The Government intends to introduce legislation to, in the Government’s words, “tear down barriers” to compulsory acquisition, with a particular focus on the projects listed in Schedule 2 of the Fast Track Approvals Act that are “public works”, and in relation to the Roads of National Significance identified in the 2024 Government Policy Statement on Land Transport.
The reforms arise in the context of a broader review of the Public Works Act, which the Government has signalled will be the “most significant reform in nearly 50 years”. These changes, however, will be expedited. They will be introduced in the coming months and are expected to come into force six months ahead of the broader reforms.
No more objections to the Environment Court
The Government intends to remove landowners’ rights to object to compulsory acquisition to the Environment Court.
At present, landowners who receive a Notice of Intention to Take Land may object to the Environment Court. The Court will ascertain the acquirer’s objectives, consider the extent to which it considered alternate ways of achieving them, and then decide whether it considers the taking would be “fair, sound, and reasonably necessary” for achieving those objectives.
The announced reform would remove that right, at least for Fast-Track approvals projects and Roads of National Significance. Instead, landowners will be able to object to the Minister or Local Authority themselves, who will decide whether the acquisition should proceed.
The change has the potential to make a material difference to the timeframes for the Government’s priority projects, by removing costly and time-consuming Environment Court processes. Given the Minister’s previous announcement that the broader reform would “clarify the factors that the Environment Court can consider when reviewing objections to land acquisitions for public works, with a renewed focus on individual property rights…”, the reform appears to be specifically designed for the Fast-Track approvals projects and Roads of National Significance.
The Minister’s (or Local Authority’s) decision will remain subject to judicial review. The High Court will hear objections based on the lawfulness of the Minister’s decision, rather than a wholesale review of whether the taking is “fair, sound, and reasonably necessary”.
The change will not affect the landowners’ right to have the compensation payable for the taking determined by the Land Valuation Tribunal. That assessment can happen after the relevant taking, so as not to delay the construction of the public work.
Incentive and recognition payments: Strong incentives for early settlement
Dispossessed landowners are entitled to fair compensation under the Public Works Act. The intention is that compensation is full, and fair, without requiring any over-compensation for reluctant landowners.
The Government has announced changes to the compensation regime, to incentivise early settlements.
The proposal is for landowners who agree voluntarily to sell their land, before a Notice of Intention to Acquire Land is issued, to receive a premium of 15 per cent of the value of the land, capped at NZ$150,000.
Landowners whose land is acquired under the accelerated process will also receive a 5 per cent “recognition premium”, up to NZ$92,000.
These premiums appear to be in addition to the premium of up to NZ$50,000 that can be payable for acquisitions of property including somebody’s principal place of residence.
These changes will provide strong, quantifiable incentives for landowners to settle early, especially for the many acquisitions involving land worth NZ$1 million or less.
As always, the detail of the Bill will make all the difference. There will be an opportunity for public comment on the Bill during the Select Committee process. Bell Gully will monitor the reform over the coming weeks and provide a further update.
If you have any questions about the matters raised in this article, please get in touch with the contacts listed or your usual Bell Gully adviser.