The Coalition Government’s miscalculation saga continues as it has forgotten an eyewatering $90 million gap in its interest deductibility cost figures, say Labour Finance spokesperson Barbara Edmonds and Revenue Spokesperson Deborah Russell.

“The Government has forgotten to include $90 million of the cost of changing interest deductions for landlords in the current financial year, a scheme costing almost $1 billion more than they bargained for,” says Barbara Edmonds.

“The changes to interest deductions start on 1 April this year. But according to data seen by New Zealand Herald, the government figures don’t show any impact on the government’s books until the 1st of July. That’s a mismatch of $90 million.”

“According to recent media reports, the policy will cost a total of $2.915 billion over four years, $800 million more than National calculated. Missing the mark by almost $1 billion is atrocious book-keeping and will leave frontline services to make cuts to cover the Government’s spend on millionaire landlords,” says Deborah Russell.

“The government costings for the changes to interest deductibility show a cost of $360 million in 2024/25, $785 million in 2025/26, $815 million in 2026/27 and $915m in 2027/28. No cost has been released for 2024/25, even though the policy takes effect from 1 April 2024, the start of the last quarter of the government’s financial year. Based on the numbers released by the government, that cost is likely to be $90 million, a quarter of the cost of the first year of the policy.

“The mega landlord priority is becoming more and more expensive, while support for children and families has well and truly fallen by the wayside,” Deborah Russell said.

“We have almost $3 billion that could instead be 439 million lunches for children, it could keep our smokefree generation, it could mean Police are paid fairly for the work they do to keep our communities safe,” says Barbara Edmonds.

“Making a mistake like this is careless, and it adds to Nicola Willis’ woeful record of being unable to say what her policies will really cost taxpayers.

“The Government continues to insist this will benefit tenants, an impossible insistence when landlords have no obligation to pass on savings. This is not a way to help New Zealanders make ends meet and it will in no way help those who rent,” Barbara Edmonds said.

Note to editors:

Since publishing, Inland Revenue has clarified its internal workings around the $90 million figure. The Government has not released details around where the still almost $3 billion figure will come from for landlords, and needs to be transparent.