Carter DavidRt Hon DAVID CARTER (National): Thank you Madam Chair. There's just a couple of points I want to make particularly in relation to that contribution from the Hon David Parker who's now standing in for the Minister of Revenue. The first point is that the ring-fencing of losses may well have an unintended consequence and I'll give him an example of that. On the news tonight where Auckland house prices have come back something like 2 percent the commentary on that particular article said that they'd come back for two reasons. One was the Government's move to ban overseas buyers and secondly was the loss of confidence of mum and dad investors to provide rentals. Now the Minister may say it's a good thing that the prices are coming back in Auckland. The average price now is $900000 and I remember at one stage it touched over $1 million. But the point that the Minister may not realise yet is that ma and pa investors are no longer confident to buy and invest in rentals and what that has is an immediate effect on rent costs. What we're seeing is that rent costs are increasing now by about $50 a week simply because there's not the supply that there was. In other words the demand for rental housing has now significantly increased in the supply of rental housing and that's what happens when people chase people out of a market. So this is a hit at landlords. They're scared and they're pulling out of the market. I remember a submission from Andrew King—who represents the property investors—at the select committee and he said that the ability to match your losses on your rental property against your income is important for people as they get into the market. I think the Government believes that people deliberately buy into a rental property with the expectation that they'll make losses for ever and Andrew King pointed out that that's just not rational thinking. People don't go into a market to make losses for ever. They may take some time having bought the property establishing it getting it into the market and getting a stable tenancy involved before they make a profit and the ability to write off those losses for the first three or four years is usually very important to them. The other point I wanted to make is around the retrospectivity. This ring-fencing situation comes into effect on 1 April this year—2019—and therefore the legislation has a definite retrospective effect on ma and pa investors who have purchased with the intention of writing off losses. The final point I want to make is on the way the Finance and Expenditure Committee on occasions works extremely diligently to tidy up legislation and I'd refer any member who is interested to pick up a copy of the bill on the Table and look at the way clause 49 which covers one two three four five six seven eight nine 10 11 12 and 13 pages of the bill has been completely deleted. What we found at the select committee by listening to the submissions was the way this legislation had initially been written was simply too complex. So we worked with Parliamentary Counsel Office to see whether we could find a better way of writing these provisions. It goes to show the value of a constructive select committee process whereby we hear submissions and Government and Opposition work constructively together to acknowledge the value of those submissions. In this particular case substantial pages had to be written to get legislation which inevitably is reasonably complex but the way it was written initially was more complex than it needed to be. I'm pleased to have been part of a select committee that now has seen it written in a way that's easier for taxpayers to understand. It's easier for tax accountants to understand as they advise their ma and pa investors in rental properties. But I say to the Government that as rents continue to increase week after week one of the reasons that is happening is because people who originally were quite happy to invest in a rental property put it on the market and provide it to those that want rents are now pulling out of it because they're scared of the capricious greedy nature of this Government. They were scared by the proposal around a capital gains tax. They're scared now by this provision whereby they've no longer got the ability to mark off legitimate losses on that property against their income. That is why rents continue to increase.