The cost of successive resource management reform will easily top a quarter of a billion dollars, but will it go higher still? - Public Purse

RMA Reform Minister Chris Bishop announcing the Government’s controversial fast-track projects during a press conference at the Beehive, Wellington, 06 October, 2024. Photo / Mark Mitchell

THREE KEY FACTS

• The Government has announced plans to replace the Resource Management Act.
• It plans to introduce two new pieces of legalisation.
• The RMA has had 18 major amendments since 1991.

Kate MacNamara is a South Island-based journalist with a focus on policy, public spending and investigations. She spent a decade at the Canadian Broadcasting Corporation before moving to New Zealand. She joined the Herald in 2020.

OPINION

Both of New Zealand’s big political parties agree cumbersome planning laws must change: the system must allow for greater ease and speed in building houses and infrastructure, for example, and it must also weigh the value of and protect the natural environment. The consensus goes no further.

Thanks to the political rancour resource management and its legal heart, the Resource Management Act (RMA), inspires, we’re now coming to the end of our fourth year of intense reform, with about $200 million spent and little yet to show for it.

And while the total cost is budgeted to reach well over $250 million by the next election, it may well rise further.

First, how did we sink so much cost for, as yet, so little? That requires some review.

The “preliminary costs” of RMA reform before Budget 2021 were not tracked and cannot be totalled, according to a Ministry for the Environment (MfE) spokesman.

But we do know that in 2019 the Labour Coalition spent $589,000 on a panel to review and outline a redesign for the resource management system, chaired by retired Appeal Court Judge Tony Randerson KC.

From 2021 through to last year’s election, the Labour Government spent a further $181.7m, centred on replacing the unloved RMA with two even lengthier pieces of legislation — the Natural and Built Environments Act and the Spatial Planning Act — and preparing for implementation.

Those replacement laws were set to be introduced very gradually, over 10 years, but on passing into law in August last year that plan was almost immediately swept aside.

All three parties in the National-led Coalition Government campaigned on repealing and replacing Labour’s planning reforms (rejecting them as more cumbersome and complex than the old system), and late last year, under urgency in Parliament, they did just that. The old RMA is reinstated, while a new alternative is hatched.

So far, the cost allowed for this work is considerably lower than was provided under Labour, but there are doubts that it will be enough.

Budget 2024 earmarked a fresh $92m for the job of replacing the RMA and of making additional select reforms to the Act and the system in the meantime. The Budget provided $24m a year for three years, including the current one, and $21m a year thereafter (the total cost of new budget initiatives is calculated across the first four years).

A trio of these additional reforms are RMA amending bills currently making their way through Parliament: the Fast-Track Approvals Bill, which has certainly been the most controversial, and two further RMA amendment bills, which tackle what the Government calls “quick fixes”.

The MfE has primary responsibility for these reforms, and it’s worth noting that Budget 2024 funding was scaled back from the MfE’s preferred bid, which totalled $120.85m for operating expenses.

The Budget documents have redactions and it’s not clear exactly what consequences the reduced funding could have.

They may prove to be unimportant, it’s not unheard of for agencies to submit well-padded bids for budget purposes, the better to insulate themselves from an anticipated paring exercise by the Treasury and the Minister of Finance.

But there does seem to be some difference of opinion between the MfE and the Treasury on the matter of whether additional funds will be required.

Treasury documents note an ongoing annual $21m is already built into the resource management reform budget (from 2027/28), and will provide for the system’s ongoing operation and “support system change.”

However, the MfE’s budget bid documents explicitly exclude costs for “the implementation of any specific measures” (distinct from ordinary course operation), and they say there is no money, as yet, for extraordinary costs such as: rolling out a new resource management plan; training and guidance, including for councils or iwi; and for different compliance and monitoring systems.

The bid documents note that this funding would be sought in next year’s budget or later.

If more money is required, the Government’s funding options will almost undoubtedly be more circumscribed than they were for Budget 2024, when much new work was paid for with money redirected from the previous Government’s priorities. That well will look much drier next year.

The new fast-track system also presents the possibility of escalating costs.

Trans-Tasman Resources' offshore Taranaki seabed mining plan is among the projects listed for inclusion in the Government's controversial fast-track consenting regime. Photo / NZME

A surprisingly large number of projects of significant regional or national benefit (149) will be listed in the legislation for fast-track consenting treatment. (The independent advisory group headed by David Tapsell helped the Government select projects and has billed $268,650 to date, though travel and meetings costs must still be added; this expense is not paid with RMA Reform funding, but from the Ministry of Business Innovation and Employment’s budget).

Once the bill passes — by Christmas according to the Government’s timeline — the proponents of these projects will be able to lodge applications with the Environmental Protection Authority (EPA), whose job it will be to convene panels of experts to consider project merits and decide consenting terms, if consent is granted.

The legislation provides for an applicant-pays model (cost recovery), but exactly how this will happen is not yet clear. Some agencies involved, such as the EPA and local councils, have well-developed systems for cost recovery, but this is not the case for all public agencies, and MfE officials have previously warned that some agencies likely to be involved in the fast-track process have no cost recovery systems in place.

The fast-track system also presents an elevated legal risk. In an attempt to blunt heavy criticism of some features of the bill, the Government has recommended considerable changes, including removing ministers’ power of final decision-making over projects.

But given the high profile and contentious nature of some of the projects to be listed (seabed mining for example) law firms, including Russell McVeagh, say there remains a heightened risk of judicial review and appeal proceedings.

Last month, the Auditor-General announced his office would conduct an inquiry into how ministerial conflicts of interest are identified and managed, with a particular focus on the decision-making about projects chosen for inclusion in the Fast-Track Approvals Bill.

Finally, how fast the process turns out to be will depend on the EPA’s ability to convene panels quickly to consider the listed projects (and any others referred by the Minister of Infrastructure to the process).

If this proves slow, there will be pressure to lubricate it with further funds, not least because it is central to the Government’s plan to unbridle economic growth.

Speed, or rather the risk of its absence, is also a broad concern for the Treasury.

Earlier this year its officials told Chris Bishop, Minister for RMA Reform: “We consider that it will be very challenging to deliver this [RMA reform] work programme over the course of this term, particularly due to the level of engagement required to work through settlement implications with Treaty partners.”

The main work of actually replacing the RMA is only now getting under way. All that’s been decided to date is that it will be underpinned by a handful of principles, chief among which is an owner’s right to the enjoyment of property and an expert advisory group, headed by Bankside Chambers lawyer Janette Campbell, is to provide a blueprint for replacing the Act with two new laws before Christmas. The Campbell group was announced in late September and will have roughly three months to do its work, by comparison the Randerson panel of 2019 took a year.

The Cabinet will need to agree to the key points of this blueprint as quickly as possible and thereafter a flurry of policy work and legislative drafting can begin. The Government’s ambitious plan is to introduce the new bills to Parliament next year and pass them into law by mid-2026, ahead of the next election.

The bulk of this work will fall to the roughly 145 full-time equivalent officials in the MfE working on resource management. On the bright side, they’ve been at this reform business for over four years now, they should be adept at it.

The Public Purse is a fortnightly Herald column focused on the public sector and how taxpayer money is spent.