Less bureaucracy, more flexibility

Law expert Mai Chen. Photo / Jason Oxenham

"Shocking slow, unresponsive and they can't get it right!" — that's how Mai Chen, managing partner of Chen Palmer Partners summed up the debacle over council administration of resource consents under the Resource Management Act (RMA).

Her stance is to some degree echoed by Mainfreight CEO Don Braid who says the current power that sits with councils to grant consents needs reform itself. "Councils need to be less bureaucratic and more pragmatic and flexible if they are to succeed".

Speed was a common concern among CEOs, many discussing the high costs associated with the time the process takes, major delays and the uncertainty around the outcome.

Says Stephen Selwood, chief executive of Infrastructure NZ, "The RMA is not delivering for New Zealand."

His view was echoed by an infrastructure specialist who said the problem was the absence of sensible planning legislation — "the RMA is environmental protection legislation, not planning legislation".

Since being passed in 1991, the RMA has been amended almost as many times as the years it has been in existence. But respondents to the Herald's CEOs Survey suggest many more changes are needed before it delivers for NZ businesses. Changes have been proposed by Government and Opposition, but the parties disagree on the most effective way to improve it.

Peter Thompson, managing director of Barfoot and Thompson, believes changes need to be discussed and enforced with a sense of urgency, "This is the biggest hand brake for all future building."

"One of the biggest costs of any new building project is resource consent costs and the way they are managed by Council needs a total revamp with urgency," says Thompson.

"This is one of the biggest reasons for housing unaffordability."

The Minister of Housing and Urban Development, Phil Twyford, appears to be following a similar approach to his predecessor, Nick Smith, by criticising Auckland Council and proposing to over-ride the Auckland Unitary Plan, which took years and multi-millions of dollars to create.

He argues that a lack of available housing in Auckland is largely due to ineffective land use planning, which is the council's responsibility.

Instead, Twyford has committed to introducing a single Urban Development Authority (UDA) in Auckland which could be established by late 2019. The UDA would be empowered to control the redevelopment of neighbourhoods in existing urban areas.

Approximately 15 areas have been proposed in Auckland, with Mount Roskill and Northcote featuring highly.

Whether Twyford's proposal will alter the consent process to the extent of pleasing businesses is a point of contention. But only 7 per cent of survey respondents agreed the council administration of the RMA was currently working for business. Some 62 per cent thought it wasn't; 31 per cent were unsure.

Businesses hope Twyford's changes will alleviate some of the costs now incurred during the consenting process, and that the UDA reform will bring change that benefits small and large businesses alike.

Business rate
Another point of contention with councils has been whether businesses should be required to pay higher rates than residential ratepayers.

Opinions were split: 34 per cent of respondents to the Herald's CEO survey felt businesses should pay higher taxes, 46 per cent were opposed, and 20 per cent were unsure.

After the 2010 amalgamation of local councils to form Auckland Council it was found businesses were paying 34 per cent of total rates, or 2.63 times more on average than residential ratepayers. Under the council's long-term differential strategy (LTDS), this was to slowly reduce to 25.8 per cent by 2036/37, or a 1.63 times premium, "approximately at a level that reflects the tax and GST advantages businesses have over residential ratepayers".

However, in the 2017/18 budget, the council voted to raise business and residential rates equally, pausing the differential reduction. Some 66 per cent of public submissions were in favour of this process which would, according to Heart of the City, keep businesses paying an average of 2.73 times more than other ratepayers.

Among those against maintaining the rates differential is the EMA's Kim Campbell who argues business already carries a disproportionate share of the burden.