Labour Party finance spokesman David Parker hit back
yesterday over claims the party's monetary policy upgrade would
hurt the low-paid.
Social agencies and Finance Minister Bill English claimed the
push to make KiwiSaver compulsory, along with allowing the
Reserve Bank to raise or lower savings contributions to help
control inflation, would hurt the lower paid.
Mr Parker said low-income New Zealanders would benefit from
Reserve Bank changes through higher wages, lower interest
rates on credit cards and loans, and rents.
Universal KiwiSaver would be introduced gradually while at
the same time, wages would increase, ensuring low-income
Kiwis were better off, he said.
''When Labour makes KiwiSaver universal, it will only apply
to those in paid work. There will be no savings requirement
for those on a benefit, so their income will not be
The changes would also help exporters by tackling the
overvalued dollar, enabling those companies to create more
and better jobs.
However, Property Investors Federation executive officer
Andrew King warned rents could go up by 25% if a Labour
government adopted the policy of ring-fencing losses made in
the early years of rental property ownership.
A similar proposal was tried, failed and reversed in
During the two-year period it was tried in Australia, rents
rose by more than 25%, he said.
If Labour's policy was introduced in New Zealand with the
same result, the current median rental price would increase
by $92 per week to $462.
''We have seen so many changes over the last few years that
are harmful to providing rental property to tenants that
people are going to give up.''
Rental industry changes included:Removal of rental property
owners' ability to depreciate their propertiesRemoval of
removal of LAQCs (loss attributing qualifying company) as a
structure for holding rental property.
Slower access to Tenancy Tribunal hearings causing greater
Introduction of loan-to-value ratios hindering property
Previously state-owned land and buildings and rental income
top-ups being given to social housing agencies, enabling them
to compete with private rental providers.
Labour's proposed capital gains tax on rental property would
also affect shareholders, business owners and farmers, he
''Labour's announcement of ring-fencing rental losses targets
the rental industry directly and will make it extremely
difficult to provide new rental property.''
Areas where house and rental prices were the highest, such as
Auckland and Christchurch, would be affected the most but
they were the areas were rental accommodation was needed the
most, Mr King said.