The Department of Internal Affairs

The Department of Internal Affairs

Te Tari Taiwhenua

Building a safe, prosperous and respected nation

 

The loopy rules report: New Zealanders tell their stories - executive summary

Message from the Taskforce

New Zealanders are fed up wasting time and money trying to work with loopy rules. We were tasked with identifying rules and regulations which are not fit-for-purpose and which impose unnecessary bureaucratic burdens on property owners and businesses. 

Everyone we heard from has had tales to tell of loopy rules - requirements that are out of date, inconsistent, petty, inefficient, pointless or onerous. These are the things that really annoy people, whether they run a business or own their own home.

In the last few months we have travelled around New Zealand listening to people in their communities. We have also met with councils, sector interest groups and government agencies. We thank all those who have candidly shared their frustrations and given us their views on how rules could be changed to make more sense.

We did hear of rules that protect people, the environment, infrastructure and our heritage but which still enable individuals, businesses and our economy to prosper and grow. But we are struck by the number of instances where the good intentions of the rule-makers are somehow lost in the translation to the real world.

Examples abound of inappropriate interpretation, over-zealous enforcement and lack of focus on the customer. New Zealanders have told us they are confused and frustrated by frequent changes in the rules. They are exasperated by inconsistency, time-consuming processes and unreasonable costs.

It was a surprise to us to find out that a number of the loopy rules are in fact just myths. They are misinterpretations and misunderstandings that have been repeated so often that they have taken on the status of facts. We heard many examples where people are not clear about what they need to do and why. Myths fill the gap when clear information is hard to find. We highlight these myths in this report along with the loopy rules that need to be changed or removed. We discovered that loopy rules are difficult to get rid of because they’re part of a wider system, because a focus on the customer is absent, or because of the interests of experts or the fears of their administrators. What’s clear is they thrive when rule makers fail to take responsibility for them.

Most importantly, we identify opportunities to fix many loopy rules and bust the myths. Our top ten fixes are listed on page 7. We call on both central and local government to stop making more loopy rules.

Jacqui Dean MP
 
Michael Barnett ONZM


Co-ChairsRules
Reduction Taskforce 

In a nutshell

What makes property owners unhappy

The Rules Reduction Taskforce received submissions on more than 2,000 topics covering what submitters call loopy rules. Around two-thirds are in the context of the Resource Management Act 1991 (RMA) and the Building Act 2004. Three quarters of the issues raised are about the responsibilities and actions of councils.

 

Percentage of Resource Management Act (RMA) and Building Act submissions
Figure 1: Percentage of Resource Management Act (RMA) and Building Act submissions

 

These rules are usually the unintended results of a well-meaning act, regulation, or a practice instituted by a local council.

We find that some loopy rules are based on people’s mistaken beliefs or on incorrect advice from an agency. Other times, a rule is simply bad practice that has become a rule only because someone says it is.

Such rules make people angry because they are simultaneously insulted by them and bound by them. The very real financial loss they can cause adds to the frustration.

What is a loopy rule

Submitters find many kinds of rule annoying. Some of these are shown below:

Table 1: Examples of loopy factors

The loopy factor

Example of what people said

The rule is not practical

The owners of a bus depot structure that has no walls are forced to install four exit signs, just in case people can't find their way out if there is a fire.

 

The rule makes no sense

The Health and Safety mining regulations define a tunnel as ‘what it is not’ rather than ‘what it is’.

 

Compliance with the rule defeats its very purpose

An owner of a rural property had to spend $30,000 putting in a driveway and watertank to meet the fire requirements. The tank was at the back of the house. When the house caught fire, the fire chief would not drive his truck past the house to the tank in case it caught fire too.

 

A small change is treated the same as a big change

As part of the refurbishment of an earthquake-damaged building, a pharmacy is being added to the front of a 1950s building. The pharmacy is to be 3.5% of the building. The rest is residential. The pharmacy has triggered the need to upgrade the fire rating of the entire building at a cost of $50,000.

 

The rule sets a standard that can never be achieved

Converting a shop into a two-bedroom residential unit required a reduction in noise levels from 70db to 35db. We tested the required noise levels in our brand new home; the only place that complied was the wardrobe.

 

The rule is inflexible and imposes costs far in excess of any benefits

Under direction from Wellington, our council enforces clean air standards. For 12 days of the year our town does not meet the standard for PM10 particles. For the other 353 days of the year the air is great. The council has subsidised the replacement of hundreds of fires – often very efficient ones – and replaced them with inferior models for little or no change.

 

The rule requires permission to fix something the property owner doesn’t want

An owner had two protected trees on his property, listed by the council. One was dying, the other was unsafe and needed trimming. The owner is expected to get resource consent to maintain the trees on behalf of the council.

