The Government's interest deductibility changes are going to cost hundreds of millions more than either ACT or National campaigned on, despite them scaling back the policy from what was promised in the coalition agreements.
On Sunday, the Government confirmed landlords will again be able to deduct interest costs on their mortgages against rental income after the previous Labour Government phased it out.
The Opposition has subbed these deductions a "landlord tax cut".
The commitment agreed to in coalition negotiations was to phase in the policy and backdate it for the current financial year.
That promise was broken and it'll now be phased in from the next financial year.
"That's just a reality of where we sit with the fiscal situation here in New Zealand at the moment," Prime Minister Christopher Luxon said at the post-Cabinet press conference on Monday.
Translation: too expensive, not that Luxon could say so.
He repeated, "it's just an acknowledgement of the fiscal situation we inherited" a number of times.
Official costings released to Newshub show the policy will cost $360 million in the first year, then $785 million, jumping to $855 million in year three, then growing to $915 million a year by the 2027/28 fiscal year.
National only budgeted for it to cost $650 million a year by then.
That's more than a quarter of a billion dollars difference.
This is the same National Party that claimed all its numbers were solid as a rock.
Asked whether he stood by the claim that National's numbers were rock solid, Luxon said, "yeah at that time, absolutely".
Asked how he got the numbers so wrong on interest deductibility, Luxon said, "we didn't".
The policy will cost a total of $2.915 billion over four years, $800 million more than National calculated.
This is partly due to costing differences and partly because it comes into effect faster, closer to ACT's campaign promise.
ACT only budgeted $2.7 billion for it.
Speaking on AM, Seymour said the policy "doesn't cost".
"The Government doesn't have money, it takes money off New Zealanders, so when you say it costs what you're really meaning is that the Government is going to take less money and take less money from residential rental housing."
The Council of Trade Unions argues the money could be better directed to those struggling.
"It's $3 billion which is a billion more than National had promised in its overall tax plans," said CTU spokesperson Craig Renney.
"It reduces the scope for other expenditure, so that could be less expenditure on health, education, on other bits of public investment."
Luxon said: "If you are thinking about the renters of New Zealand, which is where I hope you might be thinking, you would be uh, they would be very grateful for the fact that we are doing everything we can to increase the supply of rental properties across New Zealand."
Hoping the landlord tax break trickles down.
