Positive outcomes under the new resource management system

Notes of an address to the Association for Resource Management Practitioners (RMLA) Annual Conference, Queenstown

Tēnā koutou, tēnā koutou, tēnā tātou katoa

Thank you for the welcome.

Queenstown issues

You may know this already, but I lived here in Queenstown in the 1980s. I was actually very close to being born here. My parents were building a holiday home in Frankton, and I arrived at an inconvenient moment. My mother had started her dash back to Dunedin, where I was raised, but I popped out at Roxburgh.

I came back to Queenstown to live, having returned from overseas. When I became a partner in Anderson Lloyd, I moved back to Dunedin. A couple of decades after that, I was the MP for Otago. And I am the only person alive who has held the Queenstown electorate for the Labour Party, though they didn’t keep me long enough! 

I understand the issues of Queenstown and I would like to acknowledge the pressures that you are under. You have had to assimilate rapid growth in your education system, health system and housing.

I wish to acknowledge the incredible pressure that your planning department has been under for many decades, the resulting funding pressures created for the council and infrastructure, the social pressures that arise from such rapid change, and the strains on your working population.

Queenstown has the highest housing costs in New Zealand, and I am pleased that the Urban Growth Partnership has been successful in your recent efforts to overcome those issues. The Partnership was an outcome of the current government, and was led by Phil Twyford, who had a vision for putting together growth partnerships before we took office.

Acknowledgements

I acknowledge my ministerial colleague, Hon Rachel Brooking, who was previously on the Randerson panel that produced the 2020 report on New Directions for Resource Management in New Zealand.

I acknowledge Edward Ellison and thank him for his service over many years. He is the Upoko of Ōtākou Marae, and well known throughout the country for, amongst other things, being Chair of the New Zealand Conservation Authority.

To Judge Kirkpatrick, head of the Environment Court, thank you for being here also.

To the members of the RMLA national executive and conference committee, thank you for convening the conference, and thank you to everyone else who has attended.

Cornerstone legislation and the need for resource management reform

The Natural and Built Environment Act 2023 (the new Act) and the Spatial Planning Act 2023 have both now passed into law.

Every country needs legislation in order to operate, and it’s self-evident that democracies require a rule of law. There are various cornerstone pieces of legislation that you need to run a country. You need a Health Act, an Education Act, a Transport Act, a Commerce Act, a Crimes Act, and you certainly need an Environment Act. It has been a huge effort over a number of years to protect the environment but also to enable development, which I'll come back to.

I've long been of the view that the Resource Management Act 1991 (RMA) hasn't been working properly. I’ve also been of the view that it is a self-evident truth that the economy is a wholly owned subsidiary of the environment, not the reverse, as economist Herman Daly put it. That is incredibly true around here. Queenstown’s tourism economy rests upon the natural environment, not the reverse.

People come here for the merits of the natural environment, the lake, the forest, the Routeburn track, Coronet Peak and the Remarkables. These are the amenities upon which this economy rests. It is also what attracts people to live here as it’s such a beautiful place to live. The rural sector, which is the cornerstone of our export economy, also relies upon environmental services.

We know that there are three ways of improving environmental outcomes; education, regulation, and price. The OECD has done study after study to prove that of these three cornerstones of environmental outcomes, the most important is regulation.

The resource management system is, and will always be, one of the most important pieces of regulatory legislation in our country. And so when it's not working properly, it needs to be fixed.

The world has changed since the RMA was passed in 1991. Very few of the pressures we face today were as pressing. Water was still allocated using the ‘first in, first served’ principle, as entrenched by the RMA. While first in, first served was not a requirement of the RMA, it allowed that principle. This was not a problem at the time because there was no shortage, and so water was allocated to the people who asked for it in the order in which they asked for it.

Climate change was barely spoken of in 1991 or even in 2000. Neither were issues of biodiversity and resource scarcity. These are pressing matters of the last two decades.

We did not have the problems and cumulative effects of more intensive forms of land use, particularly in rural areas. Fertiliser use was about 20% of what it is now, livestock numbers per hectare were far lower, and we did not have a housing shortage.

In the decades since the RMA was introduced, all those problems have become far more pressing, and, in truth, the RMA did not cope with them very well.

