Twyford Phil: Taxation (Bright-line Test for Residential Land) Bill — Third ReadingText is incorporated into the Bound VolumeTwyford Phil: Taxation (Bright-line Test for Residential Land) Bill — Third Reading[Sitting date: 12 November 2015. Volume:710;Page:7999. Text is incorporated into the Bound Volume.]PHIL TWYFORD (Labour—Te Atatū): We are voting for this bill. We are voting for it because it is better than nothing—but not by much.The question you have to ask is why the National Government so often particularly on the housing issue brings so much flimflam to this Parliament. This bill is one in a long line of flimflam housing measures. Take for example Nick Smith lifting tariffs and anti-dumping duties. It was the centrepiece Budget announcement and his own officials have declared that it has had no discernible impact—no impact on prices nada zilch nothing. With the special housing areas the other great flagship initiative 102 houses were built in the last 2 years—102 houses. And this bill the Taxation Bright-line Test for Residential Land Bill is likely to go down in the annals of this House as a measure that will have very little impact. All of the informed commentators the experts from the day that this Government announced this bill have said that it will not deter speculators and it will not make any difference to the price of Auckland houses. It is simply there as a piece of political window dressing.But why—why—does the National Government constantly do this? The reason is that speculators generally who are purportedly the target of this bill are the friends of the National Party. The last thing the National Government wants to do is to make a significant difference to property speculation in Auckland because that is where it gets its money that is where it gets its support. The last thing National wants to do is choke off the supply of foreign money. For years now the National Government has denied that property speculation is even a problem. I have lost count of the times that Ministers have stood up in this House and denied that property speculation is a problem. If you listen to them you would think that it is only a question of supply.Now with the IMF and the Reserve Bank telling us that the Auckland housing crisis poses a real risk to the whole economy and that Auckland is teetering on the brink of the housing bubble bursting National is panicking. Government members are terrified out of their wits that this housing bubble will burst on their watch. They are petrified that their inaction combined with low interest rates high immigration a structural shortfall of housing in Auckland of about 30000 and rampant property speculation will see the bubble burst on their watch. They are absolutely terrified about it. They are terrified that their inaction will be blamed for causing the housing bubble to burst and they are terrified that anything they do will trigger a bust in the Auckland housing market which would undoubtedly cause major economic and social damage. That is why this bill is so insubstantial. That is why it will make very little difference. Treasury said it will be lucky if the bill generates $5 million in revenue when we know there are billions and billions of dollars’ worth of tax re capital gain going on in the Auckland housing market as we speak.What is it about this bill that makes it such a dud? The very premise of the bill the 2-year test is an invitation to speculators to hold on to their properties for 2 years and a day. It will deter only the most short-term of the quick-flick merchants. Treasury warned that the 2-year limit would be ineffective. It said: “Push it out make it 3 years or 5 years.” It said that 2 years would be ineffective. The experts came along; they said that the bill was incoherent and it would be ineffective. One of the senior tax experts in the country said that it was professionally confusing. It will not capture speculators but it will capture ordinary Kiwis who by no fault of their own—because of relationship breakup because of a death or because of illness—are forced to sell their house. Those are the people whom this legislation will punish but it will capture very few speculators and it will not make very much difference at all.It is riddled through with problems. The definition of “main home” is a joke. It is ridiculous as Clayton Cosgrove said that if you have to choose between two homes that the person claims are their main homes it is the place of “greatest connection”. This is a made-up definition. It is going to be a field day for tax lawyers.Chris Bishop: Welcome to legislation Phil.PHIL TWYFORD: Would you like me to quote The Castle again? Because if you insist I will.Why all these problems? Because it was a chaotic rushed political response to the opinion polls that were telling the Government that the public thought it was doing nothing about the Auckland housing crisis and Bill English was desperate to see some kind of measure incorporated into the Government’s Budget package.What should the Government have done? It could have done something much more effective and more substantial. That opportunity is still with the Government. It could support my member’s bill which was pulled out of the ballot today. If the Government wanted to do something that would have more effect than this pathetic Taxation (Bright-line Test for Residential Land) Bill it could support Labour’s policy to ban non-resident foreign buyers from purchasing existing homes. That is the Australian Government’s policy. It has successfully channelled $30 billion of offshore money into building new homes in Sydney and Melbourne in the last 12 months. Would that not be a nice problem to have? It is a policy that works it is effective and it is actually generating foreign investment that is invested productively in the building of new houses in Australia so why would you not want that?But this Government went off to the Trans-Pacific Partnership agreement and it did not even try to negotiate a carve-out for this kind of legislation to ban foreign buyers from buying existing houses in this country like the Australians did and like several other countries did. It does not care. This National Government stands on the side of property speculators both domestic and foreign. It does not care about Kiwi families who are struggling to get a foothold in the property market. It should not surprise us because the National Party is the party of speculators.It does not believe in productive investment in businesses and the economy. It does not care about Kiwi first-home buyers. It is happy to sit back and watch homeownership levels fall to the lowest in 64 years. It is happy for homes in Auckland to be left as ghost houses empty because their foreign owners do not care about renting them out for people to live in because they are happy to make a 25 percent year-on-year capital gain on those houses. National is happy with that situation. It is happy for people to live in cars and campgrounds and garages because it is so petrified that if it does anything significant its housing crisis—the National Party’s housing bubble—will burst before the election and it will be blamed for the massive economic and social damage that will be left in its wake.It is not fair or strictly correct to accuse this bill the Taxation (Bright-line Test for Residential Land) Bill of being a poor case of legislative drafting. It is not the fault of officials. It is actually a perfectly good example of legislative drafting because this bill does exactly what the National Government wanted it to do and that is not very much at all. It is emblematic of this Government’s entire response to the Auckland housing crisis. It denied it it denied it it denied it. It hoped that it would somehow just go away. It did not want to pay attention to it. Then for the last 3 years while Nick Smith has been the housing Minister we have seen an endless procession of micro-initiatives photo stunts and press releases—all designed like this bill to convey the impression of activity. Simon Bridges knows that is right. He is laughing. He knows that Nick Smith is a liability for this Government. He knows that the public of New Zealand want to see real action.The public want to see a crackdown on speculators. They want to see a policy that actually results in houses being built that people can live in not this ridiculous policy of this National Government that has led to 102 houses built in the last 2 years. They want to see a crackdown on speculators not this flimflam. It is a pretence. It is a joke and the public can see through it. This Government does not want to do anything about it. It does not want to move because it is petrified that if it actually takes action against speculators if it actually builds houses it will trigger a bust in the housing market and the egg will be all on its face.