NZ 3rd for material living standard

July 31, 2015

Trans Tasman points out that child poverty lobbies are wrong on living standards:

Lobby groups which bleat about child poverty in NZ took a knock this week when independent research showed NZ households have the third highest material living standard in the world for households with a teenager. The research also dealt a blow to those who contend there is growing inequality in NZ society. Using a new measure for wellbeing, Researchers at Motu Economic and Public Policy Research found NZ ranks just behind the US and Canada, and ahead of Aust and all the Scandinavian countries.
Motu is a not-for-profit, non-partisan research institute and received funding for this work from the Marsden Fund of the Royal Society of NZ. Dr Arthur Grimes, one of NZ’s most respected economists, says “our new measure focuses on actual consumption of households, which is a better measure of living standards than income. What we found is that we have very high material wellbeing levels. I think this should call into question the widespread negative impression of living standards in NZ compared with other developed countries.” Grimes and Motu researcher Sean Hyland worked from a dataset of household possessions for almost 800,000 households over 40 countries, including all OECD countries.
“Our results show NZ is still a great place to bring up children, at least in material terms. Not only do we have wonderful natural amenities, but contrary to what GDP statistics tell us, most kiwi families have a high standard of material wellbeing relative to our international peers” The study also looked at the degree of inequality in household material wellbeing, which fell in most countries, including NZ, over the period 2000-2012. In 2012, NZ ranked twentieth of 40 countries in terms of inequality, with levels similar to those in the US, Canada and the UK.
Grimes points out most public policy concern is with the living standards of ordinary people, especially those closer to the bottom of the wealth distribution curve, whose living standards are well captured in the data. “If we look across the Tasman, Australia’s households are not quite as wealthy as their NZ counterparts but inequality in Aust. is lower than that in NZ. Overall, these figures suggest we may need to reassess how we look at this country’s economic performance.”

This doesn’t mean everyone has enough nor that we can ignore the needs of those who don’t.

But it does contradict the people who keep trying to tell us that inequality is growing and that up to one in four children are living in poverty.


10 major changes to RMA proposed

January 22, 2015

The government will be including 10 major changes to the Resource Management Act in the second stage of reforms:

Overhauling the Resource Management Act (RMA) is critical to addressing housing supply and affordability, and maintaining the momentum of economic and job growth as well as better managing New Zealand’s environment, Dr Nick Smith said today in his 20th annual speech to Nelson Rotary.

“The Resource Management Act has produced over 80,000 pages of plans and rules across New Zealand’s 78 councils. This 10-metre mountain of red tape is holding back the development of new houses and jobs, and it is not performing well enough in managing key resources like freshwater,” Dr Smith says.

“The Government is planning the most significant overhaul of the Act since its inception 25 years ago. We want to modernise the purpose to make it more practical and relevant, standardise council plans and simplify the process for gaining consents.”

It shouldn’t be necessary for every council to have their own individual plans and rules for every aspect of resource management and planning. At least some of these could be standard across the whole country.

Dr Smith today also released an independent report by Motu Economic and Public Policy Research – commissioned by the Treasury and the Ministry of Business, Innovation and Employment – into the impacts of planning rules, regulations, uncertainty and delay in residential property development.

The report concludes that the RMA is adding an extra $30,000 to the cost of an apartment, an extra $15,000 to the cost of a home, and that it is reducing the capacity of housing development by 22 per cent.

“This report is consistent with the conclusions of the Productivity Commission and the Organisation for Economic Cooperation and Development in highlighting the high administrative burden of our system of environmental regulations, but also adds new information by estimating the actual cost of its flaws. It indicates that over the last decade, the RMA has added $30 billion to the cost of building and reduced new housing stock by 40,000 homes,” Dr Smith says.

Dr Smith also cited practical examples in his speech of where the RMA had wasted health and education funding, and where councils were using the RMA to unnecessarily interfere in people’s lives.

“Our first phase of RMA reforms has made a positive difference in getting consents processed more quickly, including for major projects like the Waterview Connection in Auckland, but we have always made plain more substantive change was required,” Dr Smith says.

Dr Smith outlined ten major changes the Government would be including in its second phase of reforms in 2015:
• Add natural hazards
• Recognise urban planning
• Prioritise housing affordability
• Acknowledge importance of infrastructure
• Greater weight to property rights
• National planning templates
• Speed up plan-making
• Encouraging collaborative resolution
• Strengthening national tools
• Internet for simplicity and speed

“Today’s speech sets the direction for reform. We have a power of work ahead to do with officials, our support parties and Cabinet committees to finalise and draft the required Bill. Our ambition is to have the Bill before Parliament and through a full select committee process this year,” Dr Smith says.

“These reforms will be pragmatic and moderate. We want to reduce the mountain of plans and rules that make the RMA a barrier to new housing and jobs, but retain the core environmental controls that ensure we keep New Zealand special and such a great place to live.”

The proposed changes won’t discount the importance of the environment but will ensure that environmental, economic and social considerations are in balance.

