Finanace and Infrastructure Minister Grant Robertson addresses the conference virtually

The Government is ready to turn the reform of the Resource Management Act next year into the basic tool to define what sort of country New Zealand becomes as it recovers from Covid-19.

It will couple the new Acts with its $42 billion infrastructure programme to essentially rebuild New Zealand.

What was clear at the InfrastructureNZ Building Nations Symposium in Auckland yesterday was that the Government,  planners, the construction industry, engineers, environmentalists and local Government regard the RMA reforms as so fundamental that they present a once in a lifetime chance to define what sort of country we can build.

Getting them right will be critical.

The Prime Minister, opening the symposium, underlined that the Covid-19 recovery would not be business as usual.

“I don’t need to tell you that any recovery plan for New Zealand cannot and should not be a return to the status quo,” she said.

“It’s about taking a crisis and turning it into a once in a lifetime opportunity to build back better to address decades of underinvestment, to build the infrastructure the next generation needs and deserves, and to do it together in partnership with local government, the private sector and with iwi.”

But if previous InfrastructureNZ conferences have been dominated by questions about where the money might come from to build existing infrastructure proposals; this one flipped that question.

It is now what do we do with all the money that we’ve got.

The Government has committed an additional $42 billion to infrastructure spending on top of the $12 billion it announced back at the beginning of the year in the so-called  “New Zealand Upgrade”.

But Finance and Infrastructure Minister Grant Robertson sees infrastructure in broader terms and whereas his predecessor as Infrastructure Minister, Shane Jones, tended to see infrastructure spending as a way of growing jobs; of getting “the nephs off the couch”, Robertson is linking his Infrastructure portfolio to his Finance portfolio and his focus there on “wellbeing”.

Primary quality infrastructure is essential, for example, in addressing the productivity challenge that has inhibited our financial wellbeing over many decades or in the natural capital space, ensuring that our investments enhance sustainability and contribute to meeting our climate change goals,” he said.

“It is essential in supporting the development of our people or human capital, as the framework calls it, in areas such as the supply of affordable, warm, dry housing or in building social capital through connecting our communities publicly and in real life in all of these areas.

“Infrastructure is essential to growing and improving our wellbeing.”

POLITIK Treasury Secretary Caralee McLiesh in conversation with ANZ Chief economist Sharon Zollner at the conference

The more specifically financial question of whether the country could afford the massive borrowing to fund the infrastructure programme was addressed by Treasury Secretary Caralee McLiesh.

“I remember when I first started at the Treasury about a year ago that net debt to GDP at that time was nineteen point two per cent,” she said.

“It seems like a very long time ago.

“Now we expect over the next four years that ratio will be more than 50 per cent.

“But our view at the Treasury is that those levels of debt are manageable because borrowing costs are really low and  they’re expected to remain low for some time.”

Rather than focusing in on the levels of debt Treasury’s view was that it was more important to focus on value for money, she said.

“In thinking about debt, we need to think about sustainability as well at this point,” she said.

“Large temporary deficits are needed to support the economy at large, temporary deficits, but as always, we need to make sure that we maintain discipline on underlying revenue and expenses and make sure that we still manage through some of the significant cost pressures that all governments face, like rising health costs and changing demographics, climate change and so on.”

The symposium got a taste of the kind of issue that the country will have to confront as it recovers from Covid-19 from British urbanist,  Professor Greg Clark.

He said Covid-19 should not be thought of as just a health crisis and a recession, but it should also be thought of as an agent of change.

He suggested that because of what we had learned from the Covid-19 lockdowns we could find ourselves living in blended cities; where we combined the best of the physical amenities and attributes of existing cities coupled with the virtual city with all the benefits of digitization.

This could impact house prices.

“Will covid-19 change house prices in New Zealand?” he asked.

“Will it be the case, for example, that the places that have been highly inflated will simply spread out into broader regional geographies and people will live in all parts of both islands whilst having jobs in another part of the country?”

He said these blended cities would have within them very significant implications for infrastructure and how it related to resilience, how it was an enabler of the path to net-zero carbon emissions, and it could now serve a revised set of settlement patterns.

The reference to “net zero” was the other theme of the day; how could New Zealand not only use its planning legislation to adapt to a post-Covid world but ensure that new world was itself dealing with climate change.

Various speakers emphasized the urgency of the situation.

POLITIK Matthew Riddle

Matthew Riddle, Executive Chair of Marsh insurance broking said his company produced an annual risk assessment survey for the World Economic Forum (which runs the Davos economic conference) and that climate change was rated as the greatest single risk facing business worldwide.

He said that as a consequence, New Zealand could not ignore what would be a growing level of climate change-oriented regulation worldwide.

In terms of practical risks that New Zealand faced, James Hughes, the technical director for climate change at Tonkin and Taylor said that New Zealand faced two basic issues as a consequence of climate change; either too much or too little water.

Too much water being flooding, sea-level coastal inundation, particularly high groundwater levels,” he said.

“We’ve got some real issues with high groundwater levels in a number of towns and cities, and that’s probably a largely unknown risk.

“And then on too little water; there are drought and temperature impacts like forest fires.

But then you move on to the emissions challenge and the urgency of emissions reductions and how we  build cities and how we reconcile the drive for building more homes and  sprawling our cities, which is the way New Zealand tends to build at the moment versus the need to reduce emissions.”

POLITIK PM Jacinda Ardern speaking

Post Covid the two new RMA Acts will need to address these challenges as they set out what will be the rules for the use of resources in a post-Covid world.

Amelia Lynzey, the chief planner at Beca, and member of the Resource Management Act review panel said the new legislation would not allow planning decisions to simply maintain the status quo.

“It’s really about working towards setting outcomes,” she said.

“Now, it’s not the legislation that will set those outcomes; it is Government.

“So no longer are we assessing and assuming that the status quo is the environmental outcome we want; that our existing conditions are the environmental outcome we want; it is that targeted outcome that we are driving to.”

It was left to the Executive Director of the Environmental Defence Society, Gary Taylor, who has been heavily involved working with IngfrastructureNZ to develop alternatives to the RMA, to remind the conference that the legislation had a huge role to play in protecting and enhancing the natural environment.

He said that the country was 80 million years old and humans had been here for 800 years.

“We’ve got the responsibility,” he said.

“We’ve got good science, and we know what we’ve done, and I think we have got the wit and will to fix it.

This legislation is as much about planning the restoration of that lost natural heritage and of doing landscape scale, restoration as it is about addressing the urgent social problems and inequities in our cities.”

It’s a tall order; it will be complex legislation, and POLITIK understands the Government is planning on giving it an unusual passage through Parliament.

It will go for an extended period to the Environment Select Committee which is likely to be chaired by the former Green Minister, Eugenie Sage.

That Committee will report to Parliament who may then amend it, and there are suggestions that it may then go back to the Committee again.

Even so, it is the Government’s intention to have it in law by the end of 2022 which would tie in nicely with the Covid-19 recovery plans.

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