Source: New Zealand Government
Good morning. It’s great to be here in Christchurch. Can I acknowledge Sam and Susan for having me here and to all of you for the important work you do around the country.
Can I also acknowledge my Ministerial colleague Simon Watts. Simon and I work really closely together, because the Local Government portfolio intersects so closely with Housing, Transport, Infrastructure and RMA Reform.
I thought I would begin with a reflection on the local government landscape.
As a starting point, it is clear to me that New Zealanders have serious questions about the performance of local government.
The Government shares those concerns.
New Zealanders question your “licence to lead”, to requisition your conference theme this year.
These questions have been bubbling for a long time, but this year it feels like they have reached a boiling point.
Restrictive planning rules holding back economic growth and exacerbating the housing crisis, crumbling local infrastructure, rapidly rising rates, and a reputation for largesse have led Kiwis to question whether local government is fit for purpose.
Key projects across the country continue to get declined by your own planning departments. Housing continues to be difficult to build, because of restrictive planning rules in your plans.
I still find myself trying to convince councils of basic economics: that restrictive planning leads to higher house prices, higher rents and intergenerational inequity.
Now, criticism of local government goes hand-in-hand with criticism of central government as well.
You would say, fairly, that our planning and infrastructure systems are broken.
You are right.
Central government has overseen the broken planning and infrastructure systems you’ve been operating within for 30 years. Only now are we starting to fix them and I’ll talk a bit about that today.
We have been a bad partner with you for a long time as well, with all of you relying on coordination across half a dozen central government Ministries to assist you in serving your communities.
As the Minister for most of those agencies, you don’t need to convince me about the difficulties you face in this coordination, believe me.
We have not made it easy for you.
As you know, there is massive work underway to fix the fundamentals of many of the problems I’ve just talked about.
Today I mainly want to talk about Resource Management Act Reform, but I want to briefly talk first about housing.
Going for Housing Growth
This government is determined to fix the fundamentals of our housing market and address New Zealand’s long-running housing crisis.
Fixing our housing crisis will help grow the economy by directing investment away from property.
It will help the cost of living by making renting or home ownership more affordable.
It will help the government books by reducing the amount of money we spend on housing subsidies.
Most importantly, letting our cities grow will help drive productivity growth, probably our greatest economic challenge.
Last year, I announced the Government’s Going for Housing Growth policy.
This is about getting the fundamentals of the housing market sorted.
Going for Housing Growth consists of three pillars of work:
Pillar 1 is about freeing up land for development and removing unnecessary planning barriers.
Pillar 2 is focused on improving infrastructure funding and financing to support urban growth, and Pillar 3 provides incentives for communities and councils to support growth.
Pillar 1 is very important.
Report after report and inquiry after inquiry has found that our planning system, particularly restrictions on the supply of urban land, are at the heart of our housing affordability challenge.
We are not a small country by land mass, but our planning system has made it difficult for our cities to grow. As a result, we have excessively high land prices driven by market expectations of an ongoing shortage of developable urban land to meet demand.
Pillar One of Going for Housing Growth will smash the urban limits holding our cities and regions back and will be delivered through our new planning laws that I’ll talk about in a moment, as well as the national direction that sits under them.
Put simply, it will be easier for our cities to grow upwards, particularly around public transport, and in city centres. It will also be easier for cities to expand outwards.
In February this year I talked to you about the changes we are making to infrastructure funding and financing to support urban growth.
Land supply is one thing. But infrastructure is critical.
You all know that under the status quo, councils and developers face significant challenges to fund and finance enabling infrastructure for housing.
Development Contributions are not fit for purpose. They under-recover costs of infrastructure and they are too inflexible.
We need to move to a future state where funding and financing tools enable a responsive supply of infrastructure where it is commercially viable to build new houses.
This will shift market expectations of future scarcity, bring down the cost of land for new housing, and improve incentives to develop land sooner instead of land banking.
To achieve this future, our overarching approach is that ‘growth pays for growth’.
