Scott AlastairALASTAIR SCOTT (National—Wairarapa): Thank you Madam Chair. I'd like to take a short call and cover two points. The second point will be a little more complex than the first and that will relate to securitisation of New Zealand Units (NZUs). But the first point I'd like to address is the ring-fencing. It seems an odd policy given that one would expect a Labour Government to want to encourage investment in rental properties and rental accommodation but this only discourages investment in rental properties. As David Carter just mentioned earlier this is around cash flow. The ring-fencing disables the ability of a new investor to come into the market to purchase a property and to negatively gear it so that there is a negative cash flow or a loss on the investment property. You're not going to see those new investors into the market because they're no longer able to offset that loss against their day job their other income that they might earn elsewhere. Whether it's personal income or trust income or company income the property is going to be ring-fenced. So that's just going to put another layer of cost on to the property investor which will be reflected in the cost of the rent that the tenant must pay at the end of the day because there's no such thing as a free lunch. So it's unfortunate because they say they care about tenants but when they put in policy like this discouraging investment in exactly the sector that needs to be invested in it's disappointing to say the least. The second point—and I invite Deborah Russell to contribute to this point—Lawrence Yule: She's an expert. ALASTAIR SCOTT: —because she's an expert on tax and I'm legitimate in my request for her to make comment. This involves the clause relating to the sale and compulsory buy-back of pre-1990 NZUs. So the carbon credits—we're talking about carbon credits. When those units are sold it's the intention for them to be non-taxable but any subsequent sale would be taxable to the vendor. This is a good amendment from what I can see because it allows the holders of those NZUs—just imagine them sitting in the bottom drawer and there's value in them but no value can be expressed from them because they're basically dormant assets and if they were sold to a third party it would be taxable. So it sort of slows down the whole process. This new amendment will allow the securitisation of those assets. They allow the owner to bring them out of the bottom drawer if you like to gather them together and to securitise them and to lend those units into the market place. Lending those units into the market place enables those owners to borrow money in return. So they're going to be able to utilise those assets to borrow—what are they going to do? They're going to give their units they're going to lend their units and they're going to borrow money on the back of it. So it enables them to get funding. I think that's a very good piece of legislation because under normal circumstances prior to this amendment that could have been seen to be a sale when in fact all we're doing is lending the units. The units are securitised and lent and then they come back to the owner. So this is a good piece of legislation because it makes it very clear that that transaction is not a sale and purchase transaction for the purposes of tax. So that's nice and tidy isn't it? Did I explain that nice and tidily? Matt Doocey: You did indeed. ALASTAIR SCOTT: I thought that was pretty clear—it's clear as mud. So that's why I was very pleased to see Deborah Russell in the Chamber because she'll be able to much more eloquently explain the tax implications because she is a tax expert and we appreciate her genuine expertise in this area. So that's a question as well—I think I've got that right. Dr Russell if you could clarify that for me I'd much appreciate that and I'm sure the committee would benefit from your wisdom and your experience in this matter.