabling housing development and providing timely infrastructure, placing clear expectations on decision-makers regarding what the new system should deliver.

As currently envisaged, the first NPF will include provisions that integrate infrastructure with other outcomes including those related to climate change, urban development, affordable housing and the natural environment.   

There will be more detailed policies around key classes of infrastructure such as social infrastructure, including schools and hospitals, and trunk infrastructure such as powerlines, pipelines and roads. The first NPF will prioritise new direction for Regional Spatial Strategies, though the Infrastructure Commission is also considering what direction will be needed for NBA plans under the new system. 

For housing and other forms of urban development, decision-makers will have to promote positive outcomes rather than focusing primarily on managing negative effects. We are deleting amenity values from the RMA’s purpose and the principles. One of the outcomes will be housing supply and building opportunity, an outcome that has to be considered alongside other outcomes in the NPF and NBA plans.

The explicit requirement to focus on outcomes will make planning instruments stronger by requiring plans and consents to say how outcomes will be achieved. 

Resolving conflicts

The NPF, with its stronger, more integrated role for central government, will help resolve conflicts between the proposed NBA outcomes, for example between building more houses and preserving farmland or developing infrastructure versus protecting outstanding natural features. 

Key conflicts will be identified and resolved at the level of national direction and plan-making, not at the consenting level as is often currently the case.

 The NPF won’t of course be able to resolve all conflicts. Conflict resolution will still need to take place at all levels of the resource management system, reflecting local and regional variation across New Zealand. 

Ministers have agreed that the NPF will include an overarching layer focused on resolving conflicts wherever possible, either by resolving a specific conflict directly or by setting out how they are to be resolved.  

 Limits and targets

Environmental limits and targets will play a central role in the reformed resource management system, particularly in relation to the reform objectives of protecting and restoring the natural environment and enabling development within limits.  

Limits and targets, to be set by the Minister for the Environment, will work together. Limits will set the starting point for the natural environment, reflecting the fact that we need to start where we are. Targets will drive improvement, bringing in broader social, economic, and cultural goals.  

The new system will stipulate environmental limits and targets for air, indigenous biodiversity, coastal waters, estuaries, freshwater and soil.  

Limits will manage risks to human health and maintain the ecological integrity of the natural environment. They will prevent further environmental degradation, relative to what we have now. Exemptions will only be granted in exceptional situations based on strict criteria. Exemptions will be provided for infrastructure where it can’t be situated elsewhere, and when needed offsetting will be required.

Targets for ecological integrity and human health will be mandatory. Like limits, targets will be set in the NPF or in NBA plans, after taking into account other objectives, for example economic development, intergenerational equity and the risk of harm to ecosystems or human health.   

Targets must be set at a level that is at least equal to the limit. Beyond that, the new system will acknowledge local differences with communities being able to set targets that reflect their own aspirations for the environment and the things they care about.  

However, where the current state of the natural environment is already unacceptably degraded, the NPF will set out a minimum target that regions must manage up to.  This approach avoids locking in unacceptable degradation. 

Consenting

Consenting is another area in need of change. There’s a perception that RMA processes are – in the expert panel’s words – “…overly cumbersome and provide insufficient certainty for major infrastructure…”.  

I mentioned the blow out in infrastructure consenting cost and timeframes earlier.

A recent MBIE report took a look at building consents. It identified a number of barriers to an efficient and effective building consent system, including a lack of understanding of roles and responsibilities, variability and unpredictability in consent processes, and all consents going through the same basic process that does not always reflect the complexity of the work.

Under the NBA, decision making will consider how a consent contributes to achieving outcomes. Notification considerations and decision making at consenting will be assessed against plan provisions that must align with outcomes, targets and limits set out in planning instruments. Notification decisions will be able to be heard by the Environment Court, not the High Court as required under the RMA.

We are reducing the number of activities categories from six in the RMA to four in the new system. When it comes to allowing a particular activity, it will be yes (that is permitted), or probably (controlled), or a maybe (discretionary) or no (prohibited).

In another move to improve certainty in the system, we are expanding the scope of permitted activities to reduce the number of unnecessary consents. 

Clearer guidance in the Natural and Built Environments Act will ensure decision-makers categorise activities efficiently to signal how appropriate an activity or resource use is in a region. Consent application notification requirements will be set out in the National Planning Framework and NBA Plans. This will help improve consent system efficiency and certainty by reducing the time taken to consider whether applications should be notified.  

Because NBA plans will be more certain and stronger, consent authorities can make robust decisions and impose effective and enforceable conditions. 

