Robertson Grant: Taxation (Bright-line Test for Residential Land) Bill — First ReadingText is incorporated into the Bound VolumeRobertson Grant: Taxation (Bright-line Test for Residential Land) Bill — First Reading[Sitting date: 08 September 2015. Volume:708;Page:6331. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): That apparently was the chair of the Finance and Expenditure Committee David Bennett offering us his deep insights into the issues facing potential New Zealand homeowners today. It was ironic in his interpretation of the words of my colleague Dr David Clark. He also managed to mis-ascribe his portfolio. Clayton Cosgrove a close friend of the chair of the Finance and Expenditure Committee is in fact the Labour Party’s revenue spokesperson. I am sure you will want the record corrected in that way.Chris Bishop: I thought it was David Clark.GRANT ROBERTSON: No no no. So that is the thing. It is Clayton Cosgrove Mr Bishop. Mr Bishop is also another close friend and colleague of Clayton Cosgrove.This bill is once again following on from the last piece of legislation and a fitting epitaph I hope to this Government which is that it wants to be seen to be doing something but it has to be the least that it can get away with—the absolute bare minimum that it can get away with. The pressure was building on the Government leading up to Budget 2015 about the fact that it had failed to do anything about a housing market out of control about a crisis in terms of New Zealanders being able to buy their own homes about the cost of housing in Auckland going up by 18 percent a year and then 20 percent in another year and the Government was on the back foot.We know now that there was nothing in the Budget to actually do anything about that so it rushed through a series of measures including this one to make it look as though there was something there. We know that because there was nothing in the Budget documentation. When the Budget documentation got released in July there was absolutely nothing in it about this. You know the normal process of ideas that are floated around Budget time—about now actually for next year’s Budget. Those ideas will be being debated within Government agencies road-tested and looked at by Treasury. This was not there because the Government had not yet decided to do it. It was a last-minute rushed job and typical of the way that this out-of-touch Government goes ahead.So what we are left with is a tentative and incremental approach to a deep-seated problem in terms of the way in which New Zealand’s housing market works. It is not going to do what the Government says it will. Bear in mind that this is not the Labour Party saying this; this is actually Treasury saying it. Treasury says that the test is likely to raise only $5 million per year due to high levels of avoidance. When Treasury was asked what it would be without that avoidance it said it would expect a revenue of somewhere between $30 million and $40 million a year. So it is half-hearted—it is less than half-hearted. It is quarter-hearted eighth-hearted. That is as good as it gets with this Government when it comes to putting forward this kind of legislation.When you ask yourself why that might be why the Government would go in such a half-hearted way it is interesting to look at the comments made by the New Zealand Property Investors Federation when this legislation was put forward. The federation itself sort of half-heartedly said that it did not really think this was a very good idea but then it came down to the end of it and said that “It is unclear if the move will have any effect on house prices.” This is the Property Investors Federation. It said: “Many New Zealanders believe that speculation in the property market is rife but there is no data to back up this belief. If property trading is rife and the cause of house price growth as many suspect then this announcement should reduce property prices. If speculation isn’t a significant contributor to house price increases then the effect will be negligible.” So the Property Investors Federation is delighted because the straw man has been set up. The straw man has been set up. It will not deliver because of the fact that there is such an easy way to avoid it and then the Property Investors Federation will say: “Well we said if this doesn’t reduce property prices therefore there isn’t a problem caused by speculation.”It is all part of the same way of going about this legislation. The Government and its good friends in the Property Investors Federation are setting this regime up to fail. That is as simple as it gets. If they were not if the Government was really serious about this why would it allow itself to propose a measure that its own officials say is going to raise only $5 million per year—$5 million per year—a drop in the bucket of the amount of money being made by property speculators? Whatever we in this House decide the definition of that is there would be no member in this House who would try to claim that the benefit from speculation is only in the 5 percent area.The intention test exists. We all know the intention test exists but the fact is that it is honoured barely in the breach. The Inland Revenue Department has come before select committees in the past and said: “Look we’ve got this. We’d like some more resources to pursue it.” More resources have been given to the Inland Revenue Department to pursue it and yet it is an ineffectual measure. The National Government knows that. That is why it has been forced into a position to do this but it is a particularly weak measure.It is particularly weak too when we learn from Auckland that around 41 percent of sales—and the Quotable Value data tells us that—were to property investors. Forty-one percent of sales were to property investors. I have no doubt and the Labour Party has no doubt that this is forcing up prices. This is pushing new first-home buyers out of the market. We do need to do more and we need far far more than this kind of half-hearted measure. When it was brought into place the Minister of Finance Bill English was quizzed repeatedly about the effect of it and he said that he did not know. He was not sure. He did not know how it was going to work did not know whether it was actually going to achieve what it set out to achieve and he kind of shrugged his shoulders in the way that Bill English does when he has been made to do something by John Key and the Crosby/Textor polling people. Bill just kind of says: “Oh well we’ll let it happen. We’ll put it in place because it’s going to scratch the political itch that’s out there.” Bill is actually a relatively upfront guy. He could not defend it. He could not get up there on Q+A and say yes—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am just reflecting on what the member said. The member cannot say that a Minister was made to do something by an outside polling company. The member will withdraw that comment.GRANT ROBERTSON: I withdraw. Bill English heavily influenced by information that he has received decides that no he is going to shrug his shoulders and go ahead with something that he does not believe in—and I do not think he does. I think actually some of his colleagues might think they will get away with this but they will not.So the loophole that is here which we need to focus on too is the 2-year brightline test. This has been raised by a number of people. By having a 2-year brightline test all we do is move that arbitrary line a little bit. We say: “All right. You have to hang on to it for 2 years.” We have been told this by people involved in the property investment industry that quite clearly people will wait out the 2 years wait for their 2 years and 1 day and then move on to sell. We know that the intention test is not working so therefore 2 years will come up and people will be able to come up with whatever excuses they already use when the Inland Revenue Department comes knocking and then they will move on to sell their properties. So simply moving the arbitrary line to 2 years is not going to deter the land bankers and the small number of people who actually just work as short-term “buy and flick on” speculators.We need a much more comprehensive regime than this. We need a regime that addresses the overall problem of speculation. We need to ensure that those who do not have an intention to come and live in New Zealand are not encouraged to simply speculate in properties here. We want to ensure that people who make a commitment to live in New Zealand wherever they are from are given the ability to buy their own home. That is part of the New Zealand dream that all of us I believe in this House have some desire to protect. But doing a half-hearted measure like this does very little for that. We need a far more comprehensive policy than this.I want to finish on something that I will come back to at another stage in this debate. It is the question of when and for how long this bill will be debated. This bill because the Government is so hopeless and incompetent when it comes to managing the business of this House has to be reported back in very very short order to even remotely look like it might pass in time to be put in place this year. Bear in mind that it has to be retrospective now. It is going to be retrospective legislation. The Government cannot avoid that now. Why bother with such a short report-back time? Why not actually take the time to get this piece of legislation right rather than rush it through just as the policy thinking has been rushed through?This is a half-hearted bill designed to make the Government look like it is doing something when it is not. We will support this bill going to the select committee propose changes and amendments and try to influence this Government to come up with something better. But the Government’s failure to produce something after 7 years speaks volumes about whether it really wants to do anything.