Parker stands by policy

David Parker.
David Parker.
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 affected.''

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 Auckland.

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 losses.

Introduction of loan-to-value ratios hindering property ownership.

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 said.

''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.

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