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Natural and Built Environments Act (RMA replacement)

Submission on Natural & Built Environments Act (Exposure Draft)

August 2021


Overview


1. I would have liked to help refine a Bill that would comprehensively puncture our

catastrophic house price bubble. Alas there is almost nothing in this Bill likely to repay

such effort. There is almost nothing in this Bill to be studied with legal precision. It is a

set of slogans drafted to look like statute. But it foreshadows an extended grant of

decree powers over land use, to the Minister and some regional panels, yet to be

appointed.


2. Our rule of law is supposed to ensure that citizens can know what is lawful and what is

not, in advance, from written rules. Discretionary powers under the RMA have always

breached that principle – allowing the property rights promised by Article 2 of the

Treaty to be subject to the whim of neighbours or planners or courts, or even NIMBY

activists who are nowhere near your backyard and suffer none of the consequences of

their interventions.


3. I note that the Committee’s scope of inquiry is specifically limited to providing

feedback on the exposure draft and the material in the parliamentary paper that

provides rationale for the clauses in the exposure draft. In other words, it seems you

are directed to ignore submissions on what is missing from the draft. Accordingly I will

not describe what is missing, to avoid wasting my time and yours in trying to detail

how to remedy the deficiencies.


The critical reform task


4. Our house price bubble is a daily tragedy for many families. My generation and

Generation X now in power are directly responsible for the despair of many hard

working young parents. How can they not be outraged and disillusioned as they bear

the burden of grotesque undeserved wealth gains for preceding generations? Is it any

wonder that our productivity performance is disgraceful, when for two decades vast

sums in bank borrowings have been flung into inflating property prices, instead of

valuable business development? How can anyone in Parliament who has been part of

delaying the end of planner blight hold their head up as housing costs drive more and

more into state dependency, and our welfare costs blow out to meet rental burdens

that are an unprecedented proportion of the household incomes of the poor.


5. Everyone associated with the introduction of the RMA should be ashamed. Despite its

worthy intentions, it was plainly naïve from the beginning about human nature and

how people would respond to getting power to interfere in decisions on land use

changes. A hostility to individual right to decide how one’s own property should best

be used, without compensation from those who’d benefit from stopping change, was

baked into the RMA.


6. I admit to not recognising the scale of the disaster that was building when I was

Governor of the Reserve Bank. I warned people against investment in what we at the

Bank believed was likely to be bubble. I warned that property prices could go down as

well as up. That simply has not happened. None of us in the Reserve Bank then

realised how devastating bad law can be. None of us realised how entrenched with

self-interest it would become. None of us realised how hard it can be for productive

people to find ways around bad law.


7. There were big headlines when I urged people to stop treating houses as a riskless

investment. In all New Zealand’s previous history when prices signalled shortage, our

builders and land-owners would promptly provide more dwellings. And prices would

settle at levels that largely reflected the actual costs of building, plus the costs of

creating serviced sections.


8. My advice on house buying was absolutely sincere. We could not imagine that an

entire generation of politicians would connive to prevent the normal responses to

demand that had previously kept median house prices around the long run average of

a bit over three times the median household income. And I am sure none of us would

have predicted a Bill like the one before you, after all this experience, doubling down

on what was wrong from the start.


9. If I had been asked I’d have said it was inconceivable that Labour and National would

allow thousands of hard working families to incur debts they could never repay from

income, to blow out welfare costs in paying artificial scarcity rents to landlords.


10. But here we are. I submit that this Select Committee should refuse to waste time on

this Bill. It should tell the Government immediately to come back with a fresh start

that actually addresses the problems.


11. There is no point in pretending to treat seriously a Bill that is little more than a series

of conflicting aspirational claims, dressing up an intention to control future land uses

by Ministerial and Planning Committee decree.

No excuses for the feeble distraction which is this Bill


12. The drafters of the RMA had faith that wise planners and ‘community’ input (aka.

political veto power) would manage land use changes better than the countless

decisions of individual owners responding to changes in need (shown by prices). The

RMA was always bound to interfere with housing supply. The RMA deliberately

subordinated supply decisions to planners/lawyers, propelled by NIMBY selfishness.



13. But I could still excuse the original drafters’ good intentions and lack of interest in

economics, scarcity and perverse incentives. The RMA promoters were probably

blinded by their own noble environmental protection objectives.


14. The last five Governments in power don’t have that excuse. It has long been very

obvious that environmental protection has been a spurious excuse for endless

interference in routine land use decisions with little or no benefit for the natural

environment.


15. The Bill is remarkable for omitting nearly everything that might end the damaging

power of NIMBYs and planners, and the green idealists who have empowered them.

The Bill contains more puffy slogans, lists of competing, unranked and contradictory

purposes, goals and weasel words than the RMA. The lawyers, planners and other

vested interest beneficiaries of the status quo rely on the powers they get from the

naïve “principles” of the RMA. They will be even more confident of being able to

exploit the regime foreshadowed by the Bill.


