Little Andrew: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeLittle Andrew: Oral Questions — Questions to Ministers[Sitting date: 19 May 2015. Volume:705;Page:3358. Text is incorporated into the Bound Volume.]2.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that there is no housing crisis in Auckland in light of the fact the average Auckland house price has risen by $100000 in the past year and the Reserve Bank says this is “increasing the risk of financial instability”?Rt Hon JOHN KEY (Prime Minister): Yes because over the last few years I have heard many overstated claims of a crisis in various parts of the economy. The previous one was apparently in manufacturing. The Government and the Reserve Bank have both acknowledged that we need more houses built in Auckland and we need to make that happen faster. That is why the Government has taken significant action to increase supply and speed up land development.Andrew Little: Why has he introduced a measure that looks like a capital gains tax but which he says is not one to fight an Auckland property market that is in crisis but which he says is not?Rt Hon JOHN KEY: Just to quote Mr Little he said the policy is “not a capital gains tax”. What we have done is said that for anyone who is an investor in a 2-year period we will take the ambiguity out of the current situation because we believe that that is reasonable. And for foreigners whom we do not have good records on in New Zealand—yes they will be forced to pay their fair share of tax.Andrew Little: In light of his finance Minister’s comment that it is “a bit unclear” what impact his new measures will have by how much does he say the new brightline test will slow the growth of Auckland house prices; and if he does not know why not?Rt Hon JOHN KEY: Well we have not modelled that but what I can say is that of the additional money we are putting into inspectors—which is $29 million in this Budget and $33 million from Budget 2013 which is yet to be spent; that is $62 million—the expectation is that we will get $420 million. The reason we are likely to get at least $420 million if not more is that the ambiguity is removed. I will say though that the intention test has been around for a very long period of time. Funnily enough and I have not actually bothered to go and look at it if one was to go back and look at all the advice that the previous Labour Government got when house prices doubled under its watch one would probably look at this issue as an issue that was raised back then. But guess what? Labour did nothing; National acts.Andrew Little: How many property speculators who are not already caught by the intention test will be caught by the brightline test; and if he does not know why not?Rt Hon JOHN KEY: The analysis of the Ministry of Business Innovation and Employment suggests that between 17 and 18 percent of Auckland’s housing transactions currently involve houses being bought and sold within 2 years. I would be pretty surprised if all of those owners are paying tax on that and I would strongly suggest that quite a few more will as a result of the brightline test.Andrew Little: Why has he announced a tax policy when he does not know how well it will work whom it will catch or what the rules even are?Rt Hon JOHN KEY: I know whom it will catch and they are people who buy and sell an investment property within 2 years. They are foreigners who are currently non - resident income taxpayers who are not paying their fair share of tax. Yes the Government takes a careful and cautious approach in this regard but that is the right thing to do because in the end taxpayers are entitled to have some clarity in what they are doing. But I do think and the Government has thought this for quite a long period of time that the intention test needs reflecting upon and that was the very reason why we asked the Inland Revenue Department to look at this very issue back in 2010. The officials in 2010 said they did not think we should move on it; in 2015 they changed their minds.Andrew Little: Why will he not just be straight with New Zealanders and admit that his new policies will not fix the Auckland housing crisis and that he is just doing the bare minimum and hoping the problem will go away because he does not have a clue what to do?Rt Hon JOHN KEY: Under this Government we have special housing areas of which there are about 90 in Auckland. Under this Government we have reduced the duty on imported materials. Under this Government we have reformed the Resource Management Act and we are looking to do more. Under this Government we have introduced a new brightline test for those who buy and sell investment properties. We have done a lot in the housing area. I know that Labour members do not like it but house prices doubled under their watch. Actually Auckland house prices went up by 79 percent under the previous Labour Government. When they asked Andrew Little last week what—[Interruption]Mr SPEAKER: Order! [Interruption] Order! The Prime Minister will resume his seat.