RMA reform is the path of least resistance - but not to salvation

Thursday, 18 December 2025

A line-up of politicians - ACT’s David Seymour and Simon Court, and National’s Chris Bishop - at a briefing on the RMA reforms package. Aeron Davis wonders whether what they are selling is what the country needs.

Dr Aeron Davis is professor of political communication at Victoria University of Wellington/Te Herenga Waka.

OPINION: On Tuesday last week came the long-awaited announcement and details on reform of the 1991 Resource Management Act (… again). The headline was that the single RMA was to be replaced by the Spatial Planning Bill and the Built Environment Bill. The proposals have been widely trumpeted as “the major” legislative achievement of the coalition Government.

Politicians, advocacy groups and journalists all quickly weighed in on the 744 pages of draft legislation. Critics wondered how this attempt differed from the previous Labour government’s efforts. Several argued that it gave more power and profits to developers and wealthy property owners at the expense of the natural environment, iwi and communities.

For advocates, the RMA, outdated consenting processes and fragmented planning regimes have held the country back for decades. As Chris Bishop, the minister in charge, declared, “the RMA is the root cause of our housing crisis… has acted as a handbrake on growth and opportunity”. The Castalia consultancy had crunched the numbers, declaring the proposals would save the country $13.3 billion and increase annual GDP by 0.56% (with the usual qualified hedging).

New Zealand’s building sector is precarious, dependent on a huge proportion of small-scale operators, many of whom are only one downturn away from collapse and exposing the country to a personnel and supply chain crisis, writes Aeron Davis.

But whether critical or supportive, what few have questioned is whether the RMA and planning system are the real root cause of the country’s housing and infrastructure problems.

Yes, reforms will help but only to a degree. Successive waves of such reforms, initiated since the early 2000s, have not really improved matters anywhere. The trouble is, planning issues are only one (possibly small) cause of the infrastructure and housing deficit. They are highlighted so often as they represent the path of least political and economic resistance. It’s the one thing that a diverse range of developers, property sector companies, consultants and cross-party politicians can all agree on. Focusing on planning means not engaging with other, far more complex and fundamental challenges.

Chris Bishop, the minister who has been leading the charge for a fundamental overhaul of planning laws - although Aeron Davis argues he may be focusing on one of the most modest impediments to New Zealand’s development.

I’ve talked to several mayors, construction company CEOs and others – those who don’t inhabit the Beehive bubble for a living. They all acknowledge the planning and RMA issues. But most also think things like the National Policy Statement on Urban Development has already achieved what was needed. It directed the RMA to function as originally intended. The Auckland Unitary Plan proved pretty useful too, hence the push to regional consolidation.

However, they also offer many other explanations for the deficits. Local councils, whatever their deficiencies (and they admit to many), quite simply don’t have the resources or risk appetite to support big developments. They can’t invest in the massive infrastructure needed to support growing populations in advance of big developments. They can’t afford the risks created by a building system which leaves councils ultimately liable for fixing constructor failures. Remarkably, there is no collective insurance agreement in place for New Zealand’s building sector.

Large developers, for their part, know a large piece of the puzzle resides in the building sector itself. Small firms (of up to five employees) make up 91% of the construction industry in Aotearoa. They have little business knowledge and are full of unskilled and semi-trained people. Their precarity means that they are one local downturn from collapse. Economic recessions of the past and present mean a nationwide collapse of the sector and a quick exit of the capable to Australia. When the next construction upturn comes there will be a dearth of personnel and supply chains to service the coalition’s growth plans.

And when I go and speak to tax experts and independent economists, it becomes clear that financial and fiscal settings encourage housing markets over house building. House buying and selling is more profitable and less risky for banks than house building. So, levels of mortgage-lending are many times that to businesses or agriculture. Likewise, Aotearoa is a clear OECD outlier when it comes to property taxes. No CGT or inheritance tax. Mortgage interest tax deductibility was phased out in the UK back in the 1980s.

Lastly, our political system in practice is too short-termist. People who have spent a professional lifetime trying to fix housing issues all lament the way every new government ignores the evidence and trashes previous investments. Central governments blame local councils. Too many local officials think it’s a central government problem. And no-one wants to upset the voter before the next election.

Each of these issues are a lot more challenging than fixing the RMA and an outdated planning system. They require more cooperative engagement structures and practices, between central and local government, public and private and third-sector entities. They need properly trained, supported, consolidated and insured construction and local authority sectors. Financial, monetary and fiscal policy settings need to be redirected to support real economy activity rather than speculative housing (and asset) markets. And yes, we need political reform.

Put that way, you can guess why it’s easier to just try and reform the RMA … again.