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Insights 4: 13 February 2026
NZ Herald: Dr Bryce Wilkinson on the hidden hurdles facing granny flat reforms
 
Podcast: Dr Michael Johnston and Marion Burkimsher discuss NZ's falling fertility rates
 
Newsroom: Dr Oliver Hartwich on why Hungary's political model is cracking

New law, old mistakes
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
The Resource Management Act 1991 was an act of economic self-sabotage. Over three decades it inflated house prices by imposing what economists call a regulatory tax: the share of prices created by planning restrictions alone. In Auckland, that tax accounts for up to 56% of the average home price. Infrastructure consenting cost developers $1.29 billion a year.

Meanwhile, New Zealand’s product market regulation ranking has dropped to 20th in the OECD, down from 2nd in 1998.

What did we get in return? The RMA has not achieved its intended environmental purpose. Forty-five percent of our river length is now unswimmable. Seventy-four percent of indigenous freshwater fish are endangered.

The Act delivered crippling process costs while parts of the environment continued to deteriorate. It was the worst of both worlds.

The Government’s intent in replacing the RMA with a Planning Bill and a Natural Environment Bill is sound. Minister Bishop and Undersecretary Court have done a huge job. Making competitive urban land markets a statutory goal is progress.

But as the Initiative’s submission argues, the Government has made a deliberate choice we think is wrong. It has kept the Bills skeletal, with most substance left to national direction that Ministers can write and rewrite. The Government says this avoids the RMA’s mistake of putting too much detail in primary legislation.

We disagree. National direction shifts with political winds, and whoever forms the next government inherits maximum discretion to reshape the system without touching the Act. Property rights protections, cost-benefit requirements and competitive land market mechanisms belong in statute.

The Bills removed section 32, which (inadequately) required cost-benefit justifications before the Government could set binding rules. Nothing has taken its place.

Key goal terms like “unreasonably affect others” and “inappropriate development” are left undefined. The Government assumes existing case law will carry their meaning into the new Act. But legal meaning is framework-dependent. Courts will interpret these terms afresh, and those interpretations will cascade through the system.

The deeper problem is that the Bills were supposed to put respect for property rights at the heart of the new system. They make some progress by ruling out certain site-specific matters from council interference, but they fall well short.

Without these safeguards in the primary legislation, the Bills will not deliver what they promise.

We do not want to spend another three decades discovering we have simply replaced one dysfunctional planning system with another.

The New Zealand Initiative's submission, Planning Bill and Natural Environment Bill, was lodged on 13 February 2026. 

Smart educational assessment
Dr Michael Johnston | Senior Fellow | michael.johnston@nzinitiative.org.nz
I have spent more than two decades involved in education research and policy, focusing on New Zealand’s school system. Yet even I struggle to understand my primary-aged daughters’ school reports.  

Parents have a right to know how their children are faring at school. Yet lack of national consistency in assessing basics like literacy and numeracy hampers the clarity of school reports. Often, the reports themselves are simply unintelligible. 

Last week, Education Minister Erica Stanford announced the release of the new Student Monitoring, Assessment and Reporting Tool (SMART) to measure students’ literacy and numeracy. Its main aim is to provide more nationally consistent information to parents. 

Crucially, SMART reporting will emphasise students’ progress over time. Never before have schools been required to provide parents with measures of students’ progress. The provision of progress information has been left to the discretion of schools.  

Now, there will be clear expectations on schools to measure and report students’ educational achievement and progress in a way that is consistent across the country and intelligible to parents. 

Reporting to parents is one purpose of educational assessment. Another, more important to education itself, is to provide feedback on learning. Assessment used for this purpose, known as formative assessment, is focused on future learning. It is one of the most powerful tools in any teacher’s kit. 

While the Minister’s announcement focused mainly on reporting, SMART will also have formative uses. It will help teachers identify students who need additional attention. That includes students who have made less than the expected progress, as well as those who need to be extended.

The tool is also intended to provide systems-level feedback. It will help to identify schools that need support. Last year’s budget provided for a massive increase of teacher aide hours, learning support and specialist teaching staff. SMART will help allocate those resources effectively.

The provision of additional resources is one way in which systems-level feedback can help improve learning. The other is accountability.  

Continued underperformance after the provision of support and time to improve should trigger a compulsory change in school leadership. Successful schools should be empowered to take over failing ones. 

Putting such a mechanism in place would be an immense political challenge. It would meet resistance. It would require revision of New Zealand’s 35-year-old doctrine of self-governing schools. 

Ultimately, though, educational feedback is about error correction. And sometimes the error is the leadership. 

The great equalizer
Dr Eric Crampton | Chief Economist | eric.crampton@nzinitiative.org.nz
Samuel Colt invented the revolver and a slogan to go with it. “God created men, Col. Colt made them equal”. The revolver was ‘the great equalizer’. Anyone could learn to shoot, levelling the playing field for those otherwise preyed upon.

You might think Colt’s slogan a relic. But there’s a modern analogue. Think about a different kind of power asymmetry. One that’s bureaucratic rather than ballistic, persistent rather than point-blank, and seemingly impossible to break.

Bureaus usually have an information advantage over their Ministers.

A Minister’s office has a handful of staff. A Ministry has hundreds, or sometimes thousands.

Ministers come and go. Officials stay.

Ministers face deadlines. Officials can play to the calendar.

A Minister can direct officials to produce legislation that achieves a specified outcome. Officials can deliver hundreds of pages of legislation, close to deadline, and claim it does the job. Were the officials flat out, or playing strategically? At that point, it is too late for the Minister to do much if legislation doesn’t do the job.

Public choice economists have wrestled with this principal-agent problem for decades. Can the legislature really control the bureaucracy?

It’s a hard problem. But there’s a new equalizer in town.

It’s something any Minister could use right now.

Get a subscription to the best frontier AI model. According to the most recent data, their capabilities double approximately every 4 months. That pace will accelerate as today’s best models help build the next generation of models. But even the current ones are excellent.

For less than five hundred dollars per month, any Minister can have a competent assistant that can parse hundreds of pages of draft legislation in minutes. And a force-multiplier for their own staff.

It can test whether the draft does what was asked, or whether officials have gone off on their own adventure.

It can suggest questions to put to officials.

It can even provide a first cut at legislative drafting, so a Minister can provide officials with a starting point.

A frontier-model subscription is a great equalizer, of a sort. Ministers will know a lot more about their area than most people. And having that kind of domain knowledge is necessary – just like knowing how to aim a Colt.

And like revolvers, it’s a bit of an arms race. Officials will also use it.

Ministers should not go unarmed if they want to hit their targets.

 
On The Record
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