Advocacy in a Nutshell | June 2018
Welcome to the June edition of Advocacy in a Nutshell; the latest update from our advocacy team, featuring all of the projects, policy and issues that matter to you.
This month we're taking a look at the seven advocacy priorities set by the team at the beginning of the year and reporting back on our progress over the month of May.
Our priorities are:
- Credibility, reputation and influence
- Infrastructure funding and provision
- Finance and tax settings
- Planning system reform
- Asset management
- Building system and building code reform
- Construction sector transformation
We'll also give a quick overview of what is happening in the Branches.
The property sector is viewed as a large positive contributor to the New Zealand economy so that decision makers proactively make decisions that benefit the sector (and use Property Council as the go-to organisation for advice and information on property).
- Steady progress in building relationships with the new Government. Regular meetings with Ministers Twyford and Salesa, and good introductory conversations with other Ministers and MPs.
- Reasonable media coverage portraying Property Council in a constructive light - this should improve further as relationships build with journalists and trialling new ways of getting media attention.
- Reputation risks around the lack of diversity in the industry, hence the prioritisation of our Diversity Working Group.
Infrastructure is well planned, is funded sustainably and equitably and built in a timely way to ensure cities facilitate growth sustainably.
- Government is actively talking about new funding models, such as value capture and targeted rates.
- Local authorities are raising the issue of alternative funding models as part of their Long-term Plan discussions.
- Review of local government funding announced to be undertaken by the Productivity Commission, giving the review credibility and robustness.
- The advocacy team are setting up a member working group to develop our position on infrastructure funding mechanisms.
Government's fiscal, financial and tax policy settings facilitate growth of the property sector.
- Property Council submitted on the Future of Tax discussion document and were invited to discuss this directly with the Tax Working Group (TWG). Questioning from TWG members implied they want to find workable solutions to issues facing commercial property businesses, especially deprecation and capital expenditure.
- We are still awaiting the Select Committee’s report back on Overseas Investment.
- Timing of fire levy changes to be delayed, but unclear whether a change of direction is likely.
The resource management, local government and infrastructure planning and funding systems are reformed to ensure they are integrated and flexible (i.e. non-prescriptive) to facilitate growth and development.
- Continued positive messages from key Ministers acknowledging that the system needs to change long-term.
- A separate Urban Development Ministry was announced and urban development authority legislation likely in 2018 (but not operative until at least 2019)
- However, the Government's short-term focus is likely to be further fiddling with the RMA - this could be positive but will distract from the bigger picture.
- Proposed Local Government Act (Community Well-being) changes around development contributions could negate housing affordability and is counter to system coherence.
Management of, and investment in, buildings and provision of tenant services is made easier, more cost effective and keeps pace with technological change and societal and investor expectations.
- Property Council is increasing its involvement in the creation and dissemination of data and research on the performance of buildings and the sector.
- Involvement in IPD/MCSI Index and the RICS Commercial Property Monitor increasing.
- Property Council’s annual Operating Expenses research was released in May.
- The new Residential Measurement Guide for New Zealand was developed and released.
The costs (time and money) imposed by the building regulatory system on the property sector are minimised while maintaining or improving safety and innovation.
- Government's focus has been understanding the problems/issues at big picture level, rather than technical parts of the building code and consenting.
- There is growing understanding that local council liability is a core problem and driving the extreme risk aversion and associated bureaucracy. Some thinking on risk and liability is now coming out of MBIE.
- MBIE's activity on building system reform has seemingly reduced and/or become less transparent, but may be starting to improve.
Productivity and value for money of the design and construction sectors improves.
- Lots of publicity around the need for innovation, including prefabrication, and better allocation of risk throughout the design, construction and property sectors.
- This issue has the attention of key Ministers Phil Twyford and Jenny Salesa, but the focus seems to be on prefab.
- Very little in the Budget regarding real improvements in construction sector around labour and materials.
- Some work on risk, liability and skills starting to come out of MBIE for engagement with the sector.
Residential Development Council
- Continued positive collaborative meetings with Minister Phil Twyford and members regarding the Government’s housing priorities at industry, project and member-level.
- Kiwibuild’s ‘Buy-off the Plan’ underwriting a win for Property Council.
- Plans for research into building cost towers advancing and being anticipated by Government officials
- Consolidated research on risk-based consenting being undertaken prior to MBIE’s Risk and Liability Project scheduled for October 2018.
New Zealand Council of Shopping Centres
- Government announcement of GST for overseas online purchases positive for sector.
- Positive signals from central Government of further investment into Auckland, especially transport, with signals that the Auckland Transport Alignment Project (ATAP) programme is going to be fully funded.
- Auckland Council has decided to progress with the Regional Fuel Tax which unlocks further funding to support the fully funded ATAP programme.
- There could be issues with increases to development contributions depending on how Auckland Council assess total package of infrastructure.
Bay of Plenty
- Property Council advocacy helped move Tauranga City to a much lower business differential than initially proposed.
- While the introduction of the differential at all was opposed, the lower option is a (minor) victory for the Property Council advocacy work in this space.
- Hamilton City Council (HCC) rates increases will be less than proposed and transitioned over several years to capital value (in line with our proposal), rather than immediately. Higher than proposed UAGC will also help lower rates increases for big ratepayers (mostly Property Council members).
- HCC decisions on development contributions will see even bigger increases than proposed (contrary to Property Council and various members’ submissions) and is a real step backward.
- A recent meeting with the HCC Mayor, councillors and staff was positive in terms of ensuring Property Council is regarded as a key stakeholder and involved in the pre-consultation stage for any upcoming policy development.
- Let’s Get Wellington Moving summary of submissions showed most respondents favouring the ambitious Scenario D, in line with our preference. Further consultation later this year.
- Government and Wellington City Council (WCC) has increased funding to $65k per building for selected buildings to strengthen their facades.
- We submitted our WCC Long-term Plan recommendations in line with our member’s preferences as evident through member survey.
South Island (including Otago)
- Positive announcements from Minister Megan Woods about key anchor projects – Metro Sports and the Stadium, but funding still has degree of uncertainty.
- Residential development in Christchurch’s CBD is not progressing at the pace expected post-quakes. Property Council research has identified big challenges to further residential development.
- Questions about Queenstown Lakes District’s ability to cope with growth not answered by their Long-term Plan.
Author | Matt Paterson
As Property Council New Zealand's Head of Advocacy, Matt leads our team of advocacy advisors, researchers and public affairs experts. Based in Wellington but frequently found in all corners of the country, Matt has his finger on the pulse of central government, providing valuable insights for our membership and acting as the conduit between our members and the country's movers, shakers and policy makers.