The Ministry?of Business Innovation and Employment will have to find extra cash in its budget to implement the Government’s promised pet bond scheme.

Pet bonds were announced by Regulation Minister David Seymour and Housing Minister Chris Bishop earlier this year. The policy was agreed to as part of coalition negotiations.

However, at that time the ministry was already midway through building a new $38 million bond system, which hasn’t been designed to include pet bonds.

Bishop said the cost of adding in the ability for the new system to manage pet bonds could not be confirmed at this stage because it was commercially sensitive. ?

However he said it would come from within the ministry’s ※existing revenue sources§.?

The bond, set at a maximum of two weeks’ rent, would allow tenants with pets a better chance of securing a rental.?

The changes also include making tenants liable for all pet damage beyond fair wear and tear.?

The landlord would still have the final say on whether the property was pet-friendly.?

In announcing the policy, Seymour said it would fix the problem of tenants being locked out of the market due to landlords not being willing to take a risk on people with pets.?

※There are tenants out there who would be more than happy to pay a little extra in order to live in their preferred home with their very good boy.?

※This policy is also important for helping victims of domestic abuse move on with their lives. Often, people stay in relationships to look after pets and become stuck. Helping these people find rentals that are accepting of pets will allow them to move on safely and have a brighter future.§?

Support for the bond has been widespread. ?

However, the logistics of getting it up and running are easier said than done. ?

The ministry is currently overhauling its bond management system, which is over 20 years old and beyond its end of life. ?

Pet bonds cannot be introduced while the old system remains in use. ?

The ministry received $38 million in 2021 for the design and implementation of a new bond management system and is currently in year three of a five-year build plan.?

However, officials have advised there is not enough money in the current budget to add in the necessary changes to the new system to allow for pet bonds. ?

No extra money to allow the ministry to set up the system was allocated in this year’s Budget.

As part of the savings exercise ahead of the Budget, the ministry made cuts of $1.9 billion over four years from both its baseline and other one-off measures.

In a briefing to ministers, officials said the function for pet bonds would have to be built as an addition to the new system once it was up and running.

This pushes out the likely start date for pet bonds to late 2025.

Pet bonds are expected to generate a source of revenue for the ministry because bonds held are invested and generate interest until they need to be paid back.

At the moment the ministry is holding approximately $867 million in tenancy bonds, generating about $8m in revenue each year. ?