Hague Kevin: Taxation (Bright-line Test for Residential Land) Bill — Second ReadingText is incorporated into the Bound VolumeHague Kevin: Taxation (Bright-line Test for Residential Land) Bill — Second Reading[Sitting date: 03 November 2015. Volume:709;Page:7609. Text is incorporated into the Bound Volume.]KEVIN HAGUE (Green): Why thank you Mr Deputy Speaker and thank you to that last speaker Jami-Lee Ross for listing the Government’s package addressing Auckland housing affordability issues. I guess that ultimately the arbiter of whether or not the Government’s response to housing affordability in Auckland has been adequate or not will be whether or not people can afford houses. I noticed on the television news this evening that the average house price in Auckland has hit a new high of $938000. I think that at this point—perhaps half-time in the contest—most spectators would probably conclude that the Government is not winning that actually at this point its package of housing measures has not been adequate.Maybe this brightline test will be the thing that actually starts to turn that round but right now that average house price is far beyond the resources of the vast majority of New Zealanders who need homes. That is because it is a housing bubble in which the market value of housing assets greatly outstrips their real or tangible value and these dynamics and particularly the use of mark-to-market valuation—an essentially unlimited supply of credit—are the classic dynamics that drive further expansion of asset bubbles. Professor Jane Kelsey most recently has written about what she calls the FIRE economy an economy based on finance insurance and real estate which is a pretty good depiction of what much of the New Zealand economy is about. But she is not the only person who has commented on that fact—on the fact that the speculative economy if you like has absolutely dwarfed the real economy in this country. Of course that directly harms many New Zealanders and it also creates very substantial risk to the overall New Zealand economy putting our country at risk.A capital gains tax is certainly not a panacea for asset bubbles but the lack of a capital gains tax certainly takes that FIRE economy and throws petrol on it because what this Government effectively says to speculators is: “Please speculate in housing because you not only get these massive windfall profits but you also get them tax free unlike any income that you might get from investment in the real economy in productive industry or in your labour.” So National’s problem is that it has railed against capital gains taxes and it probably also believes the economic theory that actually Governments cannot deflate asset bubbles. So it has got those problems but stacked up against that is the realpolitik of voters—and its voters—being unable to afford houses in Auckland. It has to be seen to be doing something. That is why we are now experiencing this half-hearted measure.Jami-Lee Ross and other Government speakers have said that it is not a capital gains tax and indeed it comes nowhere close to the kind of capital gains tax that the Green Party has advocated that Treasury has advocated and that all of the experts have advocated. Instead it is a half-hearted measure. According to Treasury we should expect that this will yield something in the order of $5 million in increased revenue. Well $5 million is better than nothing and the Green Party will be supporting this bill again tonight. But let us put that $5 million and stack it up against all of that untaxed windfall profit that so many speculators have realised on the Auckland housing market. I echo the comment of my colleague Eugenie Sage: once again this is a Government responding to a real serious problem with nothing more than gesture.