I’m pleased to report that we’re making good progress on legislation to give you a more flexible toolkit of mechanisms to better support growth in a flexible planning environment.
I expect two Bills to be in the House by November this year. One Bill will replace Development Contributions with a new Development Levy System and make a series of other useful changes.
The second will overhaul the Infrastructure Funding and Financing Act to make it much simpler to use.
These are all complex, major reforms that you have been asking for, for years. They deliver on this Governments commitment to make sure growth finally pays for growth.
I strongly encourage you to engage with this work. It is absolutely critical to New Zealand’s future. It is complicated and complex but it really matters. I cannot stress this enough to you.
We are committed to getting this toolkit in place and making it work for you and work for developers. DIA and HUD are here at the conference and are leading a workshop on the development of the new and updated tools.
The government expects you to use these tools to help support urban growth. You’ll see that in our City and Regional Deal Framework – and there will be help along the way to work out how to use them. That’s one of the reasons we’ve powered up the National Infrastructure Funding and Finance company, our new National Infrastructure Agency.
Last year you asked for new funding and financing tools and you released a list of 25.
We’ve acted.
Time of use pricing legislation is before Parliament.
We have made clear that all new roads will be considered for tolling.
Local Water Done Well is well underway.
Infrastructure Funding and Financing Act reform will be before Parliament before the end of the year – which we’ll use as a form of value capture, or cost recovery.
We’re replacing the Development Contribution regime.
We’ve introduced the Regional Infrastructure Fund.
But I have to say, the list of things councils want from government is growing, but the evidence that you are doing what you can to enable growth and cut your own cloth is shrinking. And New Zealanders are noticing.
You cry out for more financing and funding tools. We’re giving them to you. You ask for a better, simpler planning system. We’re giving this to you, too.
We are getting our house in order. Its time you sorted yours out.
I want you to make hard decisions about your spending. People don’t elect you to make the easy decisions – they elect you to make the tough ones.
This government has had to make some very tough calls, not all of them very popular.
My message to you is this.
It’s ok to build a local road without spending hundreds of thousands on artworks. Not everything you do has to be an architectural masterpiece. Not everything has to win awards for being the most sustainable or the most innovative or the most beautiful.
Simplicity is smart. Complexity is costly. Ratepayers don’t care what Greenstar rating your new council facilities have or whether some international architectural body thinks your latest build is pretty or not. The only awards your projects should be winning are for cost efficiency and effectiveness.
That’s where central government is heading. We’re moving to modular, standardised designs for school property and for hospital facilities. I’ve told NZTA to get back to basics with road building. Simplicity and cost-effectiveness are in and gold plating is out. New Zealand can’t afford it.
I also want local government to properly embrace your ability to supercharge growth, particularly through your control of the planning system.
Right now, many of your district and regional plans put a choke hold on your local economies and housing markets. That case is now incontrovertible.
Soon, you have an opportunity to rewrite these wrongs of the past. In the next term of local government, you will all be grappling with implementing New Zealand’s new planning system. A system that will be far more enabling of growth, housing, and business.
This year, elected members will be judged by New Zealand for their commitment to growing their local economies and their regions. They will be judged on whether they are going to help the housing crisis or hinder it.
I implore you to think about this when you are outlining your visions for your regions in the coming months.
Resource management reforms
Let me get onto the RMA. The Government is reforming our planning system after thirty three years with the failed experiment that is the RMA.
New Zealand is a country of only five million people on a land mass the size of the United Kingdom. Yet, we have managed to design a planning system that locks up so much land we have some of the most expensive houses in the developed world.
Achieving our economic goals will be impossible without fundamental planning reform.
A 2021 report commissioned by the Infrastructure Commission found the time taken to consent a major project more than doubled from 2014 to 2019 and we were spending $1.3 billion on resource consents a year.
This is a colossal amount for a resource management system that has consistently failed to deliver better outcomes for development and the natural environment.
We need to go as hard as we can to lift our economic growth rate. Growth is what raises our incomes and means better and higher paying jobs.
