Too early to say

Dr Eric Crampton
Insights Newsletter
18 November, 2022

The main legislation for the government’s proposed reform of the Resource Management System has over 850 sections and was released only three days ago.

Critical parts of the framework are still missing.

Former Chinese Premier Zhou Enlai reportedly claimed that it is too early to say what the influence of the French Revolution has been – though he may have been misinterpreted. But it is far too early to say whether New Zealand’s resource management reforms will improve things, make little difference, or mainly bring years of worsened uncertainty in planning and consenting.

The legislation specifies eighteen different objectives and sub-objectives.  

Many of them sound worthy. But the Bill provides no way of weighing objectives against each other when they conflict. And conflict is inevitable.

Cost-benefit analysis and an emphasis on property rights can help in adjudicating across competing objectives. But property rights are as absent from the new legislation as they were from the system it replaces.

Guidance on how regional spatial planning should weigh competing priorities under the new legislation will have to wait for the National Planning Framework – yet to be delivered.

If the National Planning Framework clearly prioritises housing development, so cities can grow up and out, reform could do a lot of good. If it fails to, then even laudable requirements like doing away with viewshafts and setting corridors for urban growth could be frustrated.

It is too early to tell.

It’s also too early to tell what some of the current legislation even means.

The Natural and Built Environment Bill tells planners to ignore effects on trade competition.

Preventing competitors from objecting to each other’s consents and zoning changes makes sense.

But it could also force the planning system to ignore a large benefit of liberal zoning rules.

The Commerce Commission’s market study into retail grocery urged that plans include enough space for retail grocery that new entrants would have choice of sites. Restrictive zoning hindered competition.

Competition’s benefits should count. And not just for groceries.

Finally, and at a deeper level, how the game plays out depends on the incentives facing councils. When growth is a benefit to be sought, they will find ways to enable it. When growth is a cost to be mitigated, they will use the system to frustrate it.

So are the proposed changes good? Ask me again in a few years. Or at least after the National Planning Framework is released.

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