4. Question No. 4—RevenueANDREW BAYLY (National—Port Waikato) to the Minister of RevenueQuestion No. 4—Revenue4. ANDREW BAYLY (National—Port Waikato) to the Minister of Revenue: Does he stand by the Minister of Finance's statement on 23 March 2021 that deducting interest expenses from rental income is a tax loophole" and what assurances if any has he sought that increasing tax on landlords won't lead to renters being forced out of their homes? Hon DAVID PARKER (Minister of Revenue): Yes and as landlords who invest in new homes will be able to deduct interest expenses the premise of the second part of the member's question is incorrect. Andrew Bayly: Does he agree with the official advice that 75 percent of renters can't afford to service a mortgage and as a result of the policy changes "the most vulnerable group in our housing system" now face the risk of having their tenancies terminated and if not why not? Hon DAVID PARKER: I do agree that renters generally cannot afford a mortgage. Otherwise most of them would choose to buy a house rather than rent it. But in respect of the idea that this rule is somehow going to decrease housing stock it's a nonsense argument because if a landlord did choose to sell a house it will either be to an owner-occupier and that owner-occupier will be freeing up another house or it will be a renter who all of a sudden is able to buy a house and if the member somehow thinks that the house is going to disappear well he's just wrong. Andrew Bayly: Does he agree a tax of around $9000 for the average rental property owner due to the removal of interest deductibility will increase rents including for low-income renters who officials advise are the most vulnerable group in our housing system? Hon DAVID PARKER: No I don't agree that that is necessarily the outcome as evidenced by the fact that when interest rates went down so remarkably over recent years they increased rents rather than put them down. Andrew Bayly: Can he provide assurances to vulnerable low-income renters that as a result of his policies they will not be evicted as warned in official advice? Hon DAVID PARKER: Well the idea that landlords would somehow come up with a pretence to evict a tenant because of changes to tax rule is absurd. Andrew Bayly: Can he provide an assurance to owners of new build-to-rent developments that are held with the express purpose of being rented out for the long term—10 to 20 years—that they will be allowed to deduct interest against their rental income? Hon DAVID PARKER: In respect of new builds yes and we're consulting on the details of that. One of the issues being consulted about is whether the period for which a new build can have interest deductibility—Andrew Bayly: Rent—long-term rent? Hon DAVID PARKER: Sorry I might have misunderstood the question but answering as I understand it one of the issues we're consulting about is whether that period should attach to the first purchaser or to the building for a period of years. Andrew Bayly: If public feedback on the interest deductibility consultation document due next Monday is overwhelmingly negative as is suggested by the 15000 people who signed the petition I received yesterday will he reconsider his policies? Hon DAVID PARKER: We're consulting on the detail of it rather than on the principle which is already working."