Cost of planning reform needs to be addressed

Local Government New Zealand (LGNZ) acknowledges the significant milestone with the passing of the Natural Environment and Planning Acts. 

Councils welcome changes that reduce red tape, drive housing development, and improve infrastructure delivery. However, implementing the new resource management system comes with a substantial price tag, and ratepayers shouldn't be left footing the bill. 

Official estimates show local government faces around $860 million in costs to get the new planning system up and running. This includes establishing new land-use, environmental and spatial plans, alongside new compliance, monitoring and enforcement requirements.

LGNZ President Rehette Stoltz says councils have long supported the need for reform and want the new system to succeed.

“The RMA has not worked as well as New Zealand needs it to. It has been too slow, too costly and has made it harder to build the homes and infrastructure our communities need and has seen the state of our natural environment decline.”

Rehette Stoltz says the focus must now shift to how to implement the new system so the burden doesn't fall solely on ratepayers. 

“Budget 26 contained $294 million for government to implement the new system, which is an acknowledgement the costs can’t be funded through baselines. We expect the same principle to apply to councils on the front line. 

“One council, Tasman District Council, estimates spatial planning alone will cost the equivalent of between 1-2% of its rates revenue. 

“Beyond the significant implementation costs, councils will also be required to compensate private landowners under the new regulatory relief regime. This could result in substantial, ongoing costs for councils – and ultimately ratepayers – to carry.

“This pressure will be difficult to manage if councils are also operating under a centrally imposed rates cap.”

Tim King, a member of the MCERT, RM Local Government Reference Group says this once-in-a-generation reform fundamentally changes how the public are involved. 

“People understand a development next door. It is far more difficult to engage with an abstract plan for their street or community years into the future.

“We call on the Government to clearly communicate what is changing, in terms of who has a say and when. Otherwise, people who are used to having a say at resource consent stage will find out too late that their chance to input has already passed – and ultimately councils will wear the fallout from their communities,” Tim King says. 

Rehette Stoltz says the new planning system must be durable and workable. 

“If this new system works as it should, it will simplify and streamline pathways for housing growth. 

“This should reduce the need to rely on exceptional processes such as Fast-track. 

“That's why LGNZ has also been calling for the Government to commission a review of housing approvals within the Fast-track Approvals Act to make sure it’s right-sized within the new planning system. 

“Councils also remain concerned at the breadth of ministerial powers in the new system. This undermines the certainty the reforms are intended to deliver and could lead to sudden shifts every time there is a change of government. There is also greater centralisation of decision-making.

“Ultimately councils needed confidence that the new system would be durable, affordable and workable.  We will continue working with the Government to make ensure the reforms meet the needs of our communities,” Rehette Stoltz says.