[WATCH] What National would do to fix CCCFA

Willis tells TMMOnline that the party is dedicated to removing Interest rate deductibility on loans for rental properties and it will bring the brightline test back from 10 years to two years.

National originally introduced the brightline test.

She calls the changes made by Labour as “tenant taxes,” and contends they have had little impact except for adding to costs for tenants and ballooning out the waiting list for state houses.

“Rents on average have gone up $40 a week since the changes were introduced,” she says.

“We have consistency that we share concerns about the housing market. The solution is to get on and build more houses. You can’t tax your way to more homes.”

The party has no plans to make changes to ring fencing which allowed investors to offset losses against other income.

Only changes to CCCFA

National supported the intent of the “dreaded” CCCFA but Willis says Labour took the regulations further than National expected.

“Banks are by their nature experts in (lending) and have done it for decades if not hundreds of years and it is not in their interests to lend to people who can’t repay,” she says.

National’s policy is to introduce “differentials” into the regulations where commercial banks, which are under the prudential regulation of the Reserve Bank, would have a far less prescriptive regime.

National would not scrap the CCCFA rather it would “change it a lot.”

Willis talks about the impact of the CCCFA on first home buyers.

“The whole episode of the CCCFA has shown is that there is a degree of distrust between officials advising our regulatory agencies and those representing some of the commercial banks.”

To the banks’ credit, she says, they did raise red flags throughout the process and there seems to be a disconnect between the banks and the officials.

“I think that’s troubling,” she says.

With regards to the new conduct regulations, Willis uses a line often trotted out by National asking what is the problem the new law is trying to fix.

She says, like the CCCFA, the devil will be in the regulations attached to the law, and these are not due to be completed until 2025.

“So, if there is a change of government…we would look at how we could approach that in a way that would yes, get the outcomes we want but not be so prescriptive as to gum up our financial institutions.”

With regards to the new financial adviser regimes, advisers should have rules and requirements imposed on them, but National had no firm policy on changes.

Striking the right balance of rules and regulations is something National are “looking at”.