The necessity for reform of the RMA was widely agreed upon across society. Before we even started the reform process, there had been numerous reports from the Productivity Commission, the Environmental Defence Society, the Property Council, the Northern Employers and Manufacturers Association, Infrastructure New Zealand, Local Government New Zealand, and the Waitangi Tribunal  attesting to the fact that the system was not working on many levels.

Then we had the Randerson Panel and the two-stage parliamentary Environment Committee process – the first stage looking at key features of the new legislation, and the second going through the detail and attracting around 3000 submissions, 94% of which were broadly supportive of the reform across both development and environmental interests.

Despite that background, and the enormity of the task to get to where we have got to, the passage of the new legislation went almost unheralded.

I think this is partly because it had been such a long and arduous process for everyone involved. But it was also partly because of the politics of it. The main Opposition parties had called for the repeal of the RMA, but now call for the repeal of the legislation that will replace it.

I will come back to the areas I think are pretty settled now, even if there's political scrapping about the new legislation.

Implementing resource management reform

Now that we've changed the system, we've got to implement it. Translating the policy into real-world action will be reliant upon the people in this room. It is possible to change the law but have the collective mindset to maintain the status quo. But we have to take advantage of all the opportunities and principles in the new legislation to make change.

The people in this room will have a pivotal role in shaping the sustainable future of New Zealand, to ensure that our natural environment is adequately protected and to enable its development responsibly. Together, we can overcome the challenges we are facing.

The resource management system does not operate alone. It alone cannot solve the housing crisis. You also need to build a lot of houses, which we have been doing as a country and catching up with the shortage.

You need to have an eye on immigration policy, because if you have a flood of immigration there is no planning system that can fix the resulting problems, I'm afraid.

You have to look at other intersections, including through the tax system, and through rules relating to foreign investment. This District has more houses worth more than $2 million than any other district in New Zealand, and already had the highest percentage of foreign buyers accessing the market prior to our banning foreign buyers of existing residential homes.

If the Opposition are elected to government and remove the foreign buyer ban for homes worth more than $2 million, there will be a dramatic effect on the land market and the housing market in Queenstown.

Promoting positive outcomes

The new system shifts the focus from managing adverse effects to promoting positive outcomes. The select committee had many submissions seeking to clarify the role and purpose of the outcomes. As a consequence, there were some additional ones added for public recreation, for the sustainable use of the coastal marine area, and for the habitat of trout and salmon.

The system must deal with tensions between environmental protection and development. Rules and plans can’t be written that govern all of those. Not all outcomes can be always achieved in all places. Nonetheless, you do need some basic biophysical environmental limits and targets, which have a central role in the new system.

We already have them in the National Policy Statement for Freshwater Management 2020. In the future, we'll have more of them, including for estuarine protection.

Other gaps in the system will be filled in. The air pollution standard will be updated, for example. But matters of personal taste as opposed to physical limits, which in our view has been a crutch for nimbyism, will have less weight in the new system.

Freshwater allocation

You will be aware we have knocked over first in, first served and created a two-stage process to produce other freshwater allocation rules to make sure that people who should have access to water can get it.

Those that do not currently have access to water to develop their land are disproportionately Maōri due to capital and ownership related constraints, fractionalised land ownership and borrowing constraints, which left them without water entitlement under first in, first served.

Somehow, we have got to create some headroom for fairness in respect of the development aspirations of Maōri and underdeveloped Maōri land, alongside underdeveloped non-Maōri land. It is predominantly an issue of fairness, and Article 2 Treaty compliance with respect to Maōri land.

To rectify this issue and enable land development, we have restricted the term of water renewals to generally 10 years. At the moment, you can get a water permit renewal for 35 years. But if we kept allowing 35-year renewals during the transition period, it would take 35 years to transition to the new system.

We wanted to make an exception to put beyond doubt the ability of our existing big hydro schemes to continue, by allowing them renewals of up to 35 years. We thought the 80/20 rule could apply, and if we enabled the big schemes to get 35-year renewals, that would be good enough.

We had complaints, which were legitimate, from the smaller schemes saying, “well, that's a bit ad hoc, what's the point of principle that lies under that?” So we've removed the threshold between bigger and smaller hydro schemes, and they can all now get longer-term renewals.

