LOCAL
FROM REFORM TO REALITY
LIBERATION OF ALCOHOL LICENSING
THE GRANNY FLAT EXEMPTION
Lucy Wesley-Smith
MEET THE TEAM
Nathan Speir
Cordelia Woodhouse
Aoife Crumley
From reform to reality: What councils need to do now on infrastructure funding
In this article, Aoife Crumley writes about proposed changes to infrastructure funding legislation in New Zealand, outlining what the reforms mean in practice for councils and the steps they should take to prepare for a more complex operating environment.
The Infrastructure Funding and Financing Amendment Bill (Bill) is, on its face, pragmatic reform. It expands the tools available to fund growth, reduces procedural friction, and promotes flexibility.
Councils broadly support that direction The need for more flexible funding tools is well understood, particularly in highgrowth areas operating under debt and affordability constraints
Whether the Bill will deliver on that promise is a different question What emerges both from the Bill itself and themes across select committee submissions, is that the concern is not the objective of the reform, but how it will operate in practice. In short, will the reality meet the commendable objectives?
The practical implications of the Bill are best understood not as a change in funding tools, but as a shift in how councils will be expected to function in practice
The Bill is currently before the Finance and Expenditure Committee, with its report due on 8 June 2026. While it remains subject to change, the direction of travel is clear and unlikely to materially shift
WHAT IS CHANGING?
At a high level, the Bill does three things:
It expands the use of Infrastructure Funding and Financing mechanisms This includes broadening the scope of eligible infrastructure and enabling a wider range of entities - such as water organisations, transport agencies, and private proponents responsible for funding or delivering infrastructure projects - to access the regime
It streamlines the approval process Discretion and approval steps are reduced, and in many cases, responsible authorities are required to endorse proposals where statutory criteria are met Ministerial oversight is also narrowed, including the removal of certain mandatory considerations.
It introduces more flexible levy structures and stronger recovery mechanisms These include one-off charges, levy deferrals, and expanded recovery powers aligned with the Local Government (Rating) Act 2002.
Taken together, these changes are intended to improve
predictability, increase uptake, and enable infrastructure to be delivered more quickly In principle, that is difficult to argue with
In practice, it could create a more complex and less controlled operating environment for councils
THE REAL SHIFT – AND HOW COUNCILS SHOULD PREPARE
From policy discretion to constrained endorsement
Under the current framework, councils have some ability to shape how infrastructure funding works However, this is significantly narrowed under the new regime
In many cases, councils (or other responsible authorities) will be required to endorse proposals unless they can demonstrate specific risks such as an inability to collect levies or charges over the levy period.
In practice, that means fewer opportunities to reshape a proposal once it is formally lodged and more pressure to approve proposals that meet technical thresholds.
Practical steps:
Develop consistent internal templates and processes so proposals can be assessed on the same basis
Expect to ask for more detail on costs, assumptions, and network impacts, even where the legislation is silent
Involve finance and legal earlier than current practice may require
Where discretion is reduced, the quality of the front-end assessment process becomes critical That work needs to be done before the system is fully operational.
From central safeguards to local responsibility
The Bill reduces some of the external checks that previously sat around levy proposals
In particular, in some cases the Minister will no longer be
required to consider affordability or long-term impacts where landowners support the proposal
That does not remove those issues It shifts responsibility for them and requires councils to be ready to assess them directly.
Practical steps:
Build a clear understanding of how levies will interact with existing charges, rates, and other funding tools
Develop internal capability to sense-check growth, cost, and timing assumptions
Establish internal thresholds for when affordability concerns should trigger further scrutiny
The model assumes that development proceeds as expected Where it does not, recovery mechanisms are triggered and the consequences are often managed locally Preparing for that reality requires councils to be more deliberate now about how these risks will be assessed and managed
From integrated planning to a multi-actor system
The reform expands the number of actors involved in infrastructure delivery. SPVs, developers, water organisations, and central agencies will all play a greater role That can improve delivery
But it also increases the risk that infrastructure is delivered outside planned sequencing or without full alignment to spatial and infrastructure strategies
Practical steps:
Reinforce alignment between funding decisions and LTPs, infrastructure strategies, and spatial plans
Ensure planning, finance, and legal teams are working from shared assumptions
Clarify expectations around long-term ownership, operation, and maintenance responsibilities
Develop internal discipline around assessing network-wide impacts, not just project-level outcomes
Without this preparation, there is a real risk of fragmented or inefficient infrastructure outcomes, with long-term cost implications
CONCLUSION
The Infrastructure Funding and Financing reforms expand the range of tools available to fund growth That is necessary, and in many respects overdue.
