van Velden BrookeBROOKE VAN VELDEN (Deputy Leader—ACT): Thank you Madam Chair. I rise on behalf of the ACT Party to talk about the interest deductibility changes that this Government is proposing. I believe that they are divisive changes. When the Government and the Minister proposed them last year it was stated that these interest deductibility changes were supposed to help tilt the market away from speculators and tilt them towards first-home buyers. The ACT Party did what the Government should have done and we actually went out and we talked to people who would be affected by this change. There are a lot of people whose financial security is now in jeopardy because of these divisive changes. But the real issue here is that it's not actually going to make people better off. This doesn't help build more homes for first-home buyers to actually live in. In the meantime it actually pushes up rents. We saw from the advisers' own advice last year that the average landlord is going to have an imposed cost of about $4000 extra per year because of these changes. It shouldn't be a surprise to anybody who would be able to realise that that cost has got to go somewhere. Most landlords don't want to put up their rents on good tenants but they will be forced to.I've gone around the country and I've spoken to a lot of property investors and mum and dad landlords who have said that they've intentionally kept their rents below market rates because they have good tenants and they know that they should be charging them more but they like their tenants and they want them to stay but because of limiting interest deductibility they will be forced to put up rent on people that they never wanted to put it up on. For that reason it's divisive.It also tries to scapegoat a class of people who are actually providing accommodation in New Zealand—a job that the Government doesn't do very well on. It should actually be the role of private investors to help supply rental accommodation in New Zealand. There is a place for that and it's very unfortunate that this is even happening.I want to take the opportunity to share a couple of examples because the ACT Party reached out to people who would be affected by this law change and we had 15000 people sign a petition asking for this not to happen. There were really really heartbreaking examples. There are a few that kind of spring to mind to give a little bit of balance to this debate. This woman says I would prefer if this letter could please be read out in Parliament. My husband and I both have disabilities. My husband can't work because of his back injury and I have diabetes and PTSD. Now the reason we bought a property was in order to support ourselves and our two adult sons who have a disability. We accept the minimum rent to cover the mortgage and miss out on charging market rent for both of my two older sons. One of my adult sons has schizophrenia and the other has a head injury and dyspraxia. We are constantly busy working with mental health WINZ network personnel and social workers acting as their advocates. Everybody is very supportive but my husband and I are nearly 60 years old and we have put our retirement on hold so that we can ensure our sons live in safe dry and secure accommodation. These two properties are plain bedroom flats. They are warm and safe. We don't get paid to support our adult sons. They're 28 and 30. Nor do we expect any additional support on top of what we already receive. We are very grateful for what we do receive. But the Government is relentless to try and make our lives even more difficult. I've made two suicide attempts in the last 12 months and ended up in hospital. Everything is related. I see more people like me in my situation who are overlooked. I've asked Grant Robertson to make an exception for people like us in this policy but it was fallen on deaf ears." It is an absolutely tragic situation. There are people in our society wanting to do the right thing and support their own families. They don't want to rely on Government support but they are being forced to sell the homes that they bought to help support their own family members to make sure that those children would have a stable home to live in. I think we should admire people like that and it is a real tragedy that this Government—and the changes made to limiting interest deductibility—will mean that those two disabled sons may be forced into Government-run accommodation rather than being able to live in a home owned by their parents.The second is a lady who lives in Porirua and she has a home that she rents out. It's pretty nice. Her tenants wanted to rent that home for another four to five years because they're well-settled in the area with work and school for their boys. But now they're going to be moving out in three days. This person had to ask them to move out because they knew that these changes were happening. Before that they offered to sell them the house but these tenants said that they could not afford it because it would cost them an extra $400 a week in a mortgage repayment the rates and the insurance. This landlord felt very bad and had to apologise to them and explain to them that they just cannot simply continue to keep this house because they will end up having to pay $150 extra a week from their salary just so that they can live in it. That $150 per week is not something that they can actually afford. This home that has been a stable secure home for a family and kids going to the local school will be sold and likely that person who was living there will have to move on.There's also another example: somebody who has four dwellings that are specifically designed as student accommodation—because they're a block of flats. It's unlikely that a first-home buyer is ever going to want to buy this block of flats. What's going to happen? They're going to have to end up either putting up rent on students who will live in these flats or selling an entire block of flats. You know what? No first-home buyer is going to be buying a block of flats. That is just not something that they would do. The Government did not exempt blocks of flats from the interest limitation rules that they're putting in. There will be people in small little units in shared titles who will have their rents increased because the Government decided that first-home buyers should buy them. There is no market for that.The ACT Party opposes this bill because it's divisive and because the changes that it will make to people's lives are so negative the costs outweigh the benefits. But there is also an element in my Supplementary Order Paper (SOP)—because I drafted this SOP to scrap these interest deductibility changes—of the brightline test. The brightline test should also be scrapped completely. It was an acorn that has grown into a fully-fledged tree. It was two years it's gone to five years and it's gone to 10 years. There is no need for us to take it back to two years. It should be scrapped completely because you need to cut it from the root otherwise it will spring forth into another tree again. It is an acorn that has grown. We need to get rid of it in particular for the types of people that have been emailing me like a man who lost his job in Auckland and managed to find a job on a farm where the home was supplied for him. He's now renting out his primary residence in Auckland but because he's now got this job in another town he's going to be captured by the brightline test. That's really unfortunate because he says "All I can do is sell and maybe never get back on the market—never be able to afford another one—or just acknowledge that I am not going to be able to get the capital gains that everybody else would be able to get."It is a divisive law. It's not going to work. It's going to push up rents for people who could least afford it and we need people to supply rental accommodation in New Zealand. There is a place for landlords. They shouldn't be vilified for actually wanting to do the right thing and we should actually be proud of people who want to put aside a nest egg for their own financial security."