One of the least understood parts of the Government’s RMA replacement could fundamentally change how, or even IF, New Zealand protects the environment.

At its heart is the idea of regulatory takings — that when regulation restricts the use or value of private property, the owner should receive compensation. It’s the same property-rights philosophy embedded in the Regulatory Standards Act, but the RMA replacement takes it a major step further: turning that abstract principle into a regime councils would have to implement through legally enforceable processes.

In this episode of Coherent, I’m joined by Dr Greg Severinsen, Reform Director at the Environmental Defence Society, to look at what this could actually mean on the ground — and whether the RMA replacement is effectively a testing ground for a much wider shift in how New Zealand regulates in the public interest.

Under the proposed “regulatory relief” regime, councils may be required to compensate landowners when rules protecting biodiversity, outstanding landscapes, heritage or sites of significance to Māori have a significant impact on the “reasonable use” of private land. But what counts as a significant impact? What is a reasonable use? And what happens when councils simply cannot afford to pay?

Greg warns that councils may face an extraordinarily complex and litigious process — and that the most likely result is not widespread compensation, but councils retreating from environmental protection altogether.

We use Auckland as a case study, where potentially tens of thousands of properties could be caught by the regime, and explore the implications for Significant Natural Areas, notable trees, outstanding landscapes, sites of significance to Māori and existing protections carried over from current RMA plans. We also look at the huge uncertainty around how compensation would be calculated, including whether landowners could seek relief for hypothetical future development that has never been consented and may never have occurred.

We also explore the deeper intellectual roots of regulatory takings, including American libertarian scholar Richard Epstein’s theory that compensation requirements can be used to constrain the regulatory state by making regulation more expensive, difficult and litigious.

And we ask what a genuinely balanced approach to property rights would look like. Why should the public compensate a landowner for protecting biodiversity when the public often bears the environmental costs of private land use? And is there already a much simpler and more proportionate solution within the existing RMA?

Greg’s conclusion is stark: the current regulatory-relief framework is unnecessary, potentially unworkable, and could leave New Zealand with fewer environmental protections, more litigation and considerably more uncertainty — not less.

Video episode available for free on my Substack.

Resources mentioned:

• Greg’s EDS webinar on this subject
• Article on influence of Richard Epstein’s theory in NZ
• Interview with Sir Geoffrey Palmer on the Regulatory Standards Bill (now Act)

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