To achieve real growth, we need more roads, more farms, more congestion-busting public transport projects, more aquaculture, more mines, more housing, more transmission lines, and more electrification.
There are two broad objectives to our reform programme.
First, we aim to make it easier to get things done by unlocking development capacity for housing and business growth, accelerating delivery of high-quality infrastructure and enabling primary sector growth and development.
The second objective is to safeguard the environment and human health, adapt to the effects of climate change, and improve regulatory quality in the resource management system.
So, how are we getting on with our reform programme?
In December 2023, we repealed legislation the previous Government introduced to replace the Resource Management Act. This was Phase 1 of our reforms.
In December, under Phase 2 of the reforms, we passed the Fast-track Approvals Act. This will help drive economic growth by streamlining the process for approving infrastructure and development projects.
We are also in the midst of the biggest series of changes to national direction in New Zealand’s history. We are amending 12 different instruments and the introducing four new instruments, centred on three packages: infrastructure and development, the primary sector and freshwater.
Our intention is to carry over most of this work into the new system.
Replacing the RMA
That brings me to our replacement planning system, or Phase 3 of our reforms.
We have been developing new legislation to replace the RMA since an expert advisory group delivered its blueprint for reform at the start of the year. We are delivering a radical new system.
One big change is to narrow the scope of the resource management system and the effects it controls. The RMA right now just does far too much.
When you’re trying to manage for everything, often, you achieve nothing.
The new system will have a narrower approach to effects management based on the economic concept of externalities. Effects that are borne solely by the party undertaking the activity will not be controlled, while financial or competitive matters will be excluded.
No more council officers telling someone how their living room should look. Or where their washing line should do. Or what way their front door should face.
The other big change I wanted to mention now is around standardised zones.
There will be national set standards around land use zones in the new system.
New Zealand does not need 1,175 different types of zones. In Japan, which uses standardised planning, they have only 13 zones.
Standardised zones will significantly reduce the cost of plan development borne by councils.
Across New Zealand local government incurs costs of $90 million per year, developing consulting and implementing regional and district plans.
Under the new system, council costs for developing your own zones, definitions, policies, objectives, rules and overlays will significantly reduce, as these would be set at the national level.
They will focus on where the zones developed by central government will apply, and develop bespoke zones, if needed.
An economic analysis of the EAG report estimated a halving in the overall costs of plan making and implementation, across the country. This could save an estimated $14.8 billion in council administrative and compliance costs, over a 30-year period.
Enabling a new planning and natural environment system will reset how we plan for New Zealand’s future growth.
It will require change to how central government provides direction on the things that matter most to New Zealanders, and to how local government delivers these things for communities. It will require new institutions, such as a national regulator, to support delivery.
I want to acknowledge at this point the discussion about the future of regional councils and local government reform. As I’ve said publicly, once you start thinking about RMA reform, you quite quickly get into a discussion about “who does what” in the system, and whether things could be improved.
Of course back in the late 1980s while Geoffrey Palmer was taking a break from putting the House into urgency to draft the RMA, Michael Bassett was doing local government reform contemporaneously.
So, we’re having a look at the functions we will need in the new system. Nothing is off the table, but I am mindful of the scale and pace of change that we’re undertaking already.
The new legislation is on track to be introduced by the end of this year, pass next year, and come into force in 2027.
There are big economic benefits for New Zealand and your local communities if we get this right.
I encourage you to consider how you prepare for this change over the next twelve months and how to make the most of the new tools we are providing local government to enable growth.
Stopping unnecessary plan changes under the RMA
In light of this speedy transition, we have to start thinking about what we need to do now to help councils focus their efforts, as well as save ratepayers money.
Plans created in the new system will necessarily look and operate differently to RMA plans – meaning that planning work completed under the RMA may be incompatible with the new system.
I have heard from councils that, despite our plans to replace the RMA, you are still required by the law to plough on with 10-year plan and policy statement reviews and implement the requirements of the National Planning Standards.
These requirements tie up council resources on planning processes that are unlikely to be completed by the time the new system is in place, and even worse, will be largely wasted.