Fast-track consenting

The Government passed the COVD-19 Recovery (Fast-track consenting) Act 2020 to respond to the economic impacts of COVID-19 by accelerating infrastructure and development projects.

The FTCA has been operative for more than two years, and 54 projects have been referred to an expert consenting panel, with 31 of these being housing projects.

A significant number of these projects has been for medium density housing in areas like Auckland, Christchurch and Queenstown. The demand for housing in these areas is higher than what is being enabled through council plans and consents. We think that the medium density residential standards, enabled by the RM Enabling Housing Act will address this demand, and reduce the need for similar developments to be consented through a fast-track process.

Former Environment Court Judge Laurie Newhook and Guy Salmon have carried out separate reviews of fast-track consenting. Newhook’s report recommended that fast-track be carried into the NBA but only be made available for infrastructure projects. The Salmon report recommended not to include fast-track in the new system.

After our experiences under the RMA that I have described it takes a significant article of faith to assume we don’t need fast-track, at least until the new system is fully operational. I expect that fast-track will continue under the NBA for central and local government trunk and public infrastructure.

Compliance, monitoring and enforcement

We also have a number of proposals to boost the compliance, monitoring and enforcement (CME) regime, including broadening cost-recovery provisions to allow costs to be recovered for compliance monitoring of permitted activities and investigations of non-compliant activities. We are also looking at substantial increases in financial penalties with a broader range of offences subject to fines for commercial gain and the statute of limitations for criminal offending increased to 24 months.

Accountability mechanisms

The use of RMA mechanisms to request extra time and additional costly and increasingly specialised information and evidence from applicants has contributed to the major increase in costs and timeframes for consents. Past amendments to the RMA have failed to adequately address the problem, thanks to a lack of accountability mechanisms.

We are placing requirements on councils to consider the extent to which requests for information will inform their decision making.

Responsibility for efficiency and effectiveness will lie with elected councils and legislative mechanisms. Councils will have to ensure they have proper control of their planning departments’ activities. 

We will make it clear that while individual consents are not subject to political control, planning and consent processes in general are.

The NBA will also enable the Minister for the Environment to require councils to publicly report on their performance, and provide good data to people who are interested in the performance of their council’s planning department.

Development scenarios

To explore how the new system would work in practice, the Ministry for the Environment developed several scenarios. What the scenarios found is that if a development is anticipated by the Regional Spatial Strategy, and the NBA Plan, then it will have smoother ride through the consenting process compared with the RMA, if a consent is needed at all.  

Two scenarios looked at proposals for low-density urban development on farmland around the outskirts of a city. In both scenarios, the Regional Spatial Strategy had identified areas suitable for meeting future housing needs, which in turn had been reflected in NBA Plan zoning.  In one scenario, the proposed development is on land identified for future urban development; the other remained zoned rural to protect the high-value soil.

Both scenarios illustrate that developers and infrastructure providers will have greater certainty in the new system. 

Proactive planning for urban development in the first scenario gives a clearer indication of what is anticipated, and what needs to be delivered and supported.  Where urban development is anticipated in the Regional Spatial Strategy, the NBA Plan zoning and activity status facilitate the development. For anticipated activities, fewer or less substantive technical assessments will be needed to support resource consent applications.

The second scenario illustrates that where a development is proposed on land identified as better suited to different outcomes, developers and infrastructure providers will have clearer and earlier direction on the suitability of their proposal.  The proposed development would be more easily identified as an ‘unanticipated activity’ because of the way the Regional Spatial Strategy and NBA plan integrate with the National Planning Framework. 

Under the RMA, this application could go deep into the consenting process before it gets declined. With the new system’s focus on upfront planning, whether or not the proposal is able to be approved will be much clearer, much earlier in the process.

Both scenarios emphasise the opportunities that the new system delivers for more collaborative and longer-term planning between councils and infrastructure providers. They illustrate that focussing on outcomes will allow development to be directed to the most appropriate locations.  There will also be fewer consent requirements for developments that meet objectives, making planning easier for developers and infrastructure providers, and protecting the environment, while enabling development within limits.

Conclusion 

The changes I have outlined today represent a significant advance in Aotearoa’s resource management planning and decision making.

For infrastructure and development, they represent an opportunity for greater certainty and reduced timeframes and costs enabling the right infrastructure and development in the right place.

But the proposed changes are only part of a much wider reform package, which I have detailed in other speeches.

I hope many of you will engage in the Select Committee process later this year, and I look forward to hearing your views on both Bills, so together we can produce robust legislation that is fit for purpose for the next generation. 

Thank you.

Happy to take your questions.

ENDS