Brownlee GerryHon GERRY BROWNLEE (National): Well that was a very interesting speech from the co-leader of the Green Party where he was mounting a fairly stinging attack on the absence of wealth tax in this particular bill and then reached the extraordinary conclusion that the best thing he could do was simply abstain from taking a position on it. Now that is the sort of leadership that the country doesn't need. Let me also say on the issue of a wealth tax wealth is one of those things that is not tangible until it is realised and so the idea that you would tax something that's intangible is pretty abhorrent. It essentially means that you would have a standstill situation for a great deal of the economy.When we saw the start of this debate the Minister began with a quiet sort of rendition of how hard it is for the Government dealing with the COVID-19 situation. Well no one is going to disagree with that but this bill is about the mechanics of how we get our way out of that at the same time making sure that life is not too difficult too pernicious and too discouraging for New Zealanders.There are a couple of things I want to speak about here that stand out for me in this bill. The first one is the issue of the minor changes effectively to the brightline test. The current Government expanded it to five years and now they've got it out for a longer period of time. It is at that length of time a splendid failure. James Shaw just stood in the House and said that in the last 12 months the average house price in New Zealand has risen by over $200000. That's his figures. Now if someone was a speculator and they decided to buy a house 12 months ago and then they sell it now and they take their $200000 profit and then pay their tax on it they walk away with about $140000. So where has the brightline test been shown to work? It doesn't. All it does is confirm that if you've got a scarcity of supply you'll have an elevation in price and if there's a tax component inside that price it will go up even higher.I am disappointed that the Government hasn't quite worked that out hasn't recognised that around the whole issue of housing tax is a problem. Just take the price of a brand new home. Let's say it's on average $700000. It's cheaper than that in some parts of New Zealand. In some parts of New Zealand it's cheaper but on average. It certainly is for our fellow New Zealanders who are locked down in Auckland for the fifth week running. That's the sort of price they'd pay for an average house up there possibly a little more—possibly more.David Seymour: Seven hundred? You've got to be kidding.Hon GERRY BROWNLEE: What was that? You'd love to buy a house up there for $700000? Just hear me out on this because it makes the example easy. In that $700000 how much is taken by the Government in GST? Over $100000.David Seymour: A hundred and five.Hon GERRY BROWNLEE: A hundred and five. So let's assume that everybody who puts an input into that building that house pays tax on their earnings. How would you calculate that? And then assume that the contractors who are building these house also want to run profitable businesses that pay tax.David Seymour: No no surely not!Hon GERRY BROWNLEE: Well you're probably right. My colleague from the ACT Party is probably right. If you follow the James Shaw prescription they should all be doing it for nothing and then the Government would do it for free. We saw what a huge massive totally capable developer they've been with the KiwiBuild debacle. So if you look at that I think it's not hard to see that tax is a very important thing in the way in which our society works. The idea that it can be used in a pernicious way to create fairness is totally wrong—totally wrong.My colleague Mr Woodhouse raised the issue of there being no mention in here of the abolition of the interest deduction on rental properties which is going to come into effect in nine days' time. So no one at the moment knows what the new rules are but here's how it works. If someone buys that property—and they know now they're up for the brightline test. They know too that anything they earn off that property they're going to pay some tax on. That's all fine. But why would you take away a legitimate business expense: the interest that's paid on the capital?We've got a housing crisis in this country. We've got a rental crisis in this country: $120 on average increase in rents in the last four years. Maybe that's because it reflects a percentage of the $200000 price increase that Mr Shaw just spoke of. What it tells us though is that even with that rental increase anybody with a house now that has the average value currently in New Zealand is making a loss constantly. So what the Government's come along to do is say Well some of the input that once could be written off no longer can." Well where does that leave someone? All it leaves is pressure upward on rents and that's exactly what we are going to see in the next 12 months. It is a dreadful situation and it is again this crazy idea that somehow a tax system used in a pernicious fashion can advantage people; it can't. The people who are going to pay for this will be the people who are least capable of paying for it—some of the people who Mr Shaw talks about who do not have the opportunity to gain the advantages of a wealth base in this country. So this is not a clever piece of work in those two aspects.As we have heard there are many many aspects in it and some of them are good. I think the changes around cryptocurrency is going to be an interesting discussion for the select committee because I don't think all of the implications for any of the decisions currently around cryptocurrency have been fully thought through and I think we'll see a lot of change in that regard in years to come. Like my colleague I think it is a good thing to see that the Le Quesnoy charitable trust is able to receive the deductions from here in New Zealand; that's a positive thing—it's a good thing. And there are other changes throughout here that I think will be useful because they come under the category of: there are minor changes that need to be made at any time.As I've said before this piece of legislation is the engine for how the Government gets its revenue in the future. But it is not a horse that can be flogged to death and so it must be measured against the quality of expenditure that the Government is undertaking at any particular time. Simply saying that we've been burdened by the spectre of COVID-19 and that lets us do all sorts of things without a great deal of scrutiny or accountability is completely unacceptable. And I will finish a little early on those remarks."