Richardson<\/a>\u2019s watch. Its repeal is happening on Willis\u2019.<\/p>\nThe RMA has contributed towards making housing \u201cseverely unaffordable\u201d and has shackled economic growth.<\/p>\n
The Government estimates the reforms will lift GDP by about 0.56% a year.<\/p>\n
A way to realise the impact of planning is to reverse-engineer 0.56% of GDP.<\/p>\n
Had New Zealand not suffered a drag of that magnitude for the past 34 years, the economy today could be about 20% larger.<\/p>\n
That estimate may be conservative.<\/p>\n
The Productivity Commission\u2019s landmark report Better Urban Planning (2017) attempted to quantify the cost of planning regulation.<\/p>\n
It estimated an annual burden of 1-2% of GDP.<\/p>\n
A permanent drag of just 1%, compounded over 34 years, would imply an economy today of the order of 40% larger.<\/p>\n
Even that understates the cost.<\/p>\n
The commission could measure compliance costs, delays and distorted land supply. It could not measure the projects never started or the investments abandoned because the RMA made development too slow, risky or expensive.<\/p>\n
I have been a company director. We vetoed good proposals solely because RMA delays and uncertainty made them too risky. The loss from projects that never were cannot be measured, but it is real.<\/p>\n
I believe the greatest cost is cultural. The RMA has helped extinguish New Zealand\u2019s \u201cNo 8 wire\u201d entrepreneurship.<\/p>\n
We now suffer chronic productivity stagnation. Innovation thrives on permissionless experimentation. As Prime Minister Christopher Luxon puts it, \u201cwe\u2019ve slipped into a culture of saying no\u201d.<\/p>\n
Successive Governments have amended the RMA more than 21 times.<\/p>\n
A statute intended to simplify planning has swollen to more than 400 sections with multiple schedules.<\/p>\n
These amendments failed because the RMA is fundamentally flawed.<\/p>\n
Its central objective, \u201csustainable management\u201d, is so vague as to be almost meaningless. The courts have struggled to give it coherence.<\/p>\n
The second flaw is irreparable. The RMA reversed centuries of common law under which landowners were free to use their land but were strictly liable for any nuisance they caused. That principle is possibly the most effective environmental protection ever devised.<\/p>\n
Under the RMA, every activity is illegal unless expressly permitted by a plan or resource consent. That is why landowners must seek approval for minor matters such as removing fallen trees, and why there are about 40,000 resource consent applications each year.<\/p>\n
Yet once consent is granted, provided its conditions are met, the landowner is effectively immune from nuisance claims.<\/p>\n
The proposed reforms move back towards the common-law principle that landowners may act but are responsible for the harm they cause.<\/p>\n
Both new acts establish a starting presumption that land use is enabled and only restricted where it causes significant harm to neighbours or the environment.<\/p>\n
That single shift matters enormously.<\/p>\n
In 1991, planners did not foresee data centres, wind and solar farms, Airbnb, remote work, indoor farming or EV-charging hubs. Any law that bans new activities until approved will always lag innovation.<\/p>\n
A permissive system allows tomorrow\u2019s land uses to emerge without asking yesterday\u2019s permission.<\/p>\n
Under the RMA, councils can restrict land use without compensation. They can, in effect, turn private land into a park by designating it an \u201cOutstanding Natural Landscape\u201d. The owner retains the title and the rates bill.<\/p>\n
Because M\u0101ori land is more likely to be undeveloped, these designations often fall disproportionately on M\u0101ori landowners.<\/p>\n
The Treaty promised \u201cundisturbed possession of their lands\u201d.<\/p>\n
Councils will be required to provide relief. If councils say they cannot afford the cost, then M\u0101ori and other landowners have even less ability.<\/p>\n
Given the history of repeated failure, it is possible these reforms will be pared back to be ineffectual.<\/p>\n
Machiavelli warned that the innovator \u201chas for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new\u201d.<\/p>\n
Local government employs thousands of planners and compliance staff. Around them sits a large industry of consultants, lawyers, experts and advisers.<\/p>\n
If there are 40% fewer consents, it could mean 40% fewer planning jobs. We frequently believe that our personal interest is the public interest.<\/p>\n
Opposition will be fierce, presented as environmental and Treaty protection, but often aimed at preserving a profitable RMA industry.<\/p>\n
If Finance Minister Nicola Willis ensures the reforms pass intact, I suspect Ruth Richardson will acknowledge that this is, indeed, the greatest single economic reform in a generation.<\/p>\n
Catch up on the debates that dominated the week by signing up to our Opinion newsletter<\/a> \u2013 a weekly round-up of our best commentary.<\/p>\n","protected":false},"excerpt":{"rendered":"Last week, the coalition Government announced what it called \u201cthe single largest economic reform in a generation\u201d \u2013…\n","protected":false},"author":2,"featured_media":187555,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[16891,5195,8834,124,3278,3597,111,43,139,20484,69,1523,15161,16860,15160,24365,85770,6624,1361,223,61,2179,1533,792],"class_list":["post-187554","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-zealand","tag-able","tag-be","tag-big","tag-could","tag-facts","tag-fix","tag-new-zealand","tag-news","tag-newzealand","tag-nicola","tag-nz","tag-over","tag-prebble","tag-reform","tag-richard","tag-richardson","tag-rma","tag-ruth","tag-that","tag-the","tag-to","tag-trump","tag-will","tag-willis"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/187554","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=187554"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/187554\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/187555"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=187554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=187554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=187554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}