Environment Minister David Parker has launched an "overhaul" of the Resource Management Act (RMA) to cut complexity and costs and better protect the environment.
The key issues to be addressed in a review of the RMA will include removing "unnecessary complexity", ensuring faster and more responsive land use planning, and ensuring Māori have more participation.
The overhaul will consider reducing the complexity of consenting processes, clarifying the meaning of iwi authority and hapū, and whether the RMA should align with the Green Party's Zero Carbon Bill if it passes.
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Also under consideration is whether part two of the RMA - the 'purpose and principles' section - should be a separate piece of law. It requires councils to consider objectives such as "the intrinsic values of ecosystems" when making any decision.
Cabinet has approved $7.9 million from Budget 2019, over four years, for the review.
"It is unacceptable for this cornerstone law to be underperforming in a country that values protection of the environment while properly housing its people," Parker said on Wednesday.
National's spokesperson for Housing and Urban Development, Judith Collins, said the review needs to "usher in meaningful changes that will break down barriers to getting things built in this country".
"The fact the Government has worked out it can't get its own KiwiBuild developments going without changing the rules shows just how bad it is for everyone else."
She said her main concern was that the Government had left the review too late in the electoral cycle, and said it suggests they aren't confident of getting the Greens and New Zealand First on board.
However, Collins said the RMA is "no longer fit for purpose" and said it "stops things from being done quickly".
"We are open to working with the Labour-led Government on this reform if it can present sensible solutions that will deliver New Zealand the infrastructure it needs."
ACT leader David Seymour said he supports the proposed RMA reform, which he said gives councils the power to restrict new development.
"I never thought Labour would be more promising than National on RMA reform, but right now that's where we are.
"ACT is prepared to work with the Government in order to reform the law. This is important work the [former] National Government refused to do."
The RMA is the principal statute for managing New Zealand's built and natural environments, including the coastal marine area.
Passed in 1991, it reformed New Zealand's environmental law, taking an integrated approach to the way central government, local government and communities manage natural and physical resources.
But according to the Environmental Defence Society, "the environmental outcomes of the RMA have not met expectations... it has largely failed to achieve the goal of sustainable management to date".
Parker's Cabinet paper points out that house prices in Auckland are "among the most unaffordable in the world". He goes on to say, "Poor quality regulation and regulatory processes have contributed to these problems".
"Infrastructure planning and provision has also been insufficient... the time is right to begin a comprehensive review to address the more fundamental issues."
Parker announced a two-step process to improve the resource management system in November last year. The first stage would reverse some changes made by the previous government in 2017 around subdivision consent applications.
The overhaul will be led by a panel chaired by retired Appeal Court Judge Tony Randerson. It is expected to produce a proposal for reform, including drafts of key legislative provisions, by mid-2020.
Parker said in the meantime the Government will press ahead with work to improve freshwater quality and urban development, protect highly productive land and indigenous biodiversity, and reduce waste.
He said these "are urgent and cannot wait for the comprehensive reform plan".