Friday, February 17, 2023

Roger Partridge: Submissions expose horrors of David Parker's RMA reform proposals

Environment Minister David Parker’s Resource Management law reform proposals have been a long time in the making. The trio of Bills Parker proposes to replace the much-maligned Resource Management Act date back to the work of a government task force established in 2019.

That review itself was long overdue. Successive governments have been trying to tame the RMA almost from the time it was enacted three decades ago.

Unfortunately, since setting up the task force, Minister Parker has not spent the time wisely.

The Environment Select Committee has only just begun hearing submissions on the reform proposals. But it is already clear Parker’s package of reforms is fatally flawed.

Federated Farmers warns Parker’s proposals will see “the RMA dog become an even bigger monster.” While leading economic consulting firm, Nera says the Bill contains “no consistent framework for decisions by local or central government.”

The warnings are not wrong. Parker’s proposals may be the most incoherent, unworkable and productivity-harming reforms ever conceived by a New Zealand government.

Rather than resolving the problems that have beset the RMA, the new laws will amplify them.

Limited role

To understand why needs only a superficial understanding of what planning laws are for and a shallow dive into the main attributes of Parker’s reforms.

The key problem planning legislation aims to solve is discovering the best use of scarce resources. Whether it’s a factory, a suburban development, a market garden, or a park, planning laws can help society allocate the available land to its most appropriate use.

Regulations can do this by making sure account is taken of what economists call “externalities” – like pollution – that markets can sometimes be poor at pricing. They can also help by ensuring societies enjoy “public goods” like infrastructure corridors and parks that private markets may struggle to deliver.

It may seem odd to some people that a discussion about planning laws should immediately descend into a discussion of economic concepts. After all, aren’t planning laws about the environment rather than the economy?

Part of the reason is that the environment and the economy are inextricably interlinked. Most economic development requires resources from the environment: land, water, minerals, and so on. But more than this, as Emeritus Professor Lew Evans explains in Nera’s submission, at its core, economics is the study of the way scarce resources are managed, allocated and used by society. Economic concepts are therefore fundamental to solving the problems planning laws try to address.

Economically illiterate

Yet, in large measure, Parker’s Bill is blind to the economic tools developed over more than a century to assist with resource management challenges. And when Parker’s Natural and Built Environment Bill begrudgingly mentions economic concepts, it does so with such a poor understanding of them that the Bill renders them unworkable.

Key among the economic concepts missing from Parker’s reforms is cost-benefit analysis. This is the tool economics has developed to evaluate trade-offs between competing proposals. To its credit, even the RMA incorporates such a mechanism.

Unfortunately, Parker’s reforms incorporate nothing so sophisticated. Instead, Parliament and central planners will develop strict “environmental bottom lines” that won’t need to be assessed for their costs and benefits. Yet, this is an idle fantasy. There are few bottom lines in life – only trade-offs. The idea that an all-seeing state can set the boundaries of resource use in stone is a fatal conceit.

The absence of a coherent mechanism for evaluating costs and benefits is but one of half a dozen of the reform’s fundamental failings.

At first blush, it seems commendable that the Bill introduces the notion of “efficiency” as one of three allocation principles (along with “sustainability” and “equity”). However, the reforms include no definition of what is meant by efficiency – and how it relates to the term as it is understood in economics.

The proposed new laws also show a contemptuous disregard for a prerequisite for economically efficient outcomes: clearly defined property rights. This will inevitably work against the Bill’s efficiency objective by reducing the incentives for market participants to invest in resource development.

The third principle for resource allocation, “equity,” is even more troubling. It raises the spectre of either planners or the courts making arbitrary determinations on what is a “fair” allocation of resources. Such an approach will work against the efficiency objective by creating uncertainty, undermining the value of property rights, and harming both productivity and well-being.

Equity is an important principle. But it has no place in a planning bill. It is better addressed by the state’s tax-and-transfer system. It should be removed from Parker’s reform proposals altogether.

Two further harmful aspects of Parker’s proposals are the emasculation of the role of local councils and a Pandora’s Box of amorphous new planning concepts.

Emasculation of local decision-making

Starting with the former, the new laws will shift planning decisions from local councils to new Regional Planning Committees. Cities as big as Taupo will lose their planning decision-making powers to new regional bodies (In Taupo’s case, to the new Waikato Regional Planning Committee based in Hamilton). The new regional committees will have Iwi-appointed members following an approach reminiscent of the controversial Three Waters legislation.

The Environment Minister thinks reducing the number of district plans from over 100 to just 15 will simplify the planning process. But will bigger be better – or just more bureaucratic? The evidence of Auckland’s so-called super-city reforms gives few reasons for optimism.

Regardless, an inevitable outcome will be the loss of local accountability that comes with local decision-making. Indeed, the proposed approach is the very antithesis of the idea of localism: of local decisions being made locally.

