Cosgrove Clayton: Taxation (Land Information and Offshore Persons Information) Bill — First ReadingText is incorporated into the Bound VolumeCosgrove Clayton: Taxation (Land Information and Offshore Persons Information) Bill — First Reading[Sitting date: 25 June 2015. Volume:706;Page:4798. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour): I will say from the outset that the Labour Party will support this bill to the select committee. But could I just point out that if there was ever an example of a Government dragged kicking and screaming to the point of reality where it had to do something—no sorry not do something but be seen to do something—in respect of corralling property speculation this is it. The truth about this is that this is a total rush job. I will provide a bit of evidence of that. The first is that the Minister Louise Upston who is putting forward this bill was not involved in any of the actual policy development. How do we know that? Because she was not told until 28 April which is when she said she was told about this proposal verbally and it was announced on 17 May. We know this because she said that in answer to a parliamentary question. The question read: “Was she”—that is the Minister—“made aware prior to its announcement that the Government was going to implement new IRD number requirements for non-resident purchasers of New Zealand homes if so on what date and how was she informed?”. The answer: “I was informed of the proposals verbally on 28 April 2015.” This was a hash job and I have got to say that I do feel a bit sorry for the Minister Louise Upston. It is sort of the Nick Smith effect. You know there is somebody else who is carted in—even Todd McClay; same deal—to be the person with the shovel following the elephant trying to clean the mess up.The second evidence of a hash job and a rush job is if you look at the regulatory impact statements. The Inland Revenue Department says it was unable to estimate compliance costs or consult with potentially affected parties because of “time constraints”—that is this Government has done nothing about an overseas buyer register for years and now panics at the last minute because it has got to be seen to be doing something because of the sustained pressure provided by the community and this Opposition to alert these people to the housing crisis that exists and the speculatory impact in relation to that housing crisis. The feet of the Government members are finally put to the fire so what do they do? They rush this out—they rush it out. We will support it to the select committee because we have maintained that there should be—for instance dealing with the overseas buyer issue—a register of overseas buyers. But we want to make sure it is real and it is effective.But of course the Minister gets up and perpetuates the myth in respect of what is a register. You know it looks like a register it sounds like a register and smells like a register; therefore it is a register. But she perpetuates a myth of course that was first kicked off in the select committee last week by the Minister of Revenue. He said that this is not a register. He said: “It is a collection of information.” So it is not a register; it is a collection of information. I suppose if we look at the Oxford Dictionary we could call it a database we could call it a record we could call it an inventory—we could call it anything you like. But I have got to say that the average Joe out on the street who is an intelligent human being as they are will see it for what it is—it is a register. I just say to the Minister: look give up. Why have this paltry argument? For years the Government has said it was too expensive. In fact it was Nick Smith the fiasco Minister the “Minister of Fiascos” who said that a register would be a “distraction”. Well let us call it a collection of data. He said that a collection of data might be a distraction that would cost “mega-millions” without doing a thing to tackle housing inflation.He went on in his own inimitable and stable way to say the following: “This is just about politics. It would be a waste of public money when we would be trying to work out whether it was 1.2 percent or 1.4 percent.” Then we have the Prime Minister who said: “We are not hostile to the idea of a register. We just don’t think it takes you very far.” So calling it a register or collection of information or something else—I mean Minister fair go. I know that you have been dropped in it. I know that you were told at the last minute that this was going to happen. They said: “Louise step up to the plate. We need you to take one for the team. We need you to take a hit.” I feel sorry for the Minister because this is becoming a pattern for Todd McClay for Peter Dunne for the whole Government for Nick Smith—including the people of New Zealand. But let us call it what it is. I am pleased that Government members finally have had the road to Damascus experience trying to dress it up as their own idea and they are actually going to monitor and have a register of foreign buyers so we can ascertain some evidence around this even though it denied that.The Inland Revenue Department makes another series of interesting recommendations—and I will be interested in how the select committee deals with this. For instance it recommended to the Government that it not exempt main homes from the register—that is the “register”—because it would not reduce compliance costs for purchasers of a main home as almost all would have a New Zealand Inland Revenue Department number anyway. So for example a person could buy a main home and then a few months later make it not into their main home but the Inland Revenue Department number has no way of tracking this. So I will be interested in the select committee process to actually tease that out. The bill says that a person selling their third main home in a 2-year period would have to provide an Inland Revenue Department number on sale. But that is going to be very hard to police if the number is not collected at each sale of the main home I would have thought.I am sure Chris Bishop who is a pretty intelligent bloke and sits on Finance and Expenditure Committee will be able to get up and rebut all of the points I have made and provide an answer to a pretty practical question which that is. But that provides again evidence of a bill that has been rushed that has not been thought out and that has just been hashed together because the Government has to be seen to do something.It is interesting that the Minister talks about the brightline test and a 2-year hold on property. Well if you have a look in Auckland the number of those who sell property inside the 2-year bracket equates to 15 percent if you have a look at the publicly available figures. What the Government has done with this is somehow proposed to the New Zealand people or built up the perception that if you do not get in by 1 October the brightline test of course comes into play but then after the brightline test 2 years and 1 day the perception is that it is all free and it is all dandy when the reality is that the basic intent test—the intent test for instance that has existed since time immemorial—will kick in after that 2-year period.I ask the Minister a couple of quick questions. If a person buys after 1 October and says to their lawyer: “Well we want to buy a second property in Queenstown. Why? Because at some stage in the future I might move from Auckland to Queenstown and get a job or retire there or my partner might want to go there and move town.” Then in 2 years and 1 day they sell the property and the Inland Revenue Department comes and knocks on the door balaclava-clad. It is going to knock on every door of people in the country with thermal imaging equipment or whatever. It is going to knock on every door and say: “You sold that. What was your intent?”. The seller says: “Well my intent was to move down there.” The Inland Revenue Department says: “Well you haven’t moved down there. OK. Why?”. The seller says: “The wife changed her mind.” or “The husband his mind.” What is the Inland Revenue Department going to do then? It is going to take every New Zealander to court to try to prove that their intent was otherwise?Alastair Scott: No they’re not. Read the legislation.Hon CLAYTON COSGROVE: I would argue basically having talked to some tax experts—not the vintner at the back—that you could actually shoot peas through the Government’s proposed brightline test and its 2-year hold. Coming back to this particular bill we will support it to the select committee. We actually want to see the detail. We congratulate the Government on finally—finally—actually admitting that there is a need for an overseas register. We think there are a number of holes in terms of the overseas register and the domestic requirement and we do have sympathy for the Minister who is proposing this given she was told a week or so beforehand. She has been told to come down here take the hit and argue that a register is not a register; it is a collection an inventory or a set of data. My advice to Louise Upston is to raise the white flag and let us get on with trying to produce a decent bill out of this rushed and hashed sort of cosmetic performance that the Government has put on for us today.