 

The rule means I cannot assume to benefit from value I have created from my own efforts

A farmer planted 5,000 kauri trees and asked the council if he could eventually harvest them. The council said it could not guarantee he could harvest them because they were kauri.

 

A rule can be interpreted in many ways

Having a level entry to showers: Some councils say yes, some say no, and then charge for an opinion or ruling.

 

There is no mechanism to update legislation as circumstances change

Long ago, hairdressers were once a source of infection – but no more. Even so, councils must register and inspect them yearly.

 

A rule has a compliance regime that does not allow for the fact nothing may change

Rigging loops have to be put in to a specified standard but then must be re-certified each year. If a year is missed, they must be abandoned and new ones inserted into the concrete, which would weaken the concrete.

 

The rule arises from officials’ zealousness and has no material effect

A council advised a farmer it was going to classify his land as a significant natural area under the Resource Management Act. Such a classification would limit his ability to use the land in certain ways, including turning his car lights on at night in case it disrupted the flight of Westland Petrels. The council acknowledged the birds never landed, swam, nested or mated there. It was simply on their flight path.

 

Where we found the loopy rules

Loopy rules are everywhere: Acts of Parliament, regulations, codes of practice, district plans and guidance material.

Five acts in particular are a source of trouble for property owners:

  • Building Act 2004
  • Resource Management Act 1991
  • Health and Safety in Employment Act 1992
  • Local Government Act 1974
  • Local Government Act 2002.

Around 400 (22%) topics are related to other acts.

The relative level of topics received on each of those acts is shown below.

Percentage of topics raised for each main act

Figure 2: Percentage of topics raised for each main act

 

Who is annoyed by loopy rules?

Property owners from various backgrounds were keen to tell us about their issues with red tape.

Homeowners are often also DIY builders, and they and tradespeople have many issues in common.

Other submitters have a very broad understanding of the loopy rules because they run businesses, are landlords, and/or carry out property development.

Around half of all councils took the opportunity to directly write to us or attend community meetings. Substantive written submissions were made on behalf of all councils by Local Government New Zealand, and by the Society of Local Government Managers. Sector groups were happy to tell us about the experiences of their members and make suggestions about fixing loopy rules.

Percentage of submitters by category

 

Figure 3: Percentage of submitters by category

The impact of loopy rules

Loopy rules not only annoy property owners, workers and tenants, they also frustrate agencies with the job of enforcing them, such as councils. They add needless complexity, clog up decision-making processes and add unnecessary cost. Submitters rate their adverse effects in the following order:

Impact of loopy rules

Figure 4: Impact of loopy rules

 

It is not always the written rule that causes these problems. A lack of customer focus can turn good rules bad. And often a rule is flawed in more than one way, multiplying the problems they cause. 

Complexity

Councils are responsible for administering 37 Acts of Parliament (according to Local Government New Zealand), many of them very complex. Their complexity is a frequent cause of inconsistent decisions – and also of complaints from submitters trying to plan their affairs and transact business dealings. The proliferation of policies and criteria add up to a potent brew:

A section 42a report done for a subdivision had to be assessed against 59 objectives and policies.

Many problems of non-compliance arise from unintentional breaking of a rule. People simply can’t understand what is required of them, in spite of numerous guidance documents. The sheer number of such documents, along with the number of agencies issuing them, compounds the confusion.

And finally, the heavy reliance on technical terms by those drafting the rules increases the complexity still further, putting them beyond the reach of ordinary people.

Unnecessary bureaucracy

Some rules are there “just in case” a problem might arise in future, with little evidence that it will.

Other rules are decades old and have lost their reason for existing, either because of technological advances or from changes in practices or community expectations:

The Council was not up-to-date with modern deer farming – deer are no longer seen as a “noxious pest”. The district plan rule uses a revoked law (Noxious Animals in Captivity Regulations 1969) and an out-of-date industry standard. Resource consent is required if we didn’t meet this standard. But the regulation was revoked in 2008 and replaced by a DoC gazette that does not label farmed deer as a noxious animal. Very remiss of the Council to not research this, and unfair to regulate us on an outdated law.

Causes delays

The time taken for consent applications to be processed by councils is a big concern for many. The ability of councils to “stop the clock” on applications was a frequent complaint. Submitters question the value of a legislative timeframe that can be overridden at will, with the result that the 20 days for consent can turn into several months.

To try to keep their figures good, the council will send out a letter (before issuing the consent) on the 18th or 19th day, asking for more information and in many cases, that information is totally irrelevant.

Too expensive

The costs of compliance are a frustration for submitters, whether incurred directly as a fee or indirectly through holding costs for property investors who are held up by repeated questions from officials.

Average building consent fee is 1% (including BRANZ fees). This is $5,000 on a $500,000 house. How can it cost so much?

Vague, open-ended rules need interpreting about how they apply to a specific business or situation, creating a market for consultants and lawyers.

