RMA reform: New planning system will move cost of planning from private to public sector

Environment Minister David Parker announced in February that the Resource Management Act would be repealed and replaced. Photo / Mark Mitchell

Changes to the Resource Management Act are likely to shift the balance of who pays for the planning system from the private sector to the public sector.

An assessment by the Ministry for the Environment (MfE) of the exposure draft of the Natural and Built Environments Act (NBA) - the first of a series of legislative changes which will reform New Zealand's planning framework - was released on Monday.

It found that, overall, the system would lead to lower costs in the planning and consent system, reducing the overall cost of planning by around $85 million a year.

MfE estimated the current system process costs are around $1.2 billion a year, around two thirds of the cost being faced by users, the rest by Government.

But both local and central government were likely to face added costs overall, more than offset by even larger savings to the private sector.

"The increased investment from Government would be a shift in 'who pays' for the [resource management] system from private users to the public sector," MfE's regulatory impact assessment said.

"Such a shift may be appropriate, given the public good benefits generated by a well-functioning RM system, which accrue to all New Zealanders, including future generations."

MfE estimated that central Government would face added costs of between $19 million and $49m a year, the largest component being around $5m a year in direct funding to assist iwi and hapū organisations to participate in the resource management process.

MfE was also expected to take on around an extra 30 staff "to undertake ongoing monitoring of targets and environmental limits" which would cost around $4.5m a year.

Local government costs would increase by around a net $43m overall a year across the country, MfE said, with added costs in monitoring and enforcement offset by expectations that clearer planning rules would lead to less costs for commissioners and litigation.

Those applying for consents, meanwhile, would reap savings of around $150m a year, MfE estimated.

The bulk of the savings would come from fewer applications being made because the rules would be clearer, including a cut in those hoping to exploit uncertainty.

"In the current system, uncertainty in plans generates more consents, because some applicants will be willing to submit contentious consents based on a perceived chance of success that exists due to plan uncertainty. As plans become more certain, users can better judge which activities are likely to receive consent."

Overall, the cost to users of the planning system was estimated to fall by around 19 per cent, while the costs of central Government would more than double, while local government costs would increase by 11 per cent.

Environment Minister David Parker released the exposure draft of the Natural and Built Environments Act at the end of June. The draft has been referred to a select committee in order to provide public feedback before legislation is introduced to the House.

"The RMA takes too long, costs too much and hasn't protected the environment," Parker said.