But the practical effect of the Bill is to shift more responsibility onto councils, arguably without a corresponding increase in control.
That does not mean councils need to change everything they do But it does mean preparing now for a different operating environment - one where decisions will need to be made earlier, with greater accountability downstream
GET IN TOUCH
For more information on infrastructure funding and what your council specifically should be doing, reach out to Simon Rickit or Aoife Crumley.
Backyard reforms: The granny flat exemption
In this article, Associates Wade Morris and Lucy Wesley-Smith examine the changes introduced by the Building and Construction (Small Standalone Dwellings) Amendment Act 2025 (Amendment Act) and what these changes mean for councils
While it’s still early days, the granny flat exemption establishes what can fairly be described as a ‘high trust’ model. It relies significantly on property owners - and their advisors - correctly assessing whether proposed building work satisfies the requirements of clause 1 Schedule 1A of the Amendment Act, and any applicable National Environmental Standards.
This represents a fundamental shift in how the system operates. In particular:
A council’s role at the PIM stage is not equivalent to its role in the building consent process;
The statutory threshold is materially lower – councils assess whether proposed building work will likely satisfy the criteria of clause 1 of schedule 1A of the Act; and
There is no express statutory mechanism requiring councils to follow up or proactively monitor cases where they indicate that proposed work is unlikely to comply
In our view, where a council issues a PIM indicating that proposed building work is unlikely to satisfy clause 1 of Schedule 1A, or is non-compliant with the relevant National Environmental Standard, that effectively operates as a warning to the homeowner The exemption does not require councils to take further monitoring or enforcement steps unless it has actual knowledge that unlawful building work has occurred
Against that backdrop, councils are not acting as gatekeepers in the traditional sense Their role is narrower, more targeted and deliberately constrained
WHAT HAS CHANGED AND WHY
From 15 January 2026, small standalone dwellings or “granny flats” may be constructed without a building consent, provided they are:
Stand-alone (not attached to any other building); Wholly new (not an addition or alteration);
Up to 70 square metres; Single story; and
Compliant with clause 2 of Schedule 1A of the Building Act 2004 (Building Act). [A Territorial Authority issuing a Project Information Memorandum for a potential granny flat, must only consider clause 1 of Schedule 1A]
The Amendment Act was introduced to increase the supply of affordable housing by making it faster and cheaper to build
granny flats (provided certain conditions are met). The Government estimates that the exemption will result in approximately 13,000 new granny flats over the next decade
The exemption sits alongside the Resource Management Act 1991 and the National Environmental Standards for Detached Minor Residential Units (NES-DMRU), which permits one minor residential unit per site without resource consent if specified standards are met (including size, setbacks, and site coverage) Granny flats that do not comply with NES-DMRU will still require resource consent or an alternative planning pathway, for example, under the relevant District Plan.
HOW THE EXEMPTION WORKS IN PRACTICE
The exemption is optional Homeowners seeking the comfort of greater council oversight can still choose the traditional consent and inspection pathway.
Those using the exemption are responsible for ensuring compliance with the Amendment Act and the Building Code All building work must be carried out or supervised by licensed building practitioners (LPBs) and must be properly documented If the exemption criteria are not met at any stage, a building consent or Certificate of Acceptance will be required [Ministry of Business, Innovation and Employment, Granny Flats Exemption Guidance, December 2025, p 9]
PIMS: THE FOCAL POINT FOR COUNCILS
The Project Information Memorandum (PIM) is central to the new regime. Before any building work begins, homeowners must apply for a PIM [Building Act 2004, s 42B(3)(c)], including a description of the proposed work and preliminary design plans There is currently no requirement for preliminary design plans to be prepared by an LPB designer
Councils must issue a PIM within 10 working days (subject to requests for further information). This compressed timeframe will likely require greater internal coordination The PIM must
address matters such as likely compliance with Schedule 1A, natural hazards, relevant bylaws, and development contributions
Importantly, homeowners may proceed regardless of the PIM’s content – reinforcing the high-trust nature of the regime However, they do so at their own risk
If work begins before a PIM is issued, the exemption does not apply Once issued, building work must be completed within two years (subject to possible extensions)
On completion, homeowners must provide their council with key completion documentation (including final plans, Records of Work, Certificates of Work and electrical and gas safety certificates) within 20 working days, and pay any development contributions. Councils are not required to review completion documents
COUNCIL OBLIGATIONS AND LIMITS
Councils are not responsible for approving or inspecting building work under the exemption, nor for verifying Building Code compliance Their role is limited to issuing PIMs, maintaining records and assessing whether proposed building work is likely (which seems to be a lower standard than required under the traditional building consenting processes) to satisfy clause 1 of Schedule 1A criteria
Councils must also retain records of information they provide to homeowners with the PIM and any completion documents received from homeowners This information should also be recorded on the property’s LIM to inform future purchasers
WHAT IF SOMETHING GOES WRONG
The exemption shifts liability from councils to homeowners and LPBs Councils are protected from civil proceedings for anything done in good faith, within their statutory role It therefore becomes crucial for homeowners to choose their LPBs carefully.
