New Zealand Planning Institute Conference

Tēnā koutou katoa

It’s lovely to be here. Can I begin by acknowledging what a wonderful conference facility Christchurch has built here. For those here who were involved in the planning or consenting of this, well done!

Need for reform

I want to begin by recounting the long journey to land the significant reform involved in replacing the Resource Management Act 1991 (RMA). You don’t want to embark on change like this unnecessarily. But by the time we started, civil society had by and large made up their mind that the RMA could no longer be fixed up by more tinkering – indeed, some of the tinkering in the last decade or two has made it worse rather than better.

The evidence for that is on both the environmental and development sides. Since the RMA came into effect, water quality has degraded very significantly in many parts of the country, mainly from non-point source discharges, although point discharges, including in some of our cities, haven’t improved as they ought to have.

Climate change emissions have grown rather than decreased, not that the resource management system is the primary control of that. It’s more to do with emissions pricing and other settings, but the resource management system has some responsibility. Planning for natural hazards hasn’t improved very much, and we’ve seen the consequences of that play out in the damage from storms of late.

On the development side, land prices have just gone through the roof. Some of that has been beyond the control of the planning system, like the decrease in interest rates driving up values, but some of it has been caused by constraints in the planning system. I’m not blaming planners for this – it’s local body politicians, central government politicians, we all have our part to play here – but our cities have not been able to intensify as they would naturally have done but for planning restrictions.

And the cost of consenting infrastructure has risen enormously in a way that nobody has been able to defend. The Infrastructure Commission/Te Waihanga did a study of that recently, benchmarking New Zealand costs compared with overseas, and found that for mid-sized infrastructure projects in Europe the consenting costs ranged between 0.5 and 5% of project costs, whereas in New Zealand they’ve averaged 5.5% of project costs. That’s outside of the highest end of the range in Europe. And for smaller projects, where the costs are higher as a percentage of project costs, it’s not a pretty picture either.

So in some ways, it’s been a fail on environment and a fail on development. For some time, earlier in my career, I resisted the idea of RM reform. I thought we could probably fix the RMA by amending it. But it passed the point of no return, because the reputation of the RMA had been thoroughly trashed and was irretrievable.

Contributions to reform

We had many civil society contributions. We had the Productivity Commission pointing out things similar to those I’ve mentioned. We had a report by the Northern EMA, the Property Council, Infrastructure New Zealand and the Environmental Defence Society. That said, there was a false dichotomy running – we actually needed better environmental protection, but we also needed better development outcomes, and we weren’t getting either.

Then we had three follow-up reports from EDS, partly funded by the Ministry for the Environment (MfE). There were other reports, including from Local Government New Zealand and the Waitangi Tribunal.

The Government then set up a panel chaired by retired Court of Appeal Judge Tony Randerson QC. He’s got a history in these things that goes back pre-RMA. Together with a panel drawn from environmental, development and local government interests, he produced the Randerson Report.

At the last election, we said we would implement that. We’ve deliberately tried to de-politicise it because we don’t want this to become a political football, and we’ve done reasonably well on that front.

We then redrafted the equivalent of part two of the RMA and put that to a select committee in Parliament, which heard submissions. That’s the environmental test and some of the core provisions. They reported back with some suggestions following good civil society engagement.

We then drafted the full Natural and Built Environment Bill, which is the main replacement for the RMA, plus a planning overlay through the Spatial Planning Bill, and we put both those to a select committee.

Just the last part of this has been a five-year journey. An enormous amount of work has been put in by many sectors of civil society, because it affects everyone’s lives. It affects the interests of the environment, of the development community, of housing, obviously the planning community, of councils, of central government, of roading agencies, of health agencies, of the Police. The farming sector, people who want to live in a house. It affects just about everything.

One of the reasons the RMA failed was the lack of central direction on national priorities. Local government didn’t get the help it needed to overcome difficult issues, including NIMBYism at times. Sometimes central and local government need to work together to overcome a status quo bias.

Freshwater management

So while the work on RMA reform was happening, the Government was filling in some very big holes in national direction. We produced the National Planning Statement for Freshwater Management 2020, and have since updated it. That’s a huge piece of work in itself, and I thank all of those involved in implementing it around the country.

