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Legalising Corruption in a Neighbourhood Near You

Legalising Corruption in a Neighbourhood Near You
Weekly Column by Dr Muriel Newman

Today the Resource Management Act (RMA) is widely acknowledged as the greatest inhibitor of economic development and progress in New Zealand. Every Government report on compliance costs and red tape - estimated a decade ago to add up to $1.88 billion annually - has identified the RMA as a major cost to business. Many investors measuring up the significant cost hurdles simply decide not to go ahead. Others take their projects elsewhere.

The opportunity costs, including a two-year wait for Environment Court hearings, are huge. Estimates have been made that RMA delays to the Northern Motorway extension at Orewa will cost the region more than $400 million over the next five years. Auckland's Sky Tower took two years to build, but was stalled in the planning process for six years. A proposed Pak'n Save supermarket for Auckland's North Shore has been waiting 14 years for approval.

The RMA, drafted by the Labour Government in the Eighties to provide for sustainable development, was passed by National in 1991. It replaced the more prescriptive town and country planning laws with effects-based legislation that was meant to be 'enabling'.

The intent of the new law was to make virtually any development possible just so long as the adverse effects could be mitigated. If the project did not fit within local authority plans, then consultation with neighbours and other affected parties would be required, or wider public notification called for. The problem is that those enabling powers and the consultation process have allowed extortionists and busy bodies to interfere in the rights of others without incurring cost or responsibility.

In effect, the seemingly enlightened RMA introduced central planning on a grand scale. Back in 1945, Friedrich Hayek, one of the greatest social scientists of the twentieth century, warned against central planning as a significant threat to freedom. He cautioned that central planning was a socialist tool designed to erode free enterprise and believed that in the long term its effects would corrupt society.

His concerns have indeed materialised. It is now publicly accepted that the RMA has spawned widespread corruption of a sort previously unknown in New Zealand: coercion, extortion and blackmail have all become common practice.

Cultural audits from local iwi - demanded by local authorities under the RMA's ill-defined process of iwi consultation - are increasingly bringing cries of brownmail, while environmental groups are gunning for greenmail. Businesses are able to use the objection process to engage in anti-competitive behaviour, neighbours use it to be vexatious, and councils themselves can use the process to hold developers to ransom.

Probably the most contentious issue with the RMA is that it doesn't actually protect private property rights - arguably our most important guarantee of freedom. Instead, local councils can effectively 'steal' land from private ownership for public purposes without the need to offer proper compensation.

When the RMA was passed by Parliament, local authorities were given no guidelines over how they were to interpret the new law. As a result, different rules and regulations apply in the various local authority areas throughout the country. This has led to a compliance nightmare for national operators who need separate consents for each area.

But the problems do not stop there. Because the RMA itself offers no guidance whatsoever as to its interpretation, council staff must impose their own judgement and value set on each application. This results in disparities within individual councils, with ratepayers reporting that the consent process is either good or diabolically bad depending on which staff member they deal with.

What really confounds comprehension is that under the RMA some people must obtain a neighbour's consent to undertake trivial work on their properties, while in Whangarei a person has been given consent to establish a lion park in a rural area without the need for any form of public notification or consultation with neighbours. While some would say it is admirable that the council has enabled this to go ahead without the need to consult, it does appear to be a tad liberal - after all, any activity requiring a zoo licence can hardly be described as an ordinary pastoral activity.

Despite the merits or otherwise of this particular case, it does serve to illustrate the absolute extremities that the poor applicant faces when dealing with this law.

So, what should be done?

It now appears that the flaws with the RMA are so fundamental that no amount of tinkering can solve them. The Act needs to be re-written, using common law principles that enshrine private property rights and ensure that if these rights are compromised then compensation will be paid.

Only those affected by a project should be able to object, and individuals and groups who make spurious objections should have costs awarded against them. Iwi consultation should be restricted to the period during the development of local authority plans with sites of cultural significance being noted on the plan in the same way as heritage sites are identified.

On-site consultation between affected parties should be encouraged to help resolve differences and reduce the opportunity cost of delay, and minimum processing timeframes should be required of both councils and the Environment Court.

Our socialist Labour government supported by the radical Green party have no desire to repeal central planning laws. To change the RMA will therefore need a concerted effort. It is imperative that the flaws in the RMA - the costs, the delays and the corruption - be exposed for all the public to see. In this regard, The New Zealand Herald newspaper needs to be congratulated for its recent series that exposed the RMA for exactly what it is - a piece of legislation that has failed to deliver and needs to be replaced.


Dr Muriel Newman, MP for ACT New Zealand, writes a weekly opinion piece on topical issues for a number of community newspapers. You are welcome to forward this column to anyone you think may be interested. View the archive of columns at


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