Nick Clark: Charting a course for meaningful RMA reform

Prime Minister Christopher Luxon. Photo / Mark Mitchell

Opinion

Nick Clark is a Senior Fellow at The New Zealand Initiative.

OPINION

On Monday, Prime Minister Christopher Luxon released his government’s 40-point policy action plan for the next three months. Perhaps the most important, but also the most controversial, item on his ‘to-do list’ is reform of the Resource Management Act (RMA).

The RMA has become a political hot potato. One of the first things the incoming government did upon coming to power was repeal Labour’s Natural and Built Environment Act and Spatial Planning Act, the replacements of the RMA enacted just prior to the election.

National, Act and NZ First did not do this because they loved the RMA. On the contrary, almost everyone agrees the RMA doesn’t work for the economy or the environment. It impedes infrastructure projects and housing developments. It is especially tough on farmers and growers, who bring in most of our export revenue, by imposing complicated and impractical rules on their operations.

However, Labour’s solution was considered by many, including The New Zealand Initiative, to be even worse than what it had replaced. Among other things, it put the environment ahead of everything else, making it unbalanced and an even bigger headache for farmers and growers, and even more of a drag on the economy. We were pleased to see it go.

With the old RMA back, the government is now pushing through changes to make it work better. The Fast Track Approvals Bill is the highest-profile amendment, and it has caused much consternation among environmentalists and others concerned about Ministerial powers. But there are also other bills progressing through Parliament, including the Resource Management (Freshwater and Other Matters) Amendment Bill.

The Resource Management (Freshwater and Other Matters) Amendment Bill tries to find a new balance for regulations affecting our crucial primary industries. It will remove some of the stricter freshwater rules that put the environment first, no matter the cost. It will also make the rules consistent for different types of mining and remove some unworkable regulations about where animals can and cannot graze. This should give our producers some breathing room while the government figures out better rules.

The Bill is a good start, but it is just the beginning of what we really need. The exciting work is to come. The government has signalled it wants to completely replace the RMA with a new law “based on the enjoyment of property rights, while ensuring good environmental outcomes”. This will be a big job.

Looking to the future we need a better system that does not hinder beneficial projects, gives businesses more certainty, and respects people’s rights to use their property. This does not mean neglecting adverse environmental impacts. Those are as relevant as ever. The goal should be to confront those who want a benefit with the lost community value from the forgone alternative.

Expressed more simply, trade-offs must be acknowledged and assessed. This would be a big shift from how we do things now. If the community really wants to use land in a certain way, it should be prepared to pay for it.

Economic pricing tools are a step in this direction. They could include tradable permits and paying landowners to change land use, making costs and trade-offs more transparent and giving people more options.

Take, for example, significant natural areas (SNAs). These are areas of land that are considered important for native plants and animals. Currently, if a council decides your land is an SNA, controls on land use mean you face high costs for the benefit of those who do not have to bear any of those costs. That is unfair to landowners. Instead, if the community really does value the favoured use, it should be happy to pay landowners to look after these critical areas, or to buy the property at an unimpaired value. Offer them enough and landowners might be quite happy to maintain their entire properties as nature reserves. That way, they can choose what works best for them, and nature would be protected.

This approach does not mean giving up on protecting the environment. Rather, it can offer more innovative ways to do it that do not unfairly burden landowners or hold back the economy.

This is important because New Zealand’s economy is not growing as fast as we need it to – in fact, it has been flirting with recession. A better system could make it easier and cheaper to build the things we need, encourage more investment, and improve our dismal productivity.

A new resource management system needs to completely rethink how to balance economic development and environmental protection. The government seems to be on the right track by focusing on property rights. Now, we need to make sure it follows through with a system that does not rely solely on heavy-handed regulation by using market-based pricing tools.

If you are not a farmer or a business owner, you might be wondering why all this matters to you. In fact, these changes affect all of us. How we manage our land and water impacts everything from the food we eat to the houses we live in and the jobs available in our communities. When resource management is not working well, it means higher prices, fewer job opportunities, and even damage to the environment.

The current RMA is like trying to drive a car with the handbrake on – it is holding us back when we need to move forward.

Luxon’s to-do list shows that his government gets it. The challenge will be to pass a replacement RMA which isn’t just repealed with the next change in government.