Councils do, however, retain their enforcement powers for noncompliance under the Building Act 2004 Notices to Fix are likely to be the primary enforcement tool, particularly when:
Building work is non-compliant; Work is carried out by someone other than an LBP; Work begins before a PIM is issued; or Building occurs on hazard-prone land
The Amendment Act also creates a new infringement offence where a homeowner fails to submit the required completion documents within 20 working days [Building Act 2004, s 42B(4)].
FINAL THOUGHTS
Ultimately, the success of the exemption will depend on how well participants adapt to this high-trust framework For councils, that means focusing on comprehensive, timely PIMs and record keeping For homeowners and LPBs, it means taking primary responsibility for getting it right
While granny flats may now be easier, and possibly cheaper, to build, they’re also easier to get wrong Without council oversight, we may see an increase in non-compliant buildings, which could lead to costly enforcement action or litigation, insurance claims being declined and a diminution in property values. How this unfolds in practice remains to be seen
GET IN TOUCH
If you have any questions or comments on the granny flat exemption, please contact Wade Morris or Lucy Wesley-Smith
Liberalisation of alcohol licensing on the horizon
In this article, Cordelia Woodhouse writes about proposed changes to New Zealand's alcohol licensing laws, covering the key reforms, their implications for businesses and communities, and the debate around their potential social impact.
The Sale and Supply of Alcohol (Improving Alcohol Regulation) Amendment Bill seeks to liberalise the existing regulatory framework by introducing significant changes to licensing processes, community participation, business flexibility, enforcement mechanisms, and consumer choice. The changes proposed in the Amendment Bill addresses the criticisms of the current system that it is “increasingly complex, bureaucratic, and disconnected from the harms it is supposed to address”.
The changes have been welcomed by many in the hospitality industry as reducing administrative costs and licensing barriers However, the reforms also face concerted opposition from a number of community health stakeholder groups (for example, Alcohol Healthwatch, Public Health Communication Centre Aotearoa, Hāpai Te Hauora and Ki Tua o Matariki) who have highlighted the significant cost and social harm caused by increasing alcohol availability and weakening existing guardrails, particularly in deprived areas In particular, opponents have highlighted the reforms fail to take heed of the 2024 report from the NZ Institute of Economic Research which estimates that alcohol-related harm costs Aotearoa $9.1 billion annually.
ONE KILOMETRE ZONE FOR OBJECTIONS
A controversial change in the reforms is the tightening of rules around who can object to alcohol licence applications. Under the current system, individuals from anywhere in New Zealand can lodge objections. The amendments in the Bill propose to substantially limit objections to those who live or work within one kilometre of the proposed premises. This dramatically narrows the current open objection process, curtailing participation by legitimate community stakeholders outside that zone.
If the reforms are enacted without change, it will result in some efficiencies for councils processing applications, and less costs to applicants However, this will be achieved by weakening the ability of local community groups with a genuine interest to coordinate opposition, unless their members meet the restrictive
geographical criteria It could also make it more difficult for communities to contain the number of alcohol outlets in their locality, including in deprived areas The select committee may well revisit this threshold to better protect genuine local participation
ADJUSTING THE ROLE OF DISTRICT LICENSING COMMITTEES
District Licensing Committees (DLCs), appointed by territorial authorities, remain central to alcohol regulation under the new system However, the Bill introduces changes that affect how DLCs conduct hearings and make decisions
The Bill introduces the ability for licence applicants to provide a written right of reply Previously, DLCs heard submissions from applicants and objectors, but applicants had limited ability to respond to concerns raised during the hearing. Allowing a right of reply enables applicants to propose mitigations to address concerns raised during the hearing without reintroducing more adversarial hearing processes, such as cross-examination.
WEAKENING LAPS
Currently, DLCs can decline a licence renewal if it conflicts with a Local Alcohol Policy (LAP), even if the LAP was introduced after the licence was granted. The Bill limits the potency of LAPs by removing this power. Under the proposed regime, DLCs will only be able to impose conditions on licences to better align with new LAPs, but will not be able to refuse renewal solely on that basis.
This change provides greater certainty for hospitality businesses, ensuring that established operators are not unexpectedly disadvantaged by policy changes. At the same time, it preserves the ability of regulators to adjust conditions to reflect evolving local priorities. Going forward, Councils will need to rely more on conditions and future licensing decisions, rather than renewals, to give effect to LAPs. Opponents will likely view this as eroding communities' regulatory tools over local alcohol availability (for example).
