Mai Chen: Dangers in picking a fight with Auckland

Nothing to smile about for either Len Brown (left) or John Key. Photo / Natalie Slade

Government needs to look again at what the country's biggest city has become before it triggers a head-on collision.

Who wins when the Auckland Council and the Government do not agree on the approach to affordable housing, for example, or when Auckland's unitary plan should take effect? What happens when Parliament's view of the national interest is very different to that of the Auckland Council's, and/or Aucklanders' assessment of what is best for Auckland?

The Auckland Council is a much more powerful single voice than before, with more cohesion and alignment of thinking and collaboration. The Auckland Council legislation effectively created a state government in Auckland.

In Auckland, the mayor and his office are the state equivalent of the Prime Minister and the Department of Prime Minister and Cabinet, the chairs of main council committees are like state ministers, and the council as a whole is akin to a state government. It manages $4 billion of assets, is projected to bring in $3 billion of income this year and it employs 8000 officials.

The council is not like other local or unitary authorities. But legally, Parliament is supreme and the Auckland Council is an entity created by Parliament by statute. In a head-on legal collision, central government will always win because Parliament can change the law relating to the Auckland Council and its activities.

But the political reality is more complex, because Auckland ratepayers also vote in national elections. No party can hope to become the next government if it does not do well in Auckland. Therefore a head-on collision with the Auckland Council comes with considerable political risk for central government, particularly if Aucklanders prefer the Auckland Council's vision for Auckland, or tire of constant Government intervention in local planning decisions.

The debate between the Government and the council about the unitary plan and the issue of affordable housing is a case in point. Housing Minister Nick Smith's comment that the Auckland Council's existing metropolitan urban limit is "killing the dreams of Aucklanders wanting to own their own home" reflects the Government's view that the council is not doing enough to free up land for new housing.

The council says the replacement of the limit with a new rural urban boundary, as proposed in the draft unitary plan, including the gradual rezoning of greenfield sites to enable a further 160,000 houses to be built over 30 years, will resolve housing affordability issues. The council has therefore asked the Government to make the unitary plan effective on notification in September.

The Government disagrees and has refused to give the plan immediate effect. The Resource Management Reform Bill, now before the local government and environment select committee in Parliament, will require the plan to be referred to a Government-appointed hearings panel before it is implemented.

The panel will have three years - four if an extension is granted - to issue its recommendations. There will also be an appeals process. This gives the Government much more influence over the Auckland Council's planning decisions, and could mean the unitary plan is not effective for some time.

The Government's second stage of reforms to the Resource Management Act announced last month also fundamentally shifts the relationship between central and local government by allowing central government to step in and control decision-making in more areas than ever before. Consultation on this second stage of reforms to the RMA closes on April 4, and the Government has made it clear in the consultation document that it wants these reforms to be enacted this year. The Prime Minister's statement to Parliament made it clear the Government is "pushing ahead" with these changes.

The RMA reforms provide for more active central government involvement, through national policy statements, national environmental standards and the power to direct plan changes. A minister could direct the consulted and implemented unitary plan be changed under this new system. It is even possible that a newly created Crown agency could take over resource consenting in matters of national importance - such as increasing the amount of land available for housing.

There is no doubt these reforms are significant, and they are much broader than simplifying urban expansion and providing answers to housing affordability in Auckland.

These further reforms aim to achieve greater national consistency and guidance, fewer resource management plans, effective and efficient consent systems, better natural hazard management, effective and meaningful Maori participation, and working with councils to improve practice.

Decoding the spin, this means more central government influence or, in some cases, control over local government planning decisions, which is why these law reforms matter for Aucklanders.

The Government's desire to create legislative levers it can use to control critical decisions under the RMA is understandable, but the Auckland Council is not like any other local or even unitary authority. The Government needs to look again at what the Auckland Council has been transformed into, and adjust its view and approach.

Mai Chen is a partner in Chen Palmer and adjunct professor at the University of Auckland business school