Towards a system that respects property rights: tidy tweaks or real change?

NZ Herald

18 hours ago

Yet beneath these improvements lies a fundamental question. Are they stepping stones toward the Government's promised property-rights-based system, or just necessary patches stuck on a fundamentally flawed framework?
The infrastructure and development package demonstrates coherent reform. It recognises that efficient infrastructure and housing supply are prerequisites for a functioning society.
New national standards for electricity networks, telecommunications, and renewable energy would sweep away inconsistent local rules that add significant time and cost for infrastructure projects – $1.3 billion a year in consenting costs alone, according to the Infrastructure Commission.
New standards could cut $1.3 billion in annual infrastructure consenting costs.
The proposed standards for granny flats could unlock thousands of affordable housing options.
The freshwater reforms show promise by abandoning a rigid environmental hierarchy that has paralysed decision-making. The current approach of 'environment-first' (and arguably second, third and fourth) prevents councils from properly weighing economic and social benefits against environmental costs.
It has created regulatory straitjackets that are not working, pleasing no one. Replacing this with objectives that treat environmental, social, and economic factors equally represents a crucial shift toward a balanced approach.
Proposals to rebalance Te Mana o te Wai would reduce layers of assessment that add uncertainty, time and cost to freshwater management. Removing its rigid hierarchy of obligations and principles and its extra layers of policy and decision-making processes would mean freshwater would revert to being managed like any other natural resource under the RMA.
Resource management changes promise infrastructure, freshwater balance. Photo / Tania Whyte
It would let councils better balance economic development with environmental protection. Crucially, it would restore the regulatory certainty businesses and farms need to invest, expand, and create jobs.
An alternative to heavy-handed regulation would allow market-based instruments to align private incentives with public objectives. Rather than mandating specific outcomes through complex rules and stifling processes, pricing mechanisms and tradeable permits could achieve superior environmental results while preserving choice and encouraging innovation. Making more use of them would revolutionise not only freshwater management but also biodiversity protection and urban development.
Other elements of the packages reveal some contradictions. The continuation of the National Policy Statement for Highly Productive Land, even with modest changes, exemplifies how good intentions are inconsistent with broader policy goals. While food production is of course important, the policy artificially constrains land use on urban fringes where housing growth naturally occurs.
The irony is stark. A Government committed to property rights as the foundation of resource management simultaneously maintains regulations that prevent landowners from responding to market signals or pursuing their highest-value land use. The restrictions not only inflate housing costs but also demonstrate an assumption that politicians and bureaucrats can better determine land use than property owners themselves.
Balancing reform goals with property rights in NZ.
These policy choices matter. Property rights create incentive structures that drive innovation, investment, and responsible stewardship. When regulations unduly constrain these rights, particularly without compensation, they generate perverse outcomes that can harm both economic efficiency and environmental quality.
The current consultation is also silent on compensation for regulatory takings. When national direction significantly constrains landowners' development rights, affected parties should not bear the full cost of delivering public benefits.
International experience offers various models for addressing this fundamental fairness issue, from statutory compensation triggers to targeted buyout schemes.
Chances to tweak a bad system should of course be taken, but they will remain patches on a bad system. Comprehensive reform in the form of RMA replacement remains crucially important.
Minister Chris Bishop's speech to Local Government New Zealand's conference yesterday shows the Government is still committed, which is reassuring.
In the meantime, the test of any interim tweaks should be simple: do they enhance or erode the principles that will govern the replacement system? On this measure, the specific proposals largely point in the right direction, but some could be better.
After many attempts to fix the RMA, New Zealand once again stands at a resource management crossroads. The path toward property rights, market mechanisms, and genuine choice remains open. Taking it would unlock decades of suppressed growth and innovative ways to improve the environment.
Taking the other path would condemn New Zealand to more of the same dysfunction that has plagued us for a generation. It is a path we simply cannot afford to take.