I think it’s going to work, due to the good efforts of the people in this room, particularly in regional councils and unitary authorities. There are new attributes for what has to be managed for, including new rules around sediment that meaningfully protect waterways.

As a country we have now settled on a hierarchy called Te Mana o Te Wai, which prioritises first the environmental health of the river (ecological integrity), then the health needs of people (such as drinking water), and then commercial uses. There’s not much argument against that, and we’re past the debates about whether it should be a wadeable or swimmable standard – you should be able to put your head under water without getting crook. So progress is being made there.

We’ve now also got National Environmental Standards to control some of the riskier practices like intensive winter grazing. We’ve got stock exclusion rules that are now pretty settled. There’s still a bit of debate around those at the edges, but communities are getting on and implementing them.

We’ve got regulations that for the first time have established a maximum amount of synthetic fertiliser that can be applied per hectare each year. Because of that, along with software tools that councils and industry have made available to farmers, we’ve seen the total amount of synthetic fertiliser application decrease by five per cent a year for two years in a row – a 12 per cent reduction over the last two years. So good progress is being made there.

Development and housing

On the development side, the Government inherited a housing crisis. Part of the answer to that lay in medium density housing, and we’ve used a fair bit of political capital on that. We had a bit of help from the National Party for part of it. It’s difficult for all of us politically, but we’re trying to do the right thing so that people can afford to buy a house and we have fewer people living in bus shelters or in vans. Who can forget those stories of a few years ago of that girl doing her homework by torchlight in the van that she was living in in South Auckland?

We’ve roughly doubled the number of houses being built each year. Just about all that growth has come from medium density housing that uses land and infrastructure more efficiently. That has stopped the rapid escalation in house prices. Rent increases have been lower than inflation in the places where supply has increased.

We’re in the middle of rejigging some of the other existing national direction on renewable energy and transitioning it to the new National Planning Framework, so that when the new system launches, it will be a more complete system than the RMA was when it launched.

New system and outcomes

Now, what are the big changes in the new system? This is cornerstone legislation, and like other such bills, they are big – unfortunately there’s no way of avoiding that. They can’t do their job without having a lot of detail. I’m so grateful to everyone who’s pored over that detail and said, “we haven’t got that quite right.”

By and large, there is general agreement on the core concepts. People like that we are going to focus on biophysical limits. We are going to push amenity down, to push against NIMBYism. That is not to say that design is not important, and urban form, but we shouldn’t confuse that with biophysical preservation of environmental values like water quality.

Once we meet those biophysical limits, we’re being more permissive in respect of development. In both of these areas, we’re going to try achieving the purpose by focusing on outcomes rather than effects.

There’s general agreement that we should be outcomes focused, and that we should be chunking down the large number of plans to regional plans. There’s a lot of complexity that lies under that, but essentially the desire is to go from a large number of plans to a smaller number that we hope will be of better quality.

Thousands and thousands of hours of effort have been put in by organisations like yours to give us good submissions. I have read many of the detailed submissions from people like you who know most about the system. I spent hours with my officials on your submission alone, and I was very grateful for the guidance in yours and other high-quality submissions.

Like a lot of submissions, yours essentially said: “We broadly agree with where you’re going. We like this focus on outcomes. We’re pretty happy with the purpose. You need to tidy up the language a bit. We think the outcomes are a bit boring. We think they need to be cast in more positive language.”

We agree, and we hope the select committee is picking up on that. They’re looking at these things independently, but I support that change. I like the active language, so we want to do better there.

Some people say we should be prioritising one outcome over another, but doing that in the outcomes as well as in the purpose of the Act doesn’t work. Once you get down to that level of detail, how those different priorities take effect has to come from the purpose, followed by articulation through the National Planning Framework, given effect to by Regional Spatial Strategies, flowing through to NBE plans and all the detail that sits in them.

That’s how you get the appropriate achievement of those different outcomes and weight them differently depending upon what you’re doing. If you do that, and we’re clear that we preserve the King Salmon hierarchy, then we will have a system that achieves all those outcomes appropriately and is more cost effective. It better protects natural environmental values and it achieves the development outcomes.