Development costs

There are a lot of little gems in the new legislation. I won’t go into them all, but one example is that we have made it easier in future for the Queenstown Lakes District Council (QLDC), or any other district, to put the costs of inefficient forms of subdivision back on to the subdivider. We have got to align the economic signal with the outcome that we want.

One of the constant battles that QLDC has with developers are the margins of areas, where they are trying to convert land from rural to urban, which is where they make most of their money through value uplift.

One of the reasons why that’s been hard for QLDC is that you have been thwarted in the way you can put the cost of less efficiently positioned subdivisions, from the point of view of council infrastructure, back to the subdivider, but you'll be able to under the new system.

The new system, I hope, will be better implemented than the RMA was. Two parallel systems were working together and that was very confusing, because both a proposed new RMA plan and the old Town and Country Planning Act plan had weight. That caused a lot of uncertainty in the system.

So the new system turns on region by region. Until there is a natural and built environment plan(NBEA plan) for a region, the new Act doesn't turn on, although parts of it do like fast-track. But most of the new system doesn't turn on. When it does turn on, it moves from the old plan to the new plan.

National Planning Framework

One of the failures of the RMA was the lack of national direction. In the last six years, we have filled in a large number of holes in national direction. This includes the direction on urban intensification, which was absolutely necessary, the companion piece to which is the protection of highly productive land. And at last we have the National Policy Statement for Indigenous Biodiversity 2023, that's been a decade or more in the making. No one had quite landed it, because it was quite contentious, but we have.

We've obviously updated the National Policy Statement for Freshwater Management. And we've got work underway on natural hazards, as well as updates of other national direction such as that for renewable energy production.

We will start with a good suite of national direction, well integrated through the National Planning Framework (NPF). There will be some interpretive provisions to assist NBEA plans and users of the system to resolve tensions between desired outcomes. We want those tensions resolved as high in the system as possible, and if we can do so through the NPF, we will.

NBEA plans are the next layer down, and through these we want to minimise the amount of time spent litigating on a consent-by-consent basis.

A new chapter in the NPF relates to development. The drafting of this has been led by the Infrastructure Commission.

We know that the consenting costs for infrastructure in New Zealand are indefensible. The average cost of consenting midsize infrastructure projects in Europe has been between 0.5% and 5%, but the average in New Zealand has been 5.5%, outside of the most extreme end of the range in Europe, which has high environmental standards. For smaller infrastructure projects, that percentage is even worse.

Under the Spatial Planning Act, there will be regional spatial strategies. Provisions in these will flow through into NBEA plans, which will mean that a lot of things foreshadowed in a regional spatial strategy will become permitted activities under the new NBEA plan.

In order for that to happen, you also need mechanisms to place conditions on permitted activities that you can't do under the current system. And you effectively have to deal with bespoke conditions for applications, which we are doing by moving to the adoption of standards.

I expect the initial version of the NPF to be publicly available before the election.  Then there is a pre-Board of Inquiry engagement process that we're required by law to go through. Obviously, we have to consult local government because they are implementers of the new system, and we can fix impracticalities if we engage with local government early.

We’ve also got obligations under Treaty settlements, to enable various iwi throughout the country to have a look at changes to national direction before the NPF goes to the Board of Inquiry. And as with all other aspects of resource management reform, we've been determined not to override Treaty settlement obligations.

Regional planning and fast-track

Over 100 RMA plans go to just 16 under the new system. As to whether this new system will work in a disparate region, I think it will. One of the constant complaints I’ve heard out of Queenstown is that the regional council ignores Queenstown interests, partly because it's based in Dunedin, and is more focused on issues over that side and in rural areas than on Queenstown’s issues.

I think the new regional planning approach will help remedy that. I certainly agree that you will need more extensive forward planning in this region than in one that hasn't got the same population growth pressures that you have. I think that the new approach will accommodate that.

The Covid era fast-track legislation has expired. It's actually worked pretty well and taken a lot of cost out of the system, and now continues under the new Act. I do have a slight worry about fast-track because it always relies on a decision maker to actually say, “I don't think this one should go through fast-track.” But without a fast-track process, the system has been glued up in New Zealand, so I've reached the point where you've got to trust those decision-makers to make wise decisions.

