MEDIA RELEASE
“New Zealand
needs a proactive approach to national planning and development to deliver
wellbeing,” says Infrastructure New Zealand CEO Stephen Selwood.
“That’s the key
recommendation from an Infrastructure New Zealand report released today
entitled National Development:
Insights from Asia.
“In March this year, we
took 75 infrastructure leaders to Singapore, Hong Kong, Beijing and Shanghai to
see how these cities and countries have been so successful at accommodating
growth and lifting national performance”.
“What we saw was a real
wake-up call,” Selwood says.
“We all know about
China’s incredible economic story and most now know that Singapore is one of the
wealthiest countries in the world.
“But equally striking
was the progress each government is making in terms of social and environmental
outcomes.
“The same development
model that the Singapore, Hong Kong and Chinese governments have successfully
used to turn their economies around is now being applied to lifestyle and the
natural environment.
“Cities are becoming
cleaner, more sustainable and more liveable.
“Further, by growing
efficiently, costs are being contained to ensure that rising incomes are not
consumed by higher accommodation and living costs. Lower costs of living result
in more competitive economies and higher disposable incomes.
“The key to this
success is a national development approach to enabling growth and tackling
challenges.
“Singapore and China
have become expert in setting a clear vision for national development, defining
the outcomes they want the nation to achieve and then delivering on those
objectives through joined up agencies, plans and projects.
“Certainty of planning
enables the market to invest with confidence, enabling a virtuous cycle of
public and private sector investment.
“This approach to
national development planning is similar to that which we have seen in
successful western democracies like Ireland, Scotland and Scandinavia, and
across the Australian states.
“In New Zealand, we
don’t manage our economy or our wider society that way.
“Our system devolves
regional and urban planning to councils. Central government provides little
guidance as to how best planning can meet national objectives.
“At the same time,
major funding sources, principally GST, income and corporate tax go to central
government.
“This means councils
operate on a narrow funding base comprising property rates and user charges
with only a weak linkage to economic performance.
“Ratepayers typically
oppose taxes being increased to pay for growth, so elected officials keep rates
low and there is seldom enough money to fund much needed infrastructure.
“Under pressure to
contain costs, councils regulate land supply and defer infrastructure
investment. Lack of infrastructure serviced land causes land and home prices to
rise resulting in a housing affordability crisis for those on low to median
incomes. Increased housing costs mean less disposable income, a decline in
well-being and an increase in inequality and other social challenges.
“Compounding matters
further, weak infrastructure imposes costs on business, disincentivises
investment and constrains our ability to lift productivity.
“We all know that Singapore
and China have vastly different political systems to New Zealand. But this is
no reason why we cannot emulate their ability to set a vision and develop a
national plan to unlock the potential of our free market economy.
“We are a small nation
endowed with natural resources and talented people. While we lack scale, we
could be agile and able to respond quickly to national opportunities and
challenges. This should be New Zealand’s competitive advantage. But to realise
this potential we need to lift our vision beyond self-interest and local
parochialism and develop a system which incentivises partnership and
collaboration.
“The resource
management framework has not only failed the environment, its focus on negative
effects has left New Zealand with an unclear vision and pathway for how the
country should grow and develop. It must go.
“We need to simplify
local government structure and laws and link funding to investment in regional
and national development.
“Central government has
to get back into planning. New Zealand needs a national plan which identifies
and enables investment in land, housing, transport and other critical services
needed to enable sustainable development and tackle major challenges like
climate change.
“Rather than just
managing negative effects, the system should promote environmental restoration
and development.
“Planning is a very
powerful tool, so we need to balance centralised power with greater devolution
of funding and delivery. We need stronger regions with spatial planning capability
and access to GST or a share of income and corporate taxes to fund and deliver
their plans.
“Central government
should transition from a funder and provider of services, to an enabler of
strengthened regions via strong national guidance.
“This means substantive
change. It’s going to take some time to empower regions to plan, fund and
deliver national development.
“The first milestone
could be for the Government to use financial incentives like ‘city’ or
‘regional’ deals, to incentivise councils to work together, partner with
business and promote alignment between national, regional and local objectives.
“Once benefits of
collaboration can be tangibly demonstrated this can be a stepping stone to full
reform of our planning laws and the purpose, form and funding of local
government.
“Establishing a system
that aligns central, regional and local council planning, funding and delivery
and which promotes individual enterprise, entrepreneurship and local identity
provides an opportunity to improve wellbeing for all of New Zealand,” Selwood
says.
A copy of the latest
Infrastructure New Zealand report National
Development: Insights from Asia can be found
here.
ENDS
For further information and comment contact
Stephen Selwood on 021 791 209