Cost benefit analysis through the Regulatory Impact Statement shows many hundreds of millions of dollars of savings, most of which fall to the users of the system. That’s in addition to the benefits that you can’t really quantify in dollar terms, such as better environmental outcomes.

Final legislative stages

We’re now nearing the final legislative stages. The select committee is finishing its consideration. The Parliamentary processes are necessarily complex, because there’s hundreds of detailed submissions to work through.

MfE has to advise the select committee about them, then the select committee gives its opinion and instructs Parliamentary Counsel to revise the bills. The committee is now at that consideration phase – that will finish in the next few days, after which Parliamentary Counsel will draft the changes, taking about a month.

Then there is the deliberation phase, where the select committee formally goes through the amended legislation. After that it comes back to Parliament, where there are three more debates on it.

The second reading debate is a general discussion, including the main changes made at select committee. Then there’s the committee stage where MPs go through legislation part by part, and I will be sitting in the chair to answer specific questions about any clause in the bills. We do it part by part to give some logic to the debate. And then we have the third reading debate, and at that point it becomes law. And then your work starts!

Implementing the new system

So how do we make sure that the new system really does focus on transformational change to achieve better outcomes? That’s one of the discussions I’ve been having with your executive. They say your peak body is an absolutely ideal vehicle for the educational programmes needed to ensure the new system makes good on its potential. If it does, all your work will be more worthwhile.

I’ve asked to see the agreement that the Planning Institute has with EQC. They understand that the expertise that lies in EQC and elsewhere, maybe the insurance industry, needs to work together with the planning industry to have better, more consistent planning for natural hazards across the country.

As I discussed with your executive, we should be making sure when we do the first regional spatial strategies and NBE plans that we’re really making transformational change – so we get plans that just aren’t the same effects-based management regime dressed up in different language, but are moving to an outcomes focus.

In respect of transitioning to the new system, one of your Institute’s submissions was that we try to fill in all the gaps in the future National Planning Framework before we start the new system. That is an impossible ideal, so the first iteration of the National Planning Framework will essentially transition all of the existing national direction without substantial change.

We don’t want to lose all the good work done through the likes of the National Policy Statement for Freshwater Management. That is a good example of an outcomes-based framework.

There will be new National Planning Framework content needed for the first regional spatial strategies under the Spatial Planning Act. Some of that’s coming from the Infrastructure Commission. MfE is working with them on the development side and the future protection of corridors, of designations for example.

There will be new content on natural hazards, but it will be at the high level needed for regional spatial strategies, not the level of detail needed for NBE plans. And by the time NBE plans have been done a couple of years later, we hope to have filled in more of that detail through the next iteration of the National Planning Framework.

The legislation will also list the areas where national direction on outcomes will be mandatory. They will be listed in the statute. We have a road map, but we haven’t legislated a strict timeframe. There will be parts that need to be filled in. The medium density housing provisions will come across.

As I said, there will be more on natural hazards. And there will be a bit more there on trees as well, although even there the detail on trees won’t be of the level that will be required for NBE plans in the future.

We can’t start planning under the new system everywhere at once. We’re conscious of the lessons learned under the RMA. We’re going to concentrate on a few regions at the start, and provide quite a bit of government support. We’re going to be at your side as we try and land the first version of these plans, and they in turn should be templates for others.

Better Treaty outcomes

There are also some complex arrangements to work through to achieve better Treaty outcomes. That’s made more complex because of the overlapping iwi interests in some areas. We haven’t gone for a co-governance model. Cabinet has agreed the principle that all existing arrangements under Treaty settlements, and some that sit outside Treaty settlements, such as with Ngāti Porou, will be transitioned into the system like-for-like. That’s quite complex in some areas because the arrangements differ, and we’re working through those issues with the relevant iwi and other Māori organisations.

Again, it’s a reason why you just can’t do everything at once, because the country just couldn’t cope with it. We would worry as to the quality of the output, or that we might be pushing things so hard that we risked doing unintended injustice to people.

Conclusion

To conclude, substantial progress has been made and the legislation is expected to pass before the election. We look forward to implementing it with you.