PART 1 – HIGH-LEVEL VIEWS ON THE OVERALL REFORM PACKAGE

1. Introduction and support for reform intent

1.1      The New Zealand Initiative welcomes the opportunity to submit on the Planning Bill and the Natural Environment Bill. Together, these Bills represent the most significant reform of New Zealand’s resource management system since the enactment of the Resource Management Act 1991 (RMA).

1.2       The Initiative has long supported comprehensive reform of the RMA. We have argued that the Act has failed to deliver either efficient development or effective environmental protection, and that its core shortcomings are structural rather than incidental. We acknowledge the scale and difficulty of what the Government has undertaken.

1.3         We cannot understate the importance of this reform. Much has been written about New Zealand’s severe and persistent productivity problem. Productivity growth has been anaemic for decades and despite strong growth in labour input we have fallen further behind Australia and other comparable economies. Without a step-change in productivity growth, New Zealand will lack the fiscal capacity to meet the costs of an ageing population, adapt infrastructure to natural hazards and climate change, and maintain the public services its citizens expect – even before accounting for the economic shocks that history guarantees. The RMA is not the sole cause of this underperformance, but it is a well-documented contributor: by restricting land use, inflating housing costs, delaying infrastructure and raising the cost of doing business, it has suppressed investment and misallocated resources for more than three decades.

1.4        2024's Nobel Prize in Economics, awarded to Daron Acemoglu, Simon Johnson and James Robinson, recognised a body of research demonstrating that the institutional foundations of prosperity are not geography, culture or natural resources but the security of property rights and the rule of law.[1] Countries that protect property rights and constrain arbitrary state action grow richer. Countries that do not, do not. New Zealand's replacement resource management legislation is, at its core, an institutional choice about property rights, state discretion and the rules governing how land and resources are used. Getting it right is not a matter of regulatory tidiness. It is a determinant of whether New Zealand arrests its relative economic decline or entrenches it.

1.5       We therefore strongly support the Government’s stated intent that RMA replacement be based on respect for property rights, and we generally supported its 10 principles for reform agreed by Cabinet in 2024.[2] Those principles pointed in the right direction. The question is whether the Bills give effect to them.

1.6       Our assessment is that they do not yet do so. This is not primarily because the Government has failed to act on its principles, but because of a deliberate architectural choice whose consequences we believe have been underestimated. The Government has chosen to keep the primary legislation lean – focused on institutional architecture – and to delegate the operative substance to national direction and other secondary instruments. We understand the reasoning: the RMA was too detailed, primary legislation can be amended by any government regardless, and secondary instruments allow nimbler course correction over time.

1.7       We disagree with the balance the Government has struck, and we think the risks of this approach are greater than its architects appreciate. The Bills articulate the right aspirations, but the primary legislation does not embed the operative mechanisms necessary to achieve them. In several areas, what the Bills promise in their goals they withhold in their provisions. This gap between aspiration and implementation is the central concern of this submission.

1.8       The choice to leave key terms undefined in primary legislation carries a specific legal risk that we submit warrants the Committee’s close attention. Some will argue that terms such as ‘unreasonably affect others’ and ‘inappropriate development’ are already defined by RMA case law and that those meanings will carry over into the new framework. We believe this thinking to be misguided. Meaning in law is framework-dependent. The Bills create a fundamentally different statutory architecture from the RMA: goals sit at the apex of a hierarchical system, national direction must ‘particularise’ those goals, and clause 56 of the Planning Bill requires the Minister to be ‘satisfied’ that national policy direction does not unreasonably restrict the achievement of other goals. That satisfaction requirement is a standard ground for judicial review. When a challenger argues that the Minister’s particularisation of ‘inappropriate development’ is too narrow or too broad, the court will assess the national direction against the statutory goal – and to do that, it will have to form its own view of what the undefined term means within this new framework. Courts may have regard to settled RMA case law where identical wording is reused. But they are required to interpret these terms within the text, purpose and hierarchy of the new Act. In a materially different statutory architecture, prior RMA meanings are not mechanically determinative.

