Source: New Zealand Government
Good morning and thanks to the Wellington Chamber of Commerce for hosting us.
I have spent most of my life in either the Hutt or Wellington and I love this city and I love our region.
Some people like to paint this city as only a public service town. The reality, as you all know, is that Wellington is much more than that.
From innovative startups, world-leading creative industries, and high-tech manufacturing, Wellington has a huge role to play in New Zealand’s economic future.
Wellington is so much more than the public service and we need to stop defining ourselves by the fact central government is based here.
We also need to gently – or not so gently – push back at other people around the country who are only too willing to do the same thing.
Like the rest of the country, Wellington faces difficult economic times.
The Government came to office with New Zealand in the midst of a prolonged cost of living crisis, with high inflation, high interest rates, and after years of profligate debt-fuelled government spending.
Like all big parties, the morning after the night before hasn’t been pretty. The hangover kicked in hard, and we are now grappling with cleaning up the mess.
The good news is that we are making progress thanks to fiscal prudence from the government and orthodox economic policy that knows that salvation lies not in ever increasing debt, spending and taxation, but the opposite.
The economic recovery is under way.
Inflation is down and is forecast to stay within the 1 to 3 per cent target band.
Interest rates are down, and forecast to fall further.
The Budget forecasts GDP to rise to healthy rates of around 3 per cent in each of the next two years.
Wages are forecast to grow faster than the inflation rate, making wage earners better off, on average, in real terms.
The Budget also forecasts that 240,000 more people will be in work over the forecast period to mid-2029.
Many New Zealanders may not be feeling better off now, but over time they will – provided we stay the course.
The recovery remains fragile. Global uncertainty has caused Treasury to peg back its forecasts, especially in the near term.
The recovery isn’t in danger, but it is likely to be slower than previously forecast.
As a government, we’re talking straight with New Zealanders about the way ahead.
About getting public debt under control and nurturing the economic recovery now under way.
About carefully managing the public purse. Making sure we’re using taxpayer dollars to pay for the must-haves, rather than the nice to haves.
About making sure we don’t put the economic recovery at risk – because a growing economy is the route to higher living standards for everyone.
It hasn’t been easy, but I’m proud of our work so far in government.
This Government is taking on big challenges.
We’re going for growth now and securing our economic recovery.
But we’re also laying the foundations for sustained growth in the medium and long-term.
We need to be honest with ourselves.
New Zealand has been slipping for years.
Our challenge as a country isn’t just about the last few years, or even the last decade.
We have low productivity growth, low capital intensity in our firms, low levels of competition in many sectors, challenges in attracting and retaining skills and talent, low uptake of innovation, and a growing tail of New Zealanders leaving school without basic skills.
Stagnation and mediocrity are not our destiny.
Not if we make the right choices and not if we have courage.
Going for economic growth means saying “yes” to things when we’ve said “no” in the past.
It means taking on some tough political debates that we’ve previously shied away from.
It means bold decisions which may look difficult at the time but which in hindsight will be regarded incontrovertibly as the right thing to do.
Managed decline is only inevitable if we let it be.
HOUSING AND GROWTH
Today I want to talk to you about housing as a driver of growth.
One of the things I’ve been trying to emphasise since I became a Minister is that housing has a critical role to play in addressing our economic woes.
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.
It is an irrefutable fact that cities are unparalleled engines of productivity, and the economic evidence shows bigger is better.
New Zealand can raise our chronically low productivity rates simply by allowing our towns and cities to grow up and out. We need bigger cities and, to facilitate that, we need more houses.
Ultimately, growing cities means growing opportunities – opportunities for jobs, for higher wages, and for a better future.
Today I want to update you on the raft of reforms we have underway to tackle our housing crisis, and tell you about some additional steps we are taking.
OUR GOING FOR HOUSING GROWTH REFORMS
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.
We have been working on the finer details of Pillar 1 since it was announced last year. This pillar includes our work on Housing Growth Targets requiring councils to “live-zone” for 30-years of housing demand, making it easier for cities to expand by abolishing rural-urban boundaries, strengthening the intensification rules, putting in new requirements on councils to enable more mixed-used development, and abolishing minimum floor areas and balcony requirements.
But freeing up land is not enough on its own. We also need to ensure the timely provision of infrastructure. This is what Pillar 2 is all about, and includes replacing development contributions with a development levy system, increasing the flexibility of targeted rates, and strengthening the Infrastructure Funding and Financing Act.