With local councils also losing responsibility for Three Waters, an unfortunate knock-on effect of councils losing planning functions will be the undermining of their vitality and viability.

Pandora’s Box

Perhaps the RMA’s biggest downfall was the ill-defined concept of “sustainable management.” The term proved a goldmine for lawyers. Unfortunately, this came at everyone else’s expense. Unaffordable housing was just one of the undesirable outcomes.

Rather than learning from the RMA’s downfall, Parker’s reforms are laden with yet more amorphous concepts.

Just imagine the games the legal profession will have with the Bill’s purpose of “Enabling the use, development and protection of the environment in a way that supports the well-being of present generations without compromising the well-being of future generations.”

Or with the new “fundamental principle” of Te Oranga o te Taiao. This concept is defined to include the relationship between iwi and individual hapū and the natural environment. It places unspecified, undefined and unpredictable race-based considerations at the centre of the planning framework.

Taken together, these concepts could mean anything to anyone. How the Minister can believe this will streamline consenting processes is a mystery.

Indeed, Parker’s reform proposals may have achieved the impossible. Despite their long gestation, Parker has produced such a horrific replacement for the RMA that its critics are calling for the RMA’s retention.

Let’s hope the Prime Minister is listening. The best outcome for the reforms is that Hipkins adds them to his bonfire of policy blunders.

Roger Partridge is chairman and a co-founder of The New Zealand Initiative and is a senior member of its research team. He led law firm Bell Gully as executive chairman from 2007 to 2014. This article was first published HERE


Robert Arthur said...

With such vague aims, plus stipulated maori involvement, the scope for maori to block for mana enhancing purposes, extortionate consultation and for discreet behind the scenes bribe settlements will be limitless. But I presume that is the objective.

Ricardo C said...

I spent a large proportion of my career trying to obtain Resource Consents via RMA. Not only for clients wishing to open quarries or extract sand in the Auckland region, but also for a small private development of my own.
I've been retired a number of years now but came across a young planner with whom I'd had contact with just last night and asked him what he thought of the proposed legislation. Having left a consultancy and gone solo fairly recently he said something to the effect that he didn't think he'd ever have to worry about a future work stream again if it was passed.
My view is that Palmer's original RMA legislation, endorsed by Upton, was on the right track i.e. effects based enabling of whatever was proposed. However they did not allow for corrupt, envious (or both) process administrators at Council level. While my corporate clients had deep enough pockets to push back via the Environment Court, I'm sure others, like me, in the end abandoned their dreams.
Last night's discussion concluded that what was required to make the current RMA a workable option was simply to introduce an Ombudsman (independent) like overseer to whom the ridiculous requirements of bent officials could be reviewed without having to outlay (another) fortune on lawyers and consultants.
30 years of case law about to go up in smoke, and guess who will benefit from a law change. RC

Anonymous said...

Thank you Roger for your insightful views on the proposed "RMA 2023". But may I take issue with your statement that planning laws are all about discovering the best use of scarce resources. Perhaps that view might be valid within the narrowest view, but looking at the bigger picture of land use within its wider constitutional setting, it is surely all about who has "control" ,...of what.
The rights and responsibilities of land use, private, corporate and public is a complex subject and one could bang on about the Magna Carta, the Glorious Revolution, the rise of democracy and so on, ie all very tedious! However, (coming back to earth) land use statutes should be regarded, I would suggest, as very senior statutory law, and treated very seriously indeed. If we agree for a moment that the "Rule of Law" is, even "the" key foundation of our present democracy (& many increasingly don't agree with that view) then any proposed legislation, especially proposed 'senior' legislation needs to be viewed in the context of the rule of law. In other words if we are to assume every citizen is deemed to "know the rules" the proposals need to be framed in a 'knowable way, that the rules (law) is established by our elected representatives in 'our' legislature, and that any infringement of such established rules, by anyone...,of any status (ruler or ruled) will be brought to account via a public process through an independent judiciary. In this context the RMA 1991 failed miserably and as you observe the current proposals are even worse.
The principle Act was certainly established by our representatives but in fact largely just contained vague undefined, albeit "inspirational' clauses but mainly just delegated all the detailed stuff to, firstly the Executive (Cabinet) to create regulations, but much worse authorized various officials to create rules or gave them extensive power to approve or disapprove actions by individual citizens.
The excuse is that the subject of resource use is too complex for Parliamentarians to understand, even government ministers and so delegates huge powers to officials. The end result is that private landowners are deemed incapable of "managing" their own affairs but bureaucrats somehow are much better. Individuals are not expected to know the rules, they just need to contact the nice person at the ministry and pay whatever dollars for a bureaucrat to tell you what to do.
All this is very much a part of rule by edict, ancient a concept as that of feudal barons or tribal leaders. Socialists, particularly their communist brethren were also great proponents of this style of "leadership", refer to Orwell's excellent writings!