Woods MeganHon Dr MEGAN WOODS (Labour—Wigram): Thank you Madam Chair. I'm very pleased to take a call on this bill and talk about some of the things that have been said in the House in the course of this space. One of which that I am most interested in is the claim by the members opposite about the tumbling down of rents that we are about to witness after the passage of this bill. I just want to give assurances to members opposite that we will be monitoring that. We will be looking for the evidence of rents coming down because there is not a single economic commentator that agrees with the members opposite in terms of what the impacts are. But none the less we take those honourable members at their word and monitoring them on these claims in the House today will be something that we promise to do with diligence and vigilance.What we have before us is the annual taxation bill that comes before this House most of which was actually work that was prepared by the Hon David Parker when he was the Minister and has come before this House. The exception to that is the Amendment Paper to this bill that puts in place several measures with which we certainly do not agree. My colleagues have talked about what some of these are and I'm going to traverse those as well because they are so important. There is the interest deductibility and what that means. There's also the extension to the brightline test. And also in that Amendment Paper is the work around the gambling tax.Now one of the issues that we have for why this is so important is because this is the annual taxation the way in which the Government collects revenue to pay for the services we need like health and education and the other core services that New Zealanders rely on. What we are seeing with the introduction of this Amendment Paper is a bit of a pickle for the Government. What we saw through the election campaign was all kinds of claims. If we take the gambling tax for example there were claims that there was going to be $176 million a year collected through this tax. That is $716 million over the four-year period which a Budget will cover. The problem that the Government now faces when putting together the Budget—with this taxation as the basis of it—is that the IRD's regulatory impact statement for this bill tells us there's going to be $35 million a year collected or $155 million over a four-year period. This is a fiscal hole of revenue of $500 million that is sitting there for the Government. So rather than the bold and audacious claims that were made on the campaign trail about what was going to be collected what we see in the regulatory impact statement that sits aside this legislation is a gaping fiscal hole of $500 million. So we look forward to the Budget for how it is that that is going to be accounted for.The other problem that sits inside this piece of legislation with the Amendment Paper is the interest deductibility and the costs associated with it. What we do know is that this policy is going to cost $800 million more than what the National Party were on campaign telling New Zealanders that it would cost. So we can see right off the bat there's a $1.3 billion hole in the Budget that this Government is trying to put together.Now I have had the great delight of being a Budget Minister. I have had the great delight of having to go through and deal with colleagues about things that won't be funded. So I can only imagine the kinds of things that are not going to be funded. But luckily given I'm not that imaginative not that much has been left to the imagination of what is not going to be funded. We're already getting a taste of that. We're already seeing disability services—the kinds of things that are being cut from those core kind of services. We have all the rhetoric around school lunches—the most fundamental thing in terms of what this money could have been used to fund—making sure that our kids are well fed in school. This is something that the Government has signalled is on the block. I know that in terms of climate action the kinds of things that were being funded—they've already been cut. That money has already been taken back to centre in terms of anything that was being funded for the Climate Emergency Response Fund. I'm informed through the annual review process that any money that was in things like insulation—underspends from this year—has already been returned to centre. That has already gone through.These are the kinds of things that could be funded through what we take with our tax take but we have a Government that is showing clearly where its priorities are and these are tax breaks for landlords. This is not funding the kinds of core things. I believe it is the responsibility of any Government to ensure that we are adequately funding health we are adequately funding education we are investing in our future by making sure we're adequately funding climate action and we are funding disability services for goodness' sake! These are the kinds of things that we need to put into place now.The members opposite seem to have drunk the Kool-Aid and convinced themselves that this is going to solve the housing crisis that this is something that they think is going to be. They tell us—I've heard the rhetoric—there's going to be increased market liquidity and flexibility. This just reads code for tax breaks for their mates because what we're seeing is some kind of magical belief that these changes are going to lead to an increase in supply. Well what they are doing is taking away the very policy lever that was put in place to increase supply. When our Government removed interest deductibility on existing rental properties it was done in a very intentional way. We said to mum and dad landlords Help us solve the housing crisis. Do not go and compete with your kids in the suburbs for their first home but instead be part of the solution and add to New Zealand's needed housing stock. Go out and build new supply." because ultimately if you want to solve the housing crisis you need more houses.And putting in place a giant lever that privileged new builds over existing housing was doing exactly that. Let's look at the evidence. In the midst of a cost of living crisis we saw rents consistently rising at less than the rate of inflation. Now look around the world globally—look around the world globally—and look what has been happening in rental markets around the world. If these members can lift their horizons beyond their desks for just a moment they can see the kinds of policy measures that need to be put in place. They are supply side measures and that is exactly what interest deductibility's not applying to new rental stock was about. This is a Government that is going to plunge us back into the days of the housing crisis with no solution simply telling councils to go and zone land. A "build it and they will come" approach with no plan for how to turn that into build-ready or serviced land is putting us back a decade from where we need to be in addressing a housing crisis.What we saw under our Government was that actually we were starting to turn the tide and that we were closing the supply gap. And we hear the howls from opposite but some simple counting—and I suggest to those members that they do learn to count; it's a very important political skill—of the gap between the number of people in the country and the number of houses we need closed for the first time in decades in New Zealand. We were getting on top of it. I have not heard from this Government one supply side measure that they want to put in place. But I would expect them to be putting additional supply side measures in place not just dismantling supply side measures like they are doing with the Amendment Paper to this bill because that is exactly what reversing interest deductibility will do. We will see the bad old days of mum and dad speculators getting into the burbs competing with their kids on existing houses rather than doing what we as a country need them to do and that is building new stock. And that is exactly where we were putting our support for those landlords.So we do not support this bill we do not support those measures and I look forward to seeing some positive policies from the Government."