Resource Management Reforms and their implications for Councils

The Government’s introduction of new resource management reforms will have significant implications for local Councils across New Zealand.

The reforms are intended to streamline planning and consenting processes, reduce regulatory burden, and improve efficiency within the resource management system.

Councils should be particularly aware of the impacts in three key areas: regulatory relief, plan-making, and consenting.

1. Regulatory Relief

The reforms introduce a regulatory relief mechanism that applies where planning rules have a significant impact on the reasonable use of land. The framework is designed to require Councils, in some circumstances, to compensate landowners for the effects of regulatory controls.

Relief may be triggered where, after taking into account prescribed criteria, a specified rule is reasonably likely to have a significant impact on the reasonable use of land. This threshold is framed in broad and subjective terms and will rely heavily on future criteria yet to be finalised.

Councils are required to establish a relief framework within their plans. That framework can be appealed to the Environment Court, that can then determine the framework relief should be granted. This raises a structural or constitutional issue. Decisions about allocation of publicly raised money by Councils and what it is to be spent on are not traditionally judicial functions to resolve disputes between parties. These decisions typically involve difficult funding trade-offs and budget allocations of scarce public funds that are ordinarily made by elected members, rather than the courts.

Relief is triggered by the four subjective criteria below:

• After taking into account prescribed criteria
• That a specified rule is reasonably likely
• To have a significant impact
• On the reasonable use of land.

The nature of regulatory relief must be specified in the plan and may include:

• Monetary compensation;
• Waiving rates, or consent fees;
• Granting additional development rights elsewhere;
• Offering alternative land in exchange;
• Providing grants, restoration, fencing, plantings or other mitigation measures.

Determining what constitutes “appropriate” compensation for different types of land-use impacts is likely to be challenging, costly and a litigious exercise.

2. Plan Making

The reforms also propose significant changes to plan-making through the introduction of a mandatory Regional Spatial Plan and the removal of Regional Policy Statements at the end of the transition period.

Key features include:

• A single joint spatial plan for each region;
• This is designed to plan for growth and development for 30 years;
• Preparation of the draft plan by a jointly appointed “spatial plan committee”. If Councils cannot agree on membership, the Minister appoints a person to determine that;
• The plan is to be approved for notification by Councils;
• The spatial plan committee will also advise Councils on appointing an “Independent Hearing Panel” (IHP) to decide on submissions;
• Councils must consider and decide on IHP recommendations.

Appeal rights to the Environment Court are limited only to questions of law, or on the merits if a Council rejects the IHP’s recommendation on infrastructure.

Ultimately then the 30 year growth plans for a community can be determined by an IHP, likely based on the evidence and submissions they receive. Clearly a 30 year growth plan is a difficult exercise to plan with certainty.

This raises a fundamental question of accountability. Why are there no merits appeals? Should there be if all other plans have to implement the Spatial Plan?

The reform requires the subordinate regional land use plan and the relevant Councils’ long term plans under the Local Government Act 2002 (LGA) to implement the Spatial Plan. There must be one land use plan per district and they must include standardised plan provisions as directed by national instruments. Land use plans can include bespoke plan provisions if authorised or not precluded by national instrument. They must contain objectives, policies, rules and a relief framework, and can contain methods. Methods may provide incentives for landowners to undertake a particular activity.

This is a major structural change for councils to implement.

3. Consenting

A new notification test has been introduced for resource consents. This only enables public notification if effects on the wider built environment are more than minor.

Furthermore, consent categories are reduced from six to four – permitted, restricted discretionary, discretionary and prohibited (i.e. with non-complying and controlled activities removed).

Lastly, financial contributions are not considered under the new Bills and “development levies” will begin to replace development contributions from July 2028. Financial contributions can currently be set under the Resource Management Act 1991, and development contributions set under the LGA. Both contributions help fund public infrastructure from growth demands. As part of Government reform to the LGA, the key changes from development contributions to development levies are:

• Development levies will be charged across levy areas that cover an entire community or service network (where this serves more than one community);
• Charges will be set based on the aggregate cost of providing infrastructure capacity for growth across those levy areas, rather than cost to provide capacity for development in a specific location. However, if the cost to service part of a levy area is significantly higher, Councils can set a high-cost overlay to reflect higher costs;
• Councils will have increased flexibility to adjust the provision of infrastructure to respond to demand.

In the same way as development contributions, development levies will be an up-front lump-sum charge.

These changes to development levies are found in the exposure draft of the Local Government (Infrastructure Funding) Amendment Bill. The final Bill will include transitional provisions, including a phased-in approach over three years to give Councils time to prepare and consult on development levies policies to ensure alignment with long term planning cycles. The Bill also enables regulations to be made that will standardise levy setting practices.

Written submissions to Te Tūāpapa Kura Kāinga and the Department of Internal Affairs on the amendment to the LGA close on 20 February 2026.

Want to know more?

If you have any questions about resource management reforms and their implications for Councils, please contact our specialist Environment, Planning and Natural Resources Team.

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