Bishop ChrisCHRIS BISHOP (National): Thank you very much Madam Speaker. Here we are at the tail end of this Parliament considering something that the Government promised in the 2020 election manifesto and I think we are on the second to last parliamentary sitting day and the Government's finally got around to this very important change to our housing laws. Angie Warren-Clark: Nothing like a pandemic.CHRIS BISHOP: What's that?Angie Warren-Clark: Pandemic.CHRIS BISHOP: Oh OK yeah the pandemic is blamed for literally everything—rents are up 175 bucks a week child poverty's up inflation's up the economy's in recession but it's all the pandemic! The pandemic is responsible for literally everything. We're sort of 18 months post the pandemic but there's nothing Labour won't blame on either (a) the pandemic or (b) the last National Government. That's basically what they say—it's all the response to the pandemic which was three years ago or the last National Government.ASSISTANT SPEAKER (Hon Poto Williams): Back to the bill please Mr Bishop. CHRIS BISHOP: Well I was just responding to the interjection from my colleague and my good friend whose bill is going to be read this afternoon—we're looking forward to supporting that bill Angie Warren-Clark. Anyway back to the Residential Property Managers Bill. We will be supporting this bill to first reading. But we do so with a degree of scepticism about the necessity of it and whether or not it will actually work in the way the Government intends. But in the spirit of good faith and bonhomie at the final two days of Parliament we will support it to first reading to have a look at it. The Associate Minister of Housing the Hon Barbara Edmonds was pretty optimistic about being able to guide it through its parliamentary passage; I'm not sure she will be the Minister of Housing or the Associate Minister of Housing after the next election.So this bill will go off to no doubt the Social Services Committee where it will be—well I'm not even sure the committee will have time to call for submissions by the time the House rises because we're going to lift tomorrow. So we'll wait and see if the committee calls for submissions but I'm sure the next Parliament—assuming the bill makes its way back on to the Order Paper of course which is not a guaranteed either. The new Parliament has to vote after the election to reinstate items of business on to the Order Paper. So we'll just have to wait and see but assuming the bill makes its way back on to the Order Paper and goes before the committee then we will have to have a look at that and we'll look forward to the submissions.Let me just canvass a couple of thoughts in supporting this. The first is that we do want to improve life for renters in New Zealand. As the legislative statement notes and the various Government background documents note about 40 percent of New Zealanders rent—actually those numbers we would like to see decline over time. We want to see more people owning their own homes. We want to see more first-home buyers. We want to see more property owners and we want to see more people be able to afford to buy their own home. But we are where we are and many New Zealanders rent and renting will always be an option for many people: for young people for people leaving home for university—going off to university and just for student accommodation—and for people who can't afford their own home and also people who move around a lot and people who do not wish to own property. At the end of the day we live in a market-based economy and people make their own choices about that. So it is important that renting and renters are looked after.That said we have to consider the costs and the benefits of this. I worry that the extra costs of mandatory regulation of property managers will end up flowing through to higher rents. This regulatory regime—this bill—does create quite a complex regulatory regime which the Minister has usefully outlined for the House. The inevitable consequence of that will be to raise costs and that's accepted by the Government and that's in the departmental disclosure statement the regulatory impact material. So the real issue the real danger is that those costs get passed on ultimately to the property owners that the residential property managers are acting on behalf of and of course where will those costs be passed on to? Well they will potentially be passed on to tenants.We have a rental housing crisis in New Zealand. Rents are up $175 a week in New Zealand in the last six years. In my own area of Lower Hutt rents have increased by $257 in the last six years. In many parts of the country they have increased by similar amounts and so we do need to be cognisant of those costs.Now to be fair to the Government the departmental disclosure statement freely admits there will be costs. So I'm just quoting from the departmental disclosure statement The most significant cost components are the costs of becoming licensed … and then ongoing sector compliance costs. Some of these costs will be borne directly by residential property managers. Other costs will be recovered"—but recovering cost doesn't mean that no one pays it just means they're recovered. It just means that they get passed on to somebody. And "gaining a qualification to be licensed the requirement to have a Trust account appropriate insurance … audit requirements" etc. etc. and some of these will be phased in over time which again you know is fine. Phasing something in again doesn't mean the cost goes away it just means it gets phased in over a slower period of time.Here's the issue. So they've done a cost-benefit and again kudos to the Government because so often in this House we impose new regulatory requirements but we never bother to do a benefit-cost analysis. But they've done one—well they didn't do one they got MartinJenkins to do one. So one of those consultancies—MartinJenkins has done pretty well under this Government. So the cost-benefit carried out by MartinJenkins indicates the net present value is $10.9 million over the forecast period of 10 years. Core costs are $159.9 million and core benefits of $170.8 million. So the benefit-cost ratio is 1.07.So it's hardly a slam dunk. I mean it's positive but it's not really positive; it's 1.07. So in other words for every dollar in cost that this regulatory regime imposes there is a benefit according to the officials of an extra 7c on top. So it's positive but it's hardly a kind of you know "for every dollar we spend we get $5 in benefit down the line"—it's a very thin benefit-cost ratio.Here's the other thing. The officials say in the regulatory impact statement there is a higher degree of certainty around the estimated costs than there is over the benefits. So in other words in plain English "We're pretty confident this is going to impose a lot of cost but we're not really sure the benefits will flow". And when the starting point is a benefit-cost ratio of 1.07 and you're uncertain about the benefits it doesn't take much for the benefits to not accrue and then the costs outweigh the benefits. Then you're literally vaporising money. You are not creating net benefits. This is why we ask officials to do benefit-cost ratios.So we'll vote for the bill to send it to select committee but we are sceptical deeply sceptical that the benefits outweigh the costs. It's not just me saying that; it's the Government's own official analysis that's sceptical about that. So as I say the starting point is a thin degree of benefits and as the officials themselves note real uncertainty over the benefits but quite a degree of certainty over the cost. So in other words "We're up for this conversation and there may well be some benefits to what the Government's proposing here but we're sceptical that it will work".The other issue in my final couple of minutes is a real risk and again the Government's own material says this. There is a real risk that landlords will shift away from licensed residential property managers and just choose to manage their own properties. So in other words it could backfire. So if you're if you're a landlord and you currently have a licensed property manager you may well just say "Well actually bugger that I'll just do it myself." and then that is a real issue because as the Minister herself just said in her own speech the bill doesn't regulate landlords; it regulates licensed property managers. So that's the issue.Look as with many debates in this House around regulatory regimes the question is: is selfregulation better than mandatory regulation? Actually we have self-regulation on licensed property managers now. And again the Government documents note that there is quite a degree of extensive self-regulation in the system already. The question is: is the Government coming in over the top and essentially creating a much more elaborate and comprehensive regulatory regime over the top of the industry's self-regulation going to be beneficial or not?So we're up for the conversation and the debate around it. I've said publicly that we're open to the discussion but we're sceptical of the benefits. It'll go to the committee. We look forward to the submissions and we will consider the matter in due course. Thank you Madam Speaker."