What the Bill lacks


16. It is inexcusable that your committee is asked to review a Bill that shows:


a) Continuing political paralysis after the adverse consequences of the RMA

became increasingly clear, from around 15 years ago;


b) No removal of the discretionary powers that have got us to our current

predicament;


c) Foreshadowed repetition of the same environmental protection slogans to

justify doubling down on pretty much all the mistakes built into the RMA – that

is political and administrative control of land use decisions by people without:

i) any skin in the game;


ii) any obligation to apply disciplined analysis of costs against benefits;

iii) any requirement for understanding economics or even knowing opportunity

costs to the parties, or communities;


iv) any effective personal cost for imposing decision delay, or wasteful

information and other requirements;

v) any requirement for people who benefit from preventing change, or

imposing costs on their neighbours, to compensate;

vi) any obligation to compensate the generation of younger New Zealanders

locked out of fairly priced housing, by people imposing their own aesthetic

preferences;


vii) any discipline or restriction on temptations by iwi to impose their

superstitions and resuscitated cultural prejudices on the communities to be

ruled by their nominees;


viii) any protections against self-dealing or corruption by persons with power to

control land use decisions and who are not susceptible to removal in

elections; and


ix) any protections against entrenchment of iwi-nominated representatives

without any relevant qualifications and nothing to contribute to land use

decision-making.


17. All that can be deduced from the current draft is negative. It shows that:


a) The Government’s work is behind schedule;


b) There is no explanation of how current restrictions on intensification and

greenfield land availability will be removed;


c) There is nothing to give the highest priority to ending the price catastrophe for

young people trying to get into their own houses. Instead it looks as if the

highest priority is to add new Maori veto powers and privileges to centralised

versions of current processes;

d) There is nothing to show how the regime will mitigate the incentives and root

causes of the use of planner powers to block and delay development. In

particular the draft shows;

i) no recognition of the need to establish priorities among competing

objectives in land use control;


ii) no understanding of the behavioural dynamics that both drive planners

toward ‘kick for touch’ prohibitions without regard to cost, and justify or

excuse normal human exploitation of power over others; and


iii) no assistance to planning law decision-makers who want guidance on how

to establish cost/benefit and trade off disciplines.


e) Despite jargon talk of ‘outcomes’ and bottom lines, there is nothing to restore

reasonable predictability and certainty in the application of rules so people can

know what constraints will apply on land use changes within rational

environmental protections.



18. Instead of respecting Article 2 of the Treaty, the Bill cements in new de facto powers

to make up the law as we go, with reference to the fake so-called principles of the

Treaty, some of them directly contrary to the actual words of the Treaty.


19. Instead of reinforcing respect for rule of law principles, the Bill states an intention to

require subservience to undefined matauranga and other resuscitated relics of

religion.


20. Operatively, the Natural and Built Environments Bill and the proposed Strategic

Planning Bill are interdependent. Properly informed response on one is not possible

without seeing drafts of both Bills.


21. I note that the Select Committee has been asked to pay particular attention to

objective (e) – “improve system efficiency and effectiveness, reduce complexity, while

retaining appropriate local democratic input”.


22. The NBA draft does not provide anywhere near enough detail or specificity to merit

comment on such matters, other than general exhortation. People charged with

applying the RMA, and working under it, have suffered more than enough exhortation,

including from National Policy Statements and sections 5-8 of the RMA. Despite over

six months since the delivery of the Randerson Report, the Bill takes no further:


a) Introducing democratic and accountability elements to the planning

committees;


b) Providing clear legislative criteria for planning bodies to resolve contradictions

between competing slogans/objectives;


c) Imposing the discipline of compensation rights for people harmed by misuse of

the powers;


d) Stating the relative priorities of the outcomes listed in section 8;


e) Defining all important words and concepts to give a reasonable minimum of

legislative certainty;


f) Delivering on the promise to take into account the positive outcomes of

development. The easiest way to do so is a requirement for cost-benefit

analysis;


g) Making it clear who pays, what cost is to be tolerated and the scale required if

the Bill is going to require that the current environment is not just maintained

but “enhanced”. Enhanced in whose eyes? That of insects, who presumably

would like fewer insect predators? The eyes of humans, many or most of whom

show by their actions that they prefer substantially human modified

environments, with many non-indigenous plants and buildings. In the eyes of

people who need to house their families, who might well seek a typical suburban

environment.


h) Similarly, if “restoring” is maintained as a necessary outcome under clause 8, to

what state must the environment be restored. To a pre-human condition, the

preference of ‘restore Eden zealots’, who imagine a mythical pre Maori

landscape of indigenous forests and birds. To maximum diversity? That might

require dumping standards that require clear streams in favour of water with

much more biological enrichment, for example from farm animals. To talk

casually of “restoring” is to condemn the next generations of New Zealanders to

endless argument, as courts slowly create definitions from the negligent use of

empty slogans to masquerade as law.


23. Ambiguity in law delivers power and profit to lawyers. Lawyers notoriously resist

normal cost disciplines. They believe that what they do is all about “justice” so that it

is improper to demand that they trade off their Rolls Royce procedures for economy

speed and certainty. They can be indifferent to the costs borne by the rest of the

community.


24. The scant information in Schedule 3 on the planning committees indicates that there

will be no elected representation on the committees or any skill-based appointments.

Significant powers have been delegated to these people. But there are no

mechanisms to ensure this will not cause further delay or protection from corruption

or nepotism. This undermines basic principles of the rule of law and they conflict with

our basic democratic principles.


Conclusion


25. The Select Committee should not pretend to address the causes of the house price

catastrophe with comment on this Bill. An attempt at genuine reform should start by

recommending the inclusion of all the many elements that have been omitted from

the Bill. If anything like the current Bill proceeds, it will do more harm than good.


Don Brash

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