Labour Backdown a Victory for Affordability

“Labour’s backdown on a policy they invented is a victory for common sense, affordability, and everyone who backed ACT from opposition into Government,” says ACT Leader David Seymour.

“Jacinda Ardern introduced a bizarre wrinkle into the tax system by removing mortgage interest deductibility from rented residential property. With trademark naivete, Ardern said she was trying to ‘tilt the housing market towards first home buyers.’

“Adding pressure on Mum and Dad investors at a time when all their other living costs were going up led to higher rents. ACT’s changes have eased pressure on the rental market and lowered rent, meaning everyone has had some cost of living relief.

“She thought she was taxing landlords but tenants, many of them saving for the deposit on their first home, paid the cost. Rents went up by record levels, first home buyers weren’t helped at all.

“The policy was part of a disease afflicting New Zealand politics. Whenever there’s a political itch some group is lined up as a scapegoat. The country is left more divided but not more affordable. As a country, we have to stop doing this to ourselves.

“Labour accepting the idea is doomed and taking it off the table gives more confidence and certainty to landlords, if you trust them. There is always the risk their $10.4 billion fiscal hole will swallow up renters’ and landlords’ funds through new taxes all over again.

“You can’t really trust Labour on taxes, but this position in principle is proof that bad ideas can be banished, rhetorically at the very least.”