Fast-tracked projects needed for post-Covid-19 economy, but the devil will be in the detail, groups say

Monday, 4 May 2020

Gary Taylor, chief executive of the Environmental Defence Society, said it's been made clear the spending surge wouldn't be 'all about motorways'.

The fast-tracking of infrastructure projects has widespread support from Parliament, but councils and the construction sector say the devil will be in the detail.

Last week, the Cabinet approved changes to fast-track infrastructure and development projects under the Resource Management Act (RMA). The changes would do away with council and public input and instead see projects approved by expert panels, chaired by a current or retired Environment Court judge or senior lawyer.

Created in 1991, the RMA allows communities to make decisions on how their own environment is managed through regional and district resource management plans. The new legislation was expected to be passed in June, and repealed in two years.

As the country braced for a one-in-100-year recession caused by the global coronavirus pandemic, Environment Minister David Parker said the new processes would get projects started sooner and more people into jobs. 'We are acting quickly to get the economy moving again and our people working.'

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Parker said existing Treaty of Waitangi settlements would be up held and each panel would have a person nominated by the relevant local councils and iwi authorities.

Labour, New Zealand First, National and ACT all agreed the RMA was not fit for purpose, but Green Party co-leader Marama Davidson has said her party objected to removing public consultation even for a limited time.

'Pragmatic' response to extraordinary circumstances

“In ordinary circumstances this kind of ad hoc override legislation would not be desirable,” said Gary Taylor, chief executive of the not-for-profit Environmental Defence Society.

“But these are not ordinary times. There is a clear imperative to get economic activity going again and a strong initial surge of public and private sector spending on infrastructure projects is urgently needed to create employment and drive a powerful recovery from Covid-19 lockdowns.'

He said it had been made clear the spending surge would include walking, cycling and public transport projects. 'It won't be all about motorways.'

The jury was out on whether the changes would support construction jobs in the long-run, says Rick Herd, chief executive of commercial construction company, Naylor Love.

However, he called on Parker to make public the criteria for fast-tracking projects and hoped it would follow the advice of the Climate Change Commission.

Resource Reform New Zealand, a coalition of business and environment interest groups, said in a statement it also welcomed the fast-tracking plan, calling it ‘’pragmatic’’.

The group — Infrastructure NZ, the Employers and Manufacturers Association, Environmental Defence Society, Property Council and Business New Zealand — said it supported the concept of rapid approvals for selected public and private sector projects, while committing to environmental bottom lines.

However, it said the work of Appeal Court Judge Tony Randerson who last year led a review of the RMA, due in May this year, shouldn't go out the window. The review had highlighted the risks, costs, and lack of financial incentives for local and regional projects.

‘’Councils face a 10 to 25 per cent drop in revenues as a result of Covid-19, limited ability to increase rates and growth councils are capped on ability to borrow,’’ the group said.

Opportunity for long-term reform

Infrastructure New Zealand chief executive Paul Blair said the Government was only the client or procurer of about one-fifth of all construction, with the rest coming from private sector or local government. That meant there was ‘’a massive opportunity’’ to reform the system at national and local level, he said.

He encouraged the Government to 'take a bit of risk', and also reduce the risks faced by councils while improving their revenue potential.

Currently, councils could only recover their costs, he said. Allowing them to share in the financial rewards of developments would not only enable them to inject more money into infrastructure but would also incentivise them to speed up consenting, he said.

Alleviating risks faced by councils, often the last organisations left to sue if something went wrong, would also reduce consent delays, he said.

He recommended looking to countries where projects were covered by private insurance or a Crown-council agency which helped back councils.

Dave Cull, president of Local Government NZ, which represents all 78 councils across the country, said the sector supported the overall intent of the legislation. 'Extraordinary times call for extraordinary measures.'

However, 'The devil will be in the detail', he said.

'Like all policies, this is about striking a balance, so that we're getting the risk environmental, cultural, social and economic outcomes.'

Local input would remain essential, he said. 'Local people know best the strengths and opportunities of their regions.'

Long-term concerns

The jury was out on whether the changes would support construction jobs in the long-run, said Rick Herd, chief executive of commercial construction company, Naylor Love.

If only infrastructure-related projects were fast-tracked, the changes were unlikely to be of much help to the construction sector at large.

Less than a quarter of construction work was infrastructure-related, and commercial and residential construction was facing a major downturn, similar to what happened following the 1987 stock market crash, he said.

But Civil Construction New Zealand welcomed the new legislation. Sometimes it took more than five years to get a project through the RMA process, said chief executive Peter Silcock.

'I can understand the concerns about excluding the public from that consultation process, but we're facing a really significant challenge in New Zealand right at the moment.'

Some of the work would also help improve the environment such as public transport projects which would reduce emissions, or repairing Wellington’s waste water system.

‘’Looking after the environment while we build projects is part of what we do, so that’s managing, for instance, sediment, and managing dust, managing impacts on native flora and fauna. We’re doing quite a lot anyway.’’

The Resource Management Law Association in a statement said it indented to make a submission to the select committee considering the legislation, most likely seeking clarity around the criteria used to determine which projects would be fast-tracked.

It also wanted to know what information would be used when considering a project's environmental effects, as well as how sustainable environmental outcomes could be achieved.

A spokesperson for Parker's office said the number and location of expert consenting panels would depend on the number and location of projects approved to use the process.

The names of those serving on the panels would be made public after the Bill passed in June.