These changes all lead to our ultimate ambition: growth paying for growth. They help create a flexible funding and financing system to match our soon-to-be flexible planning system.
Today, however, I want to focus on Pillar 1, and the work we are doing to increase development capacity and let our cities and regions grow.
A COMPLICATED STARTING POINT
When we came into government, we inherited a complicated legal landscape.
The last government introduced a thing called National Policy Statement on Urban Development – or NPS-UD – in mid-2020. This is the legal mechanism that required councils to allow greater density around rapid transit stops, in CBDs and in metro centres.
The NPS-UD is a good tool and Phil Twyford in particular deserves great credit for getting it through. I supported its introduction at the time and I continue to support it. And we’ve committed to strengthen it.
Then in 2021 Parliament legislated for the Medium Density Residential Standards, known as the MDRS. These are the rules that require councils to allow the development of three homes up to three storeys on each site, without the need for resource consent.
National campaigned on making the MDRS optional for councils, rather than mandatory. We also campaigned on requiring councils to live-zone enough housing capacity for thirty years of growth at any one time through housing growth targets that would be set by government. The intent was to give councils more choice about where growth occurred, not to stop it.
When we came to Government, Councils across the country were in the middle of implementing expensive, long-running plan changes to adopt both the NPS-UD and the MDRS.
Almost all councils have now completed these plan changes, including here in Wellington. I signed off on the new Wellington District Plan last year, which significantly raises development capacity. There are already developers taking advantage of the new liberalised rules.
I tip my hat to the progressive majority on the Wellington Council who wrestled with the economically perverse and wrong-headed conclusions of the Independent Hearings Panel and zoned for more housing.
The Wellington City Council rightly gets a bad rap for many different reasons. But on housing they got it right.
The three councils who have not yet completed their plan changes are Auckland, Christchurch and Waimakariri.
As I say, our original policy was to let councils opt-out of the MDRS laws (but not the NPS-UD). But the practical reality is that would require councils to go through yet another round of plan changes – and all of this with more fundamental changes coming to the RMA in 2026 anyway.
In 2026 Parliament will legislate for completely new planning laws, due to take effect in 2027 to align with councils’ new Long Term Plans.
It seemed ridiculous to make councils go through another round of plan changes in advance of a completely new system coming in 2027.
We have therefore taken the pragmatic decision to remove the ability for councils to opt out of the MDRS and to work on bespoke legislative solutions for the two major cities – Auckland and Christchurch – who hadn’t yet finished their plan changes.
SOLUTION FOR OUR BIGGEST CITIES
Auckland’s intensification plan change, PC78, has been underway since 2022.
Progress has been slow for many reasons, including the Auckland floods. The intensification plan change process does not allow Auckland to “downzone” certain areas due to natural hazard risk – only to “upzone” them – and the Council asked the government to fix this problem.
So we have agreed to allow Auckland to withdraw PC78. The legal mechanism for this is a RMA Amendment Bill currently before Parliament and recently reported back from the Environment Committee.
We’ve taken two key steps to ensure development capacity is still improved in Auckland.
First, we directed Auckland Council to immediately bring forward decisions on the well-progressed parts of PC78 that related specially to the city centre. The Council met this requirement, finalising this part of their plan change on 22 May.
The Auckland CBD plan could go a lot further in my view. It is a real missed opportunity and in due course the council is going to have to have another look at it, particularly around the viewshafts which eviscerate hundreds of millions of dollars of economic value.
Second, the law will require Auckland Council to progress a brand-new plan change urgently, notifying by 10 October this year.
This new plan change lets Auckland Council address natural hazard risks and allows for more development capacity for housing and businesses.
Crucially, it directs that this plan change must enable the same or more capacity as PC78 did. We’re also requiring greater density around three key stations that will benefit from City Rail Link – Mount Eden, Kingsland, and Morningside.
This ensures that housing capacity increases in Auckland, and that we make the most of a once-in-a-generation infrastructure investment.
Thankfully, Christchurch’s solution is far simpler (although all of this is relative): they are able to withdraw their plan change, provided they allow for 30 years of housing growth at the same time.
ENDING THE CULTURE OF NO
With Auckland and Christchurch in the process of being sorted, and other councils – including Wellington – having completed their housing plan changes, the rules are now largely locked in until our new planning system takes over.
