Watts SimonSIMON WATTS (National—North Shore): Thank you Madam Chair. Twice in one night and I appreciate that humour—CHAIRPERSON (Hon Jenny Salesa): My apologies.SIMON WATTS: —because listening to that last contribution from the Minister I was starting to get a little bit worried about some other thing. I think for those five or so people that are still watching this at home and haven't gone to sleep after listening to that I think they will be significantly disappointed because what we've just heard really is the difference around ideology around driving the denial of interest deduction on the mortgages for rental income versus the case where interest deduction is allowed on any other form of business income. Right? So we've got a complete inconsistency that's being created within the tax system. And one of the benefits of the New Zealand tax system is that actually we've got a reasonably fair and broad-based system right? But what is happening as a result of this specific change in Part 2 is the denial of interest deductibility based on an ideological view that this is going to have some miraculous impact in terms of improving the issue that impacts pretty much the majority of Kiwis and is the most significant issue facing Kiwis—which is around housing affordability and housing access—which is an absolute fallacy.And it's not just me saying that. Can I quote to you from KPMG's submission to the Finance and Expenditure Committee in regards to interest deductibility—and maybe KPMG are also believing that this is that but I will quote from the front page and it says We understand that standard economic approaches would suggest the above propositions generally do not hold." What they were referring to there is the concept that this denial of interest deductibility will actually have an effect around decreasing the ability for property investors to pay less when they purchase properties in effect trying to bring back the price of houses and the other aspect is around a reference around the change in rents.So what the difference is I think and as the Minister tried to look at the difference between you know this side of the House—and that side of the House actually—when we think about taxation we think about how do we use taxation in order to deal with factors that are true market failure. And what we're trying to deal with here through this is an ideological tax that makes the members on that side of the House and a small number of supporters in this country think "Oh that feels good that's going to deal with the problem." Well it's not and it's not going to deal with the problem. That's the shame about this aspect of Part 2 of the bill.The analysis to support the anticipated effect on the housing market of not allowing interest deductibility is pretty much sparse if not available and that was also commented for a number of submissions through the Finance and Expenditure Committee process. The other aspect that we haven't—and I'd be interested to hear the feedback from the Minister around is the complexity that this change brings into our tax system. As I said before we have a simplistic a reasonably simplistic tax system. But what we're bringing in play now is a complete inconsistency that will bring complexity which really again will only probably derive benefit for those advisers out there.Lastly it is interesting to note that both the IRD and Treasury also advised the Government against the denial of interest deductibility. So it's not just this side of the House at this time of the night saying that this is a completely ridiculous idea and hearing the other side of the House saying that actually "Government knows best and Kiwis don't quite understand." Well I'm sorry it doesn't work like that. And that is backed up by a number of advisers a number of people around this country. I back Kiwis I back smart sensible Kiwis out there that know what they're doing with their own money and know that this is an absolutely an ideological tax that will not benefit and not bring any change to the housing market that so significantly needs change in order to make sure that our future generations have a house to live or to rent and to live a great life in this country."