ACT's Cyclone Gabrielle recovery ideas: Declare Special Economic Zone, exempt affected businesses from minimum wage increases

The ACT Party is proposing a Special Economic Zone be established covering Hawke's Bay and Tairāwhiti to slash regulation and accelerate recovery from Cyclone Gabrielle.

"People have had their lives turned upside down in the floods, the same old one-size-fits-all rules and regulations aren’t going to work," said leader David Seymour.

"Declaring a Special Economic Zone allows people to access finance, bypass red tape and ensure they can work within their means to do what they need to do to recover.”

It's one of 15 ideas contained in a policy document released by the party on Friday focused on assisting the two cyclone-battered regions to rebuild after the severe weather event caused significant destruction last month.

Among them is the proposal for a Special Economic Zone covering Hawke's Bay and Tairāwhiti which would lift regulatory barriers "that normally stand in the way of getting stuff built and businesses humming".

"The idea of cutting through red tape to enable disaster recovery has a strong history in New Zealand. In the wake of both the 2010 and 2011 Canterbury earthquakes, as well as the 2016 Kaikoura earthquake, Parliament passed legislation which allowed Ministers to override legislation for the purpose of the recovery."

The document said this would avoid the "extraordinary concentration of powers with one minister", like after the Christchurch earthquakes, and allow "local communities to act free from Government interference".

RMA and money

Within the Special Economic Zone, ACT would like to see Resource Management Act (RMA) barriers removed. It would automatically permit any emergency or restoration work.

"There will be clear criteria for when consenting will be required (including a principle that any significant adverse effects of the restoration work on adjoining landowners must be avoided, remedied or mitigated), but with a simplified and more rapid consenting process. 

"This will be similar to what was done in Hurunui/Kaikoura, but would be applied to the entire affected region."

ACT has opposed the most recently announced minimum wage increase - from $21.20 to $22.70 - as well as the Government's Fair Pay Agreements, and wants a moratorium on these in the Special Economic Zone.

The policy document said there shouldn't be any new minimum wage increases in the zone for three years to provide relief to businesses and farms hit by the cyclone. An exemption to Fair Pay Agreements would mean businesses "don't need to be dragged into negotiations" while recovering. 

Finance would also be more readily available, the party said, by widening an exemption to the Credit Contracts and Consumer Finance Act (CCFA).

Following Cyclone Gabrielle, the Government introduced a temporary exemption to the CCCFA allowing money to quickly be lent to people needing to address damage, replace property, provide for a loss of income or meet everyday costs without extensive assessments of their ability to repay it.

The exemption applies for temporary credit up to $10,000, but ACT wants this increased. 

ACT leader David Seymour.
ACT leader David Seymour. Photo credit: Getty Images.


The Government's also announced a six-month Recovery Visa to bring in specialist workers needed for the rebuild from the cyclone, like insurance assessors, engineers, and heavy machine operators. Successful applicants have their fees refunded, making it free for those who arrive.

The Government aims to have these applications processed within a week of receipt. 

Immigration Minister Michael Wood last week told AM that the "vast majority" of the visas would be processed within seven days, but there could be a small number of cases that take a little longer as they haven't filed their applications properly.

Processing times can also be affected by the number of people at Immigration NZ to deal with the workload. 

ACT wants to ensure the visas are processed as quickly as possible and would also extend the length of the visa to three years, but only for work in the Special Economic Zone.

"The Recovery Visa should involve fast track processing for any person from a visa waiver country. People from visa waiver countries can already holiday in New Zealand for three months at a time. These are countries that are considered low risk to our national security. 

"The Recovery Visa would allow applicants to work within the Special Economic Zone (as long as the work does not involve children). In order to speed up processing, a standard police and character check will be undertaken to validate the visa, but will not need to be completed prior to working."

Many of the other ideas proposed in the policy document have already been mooted by the party.

ACT's list of "15 urgent solutions for the cyclone rebuild":

  1. Create a Special Economic Zone for Hawke’s Bay and Tairāwhiti where a number of normal restrictions don’t apply, so the rebuild is not caught up in unnecessary bureaucracy
  2. Amend section 9 of the Sentencing Act 2002 so that offending in a state of emergency would be an aggravating factor at sentencing
  3. Invoke Section 9 of the Defence Act so the New Zealand Defence Force can assist Police with civil powers in a time of emergency
  4. Cut all wasteful spending, including Three Waters reforms, to focus on recovery spending and avoid inflationary deficit spending
  5. Increase the amount of financing available and extend the time of the exemption to the Credit Contracts and Consumer Finance Act (CCCFA) to allow people to quickly access finance
  6. Remove RMA barriers to rebuilding and repairing with special legislation so the recovery doesn’t need to wait for consents
  7. Beef up the Recovery Visa so that it lasts for three years and has 48 hour processing turnarounds
  8. Enact a Materials Equivalence Register so there is ample supply of building materials for the rebuild
  9. Reduce pressure on small business owners with a three-year moratorium on minimum wage increases, and an exemption from Fair Pay Agreements for businesses within the Special Economic Zone
  10. Streamline foreign investment by allowing foreign direct investment from democratic OECD countries to skip Overseas Investment Office approval so businesses needing investment to rebuild can access more capital
  11. Replace council building consent processes with private insurance so that people do not need to wait for council consent if an insurer is prepared to insure the building
  12. Share GST revenue with local government to fund infrastructure development so local Government has certainty of funding to invest in rebuilding
  13. Focus local government on core goods and services and price flood risk though variable rates so building in dangerous places pays more of its own council costs
  14. Review the role and purpose of EQC in response to climate events so that it does not subsidise building in risky places
  15. Deal with the risks of forestry slash by making it easier to remove and set mitigation measures, and explore the concept of refundable bonds upon planting

The Government has already taken a number of steps to assist with the recovery, including by appointing a new Cyclone Recovery Minister and a taskforce purposed with aligning local recovery plans with the work of government agencies, and injecting money into mayoral relief funds and the National Land Transport Fund.

A $50 million emergency package includes $25 million to help businesses meet immediate costs and $25 million for farmers and growers.