INCREASED FLEXIBILITY FOR CERTAIN BUSINESSES
The Bill seeks to reduce regulatory constraints and improve commercial flexibility for some businesses. Under the new regime, clubs will be able to serve alcohol to the general public – rather than just members and guests Restaurants with existing on-licenses will also be able to apply for off-licenses, enabling customers to purchase alcohol to consume at home
The Bill also recognises that some existing requirements are disproportionate to the level of risk involved For example, hairdressers and barbershops currently need an on-licence to offer customers a drink The proposed change exempts these types of businesses from this requirement, allowing limited alcohol service to customers under specified conditions Critics highlight these changes incrementally normalise alcohol across more settings, accumulating long-term social costs
REDUCING ADMINISTRATIVE BURDEN FOR SPECIAL EVENTS
For significant televised events such as the Rugby World Cup or other international sporting tournaments the Governor-General will be able to declare eligible events via Orders in Council, if the event meets the eligibility criteria This removes the need for ad hoc legislative changes or special licence applications each time such an event occurs, reducing bureaucracy for both government and businesses.
The process for special licenses is also being overhauled. A national risk-based framework will guide DLC decisions, and the threshold for what constitutes a “large-scale event” will increase from 400 to 2,000 attendees. These changes aim to create more consistent, efficient, and proportionate regulation across the country, particularly for events held in multiple locations.
EMBRACING DIGITAL INNOVATION AND THE USE OF RAPID DELIVERY SERVICES
The Bill supports the Government’s broader digital transformation by expanding the approved forms of identification for purchasing alcohol to include accredited digital identity credentials. This recognises the increasing use of digital wallets and strengthens age verification, particularly for remote sales.
In response to the rise of rapid delivery services / remote sales, the Bill also introduces clearer requirements for alcohol deliveries made within two hours of purchase Delivery providers will be required to verify both the age and intoxication level of recipients, and drivers must be at least 18 years old
SUPPORTING PUBLIC HEALTH OBJECTIVES
Finally, the Bill supports public health objectives by improving access to low and zero alcohol options Licensed premises will be able to meet their obligations by stocking zero-alcohol products, and supermarkets can display these products alongside alcoholic beverages These changes reflect growing demand for alcohol-free alternatives and encourage healthier consumption
CONCLUSION
As drafted, the reforms shift the balance firmly toward hospitality businesses through reduced costs and greater licensing flexibility Whether the select committee moderates the more contentious provisions, particularly those affecting alcohol availability, remains to be seen
GET IN TOUCH
If you would like to discuss what the changes might mean for you, please get in touch with David Collins or Cordelia Woodhouse
Meet the team: Nathan Speir
Each month we’ll spotlight a member of the Meredith Connell team, so you can get to know the people behind our Local Government practice
This month, we introduce Nathan Speir, Partner and CoLeader of the Local Government team.
Nathan is the kind of lawyer councils call when things get complicated As co-leader of MC's Local Government team alongside Simon, he has spent more than a decade working with local authorities across New Zealand on their most demanding legal challenges – complex disputes, regulatory enforcement, public law issues, and the kind of crisis response that doesn't leave much room for error.
Nathan began his legal career at MC as a Crown prosecutor, building courtroom experience at the sharp end of New Zealand's largest city. He went on to run two specialist legal firms before returning to MC and joining the partnership in 2024 – bringing with him a breadth of experience that is hard to replicate.
Much of Nathan's recent work sits at the intersection of the built and natural environments. He is leading the legal response to the January 2026 Mauao landslide for Tauranga City Council, supporting the independent review and managing the Council’s response to the coronial and regulatory processes, WorkSafe enquiries and related public information issues
Nathan continues to advise councils across New Zealand on practical implications following a significant weather event, including building consenting and land management, and regularly acts in high-profile building defect and construction disputes involving large multiunit claims and associated regulatory and disciplinary processes
It's detailed, high-stakes work and Nathan has a reputation for helping councils navigate the complexity His problem-solving approach and deep understanding of how in-house legal teams operate has made him a trusted adviser to local authorities of all sizes, and a recognised thought leader to the local government sector.
In 2023, he was appointed an Independent Director of Te Manawataki o Te Papa Limited, the Council Controlled Organisation established to govern the delivery of Tauranga's civic precinct development – one of the most significant urban projects the city has undertaken
GET IN TOUCH
Although Nathan can be most often found in our Auckland office, he visits councils regularly For any questions, reach out to Nathan via email or send him a text – 021 621 226