This is largely a good thing. Either the MDRS, or the capacity it unlocks, is in place across the country. That represents hundreds of thousands of additional potential homes for the coming years.
The NPS-UD has now also been implemented nationwide, ensuring that growth will be clustered around public transit hubs and key urban centres. This means shaping our cities to reflect the way that Kiwis actually live.
These are big, world-leading, reforms. They’re not perfect, but they are progress – and we shouldn’t take that lightly.
I’m proud that these reforms are basically supported in a bipartisan way across Parliament.
National started the Auckland process with the Auckland Unitary Plan in 2016, following Auckland local government reform in 2010. The Unitary Plan has been closely studied internationally and the evidence is clear that rents are lower in Auckland because of the AUP.
World-leading reform is exactly what we need to fix a world-leading housing crisis. We need to get as close to perfect as possible.
That brings me to local government.
It is an inarguable, and sometimes uncomfortable, fact that local government has been one of the largest barriers to housing growth in New Zealand.
It took nearly five years for councils to implement the NPS-UD and MDRS. To say they dragged their feet is an understatement.
In this time, Christchurch City Council just outright defied its legal obligations, voting to ignore the MDRS altogether. The last Government used RMA intervention powers just to make them do it.
The Council then spent years and a large amount of money arguing for special exemptions, ignoring clear directives from central government.
Auckland Council wasn’t much better. Yes, the Auckland floods caused delays, and yes, the cancellation of Light Rail had an impact on their plan. But they used every excuse in the book to stall progress.
I am convinced that if we had not come to an agreement on PC78, Auckland would still be dragging its heels — and many of these future homes would still be stuck on paper.
Wellington isn’t perfect, either. It took the most high-profile district-plan lobbying campaign in New Zealand history, and some very committed councillors like Rebecca Matthews, to get a plan in place that actually supports and enables growth.
Sadly, some council planning departments are basically a law unto themselves. I’ve lost count of the number of people who have told me awful stories about battles with council planners who try and micro-manage every little element of a housing development.
Where the planter boxes on the driveway will be located. The architectural design of the new garage. Which way the living room is designed. Whether front doors should face the street in order to create “neighbourliness” or whether they should face away from the street in order to create “seclusion and privacy.”
We have had decades of local councils trying to make housing someone else’s problem, and we have a planning system that lets them get away with it.
So, what do we do? We fix the system.
A streamlined planning system that requires housing growth – not just permits it – is the answer. Standardised zoning, housing growth targets, and less red tape solve this problem.
What they don’t solve, however, is the time it takes to reform our planning system. Councils won’t start work on their new plans under our new system until 2027.
And while we can’t legislate to fast-forward time, we can’t afford to wait either.
That’s why today, I’m announcing that we will be adding a new tool to our growth toolkit.
Cabinet has agreed to insert a new regulation making power into the RMA, allowing us to modify or remove provisions in local council plans if they negatively impact economic growth, development capacity, or employment.
Prior to exercising this power, the Minister must carry out an investigation into the provision in question, consider its consistency with existing national direction under the RMA, and engage with the local authority.
We believe this strikes the appropriate balance between the local and national interest.
This new regulation making power is only an interim measure, and is intended to only be in place until our new planning system comes into effect. We intend to add this as an amendment to the RMA Amendment Bill currently before Parliament, expected to pass into law in the next few weeks.
We know that this is a significant step. But the RMA’s devolution of ultimate power to local authorities just has not worked.
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 hold back millions or billions in economic potential. If local councillors don’t have the courage to make the tough decisions, we will do it for them.
Let me be absolutely clear: the days of letting councils decide that growth shouldn’t happen at all are over.
EMBEDDING A CULTURE OF YES
That brings me back to Pillar One of our Going for Housing Growth plan, and our new planning system – designed to embed a culture of ‘yes’ in our country.
Originally, we had intended to have these Pillar One reforms in place by now. As our plans for more fundamental, wider-reaching change to the RMA took shape, we started to realise that implementing Pillar One now would be, frankly, too difficult and too confusing.
So instead, we will be implementing Pillar One of Going for Housing Growth into the new planning system, where it will form the heart of our reforms to enable more housing.
These will be crucial for creating a more flexible and responsive housing market. We will be establishing ambitious housing growth targets for councils, removing hard urban boundaries to provide more opportunities for development, and strengthening intensification provisions to make it easier to build new houses in the right places.
