Tuesday 18 October 2022

A confusion of National Policy Statements

When Alice tried to recite one of her lessons while down the rabbit-hole in Wonderland, she thought only a few words had come out wrong. The Caterpillar corrected her bluntly: “It is wrong from beginning to end.”

By contrast, the Cabinet Paper on the National Policy Statement protecting sensitive soils is not wrong from beginning to end.

Paragraphs 90, 91 and 92 contain sound advice from Treasury.

Otherwise, the paper has a few problems.

From my 2019 column on the then-draft National Policy Statement on Highly Productive Land.

Treasury's advice on the NPS was appropriately scathing. The CBA in support of it was incompetently produced. There was no market failure to be solved by the policy. The policy was wrong from beginning to end. 

Even within the constraint of "Voters are just terribly, terribly mistaken so we have to be seen to be doing something to prevent building houses, which are scarce, on agricultural land, which is not," the policy fails. It could have chosen to protect only the top two land use categories, covering about 5% of the country's land (urban land is about 1%). Instead it added in LUC3 land - piles of paddocks mainly - and in so doing locked up another 10% of the country against housing. 

I was curious about Treasury's advice on the revised NPS. They provided it last week, so it formed this week's column for the Stuff papers. Treasury still sees the policy as too restrictive, backed by far too weak of analysis, and as conflicting with the National Policy Statement on Urban Development.

The OIA documents from Treasury are here

Bottom line?

Treasury Recommendation: Do not support, defer until the paper includes robust analysis of the costs and benefits of the policy choice to include or exclude LUC 3 land from the default definition of HPL under the NPS-HPL. This could also include recommendations for improved implementation of the NPS-UD. 

And they warned that the CBA MPI had commissioned is still too shonky to rely on.

There's still a potential way through the mess. The coming Resource Management legislation could direct that priority be given to housing in the National Planning Framework. It'll take fairly sharp direction: councils looking for excuses to obstruct housing development will find plenty of them in NPS-HPL. 

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