The wrong direction for RMA reform

Dr Bryce Wilkinson
NZ Herald
4 August, 2020

In George Orwell’s “1984” dystopian novel, the Ministry of Truth was the ministry for propaganda and falsifying history.

He would have appreciated the Resource Management Act 1991. It is, in reality, a Resource MisManagement Act.

A real resource management act would focus on actual public good problems. Pollution from many sources is an example. Most resource uses do not involve such issues. Government management or oversight is not needed.

The existing Act turns this on its head. It invents an amorphous, all encompassing goal for government –“sustainable management”. That goal has allowed planners, lawyers and bureaucrats to dictate resource use wilfully. Community wellbeing has become whatever decision-makers want it to be. Impenetrable complexities disempower the common person.

Economists and others questioned the sustainability of this approach at the time. Almost three decades later, the outcomes are unsatisfactory across the board. For many New Zealanders, incomes are inadequate and housing unaffordable. Moreover, some environmental outcomes are poor.

The myth of fundamental ‘environmental bottom lines’ underlies the Act. There is no clarity about their existence, the cost of achieving them, or whether they were at risk. Their ambiguity serves to justify open-ended state force. The sales pitch was that people would enjoy wide freedom of action above these lines.

The flaw was obvious. Cost is relevant to New Zealanders' wellbeing. There are no bottom lines that must be achieved regardless of cost. There are only trade-offs between benefits and costs at the margin. Only extremists advocate state-imposed outcomes regardless of cost.

Unfortunately, the latest proposals for RMA reform double up on the myth. In the Review Panel's assessment, the problem with the RMA is that it is too permissive. It wimpishly seeks to “manage” the adverse effects of activities on the environment. Why allow adverse effects?

The report proposes a stouter purpose. It is “promoting positive outcomes for both the natural and built environments, ensuring that use, development and protection of resources only occurs within prescribed environmental limits”. New Zealanders’ wellbeing is not mentioned, and the said limits are not prescribed.

Well, are wind farms a “positive” outcome or a blight on the visual landscape? Whom is to say, why should their view prevail, and do the costs to the community of getting what they want fall on them?

To its credit, the original RMA acknowledged (in section 32) the importance of assessing benefits relative to costs. In practice, the application of this discipline has become a farce. Decision-makers do not even have to know the difference between a cost and a benefit. (Is employment generated a cost or a benefit, for example, and relative to what alternative?) The panel conceded it has become a farce. Current analyses serve to justify "the end result, rather than supporting good decision-making.”

The Panel’s report proposed no meaningful remedy. Instead, it asserts that “the use of mātauranga Māori alongside Western science will be essential to improve the wholistic nature of assessment”. 

But what is mātauranga Māori and how will it help establish net benefits or costs to the wellbeing of those affected? The report provides no light whatsoever on the answers to these questions. It extols "adopting", "recognising", "incorporating" and/or "employing experts in" mātauranga Māori no less than 26 times. It mentions community values only three times and cost-benefit analysis twice.

How mātauranga Māori values might differ from other value sets is left to readers’ imaginations. Are governments the agents of people who have values of their own, or the dictators of values? The report discounts the validity New Zealanders' actual values.

By these means the report seeks to impose outcomes through elitist central government-directed processes. It views the number of local authorities – currently 78 – with some distaste. Local community democracy is messy and insufficiently elitist.

Genuine environmental legislation would focus on public good issues. These arise around the world regardless of ethnicity or different value systems. Examples include water quality and allocation, sanitation, waste disposal, flood control, natural hazard risks, over-depletion and non-point source pollution. The core policy issue is clear. It is not to achieve outcomes regardless of cost. It is to ensure that costs and benefits are balanced at the margin. Those proposing or opposing development need to be confronted with the cost to the community of getting what they want. Where possible a system of private property rights ensures this in most cases.

In other cases, government remedial action may help. There are three generic options. One is to improve private property rights (as with the establishment of transferrable fishing quota). Another is to impose corrective taxes or subsidies. The third is command and control regulation including government ownership. The most efficient remedy is likely specific to the circumstances of the case.

The most efficient remedy is the one that most raises community wellbeing. This is in the sense that the benefits most exceed the costs to those affected by the remedy. Critically, this is as perceived by those affected. The need to focus on costs and benefits as perceived by those affected is central, and non-elitist.

The Panel ignores this critical aspect. It proposes four recommended principles for designing “a more responsive resource management system”. They do not include efficiency.

The following word counts show the Panel’s main focus. “Property rights” achieve 10 mentions, “Māori” 525, “Te Tiriti” 173, “Treaty” 68 and “partner” 140. Maori values get 20 mentions. Those of other ethnicities get zero mentions. Individual rights rate a single mention, individual autonomy not at all.

In short the report is not much about public good problems or community wellbeing. It is not about helping individuals pursue worthy goals of their own choosing. It is about centralising political power and privilege for dictating resource use. All-encompassing coercive central plans are a major element of what the Panel proposes.

Contrary to its purported intention, the RMA exacerbated public good problems. It did so by failing to confront objectors with the costs to the community of getting what they wanted. It weakened earlier common law constraints on whom could object. It also impaired the need to compensate owners for development rights taken.

Sadly, the Panel’s proposals magnify exactly that problem. For example, applicants might have to “pay or contribute towards the costs of opposing parties and the costs of retaining expert witnesses”. It also proposes to remove the Court’s discretion to require security for costs imposed on the applicant by unworthy objections. The effect should be chilling on would-be applicants.

None of this is to be overly critical of the Panel. It had a tough job. It did not choose its terms of reference or its composition, and has doubtless done its best with both.

The government has presumably got the report it sought. We can expect it to take 5 years to put these proposals into effect. Unsatisfactory outcomes for incomes, housing or the environment will continue. No doubt our clerisy will call in 20 years for yet stouter measures. Turning private property into a liability is too wimpish. Outright state ownership and control will do the job. East Germany under the Soviet Union illustrates this path.

What the public needs instead is a non-elitist focus on genuine public good issues. Environmental benefits must be assessed relative to costs. Individual autonomy and local democracy should be respected. New Zealanders’ wellbeing should be taken seriously.

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