Budget 2026: Government dangles fiscal carrot to councils to grow consents

Thursday, 28 May 2026

The Government is dangling a financial incentive to councils in an attempt to boost the number of consented dwellings.

The $400 million, four-year scheme will essentially pay councils according to the number of consents they approve - the more consents, the better the pay.

The payments are expected to go towards community infrastructure and councils will have to demonstrate that.

Under the scheme, each time a council consents up to 1% of the existing dwellings in its boundaries it would get a payment of 0.25% of the national consent value.

Catch up on all Budget coverage here: The Post Budget 2026

The payments increase if the amount consents reach between 1 and 2% of existing dwellings, to 0.5% of the national consent value.

Beyond 2% of existing homes, each new consent will provide a payment of 1.25% of the national average consent value.

For example, a council overseeing a population of 100,000 would receive 0.25% into their council budget if they consented 1000 new homes.

Payments would start from April 1 next year, for consents granted in the year to January 31, 2027.

Associate Finance Minister David Seymour likened the financial carrot akin to how councils operate parking and parking fine systems.

'They'll come to you, anywhere, any time, because there's money in it,' he said. 'Imagine how many consents they'd issue if there was money in it for them?'

Housing Minister Chris Bishop said the fund was the third pillar of the Government's going for growth programme.

'New Zealand's housing crisis didn't happen by accident. For decades we've had a planning and infrastructure funding system that made it too hard to build the homes New Zealanders need.'

Funding boost to social housing

$69.2 million will go to the delivery of up to 2250 more social houses through the Government's flexible fund, starting from the 2028/29 financial year.

Housing Minister Chris Bishop said it is on top of 2024 and 2025 Budgets funding more than 2700 social homes.

'Since the Government was formed in late 2023 the social housing waitlist has reduced from 25,483 to 19,704. However it's clear there's more work to do.'

Bishop said taking into account the investments into the flexible fund through Budgets 2025 and 2026 there was now operating and capital funding for a four year pipeline of social housing.

'Community housing providers often tell me they need longer-term certainty of consistent funding so they can plan their build pipeline further ahead.

'Today's announcement will help them do that.'

Money to pay for the rollout of RMA Reform

The Government will provide $294 million over four years to support the cost of its new RMA reforms.

Funding would go to the 'digital foundations' that would the new system would rely on.

This included nationally consistent data standards, shared digital services and a centrally-managed platform for planning, consenting and monitoring.

Bishop said the digitisation investment was a critical part of the reforms and had a cost benefit ratio of 7.2.

'Right now we have 78 councils maintaining separate planning systems that often duplicate effort, reinvent the wheel and create confusion and inefficiencies.'

Budget 2026 also invested $41 million in the first phase of the flood map which will map out which properties are at risk for natural disasters.

That would include development of national data standards, an e-Plan viewer and the core system architecture needed to support the new planning system over time.