The full speech is here. In it Dr smith says:

The big challenge in the environmental area is finding a path that better manages New Zealand’s water, air, oceans and native flora and fauna while
enabling our economy to grow and prosper. Key priorities this year will be passing a new Environment Reporting Act to give greater clarity to New
Zealand’s important clean, green brand. . . .

Environmental protection and enhancement and economic development aren’t mutually exclusive.

 . . . the most challenging of my jobs this year will be the reform of the Resource Management Act. The Act, in governing the use of water, land, air and the coast, and which is responsible for protecting heritage, native plants and animals is so wide-ranging that it has implications right across the economy and into almost every facet of life.

There is not a single official anywhere who understands this huge pile of RMA plans and rules. Even at a local level, only a few individuals working in council or in planning consultancy will fully understand how the rules work in their city or district. . .

If they don’t understand it how can anyone else?

  The OECD published in November a comparative study of its 34 member countries on the cost burden of environmental regulation. In most OECD reports New Zealand ranks very well as a good place to do business and create jobs. We ranked bottom when it came to the administrative burden of the Resource Management Act. I have no problem where there are costs to achieve good environmental outcomes. The OECD study actually showed that many countries had more stringent
environmental policies than New Zealand but a far lesser administrative burden.

A key difference of the New Zealand system of environmental regulation under the RMA is that we have a very fragmented system where there are
differing rules in every district and region, and secondly that we require consents for most activities when most other countries simply had national
standards that had to be met.

National standards would be far better for many activities.

Examples can be more powerful than national or international studies. I get inundated with hundreds of complaints from all corners of New Zealand and
from people from all walks of life with frustrations over their experience with the RMA.

My first example is the Stoke Medical Centre, a typical suburban GP clinic on Main Road Stoke, employing 15 full-time staff. Three years ago the practice
wanted to expand its staff and extend its permissible opening hours. This required a change to their resource consent which Council ruled under the Act
had to be notified. Six months and $57,000 of bills later the amended consent was granted with the requirement that they had to provide seven new bike
stands. And this cost excluded the time doctors and practice staff had spent on the process. The bike stands cost $35 each but the bureaucratic paper
associated with each meant they ended up costing over $8000 a stand. The tragedy of this case is that the $57,000 consent cost will ultimately come out
of the health budget and people’s GP charges in an area where there are many low income struggling families and retirees.

It is not just health dollars that are being wasted under the RMA. The resource consenting process for Nelson’s new Young Parents’ School
officially opened by the Prime Minister last year was a fiasco. The new school is smart social policy aimed at supporting teenage mums by enabling them to
continue their education, while also ensuring their pre -school children are engaged in education from an early age. The school is sited at Auckland
Point School where the roll is a lot less than the school’s capacity. The Principal and Board of Trustees fully supported the initiative being on their
school site.

The problem was that the school is designated under the RMA for “primary education” and the Young Parents School was about providing education for
secondary school age mums and early childhood education for their children. This meant under the RMA a change of designation, notification of neighbours
and a full Commissioner hearing at a direct cost of $64,000. There would have been no change out of $100,000 if you included the considerable staff
time of the Education Ministry, Kindergarten Association and school. This process also delayed the Young Parents School’s opening by more than a
year. More was spent on the RMA bureaucracy than on the facility for the specialist teachers, young mums and their babies.

The nonsense of this case is that the RMA is meant to be about protecting the environment and whether Auckland Point School has primary, pre-school or
secondary students, makes not a jot of difference. The early childhood regulations and building consent requirements are separate and ensure the facilities are safe and appropriate. More good would have been achieved for the environment had the $64,000 of cash been deposited in the school’s composting bins.

I could give hundreds of examples of the RMA wrecking Kiwi family dreams of building their own home. I choose this Nelson example because it illustrates how far council planners under the RMA are now intruding into people’s lives. A couple in their 60s bought a 630 square metre flat section in Sanctuary Drive in the Marsden Valley. Their architectural designer produced plans for their dream home that included an internal access garage in the front corner to minimise the portion of the section used for the driveway and located their living area so as to maximise the sun. The orientation was similar to 14 other homes in the subdivision. They were gobsmacked to have their consent application declined on the basis of a new RMA rule that had just come into
effect in late 2012. They were told they had to relocate the garage out the back and have their living area face the road. 

The RMA justification for rejecting the design was that the house failed to provide for a “positive private to public space relationship”. In plain language they wanted the living area to face the road so the residents would keep a safe eye on the street. The couple abandoned the section at a cost of many thousands of dollars. So much for a person’s home being their castle.

The RMA is being used to micro-manage building designs down to the extent of what direction people should look.

This sort of madness has been repeated in Auckland and had property magnate Bob Jones venting his spleen late last year. He owns a 17-storey CBD building and wanted to re-establish a ground-floor shop window that had been blocked off by a previous tenant. Not only did this minor work require a $4500 resource consent, but because it would have people looking out on a designated heritage site, the consent required a cultural impact statement and consultation with 13 iwi. This is all for permission to replace a window!

This isn’t only madness, it’s expensive, wasteful and the triumph of bureaucracy over common sense.

These and many other examples show why change is needed.

The Motu Economic and Public Policy Research report is here.

 


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