Zoning approach urged for regions
New Zealand does not capitalise on its regional potential and should create special economic zones for a better approach to policy-making, a new report has found.
The New Zealand Initiative has proposed creating special economic zones that would see policy changed for regions that ask for it, and need it, but not in others.
The public policy think tank report, ‘‘In the zone: creating a toolbox for regional prosperity’’, says special economic zones could pilot policy reforms, with successful policies rolled out more broadly.
Allowing a more regional say on policy reform would not only let cities and regions find the policy solutions that work for them but would also act as case studies for other regions.
Authors Eric Crampton and Khyaati Acharya say it could be what New Zealand needs to bolster its flagging productivity growth. ‘‘It is an experiment worth trying.’’
A reform of the Resource Management Act targeted at Auckland housing, and restricted to the Auckland region, could track housing affordability as well as GDP growth and employment levels, they say.
This approach could allow Auckland to solve its housing crisis and the regions to find housing solutions that worked for them, ending much of the current adversarial relationship between central and local government.
The report highlighted China’s Shenzhen as a spectacular success, which showcased the possibilities of special zones.
This was more favourable for New Zealand than a federalist system, such as Australia and the United States, where different provinces set their own legislation, which would be overkill.
‘‘Trying policies in limited areas and assessing whether they work would allow New Zealand to harness the advantages of federalism in encouraging policy innovation, but within a unitary state ... We propose giving councils a bigger stake in economic growth … Councils will be able to identify barriers to their own growth that neither we, nor the Wellington bureaucracy, have thought of,’’ the report says.
Local Government New Zealand chief executive Malcolm Alexander said special zones were not new to New Zealand – in essence special housing areas in Auckland and the Canterbury Earthquake Recovery Authority (Cera) were already special zones, he said.
Special zones deserved serious consideration and were one of the 10 proposals outlined in the Local Government Funding Review to incentivise stronger economic performance in the regions.
The right resources and incentives must be in place to enable growth and a special zone would be a useful instrument to drive a better alignment between unlocking regional opportunities and achieving national economic objectives, he said.
Zones would address policies and regulations that were not fit for purpose at the regional level, while reducing unnecessary and non-productive red tape that can slow or deter growth.
Zones had been trialled in more than 130 countries and the lessons learned suggest conditions in New Zealand could support successful implementation, he said.
Wellington deputy mayor Justin Lester supported the proposal.
‘‘There are some clear examples why you’d accord territorial authorities more flexibility, such as the housing LVR restrictions impacting on first home purchasers all across New Zealand when the restrictions aim to dampen down Auckland’s housing market.
‘‘If there are innovative policies within a particular city, they should be accorded some flexibility to pursue them and be provided financial incentives for success.’’