Cross-Sectoral Issues

Regulatory Issues

335. In the context of infrastructure, the objective of regulations is to ensure sufficient certainty and consistency for business to operate competitively and with confidence, and with minimum transaction costs. New Zealand’s productivity performance has been very low by international standards (22nd out of 30 OECD countries) and there is concern that this may in some part be the result of the cumulative cost of compliance, particularly on small businesses. Consequently the government has initiated a regulatory review programme to identify and remove inefficient and superfluous regulation.

336. The regulatory review programme sets out general principles for good regulation which include that it:

a) Be the minimum necessary to achieve its objectives, having assessed costs, benefits and risks;

b) Be as generic and as simple as the sector allows;

c) Be appropriately durable, predictable and adaptable;

d) Where appropriate, accord with international best practice while being mindful of our commitment to a single economic market with Australia;

e) Minimise compliance costs imposed; and

f) Aim to minimise adverse impacts on:

1. Innovation and investments;
2. Competition;
3. Individual responsibility (with appropriate risk balance); and
4. Property rights.

337. In conjunction with this, the Infrastructure Plan will have a particular focus on identifying and reducing existing hurdles to investment in infrastructure. The following sets out the intended impact of changes in legislative and regulatory reform already underway.

Resource Management Act

338. The Resource Management Act 1991 (RMA) is the principal legislation for managing New Zealand’s environment and allocating natural resources. The RMA is intended to provide a legislative framework that enables integrated regulation (covering local planning and environmental effects) at regional and local levels. In practical terms, this means that decisions on resource management issues, both in the planning process and in specific consents, need to take into account social, economic and cultural considerations, in addition to the direct physical effects of proposed activities upon the receiving environment.

339. The government believes that the RMA is creating unnecessary delays and compliance costs which are hindering economic growth and infrastructure development. Streamlining and simplifying the Resource Management Act is an important part of the government's overall economic strategy (especially given that its programme for economic recovery includes major infrastructure investment).

340. As a result, the government has launched a major reform of the RMA. In the first phase, it developed a package of proposals to streamline and simplify process. The Resource Management (Simplifying and Streamlining) Amendment Bill, which will implement this package, is currently before the Local Government and Environment Committee.

341. Phase two of the RMA reforms will progress over a longer timeframe and examine a range of more complex issues. The primary objective of these reforms is to achieve least cost delivery of good environmental outcomes, including (among other things) improving the economic efficiency of implementation without compromising underlying environmental integrity.

342. Specific areas for investigation include aquaculture, the role and functions of the Environmental Protection Authority, fresh water management, and urban design and infrastructure issues.

343. With regards to infrastructure, the government will:

• Review the role of designations in facilitating infrastructure development and examine options for reviewing and streamlining the designation mechanism;
• Investigate the alternatives to designations for planning for and managing the effects of activities on network infrastructure;
• Investigate alternative options for compensation under the Public Works Act 1981; and
• Streamline and integrate processes under the Public Works Act and other legislation.

344. The objective is to remove unnecessary barriers and identify new mechanisms, so that infrastructure development can be progressed in as timely a fashion as possible.

Reviews and legislative changes

345. The Corrections Contract Management of Prisons Amendment Bill, which removes the prohibition on the use of public private partnerships in the management of prisons, is currently being considered by Select Committee. The Infrastructure Bill changes utilities’ access to transport corridors and provides for a mandatory code of practice to manage the use of transport corridors by utilities. There are also a number of reviews underway including reviews of Land Transport Management Act, Local Government Act 2002, the Building Act, the Watertight Homes Resolution Services Act, and the Overseas Investment Act and Regulations and the Electricity Review. Complementary measures to facilitate the roll out of Broadband are also being considered. This may or may not involve regulatory changes.

Other possible regulatory initiatives

346. The New Zealand Council for Infrastructure Development (NZCID) has drawn attention to the multiplicity of legislation and approval processes that sometimes apply to infrastructure developments and has advocated legislating for a single consenting process, at least for nationally critical infrastructure[94].

347. The practice of requiring detailed specification of projects before a resource consent can be obtained under the RMA is difficult to reconcile with the desire to encourage innovation. While there have been instances where applicants have successfully obtained ‘outline consents’, in practice this is often difficult. Consideration could be given to legislative changes that make this easier.