RMA changes could spell headache for Marlborough council

The Marlborough District Council potentially faces a massive fiscal headache with proposed changes to the Resource Management Act.

Under the proposed changes, landowners could be entitled to compensation from councils if a Significant Natural Area (SNA) is identified on their land.

Marlborough has the most Significant Natural Areas in the country, at 796.

A Marlborough council spokesperson said it was too soon to say what the financial and environmental impacts could be.

"We have commenced analysing recent Government announcements, but it will take time – as elected officials and management staff – to fully understand all the implications of what is proposed,” the spokesperson said.

The RMA required councils to identify and protect areas with significant habitats and biodiversity, which was controversial because it affected landowner rights on their own properties, and there was disparity in the way councils enacted the requirements.

On Tuesday, RMA Reform Minister Chris Bishop announced plans to replace the much-maligned Resource Management Act with two new laws, the Planning Bill and the Natural Environment Bill.

The controversial regulatory relief policy would see councils compensating landowners when their property rights were restricted by regulations such as heritage sites, SNAs and Outstanding Natural Landscapes.

RMA reform under-secretary and ACT MP Simon Court said the new mechanism would force councils to foot the cost of regulation.

“If they want to impose significant restrictions, they must justify them, provide relief to the landowners, and convince their ratepayers the public benefit warrants it,” Court said.

This compensation could be cash, rates rebates, no-fee consents or extra development rights, adding another fiscal challenge for councils facing rising costs and restricted income from rates capping.

Bishop’s office confirmed that the relief would be retrospective, and landowners with existing SNAs could be eligible for compensation if the SNA had “significant impact” on reasonable use of the land, and if the landowner didn’t buy the property after the designation was issued.

“In certain circumstances, councils will need to reassess SNAs (and other controls) against the new rules,” a spokesperson told Local Democracy Reporting.

Some councillors in other regions were pointing out issues with the new policy.

A West Coast councillor told LDR councils had two choices ‒ pay up or remove SNA designations on private land.

In Marlborough, 15.3% of SNA sites north of the Wairau River were on private property, and 19.8% of sites south of the Wairau River.

The council’s Landowner Assistance Programme spent about $230,000 helping landowners improve biodiversity in their SNAs in the 2024/25 year, according to the council’s SNA annual report.

Landowners themselves spent about $269,000, significantly more than the about $184,000 they spent last year.

In August 2023, the Labour Government’s National Policy Statement for Indigenous Biodiversity came into effect.

The statement gave more specific direction on how councils should identify and protect SNAs, but months later the current coalition Government was elected and suspended the requirement to enforce SNAs due to the impending RMA reform.

Most of Marlborough’s SNAs were designated prior to 2016. In the years since the council had added about a dozen each year, although 2020-21 was an outlier with 45 added.

Federated Farmers national board trustee and Marlborough farmer Richard Dawkins welcomed the new policy, saying land use restrictions had shifted the cost of “public good” onto the individual landowner.

“Restrictions such as this can wipe tens of thousands of dollars, sometimes millions of dollars, off the value of private property, by significantly restricting what can be done on it,” Dawkins said.

“Federated Farmers believes in too many instances, councils have gone far too far with the extent of these overlays – after all, it costs them nothing.”

Dawkins likened the new policy to the Government compensating property owners if they wanted to build a motorway where their house was.

“With relief costs now involved, we think councils will be more selective in use of these tools, prioritising the most important areas,” he said.

Marlborough Sounds Restoration Trust chairperson John Hellstrom said he was concerned landowners could use the removal of SNAs to plant invasive species, such as pine trees, that could spread beyond their boundaries.

“If it’s just essentially saying if you want to plant pine trees but you've got an SNA, you need to be compensated, then that that would be something of real concern from our point of view,” Hellstrom said.

Under the current system, landowners who made alterations to their own properties were not liable for the effects on adjoining properties and surrounding environment, Hellstrom said.

“If someone bulldozes a helipad, or [there’s] a building site or a train up the hillside and the land slips and the sedimentation goes, they should be paying the same compensation for that for sure.”

“We're all talking about property rights, but if we're going to have a regime of really strong property rights, then we also have need to have a regime of very strong penalties for externalities.”

LDR is local body journalism co-funded by RNZ and NZ On Air.