7. Question No. 7—HousingCHRIS BISHOP (National) to the Minister of HousingQuestion No. 7—Housing7. CHRIS BISHOP (National) to the Minister of Housing: Was Inland Revenue right that additional taxes on rental housing will put upward pressure on rents and may reduce the supply of new housing developments in the longer-term" and how much have average rents increased since the Government's interest deductibility changes were introduced?Hon WILLIE JACKSON (Acting Minister of Housing): On behalf of the Minister of Housing the evidence does not suggest that the interest deductibility changes are the main causes of rent increases. A recently released report from the Treasury the Reserve Bank and the Ministry of Housing and Urban Development found that wage increases and the relative supply and demand of homes were instead the main driver of rents. Since the introduction of the new interest deductibility rules in October 2021 nationwide rent for new tenancies has increased by 5.9 percent to the end of July 2023. This is in line with the longer-term average and below the rate of general inflation. We know the way you get out of a housing crisis is by building more houses not selling them like the previous Government used to do. That's why we've ensured new builds are exempted from the interest limitation rules for a period of 20 years. Consents remain above pre-COVID levels and completions of new builds are at record highs.CHRIS BISHOP: How does she square those comments with the research conducted by the Ministry of Housing and Urban Development which actually asks landlords why they are increasing rents for which the answer is: because of changes to interest deductibility legislation introduced by her Government?Hon WILLIE JACKSON: That's not the information we've got from landlords—Chris Bishop: It's your own document.Hon WILLIE JACKSON: No the member is quoting something that is out of line with what we've received and we don't agree with those comments. Chris Bishop: Has she seen the comments of noted tax expert Dr Deborah Russell who said that removing the ability for landlords to deduct interest costs is "a bad idea" and "simply won't work" and does she agree?Hon Dr Deborah Russell: Over 10 years ago mate.Hon WILLIE JACKSON: Yet another stupid question from that member. We all say things and we do things differently than 10 years ago. I mean that member was a lobbyist for the tobacco companies 10 years ago and now he's an honourable member. Chris Bishop: Has she heard the comments from noted tax expert Dr Deborah Russell—that her comments were 10 years ago when she said removing ability for landlords deduct interests costs "would be an arbitrary rule designed to achieve a non-tax purpose" and what responsibility does she take for rents being up $175 a week in the last six years?Hon WILLIE JACKSON: These questions are getting stupider and stupider. The member is talking about what someone said 10 years ago. We have a member here who totally supports what the Government are saying. He should look at what he was doing 10 years ago which was advocating for the dirty rotten tobacco companies.Chris Bishop: What is incorrect about the remarks of noted tax expert Dr Deborah Russell that removing the ability for landlords to deduct interest costs were an arbitrary rule designed to achieve a non-tax purpose were a bad idea and simply won't work; what is incorrect about the analysis?Hon WILLIE JACKSON: The member can't get it through his thick head that the Minister was making those comments in a previous life—10 years ago. So get it through your thick head that this member here totally supports the Government and we support Minister Russell 100 percent.Hon Michael Woodhouse: Point of order. The question of time has nothing to do with the correctness of the answer. He could at least address the question which was: what was incorrect about the quotation? Being old doesn't make it incorrect.SPEAKER: I'll have to have a bit of think about that one because there was a lot that the Hon Willie Jackson said. I'm just trying to think whether it actually addressed the question or not. One of the problems of course was it was quite loud in here—been many rulings about that whether the Speaker can hear the question. I don't think it probably was and I'll give the member the benefit of doubt. Mr Jackson unhelpful to describe any question by a member in that way. I encourage the Minister to think carefully about the question. I'll ask Chris Bishop to ask it again. Answer the question not comment on the quality of it. Chris Bishop: Thank you Mr Speaker. The question was—paraphrasing slightly—what was incorrect or what is incorrect about the analysis of noted tax expert Dr Deborah Russell in her long blog post that explains that removing the ability for landlords to deduct interest costs is a bad idea won't work and is an arbitrary rule designed to achieve a non-tax purpose?Hon WILLIE JACKSON: In 2013 the Minister now—who was not even a member of Parliament at the time—was probably correct because it was a different time. It was a different environment. Since then we've had to inherit a housing crisis. Times change people change jobs change. As I keep saying this person here was advocating for the tobacco companies advocating against the average New Zealander. He should hang his head in shame but now he's an honourable member some say.Hon David Parker: Can the Minister confirm that since interest deductibility was limited rents have gone up by less than the rate of general inflation?Hon WILLIE JACKSON: One hundred percent. Rents are below the general inflation rate and in fact things are so much better for renters under this Government. Under the previous Government landlords would kick our people out—Kiwis out—just at a whim. Chris Bishop's mates—these landlords they had no time for the average Kiwi. Now we have warm homes. We look after people. You can't put rent up just at the drop of a hat like Mr Luxon and his rich mates would do. SPEAKER: That last comment was not helpful. I think I'll get you to withdraw and apologise.Hon WILLIE JACKSON: I withdraw and apologise."