“New Zealand needs a proactive approach to national planning & development to deliver wellbeing,” Infrastructure NZ chief executive Stephen Selwood said last week on the release of a report from the organisation, National development: Insights from Asia.
“In March this year, we took 75 infrastructure leaders to Singapore, Hong Kong, Beijing & Shanghai to see how these cities & countries have been so successful at accommodating growth and lifting national performance.
“What we saw was a real wakeup call.
“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 & environmental outcomes.
“The same development model that the Singapore, Hong Kong & Chinese governments have successfully used to turn their economies around is now being applied to lifestyle & the natural environment.
“Cities are becoming cleaner, more sustainable & more liveable.
“Further, by growing efficiently, costs are being contained to ensure that rising incomes are not consumed by higher accommodation & living costs. Lower costs of living result in more competitive economies & higher disposable incomes.
“The key to this success is a national development approach to enabling growth & tackling challenges.
“Singapore & 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 & projects.
“Certainty of planning enables the market to invest with confidence, enabling a virtuous cycle of public & private sector investment.
“This approach to national development planning is similar to that which we have seen in successful western democracies like Ireland, Scotland & 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 & 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 & corporate tax go to central government.
“This means councils operate on a narrow funding base comprising property rates & 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 & 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 wellbeing and an increase in inequality & 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 & 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 & talented people. While we lack scale, we could be agile & able to respond quickly to national opportunities & challenges. This should be New Zealand’s competitive advantage. But to realise this potential we need to lift our vision beyond self-interest & local parochialism and develop a system which incentivises partnership & collaboration.
“The resource management framework has not only failed the environment, its focus on negative effects has left New Zealand with an unclear vision & pathway for how the country should grow & develop. It must go.
“We need to simplify local government structure & laws and link funding to investment in regional & national development.”
This is how Mr Selwood sees a transformation occurring:
“Central government has to get back into planning. New Zealand needs a national plan which identifies & enables investment in land, housing, transport & 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 & development.
“Planning is a very powerful tool, so we need to balance centralised power with greater devolution of funding & delivery. We need stronger regions with spatial planning capability & access to gst or a share of income & corporate taxes to fund & deliver their plans.
“Central government should transition from a funder & 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 & 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 & local objectives.
“Once benefits of collaboration can be tangibly demonstrated this can be a stepping stone to full reform of our planning laws & the purpose, form & funding of local government.
“Establishing a system that aligns central, regional & local council planning, funding & delivery and which promotes individual enterprise, entrepreneurship & local identity provides an opportunity to improve wellbeing for all of New Zealand.”
Attribution: Infrastructure NZ release.