Most Read Contributor in New Zealand, September 2016
The passage of the Local Government Amendment Act (No 3)
in the last week before the House rose for the elections completes
the eight point reform programme announced by National in
We outline the changes with particular focus on the new
development contributions regime.
Broad reform directions
The reforms have:
redefined the purpose of local government away from the three
well-beings (social, economic and cultural) to delivering good
quality local infrastructure, local public services, and
performance of regulatory functions in a way that is most
cost-effective for households and businesses
reduced the impediments to inter-council amalgamation
expanded the Auckland local board and mayoral model to the rest
of the country
provided for increased fiscal responsibility
strengthened central government's ability to intervene when
there is a significant problem with local governance
required councils to prepare infrastructure strategies to
manage infrastructure assets (such as water supply and sewerage)
into the future, including identifying significant decisions on
capital expenditure, and
streamlined consultation requirements to limit the use of the
'clunky' special consultative procedure.
With the help of the reform, we anticipate more local government
amalgamations similar to Auckland's super city 'unitary
authority' model being rolled out across the country. From our
experience in Auckland, such amalgamations are likely to have a
wide range of potential impacts on business, particularly during
the transitional phase. Watch this space for more information
post-election when the pathway for further amalgamations is likely
to be clearer.
The initial development contributions discussion paper proposed
a range of reform options from minor tinkering to radical
legislative change (see Chapman Tripp's
commentary). However, despite the scope of the reforms
available to it, the Government has made relatively minor
amendments to the regime.
Development contributions now have a purpose and principles that
must be taken into account. They are to be used to:
enable territorial authorities to recover from
those persons undertaking development a fair, equitable, and
proportionate portion of the total cost of capital expenditure
necessary to service growth over the long term.
Right to a reconsideration
Property developers can now apply to have a council's
decisions on development contributions reconsidered through a
specialised challenge process. The grounds for reconsideration
incorrect calculation or assessment under a development
incorrect application of a development contribution policy,
incomplete or wrong information used by the territorial
This reform will be good news for property developers, given the
previous uncertainty and broad discretions involved in applying
development contributions policies. Having a decision maker at
arms-length from the benefiting party (councils) should also lead
to more transparent, fair and efficient resolution of development
Development agreements between councils and developers are now
explicitly recognised in the Act. These must include details of the
infrastructure that each party will provide or pay for.
Helpfully, the Act now includes a list of non-mandatory
requirements that should trigger developers and council to consider
matters such as staging, operation and maintenance, vesting and
transfers, timing of payments and enforcement of the agreement.
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Please briefly describe the main laws that govern real estate in your jurisdiction.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).