1.9       The mechanism is not novel. Parliament has previously placed undefined normative language at the apex of a statutory scheme and required downstream decision-makers to act consistently with it. In the State-Owned Enterprises Act 1986, the phrase “the principles of the Treaty of Waitangi” was not defined in the legislation. The courts were required to give that phrase content in order to apply it. They did so responsibly and within orthodox interpretive constraints. But once articulated, that content shaped the operation of every subsequent statute using the same formulation. The Planning Bill adopts a comparable structural choice in relation to clause 11: undefined apex terms, mandatory downstream consistency, and judicial review available at each stage. Where Parliament leaves such terms undefined, it is necessarily leaving their outer boundaries to be worked out by the courts through litigation rather than specified in primary legislation.

1.10     The durability argument cuts both ways. If primary legislation is easy to amend, national direction is easier still. A future government – possibly as soon as next year – could rewrite every national instrument without changing a single clause of the Act, reshaping the entire planning system through secondary instruments unconstrained by meaningful statutory criteria. The very leanness of the primary legislation that is meant to provide stability instead provides maximum legislative freedom to future Ministers. The Bills need fail-safe mechanisms in the primary legislation that constrain how delegated powers can be exercised, regardless of who holds them.

1.11     Against this background, four structural problems recur throughout both Bills:

• Property rights acknowledged but not protected. Neither Bill includes property rights among its goals. This is a fundamental omission. Ill-defined or poorly enforced property rights are at the heart of the problems these Bills seek to address (externalities, housing affordability, the tragedy of the commons and the tragedy of the anti-commons). The Bills need both a statutory presumption that land use is permitted unless restriction is justified, and a compensation framework for cases where restriction goes too far. Without the first, courts will balance property rights away. Without the second, regulators will impose restrictions without bearing their cost (see Sections 7 and 9).

• Discretion without hierarchy. Both Bills list broad goals without prioritisation or defined trade-offs. When goals conflict – as they inevitably will between enabling development and protecting natural character – the absence of hierarchy invites litigation and risk-averse interpretation. The RMA suffered from precisely this flaw. These Bills reproduce it (see Sections 3 and 5 of this submission).

• Centralisation without safeguards. The Bills’ hierarchical architecture funnels authority upward: national direction, environmental limits and regional spatial plans will shape outcomes for decades. If these instruments are poorly calibrated, errors become embedded system-wide and are difficult to correct downstream. Yet the Bills provide weaker procedural disciplines for making national direction than the RMA they replace, and no meaningful error-correction mechanisms at the bottom of the system. The Government’s choice to keep the primary legislation lean makes this worse, not better: the less the statute constrains, the more weight falls on national direction, and the greater the consequences if that direction is poorly made or politically captured. Localities need the means to discover when higher-level instruments impose disproportionate costs in particular places, and the authority to seek relief. Without such mechanisms, errors in national direction will persist uncorrected regardless of their local consequences (see Sections 6, 9 and 12 of this submission).

• Limits without discipline. Both Bills place considerable weight on environmental limits as a central organising concept. Any such limits will be set through political processes and will reflect compromises between competing interests – they will not be objective scientific findings. The question is not whether limits can be made “clear” but whether the process for setting them will be disciplined by rigorous cost-benefit analysis, grounded in respect for property rights, and open to revision as circumstances change. Without these disciplines, environmental limits risk becoming a vehicle for regulatory creep dressed in scientific clothing (see Sections 6, 9, 22 and 25 of this submission).

1.12     These are serious concerns. We are not asking the Government to abandon its architectural approach. We accept that a leaner primary Act with stronger national direction may be preferable to the RMA’s overloaded framework, provided the primary legislation contains adequate fail-safe mechanisms. However, our submission identifies two categories of change:

• Matters that belong in primary legislation because they do unique work that national direction cannot replicate. These include the statutory presumption in favour of property rights (Section 7), the put option for affected landowners (Section 9), and the core architecture for competitive urban land markets including agile land release mechanisms (Section 16). These provisions constrain and discipline the exercise of delegated powers. Placing them in national direction would defeat their purpose, because the powers they are meant to constrain are the very powers used to make national direction.