These reforms are bold and ambitious steps in solving our housing crisis. If done right, they will transform the New Zealand economy, and bring housing within reach of the next generation, like it was for ours.
However, the key here is doing this right. The devil is in the detail, and as I regularly say, the Government does not have a monopoly on good ideas.
Today I am announcing the release of our Going for Housing Growth discussion document, and the opening of consultation into these changes.
This is the first time New Zealanders will be able to have their say on the Government’s new planning system and will help put flesh onto the bones of our plans to unlock more housing across the country.
I want to run through a few of the key proposals in this document, and the kind of questions we are keen to have answered.
First, our housing growth targets will require councils to enable enough feasible and realistic development capacity to meet 30 years of demand.
We propose that each relevant council will have its own target for its urban environment, therefore excluding rural areas. We are also asking whether councils be allowed to transfer a portion of the target between themselves by mutual agreement.
Unlike now, councils would be required to determine their target by using the same set of 30-year high-growth projections from Statistics NZ. Councils could choose to use a higher projection, but not lower.
We are also proposing a contingency margin of 20% on top of those projections. We would rather an oversupply of houses than an undersupply, and this margin protects against that.
This would see councils following a strictly controlled set of steps to calculate their own growth target, however, it would still leave the calculation up to them. We are especially keen to hear feedback on whether this is the right approach, or whether central government should determine each council’s growth target instead.
Standardised zoning in the new planning system is one key mechanism we will use to strengthen and embed these Housing Growth Targets.
Standardised zoning essentially turns plan making into a ‘paint-by-numbers’ exercise for councils. We will have a range of pre-designed zones for councils to use – like CBD zones, medium density zones, or single house zones. We set the technical requirements of each zone, but councils chose where to apply them.
This approach poses huge opportunities for Housing Growth Targets, making them more impactful, easier to implement, and more transparent.
Right now, councils spend many months and thousands of dollars modelling capacity in their plans. With standardised zones, there are opportunities to assign clear capacity assumptions for each zone. With standardised technical rules, we can standardise capacity modelling as well. We may set these capacity assumptions centrally, for example, by saying the standardised medium density zone allows for 65 homes per hectare.
This approach saves costs, makes plan changes faster and simpler, ensuring that the additional housing capacity they bring is in place as quickly as possible.
Housing growth targets will ultimately mean that a lot more land is zoned for housing and businesses. The trick is going to be ensuring infrastructure and services are brought on to these areas over-time, and in a way that is truly responsive to demand.
We are considering agile land-release mechanisms to bring development areas online quickly, without requiring a full plan change. To achieve this, plans could be required to specify triggers for release such as infrastructure availability, developing and agreeing a detailed development plan, or land price indicators.
Now a lot goes into this. What should these triggers be? Does the land get automatically released if they are met? How could the land price indicators be calculated in real-time?
We’re also considering whether we might need to provide strengthened requirements for councils to be responsive to unanticipated or out-of-sequence development proposals, with less discretion for councils about what constitutes ‘significant’ development capacity.
Cabinet has agreed to remove councils’ ability to impose rural-urban boundary lines in their planning documents. We’re proposing that the new resource management system is clear that councils are not able to include a policy, objective or rule that sets an urban limit or a rural-urban boundary line in their planning documents for the purposes of urban containment.
Creating efficient land markets requires creating responsive land markets. These proposals are all highly technical, but if done properly, will deliver development-ready land for housing exactly when the economics is right.
That’s what Pillar 1 is all about – letting the economics drive development, rather than council planners.
This discussion document contains a range of other questions and proposals, including how we strengthen our existing intensification requirements along public transport corridors, how we measure walkable catchments, what we do with ‘special character’, and how we enable greater mixed-use in our cities through standardised zoning. Consultation opens today and will run until 17 August.
CONCLUSION
This discussion document is a critical step in shaping a planning system that finally puts housing supply, economic growth, and common sense at its core.
It asks big questions, because 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 housing growth is not just allowed – it’s expected. Where councils are accountable for delivering capacity, not blocking it.
I encourage every council, planner, business, and Kiwi who cares about housing affordability and economic prosperity to engage in this consultation.
We are open to ideas—but we are not open to delay.
The time for excuses is over. The culture of “yes” starts now. Thank you. I will now take your questions.
MIL OSI New Zealand News –