Poor customer service

Councils like to avoid making mistakes. But the fallout from the leaky homes saga, together with an affinity for sticking to the rules and a desire to minimise liability, results in councils failing to treat their ratepayers first and foremost as customers.

It is less risky for an official at a front desk to follow a standard procedure than to recommend a deviation. As a result, many submitters say they seldom feel valued in their dealings with councils, let alone treated as customers:

He has made about 15 phone calls every week for six months trying to resolve the drainage issues for a building project when it is a non-active drain. He has dealt with three different people in council… and no one will sign off or make a decision.

Inconsistency

Councils’ inconsistent interpretation of rules is a cause of frustration. Inconsistency can occur even among staff in the same council, something most evident when councils are either exercising discretion or trying to make sense of an unclear meaning.

Misalignment of interpretations within one council and between district councils creates situations where the building industry gets stuck in the middle of interpretations.

Our top ten fixes

Fixing individual rules that don’t make sense is the main priority, and we have identified many opportunities for central and local government to consider. Most of our report looks at these. But collectively our future objective must be to stop the creation of more loopy rules.

Regulators don’t set out to make silly rules. Making laws and regulations takes place within a wider system with its own culture and practices.

1. Make it easier to get building consents

  • Speed up the development of risk-based consenting and investigate other ways to simplify the consenting of minor structures.
  • Promote the use of building consent exemptions under Schedule 1 of the Building Act 2004.
  • Complete the fix-up of the building fire upgrade regulations this year. Ensure additional requirements imposed reflect the extra costs imposed and the benefits to be gained.
  • Use progressive building consents so work can begin sooner, with non-structural details confirmed later.
  • Streamline the determinations process for applicants.

2. Get serious about lifting the skills of building sector

  • Develop an industry-wide strategy to lift the professional practices of builders.
  • Work towards builders certifying their own work so as to deal with joint and several liability pressures on councils.

3. Make it easier to get resource consents

  • Establish an end-to-end relationship management approach for all resource (and building) consenting within councils.
  • Require councils to report publicly on their actual performance in meeting the statutory 20-day deadline (for building and resource consents), as well as the total time (including all delays resulting from information requests and so on).
  • As part of the planned Resource Management Act 1991 reforms, eliminate the need for resource consents for minor and technical breaches.
  • Introduce a faster, more flexible process for changing plans under the Resource Management Act 1991reforms.

4. Reduce the cost of consenting fees

  • Cap government building levies.

5. Sort out what “work safety” means and how to do it

  • Define what is meant by “all practicable steps” in the Health and Safety in Employment Act 1991 and any replacement term in the Health and Safety Reform Bill.
  • WorkSafe should do more about myth-busting, correcting misunderstandings and providing consistent information.
  • Develop clear and accessible guidelines and codes of practice once the Health and Safety Reform Bill becomes law, working with all other agencies involved.

6. Make it clear what the rules are

  • Define what is meant by “as nearly as is reasonably practicable” in the Building Act 2004.
  • Require the Ministry for the Environment to work more closely with the other agencies to provide more timely and comprehensive guidance when developing and issuing national directives.
  • Make government agencies accept their responsibility to correct misunderstandings about their policies and regulations, particularly in the building and resource management areas, and as noted in health and safety.

7. Establish a new customer focus the public sector

  • The State Sector Act 1988 and the Local Government Act 2002 should include customer service responsibilities for chief executives.
  • All Local Government Chief Executives should have a customer focus component in their Key Performance Indicators. They should consider utilising the Customer Champion and Fast Fix approaches.
  • To maintain a permanent focus on loopy rules, establish a website for people to report loopy rules, which are then referred to the responsible agency to put right.

8. Departments should introduce a stakeholder engagement approach to developing local government policies and regulations

  • Require all government departments to adopt a stakeholder approach, such as that used by the Ministry of Transport. The Ministry signals policy changes in advance, involves stakeholders early on and is open to critical feedback.
    • Require central government to develop a project-specific engagement approach when developing policies and regulations that local government must implement. This approach could be useful for example, in the development of proposed changes to amended shop trading hours  (Easter Sunday trading) and the implementation of the Building (Earthquake-prone Buildings) Act.
  • Amend the guidelines for Cabinet papers so they include “consultation with the Minister of Local Government” when a proposal will affect local government.

9. Reform the Local Government Act 1974 and the Reserves Act 1977

  • Update the remaining provisions of the Local Government Act 1974 Act.
  • Review and update the Reserves Act 1977.

And, most importantly:

10.  Stop making loopy rules

  • Develop a coordinated pipeline approach to regulation.
  • Include a cost-benefit analysis prior to development.
  • Create a mechanism to actively review central and local government regulations.
  • Extend Treasury’s annual review of departmental regulations, and incorporate an assessment of local government regulations.

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