Coalition puts pro-development stake in the ground
The 100 days is up. A fair bit of repealing, other initiatives started, but right at the back end of the period we are starting to see the National, ACT and NZ First coalition bring its own thinking to Government.
This has happened in three ways in the past three weeks: housing policy, transport policy and in the new RMA fasttrack scheme.
It was also a week in which the prime minister’s Wellington residence and the NZDF plane in which the prime minister sometimes travels were both confirmed to be in various states of disrepair. Years of non-decisions based on the political difficulty of spending on them have meant that both have likely ended up in this Government’s lap.
In an interview with The Post on Thursday, Prime Minister Christopher Luxon said it was symptomatic of a wider problem.
“It is frustrating because essentially, successive administrations have just deferred decisions, right? And you can always defer a decision. You can always defer investment and capital, but it's not just a Premier House or the airplane.”
“You sit across New Zealand, you know, seeing the state of our roads, you see it instead of our core infrastructure, where a lot of decisions have been deferred.”
This is the fundamental problem that, among all the others, this Government sees itself as elected to fix. And it knows that in order to shift New Zealand’s political economy more in its favour, it has be seen to be doing so by the public.
The significance of the fast-track legislation cannot be understated. Three ministers - RMA Reform and Infrastructure Minister Chris Bishop, Regional Development Minister Shane Jones and Transport Minister Simeon Brown - will now be the ultimate decisionmakers on what big projects in New Zealand get approved.
This is a huge grab of power towards the centre and reflects that central importance of getting projects under way for the current Government - both practically and politically.
If Covid-19 demonstrated anything, it was that the New Zealand public is quite comfortable with central government grabbing power if the reason is considered good enough. The political test is now whether that holds for infrastructure (spoiler: it probably does).
The process will be simple enough: the Government will select an expert advisory group which will evaluate projects to be put on to Schedule 2A of the Fast Track Approvals Act.
When that list comes out, ministers will choose which to prioritise and those will be sent off to an expert panel which is basically the technical advisory group headed by a judge (to be appointed) and made up of RMA practitioners who will apply permit and consent conditions to the various projects. That could cover hours of construction, environmental conditions, noise and so on. The panel then presents those projects back to one of the three ministers for approval. If the conditions are considered too onerous, ministers can refer them back to the panel.
A small, but very important change is being made to this panel, which also existed under the current RMA fasttrack system introduced by the previous Labour government. Under the current rules, members of that panel are paid a fee by the applicants at a rate set by the Government.
Under the new rules, those panel members will be able to charge market rates for their services and the new Government’s hope is that this will mean a lot more experts get into the business of working on fast-track consents, and that supply will meet demand and clear projects on to ministers quickly.
As government ministers and MPs have got around the country, there has evidently been a sense coming through of some applicants who were prepared to pay more to get their applications moved quickly. The Government hopes that this will now occur.
On Schedule 2B, the expectation seems to be that there will basically be a massive laundry list of projects in the pipeline, but not necessarily ready to go for consent. One such example will be the second Mt Victoria tunnel - which the new Government is committed to, though final route plans haven’t yet been made.
The projects on this list will then be given extra weighting in considerations, because Parliament has deemed them, in legislation, as important projects.
Consultation on the bill is now open and it will go through select committee over the next six months.
The breadth of projects it could throw up will be significant. As Bishop said on Thursday,
“It's sort of self-defining projects that are regionally significant in terms of job creation, economic value creation, when it comes to a road - congestion benefits or savings”.
That could range from big greenfield housing developments to motorways, to aquaculture to mining to renewable energy generation and much more besides.
Coupled with the Government’s Policy Statement on Transport, which was released Monday as well and is best described as “roads first”, there is now a clear message to would-be foreign investors: come to New Zealand.
Bishop and Jones will be expected to get out of New Zealand and sell the story that if big companies - and big infrastructure investors - want to come to invest or set up shop in New Zealand, that projects will be approved quickly and that the government finance side will be sorted. Luxon will be doing the same, as will Foreign Minister Winston Peters. David Seymour’s regulation ministry will be trying to further reduce regulatory cost and burden.
Under the new rules, those panel members will be able to charge market rates for their services and the new Government’s hope is that this will mean a lot more experts get into the business of working on fast-track consents, and that supply will meet demand and clear projects on to ministers quickly.
Getting New Zealand more investment to generate more revenue and wealth for the country is the uniting goal of this coalition. We are now seeing some of what that looks like.
The new national infrastructure agency that Bishop is setting up is expecting to operate effectively as a shopfront to take inquiries and put together deals with domestic and foreign investors.
Unlike many government projects in New Zealand, it will be much more open to foreign capital and expertise, through either public-private partnerships, or bids for projects from long-run pension funds around the world.
The Government now has a story to tell overseas, which Luxon began telling in Melbourne this last week when he visited the ASEAN Summit hosted by Anthony Albanese. He met with every ASEAN leader. He is now talking about the first stop for potential investment being in the region. This will be a concerted effort for the next three years.
Obviously there are some sensitivities around foreign investment with NZ First, but it is highly unlikely any of them will be triggered by foreign cash to build new things. Instead, these relate more to farmland and buying houses.
These changes will be welcomed by some people and greeted with horror by others. But it will certainly change the country and if the Government gets it way, New Zealand will becomes a much more pro-development country.
Given the run-down state of much of the country’s infrastructure and high house prices for a lot of pretty poor housing stock, that will be a welcome development for many. But talking about big projects and building them are two different things.
And given the three ministers will now be the local deciders, it could affect the Government’s political fortunes very directly.