The Government will strengthen infrastructure funding settings to ensure the costs of growth from incoming Fast-track developments can be recovered, Housing and Infrastructure Minister Chris Bishop and Local Government Minister Simon Watts say.

“A key part of this Government’s plan to fix New Zealand’s economy and drive higher living standards is to say yes to growth more often. That’s why we are overhauling planning rules, progressing our Going for Housing Growth agenda, and removing unnecessary red tape. It’s also why we established Fast-track”, Mr Bishop says.

“Councils have told us that they are not able to effectively recover the costs of enabling infrastructure for growth, particularly when it comes to unplanned or out-of-sequence developments.

“The Government’s position is that that growth should pay for growth and we are building a flexible infrastructure funding and financing system to match our new, flexible planning system.

"The Government is in the process of replacing Development Contributions with a new Development Levies system. Consultation on this new system has been extensive and final policy decisions will be announced soon, with legislation to follow. The new system will be operational from 2029.

“In short, the Government wants the economics of development (including infrastructure provision) to guide growth rather than restrictive planning rules.”

“As a targeted, interim step on the path to Development Levies, the Government has agreed to amend the Local Government Act 2002 to provide councils with better tools to recover growth-related infrastructure costs from future Fast-track developments," says Mr Watts.

"In particular, we've identified situations where Fast-track developments may proceed ahead of council infrastructure planning, where developments may take up network capacity intended for live-zoned land, or where developments rely on infrastructure across a council boundary.

“The Government will progress changes so that councils will be able to amend Development Contribution policies where necessary to recover infrastructure costs attributable to growth from eligible fast-track developments. They will also address cross-boundary infrastructure issues by enabling the recovery and transfer of Development Contributions where infrastructure impacts extend into neighboring council areas.

“At the moment, Development Contributions are locked in once applications for resource consent are made. The Government’s changes will allow councils to update Development Contributions after an application has been made through fast-track.

“To support certainty for all parties, these changes must be adopted within six months of a Fast-track approval being granted and, once approved, published as soon as practicable."

Mr Bishop says that the Fast-track Approvals Act 2024 was enacted to enable nationally and regionally significant infrastructure and development projects.

“Projects that should have been creating jobs, delivering homes, and growing local economies were instead caught in prolonged, costly consenting processes.

"Fast-track has been a much-needed circuit breaker. In the short time it has been operating, 31 projects have been approved across housing, infrastructure, mining/quarrying, aquaculture, and renewable energy – representing billions in investment and supporting tens of thousands of jobs.

“It is important to stress that panels are already setting conditions to address local infrastructure required to service developments, requiring roads, water, wastewater and other services to be delivered. They can also decline a project if its adverse impacts, including infrastructure impacts, are out of proportion to its regional or national benefits.

“However, some Fast-track developments can still put pressure on the wider infrastructure network, beyond what council can currently recover, and the changes we are announcing today recognise that reality.

“Fast-track projects that have been ‘Approved’ or for which a substantive application has been lodged at the time the amendment takes effect will not be impacted by this change.

“For Fast-track developments where these changes will apply, the Development Contributions regime has a series of guardrails to ensure there is reasonableness in determining growth costs. Additionally, developers and councils can enter into development agreements to provide earlier certainty, and we encourage that.

"This strikes an appropriate balance. We are maintaining the effectiveness of Fast-track, while ensuring infrastructure funding arrangements are fair.

"As Fast-track development accelerates across the country, we need infrastructure funding settings that can keep up.”