Fast-track has always been intended to change process, not environmental tests. Before we did fast-track, people who were calling for an equivalent wanted us to change environmental tests. I think we've proven through fast-track that you can change process without changing those tests and get a more efficient outcome. So we’ve done that.

I think fast-track has been a force for good, and it's taken a wee bit of pressure out of the system. If you don't respond to that pressure, you run the risk of the environmental protections you need in the system being chucked out as the baby with the bathwater, as people try to do things more quickly than the old system has allowed.

Essential Freshwater reforms

I’ll give you a bit of an update as to where we’re at on freshwater reforms. That's another piece of work that's changing the system, and it’s creating a lot of work for councils as we get a handle on what’s been causing the gradual degradation of waterways throughout the country.

The Essential Freshwater package introduced in 2020 elevated Te Mana o Te Wai and gave it some teeth. In summary, Te Mana o Te Wai principles are first, protect the health of freshwater, second, meet human needs, and third, look at commercial uses of water.

The package included a new freshwater plan-making process because it has taken forever to land freshwater plans. I asked someone from the horticulture industry recently what she was up to and she said, “my life continues, I'm in a constant revolving water planning process that never finishes, it just keeps on going.”

That’s because it takes too long to land those plans, including a two-stage process that involves appeals. So that's been remedied through a new freshwater planning processes overseen by freshwater commissioners, who are headed by an Environment Court Judge, and who evaluate councils’ new land and water plans against the requirements that are set out in the National Policy Statement for Freshwater Management.

We’ve also set new environmental standards relating to the exclusion of livestock from lakes and rivers.

All of this stuff is really complex. And you'll have seen that we've had a number of iterations of these things because we didn't land them perfectly first time, but we are actually getting closer to perfection. We're doing good things.

I think it's absolutely shameful that, outside of national parks, more than 90% of our wetlands have been lost, a trend that had been continuing. So we’ve now got strict rules around that.

Again that's complex, because unless you still allow quarries for example to expand, you push up the cost of housing. And around here, we found that we had effectively stopped tracks being put into ski fields, which is not what we intended.

We're also working with the rural sector to improve outcomes. We've put a lot of support into catchment management groups and the development of the farm planning system, because you actually need to change practice through other instruments as well, not just through regulation.

We've set a limit on the amount of synthetic nitrogen fertiliser that that can be applied, and we’re seeing a decrease in its total application.

We’ve been funding a lot of practical stuff through Jobs for Nature, and working up and down the country with regional councils, local iwi and hapu, and communities.  

Climate and natural hazards

I'm not going to say much about climate except that, for the first time, we've had three years in a row where New Zealand's total emissions are declining. So we've bent the curve and we're now on a downward track. And you would expect that the trend towards decreasing emissions at a greater rate will continue with the first Emissions Reduction Plan being well underway.

We're now in the process of developing the second Plan. You’ll have seen that the Parliamentary Commissioner for the Environment has just put out a report as to how we can improve upon the first Plan as we're putting the second one together.

Natural hazards work has had a push-along because of this year’s Auckland floods and East Coast cyclones. And we've now had actual experience of how you try to categorise land in response to those very difficult issues.

Working in part with the insurance sector, we are trying to bring forward an early piece of national direction on natural hazards under the RMA. This will be needed even before we get to NBEA plans, and will, we expect, transition into the NPF.

This national direction will look at preventing further investment in at-risk areas, rather than dealing with the even thornier issues of adaptation for areas that are already built up. That said, there's some very good work being done on this by various councils around the country.

Hon Eugenie Sage

The last thing I want to say, before moving to some questions, is about Eugenie Sage, whose time in Parliament is coming to an end.

Eugenie has been an outstanding Member of Parliament. When she gave her valedictory speech in Parliament a couple of weeks ago, you could just see the respect with which she was held across the House.

Not everyone from other political parties agrees with everything that any one of us stands for.  But Eugenie is admired for bringing such competency and a lifetime of effort pursuing her world view in accordance with her values, which I pretty much share personally.

It was just remarkable how much affection there was for her across Parliament. So I leave you with that. I hope when she is in the room later today, someone else can acknowledge her because she really has been an exceptional advocate for better environmental outcomes.

Thank you everyone.