2. Question No. 2—Prime MinisterHon JUDITH COLLINS (Leader of the Opposition) to the Prime MinisterQuestion No. 2—Prime Minister2. Hon JUDITH COLLINS (Leader of the Opposition) to the Prime Minister: Does she stand by all of her Government's statements and actions?Rt Hon JACINDA ARDERN (Prime Minister): Yes particularly the Government's decision to incentivise investment into the construction of new homes and jump-start developments by funding the vital infrastructure like pipes and transport links needed for new housing. New Zealand's housing crisis as we've said many times in this House and beyond has been decades in the making and there is no quick fix. It's an issue that'll take time to turn around but our package of urgent but also long-term changes will increase housing supply relieve pressure on the market and we hope make it easier for first-home buyers.Hon Judith Collins: Why is she extending the brightline test despite Treasury advice that this may put upward pressure on rents when under her Government rents have already increased at the fastest rate on record?Rt Hon JACINDA ARDERN: The member ignores the fact that Treasury actually advised extending to 15 or 20 years and so they were in favour of that. Obviously we've settled on 10 as we believe that that's more reflective of the reality in the market. The member herself on occasion has addressed the fact that if you want to help with the rental market the best thing you can do is ensure supply. That is why we have done multiple things in this package by carving out new builds making them exempt from interest deductibility changes and also the extension of the brightline and on top of that making sure that we've got investment in infrastructure.Hon Judith Collins: Has she requested advice on the impact that further rent increases will have on her promise to end child poverty?Rt Hon JACINDA ARDERN: All of the initiatives that we've announced yesterday actually are aimed at doing two things: we want to enable first-home buyers to get into the market but equally we've constantly had a view to housing affordability across the board and that means rents. As I've already said if we want to make a difference to rents we need more houses. We need general housing supply. Someone who's currently an investor choosing to sell their home doesn't mean that house is suddenly out of the market but what we do need are additional stable tenancy options for people and that is why we are focused on seeing that new supply come on stream. Also the Minister of Housing is looking at the market when it comes to specific build-to-rent propositions.Hon Judith Collins: Is she concerned that removing interest deductibility from residential rental properties will result in higher rents being charged to tenants?Rt Hon JACINDA ARDERN: One of the things that we've openly acknowledged is that there is a place for investors in New Zealand's housing market but what we want to do is make sure that we are incentivising those investors in the new builds that we need so that we can see that increase in supply. To answer the issue around those who may already own an investment property we have tried to smooth the removal of the interest deductibility provisions. We learnt from the UK example. They initially proposed interest deductibility changes that came in all at once for those with an existing property and then down the track chose to phase it. We have phased it straight off the bat and we're doing it at a time when interest rates are low to try and reduce the impact on those investors who already have tenants.Hon Judith Collins: Does she stand by her statement this morning to media in regards to her brightline test changes It does not apply to the family home."?Rt Hon JACINDA ARDERN: Yes.Hon Judith Collins: So will her changes to the brightline test mean that a police officer who undertakes a two-year posting in another town could now be subject to tax on their family home?Rt Hon JACINDA ARDERN: Under the policy introduced by the National Government for brightline there has always been provision for what happens when someone is not living in and using a home as their primary home. It was however quite crude. It used 50 percent as the mark. Our view was that you would have with that rule still in place some unfortunate and unfair scenarios. Our view was with the extension that we needed to be more specific; we've done that. But the change-of-use rule has always been there as introduced by National.Hon Judith Collins: Has the law she passed this morning under urgency—SPEAKER: Order! [Interruption] Order! The member will rephrase the question. She knows that's out of order.Hon Judith Collins: Has the law passed this morning under urgency changed the definition of residential property so that farms that include worker accommodation will now be subject to a capital gains tax if sold within 10 years?Rt Hon JACINDA ARDERN: One of the things that we've had—Hon Judith Collins: Yes.Rt Hon JACINDA ARDERN: —to address for instance is that—SPEAKER: Order! Order! No I'm not going to let the Prime Minister continue. If the Leader of the Opposition thinks she's got the answer she shouldn't ask the question.Hon Judith Collins: Point of order. Mr Speaker you have long been of the view stated here that people shouldn't ask questions they don't know the answer to.SPEAKER: Well that might be the case in court. I just live in hope that some time in this House someone will ask a genuine question.Hon Judith Collins: Does she stand by her statement this morning that the reason 10 years was chosen was so that the test could apply to "the majority of sales" and does she consider the majority of rental property owners to be speculators?Rt Hon JACINDA ARDERN: In answer to the last part of the member's question no. What I was reflecting was the advice that we have received which took into account—and unfortunately we don't have the data that delineates between residential and investor but we know that we see high churn under 10 years. That was the basis on which we received advice from Treasury to increase. They suggested increasing out to 15 or 20. The reason we chose 10 was based on the evidence that was provided around where that churn was.Hon Judith Collins: When will she respond to my letter dated 16 March outlining my concern regarding the conduct of the Rt Hon Trevor Mallard?Rt Hon JACINDA ARDERN: I did ask my office to ensure that we had a response to the member—I asked them today to make sure we had a response to the member. So I expect that in the coming days.Hon Judith Collins: Point of order. I seek leave to table a letter dated 16 March 2021 to the Prime Minister from myself including an attachment including a statement of claim.SPEAKER: I'm just going to ask the member whether that is something that has already been circulated and is on the internet from the member?Hon Judith Collins: Not that I'm aware of Mr Speaker.SPEAKER: Well I have seen it there.Hon Judith Collins: I haven't seen it.SPEAKER: Is there any objection? There appears to be none.Document by leave laid on the Table of the House."