Last week’s amendment to the Fast-track Approvals Act, now before Parliament, intends to enable greater competition. It will also allow ministers to issue policy statements to guide decision-makers. One of these will focus on grocery competition.
This is a sensible stopgap while the resource management system is being reformed. It signals to investors that Wellington is serious about expediting the approval process.
Yet it may not go far enough.
The biggest barriers sit within the planning system: local zoning rules, transport requirements, and council policies make large developments slow and costly. These rules discourage large-scale retail investment and other kinds of productive development as well. Removing undue barriers will take time, patience and political will.
The fast-track amendment, by comparison, is a minor procedural tweak.
But other problems remain.
One is how fast-track decision panels have been interpreting “long-term regional and national benefits.” For example, existing processes can block new supermarkets if they might take too many shoppers away from other neighbourhoods. But entry to displace incumbents can drive innovation and competition. If a new supermarket aims to capture market share from less efficient rivals, it should not have to de facto prove its entry does not hurt those rivals.
Another problem is that panels second-guess the commercial viability of businesses. Investors are often better informed about their businesses than officials are. Their willingness to take risks and commit capital is itself a signal of public value. Confidence in that principle will matter not only for supermarkets but for all sectors seeking to grow.
The Government is right to want a more dynamic economy.
It has taken a modest, pragmatic step. The next challenge will be to ensure the new process works as intended. Allowing new supermarkets, even if they draw customers away from other places, would be a strong start.
If investment still stalls, deeper planning barriers will need attention that continue to hold New Zealand back. Ultimately, the Fast-Track Act serves as a temporary expedient while more comprehensive reforms are being implemented.
For now, the legislation before the House is a welcome step in the right direction, even if the journey is only beginning.
Benno is a Research Fellow at The New Zealand Initiative with a wide range of policy interests. This article was first published HERE
Yet it may not go far enough.
The biggest barriers sit within the planning system: local zoning rules, transport requirements, and council policies make large developments slow and costly. These rules discourage large-scale retail investment and other kinds of productive development as well. Removing undue barriers will take time, patience and political will.
The fast-track amendment, by comparison, is a minor procedural tweak.
But other problems remain.
One is how fast-track decision panels have been interpreting “long-term regional and national benefits.” For example, existing processes can block new supermarkets if they might take too many shoppers away from other neighbourhoods. But entry to displace incumbents can drive innovation and competition. If a new supermarket aims to capture market share from less efficient rivals, it should not have to de facto prove its entry does not hurt those rivals.
Another problem is that panels second-guess the commercial viability of businesses. Investors are often better informed about their businesses than officials are. Their willingness to take risks and commit capital is itself a signal of public value. Confidence in that principle will matter not only for supermarkets but for all sectors seeking to grow.
The Government is right to want a more dynamic economy.
It has taken a modest, pragmatic step. The next challenge will be to ensure the new process works as intended. Allowing new supermarkets, even if they draw customers away from other places, would be a strong start.
If investment still stalls, deeper planning barriers will need attention that continue to hold New Zealand back. Ultimately, the Fast-Track Act serves as a temporary expedient while more comprehensive reforms are being implemented.
For now, the legislation before the House is a welcome step in the right direction, even if the journey is only beginning.
Benno is a Research Fellow at The New Zealand Initiative with a wide range of policy interests. This article was first published HERE
1 comment:
Can I go a little off track here and complain about all the supermarkets in NZ and the shoddy way they now package meats.
Not long ago they provided reasonably airtight and sealed packages. Easy to freeze with not much risk of icing.
Now they just don't care and place the product in oversized trays with the crappiest wrapping with large air spaced cavities.
Can't put those in the freezer without icing up so have to resort to repackaging anything you want to freeze.
I've complained previously in stores, but those cheap bastards continue shoving it to the NZ consumer. Any previous customer care has gone.
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