A Government-ordered review has called to replace New Zealand's outdated, linchpin rulebook for the environment with two new ones – and also create legislation to deal with climate change impacts.

The top-level behind it has separately called for a shake-up of New Zealand's councils, arguing having 78 of them is "difficult to justify".

The independent review, commissioned by Environment Minister David Parker, explored what to do about the regulatory system built around the 30-year-old Resource Management Act (RMA).

It proposed starting over with two fresh pieces of legislation; a Natural and Built Environments Act and a Strategic Planning Act.

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Under the Natural and Built Environments Act, councils would be required to work together to produce one combined regulatory plan for each region.

It would require environmental bottom lines for certain resources like air, water, soil, biodiversity, and consolidate more than 100 RMA policy statements and plans into 14 combined plans.

The proposed Strategic Planning Act, meanwhile, would see long-term spatial strategies developed and agreed by central government, councils and mana whenua, with objectives and policies consistent with the purposes of the Natural and Built Environments Act and other laws.

"Managing the effects of climate change has been a significant focus of our work," said the panel's chair, retired Court of Appeal Judge Tony Randerson QC.

"We have concluded that the complexities of the process of managed retreat - for example in coastal areas - require new discrete legislation we suggest be called the Managed Retreat and Climate Change Adaptation Act.

"Our report identifies the importance of providing for a much more effective role for Māori throughout the resource management system and we make a number of recommendations about how this can be achieved."

Randerson said the legislative overhaul could also come with more "national direction" from the environment minister, along with a more streamlined process for council plan-making and a more efficient resource consent process.

"We also recommend the creation of a National Māori Advisory Board with a range of functions including providing advice to government and oversight of the resource management system from the perspective of mana whenua."

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Environment Minister David Parker said the review had been long overdue.

"The RMA has doubled in size from its original length. It has become too costly, takes too long, and has not adequately protected the environment," he said.

"There are significant pressures on both the natural and built environments that need to be addressed urgently. Urban areas are struggling to keep pace with population growth and the need for affordable housing.

"Water quality is deteriorating, biodiversity is diminishing and there is an urgent need to reduce carbon emissions and adapt to climate change."

While a big improvement on the previous system, the RMA, introduced in 1991, had failed to protect the natural environment, with a lack of adequate national direction, enforcement, and input from iwi.

"The RMA has favoured existing uses and consents, protecting established activities from changes to plan rules and standards designed to promote better environmental outcomes," the panel said.

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"The range of protections of this kind in the system is extensive, which seriously impairs the ability to respond to the environmental challenges New Zealand is facing."

It was also notoriously complex – something that was a result of both the RMA's own design and how it intersected with requirements across the Local Government Act, the Land Transport Management Act and the Building Act.

"Processes are complex, litigious and costly, and frequently disproportionate to the decision being sought or the risk or impact of the proposal."

The review noted how New Zealand had become increasingly urbanised, with recent population growth centred on cities like Tauranga, Auckland and Hamilton.

Our cities were now under pressure with rising urban land prices and some of the highest housing costs relative to income in the developed world.

"Poorly managed urban growth has also led to increasing homelessness, worsening traffic congestion, increased environmental pollution, lack of transport choice and flattening productivity growth," the review stated.

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Some councils - particularly in high-growth areas – were struggling to provide enough development capacity for housing in regulatory plans, along with enough infrastructure to support urban growth.

At the same time, rapid changes in rural land use had heaped even more pressure on our straining natural ecosystems.

Between 2002 and 2016, for instance, there was a 42 per cent increase in the proportion of farmland used for dairy, and a decrease in the area used for sheep and beef.

There was also continued intensification of land use and a shift to higher stocking rates.

"In farming areas, water pollution affects almost all rivers and many aquifers – which in turn affects the mauri of the water, human health and our ability to swim and enjoy our water for recreation," the panel reported.

"Land-based industries are critical to New Zealand's current and future prosperity, and to addressing global challenges like food supply, biodiversity loss and climate change.

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"A transition is needed to achieve sustainable land use and ensure cumulative environmental effects are sustainable across generations."

In the background, climate change was unfolding at an unprecedented rate and already affecting where people lived, while almost 4000 of our native species – including 90 per cent of seabirds – were threatened with or at risk of extinction.

Parker said the Government had already made changes to the resource management system over its current term to address issues that could not wait for the review.

"It is for the next Government to consider the report, and decide which aspects to adopt and decide whether to implement it in whole or in part."

But Parker said he expected political parties would develop their policies for the upcoming general election campaign in light of the report's findings.

New Zealand's Resource Management Act
New Zealand's Resource Management Act "has become too costly, takes too long, and has not adequately protected the environment", Environment Minister David Parker said. Photo / Mark Mitchell

National leader Judith Collins said the panel had come up with what her party had asking for over three years.

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"Labour has wasted three long years with RMA working groups when it could have done what National has been saying in the first place," she said.

"The three wasted years means New Zealand is in much worse shape to invest and grow our way out of the economic and jobs crisis than we should have been."

Collins said, if elected to power, her party would introduce legislation to Parliament within the first year giving effect to today's recommendations.

"We will pass it all before the end of our first term. The RMA is gone under National."

Outside the panel's terms of reference, Randerson saw a need to reform local government more widely.

"It has become clear to us that the resource management system would be much more effective if local government were to be reformed," he said.

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"The existence of 78 local authorities in a nation of just five million people is difficult to justify.

"Much could be achieved by rationalisation along regional lines, particularly in improving efficiencies, pooling resources, and promoting the coordination of activities and processes."

The panel also saw a need to finally resolve water rights with iwi.

"The Panel's view is that it would be desirable for the Crown and Māori to address and resolve this issue sooner rather than later," Randerson said.

"Without such a solution, we believe the allocation and use of water rights will continue to pose significant difficulties for all those involved in the system."

The Environmental Defence Society (EDS), which has proposed its own RMA replacement, broadly welcomed the panel's proposals.

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"In particular, replacing the RMA with a new piece of integrated legislation is a good step," said senior researcher Dr Greg Severinsen, who has been leading the EDS work on its system reform.

"It has become long, complex and cumbersome and has failed to protect the environment or provide for people's wellbeing.

"A future system needs to be more focused on what kind of future we want, not just the things we don't want to happen.

"We agree that national direction needs to be mandatory where a matter of national importance is at stake, and it needs to form a more coherent package rather than just adding a new instrument when a problem emerges."

But the EDS still wanted to see "deeper change", he said.

"For example, providing for a much smaller number of integrated combined regional plans would simplify the planning landscape.

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"We'll be delving deeply into the 500 plus page report, as the devil is always in the detail.

"But the report is definitely setting us on the right path."

Today's report comes three years after the Productivity Commission, in its report on how to improve urban planning, called for lawmakers to make a distinction, within a single statute, between the built and natural environments - and set clear objectives and principles for each.