Original published in NBR

Many people are now complaining that the last nine years of a Labour-led Government have left us languishing near the bottom of the OECD tables of economic growth and development, and are seeking explanations.

While a number of left-wing policies are held to blame, the most obvious explanation tends to be overlooked.

Socialism, Fascism and Communism – the great failed experiments of the twentieth century – were all committed to central planning. The “Great Leaders” of these regimes declared the modern world to be too complex to depend on spontaneous order. Therefore central planning was needed to direct and control our chaotic lives.

Today’s band of “controllers” claim that our population, wealth, technology, and consumption are combining to destroy the planet, or will do so in the future, unless, of course, ‘environmental planners’ are empowered to ‘sustainably’ order, direct, and control, every aspect of our lives.

In his seminal work, The Road to Serfdom,[1] Hayek pointed out that central planning fails because it attempts to form a universal view on matters on which there can be no universal agreement. The planners must necessarily coerce those people who are unwilling to go along with their visions. When the ARC decides how and where future Aucklanders must live, all those people with plans of their own must be coerced into making second-best choices. They lose their property rights – and their liberty.

The Great Leaders of the planned economies never admitted error. They simply increased the size and power of their police states and imposed more detailed and more widespread controls. Experts who criticised the Soviet Great Plan for Agriculture were dispatched to the Gulag for heresy – even though millions were starving.

The most striking change over the last nine years of Government in New Zealand has been the proliferation of central plans – at all levels of government.

The Resource Management Act was intended to deregulate the use of land, by declaring that people and communities were to be enabled to promote their own wellbeing, provided they managed their environmental effects.

But by introducing the words ‘Sustainable Management’ into the lexicon, the RMA opened the door to takeover by those planners who promoted ‘sustainable development’ as the solution to modern threats.

For example, the Courts were soon persuaded that the ‘Plan’ was part of the environment and must also be protected from ‘adverse effects’. Applications failed if they “undermined the integrity of the plan” – which seriously undermined innovation.

However, the RMA’s enabling provisions continued to frustrate the dedicated Central Planners especially when subjected to higher levels of Judicial Review.

Consequently the Government passed the Local Government Amendment Act of 2002, a Central Planner’s dream, which put the RMA in its place by reversing the enabling provisions of the RMA. As the MfE says:

The reforms encourage local authorities to focus on promoting the social, economic, environmental and cultural well-being of their communities, consistent with the principles of sustainable development.

Councils are now empowered to rule, rather than ‘enable’, and have been given “the powers of general competence” to do so – in spite of the task being beyond anyone’s competence.

The new Central Planners decided that Soviet Central Planning failed because it was “top down” and hence their ‘benign tyranny’ insists on consultation on everything. Neither approach solves the real problem, which is that central planners simply cannot acquire the information necessary to manage resources better than individuals making decisions in a market-led economy.

Putting it brutally, the new central planning of sustainable development replaces the ignorance of the tyrants with the ignorance of special interest groups with time to spare.

These Councils must now embark on lengthy rounds of LGA consultation and hear submissions on their Long Term Council Community Plans and Annual Plans, and then publish a Draft District or Regional Plan or Policy Statement, and then finally publish a Proposed Plan or Policy Statement. Then follows a round of submissions, followed by a round of further submissions, followed by a year or five of Hearings, followed by a year or so of mediation, and finally Hearings before the Environment Court, the High Court, the Appeal Court and the Supreme Court. When all this is completed the Plan becomes fully Operative Rodney District's Plan, optimistically named ‘Rodney 2000’, is really nowhere near Operative because it is being overturned by the new Regional Planning Documents prepared under the LGA, and Auckland’s special LGA which require Districts “to give effect” to their regulations.

Naturally, if a Central Plan fails the solution is to increase the size of the territory. Let a Super-City-State bloom!

If that sentence sounds like a mouthful it was meant to. Soon half of the population will be permanently consulting while the other half will be being permanently consulted.

These expensive processes all generate uncertainty as to ongoing property rights. Property owners have learned to expect that every plan variation or review will remove or threaten more of their existing rights, and increase their compliance costs.

And they are right.

Aaron Wildavsky found – in “The Politics of the Budgetary Process” – that all departmental budgets increase over time. Similarly, all Planning Documents get longer and more complex over time. Hence his cautionary “rule of thumb” which said “Any plan which is thicker than my thumb bears no relationship to the real world.” When Councils ask their advisers to review the Plan, they are hardly likely to be told the existing plan is perfect.

A slim and simple plan is a sty in any Central Planner’s eye.

Since 2002, Plans have been expanding their orbit at both ends of the scale. Regional Plans attempt to enforce “sustainable urban form.” Local Plans assert controls down to the colour and profile of the window joinery. Climate Change alarmists regulate our light bulbs and shower-heads.

This is bad enough at the best of times – but we happen to be entering the worst of times.

The National Party has already promised to make significant changes to the RMA, which will make any planning document obsolete – at least in part, and in some cases, a very large part indeed.

It may be that the changes made in the first 100 days will focus on process rather than substance but if so, then the changes will have little effect on the investment climate in New Zealand.

Although many Councils have been warned that their expensive Plan Reviews are potentially wasting millions of dollars of ratepayers’ money, their advisers understandably insist the gravy train must continue to roll. Times are tough enough without losing their biggest source of income. Hence the old adage, "Never ask your Barber if you need a Haircut."

The only way to stop this totally unproductive spend-up is to impose a moratorium on all district and regional plan reviews, national policy statements, structure plans, regional policy statements, visions, and nightmares, until the RMA and LGA have been thoroughly scrutinised.

If any urgent plan changes are required, by either the public or private sector, they can be submitted to a new RMA Regulatory Reform and Review Committee for approval by Order in Council.

The pressure groups and bottom feeders will scream – but the vast majority of productive people will be eternally grateful.

We might even end the recession.

1200 words

Owen McShane