We don’t want you to waste your limited resources on tinkering unnecessarily with plans under the RMA when very soon, you should instead be spending that time preparing for the RMA’s replacement.
Today I am announcing that the Government will stop unnecessary plan changes under the RMA – except for limited plans that we consider important to continue. This will be done via an amendment to the RMA Amendment Bill currently before the House. It had its second reading yesterday.
The change we are making will suspend requirements for councils to complete 10-year plan and regional policy statement reviews, as well as implement national planning standards.
Councils will not be able to notify new plan or policy statements or changes to them unless they meet certain exemption criteria.
Plan or policy statement changes that have been notified, but not proceeded to hearings, will also be subject to the plan stop. Provisions that had legal effect on notification will be reversed. These plan changes will need to be withdrawn, unless they meet exemption criteria.
There is little point in progressing long and costly hearings on a plan change that will be incompatible with the new planning system, or probably won’t even be complete by the time the new system is switched on.
Councils that are using the Streamlined Planning Process, private plan changes, or parts of plan changes that uphold Treaty settlement obligations or relate to natural hazards, will be exempt from the plan stop.
Councils will also be able to apply to the Minister for the Environment if they have important plan changes that can’t wait until the new system. There’s a process to support this.
Councils and ratepayers have been calling for this kind intervention to relieve pressure on their resources where work is likely to be significantly changed under the new system.
So my message is that the transition to the new system starts now.
Regulation making power
As part of this transition, a few weeks ago I announced that Cabinet has agreed to insert a temporary regulation making power in the second RMA amendment Bill before it goes back to Parliament for its final reading.
This power would allow the Government to modify or remove provisions in council plans if they negatively impact economic growth, development capacity or employment.
We know this is a significant step, but New Zealanders elected us with a mandate to deliver economic growth and rebuild our economy, and that’s exactly what this new power will help do.
We aren’t willing to let a single line in a district plan unjustifiably hold back potential economic, employment or development opportunities.
You should also see this as an opportunity. I know how painful plan change processes are, how costly, and how long. I suspect you all could name one or two things in your local plans that you have slated for removal though your next plan change process.
Well, this is your chance. Write to me yourselves, and highlight provisions you want removed from your plans to enable growth.
Embedding a ‘yes’ culture
I want to end today by reminding you all of the size of our planning problems, and the size of the prize in getting these reforms right.
Consenting costs are up 70 per cent since 2014 and the average time to process consents is up 50 per cent.
The consents that your planning departments issue are far too complex, and include lengthy, disproportionate conditions. One example is from a NZTA project, where the condition decision document was 170 pages long.
The problem is not limited to significant infrastructure. Consents for relatively minor repairs are also unduly complex. To carry out minor maintenance to repair culverts now sometimes requires a full consent and full hydrological and engineering assessment. Just to repair a culvert.
Plans used to be simple. In the 1970s, when New Zealand building numbers were some of the highest they had ever been, the Wellington and Christchurch district plans were less than 200 pages long. By the early 2000s, both cities had plans in excess of 1000 pages, and were violently complex. Now, they are even longer.
Local government has a key role to play in implementing this bold new system. But we need you to truly grasp and drive the opportunity these reforms present.
This means properly balancing the protection of the environment with the necessity of development.
It means accepting that things like houses, supermarkets, and quarries are not ‘nice to haves’; they are essentials for human life.
It means recognising that we live in a market economy, not a planned one.
It means understanding that we cannot justify being as restrictive and fragmented as we have been in the past.
As a country, we have to start saying ‘yes’ a lot more, and ‘no’ a lot less.
The stakes are big: can we build a system that responds to need, not NIMBYs? One that treats enabling land use as an economic necessity, not a nice to have?
We are not interested in tinkering. We are building a planning system where growth of our urban areas, infrastructure and primary sector is not just allowed – it’s expected. Where councils are accountable for delivering capacity, not blocking it.
The time for excuses is over. The culture of “yes” starts now.
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