• Matters where the balance between primary legislation and national direction should be adjusted. These include defining key goal terms (Section 3), reinstating cost-benefit evaluation requirements (Section 12), and extending the regulatory relief framework to cover all environmental limits (Section 9). If the Government prefers to give these terms operative content through national direction, the primary legislation must at minimum define the outer boundaries within which that content must fall. Leaving the terms entirely undefined, as the Bills currently do, does not delegate content to Ministers – it delegates it to courts.

1.13     Understanding how the current drafting arose matters for the Committee’s work, because it identifies where slippage occurred and therefore where correction is needed:

• The 2024 Cabinet paper Replacing the Resource Management Act 1991 set a clear direction: property rights as the starting point, regulation narrowed to material effects on others, and shorter, less complex legislation.[3]

• The Expert Advisory Group (EAG) Blueprint, delivered published in March 2025, broadly tracked those principles but introduced architectural choices – broad goals without hierarchy, qualitative rather than quantitative thresholds, environmental limits as the central organising concept – that created the conditions for the drift we describe above.[4] The minority report to the EAG identified these vulnerabilities at the time and proposed specific alternatives: scope-defining purpose statements, quantitative materiality thresholds, and pre-negotiated compensation for regulatory overlays.[5]

• Cabinet's March 2025 decisions adopted some of the minority report’s recommendations but mostly accepted the EAG majority's structural architecture unchanged. It delegated many key decisions on the Bills’ architecture to officials.[6]

• Officials then drafted the Bills through 2025 within that architecture, and at several points the drafting moved further from the 2024 Cabinet paper's original intent: the section 32 cost-benefit evaluation requirement was removed without replacement, key goal terms were left undefined, and the compliance regulator was deferred.

• The result is legislation that reproduces the EAG's institutional architecture (two Acts, a funnel hierarchy, national standards, spatial plans, a planning tribunal) but drains it of operative force through the very mechanisms the minority report warned against. The Select Committee process is the last realistic opportunity to address this.

1.14     The success of RMA replacement will depend less on new institutional labels and more on whether the underlying incentives, disciplines and decision-making rules are materially improved. Some of the measures we are suggesting are of fundamental importance but would be strongly resisted by those who benefit from the status quo. These Bills are unfinished business in those respects. Much work is needed to get them back on the track set out in 2024.

[1]     The Nobel Prize for Economics, Press Release, 14 October 2024, https://www.nobelprize.org/prizes/economic-sciences/2024/press-release/

[2]     The 10 principles for reform agreed by Cabinet were: (1) narrow the scope of the resource management system and the effects it controls; (2) establish two Acts with clear and distinct purposes; (3) strengthen and clarify the role of environmental limits; (4) provide for greater use of national standards to reduce resource consents; (5) shift from ex ante consenting to strengthened ex post compliance; (6) use spatial planning and simplified designations to lower infrastructure costs; (7) require one regulatory plan per region; (8) provide for rapid, low-cost dispute resolution with a Planning Tribunal; (9) uphold Treaty of Waitangi settlements and Crown obligations; (10) provide faster, cheaper and less litigious processes within shorter legislation.

[3]       Ministry for the Environment, Cabinet Paper: Replacing the Resource Management Act 1991, October 2024, https://environment.govt.nz/assets/publications/Cabinet-papers-briefings-and-minutes/MfE-Proactive-Release-Replacing-the-RMA.pdf

[4]       Ministry for the Environment, Report from the Expert Advisory Group on Resource Management Reform Blueprint for resource management reform: A better planning and environmental management system 2025,  https://environment.govt.nz/publications/blueprint-for-resource-management-reform/

[5]       Ministry for the Environment, Blueprint for RM reform: Minority Report, March 2025, https://environment.govt.nz/publications/blueprint-for-rm-reform-minority-report/

[6]       Ministry for the Environment, Cabinet Paper: Replacing the Resource Management Act 1991 – Approach to development of new legislation, March 2025, https://environment.govt.nz/assets/publications/Replacing-the-RMA-MfE.pdf