Bishop Chris: Land Transfer Amendment Bill Tax Administration Amendment Bill — Third ReadingsText is incorporated into the Bound VolumeBishop Chris: Land Transfer Amendment Bill Tax Administration Amendment Bill — Third Readings[Sitting date: 10 September 2015. Volume:708;Page:6551. Text is incorporated into the Bound Volume.]CHRIS BISHOP (National): “Professor” Tabuteau is a new member as I am. We are both new to this House—just coming up to our 1-year anniversary as members of this Parliament. But even I know that this Government has a very proud record of enforcing our existing tax law that as Mr Tabuteau rightly points out says that if you buy and sell property with the purpose of making a profit you pay tax on it. Actually as a Government we have significantly enhanced the ability of the Inland Revenue Department both through funding and the logistical operations that sit behind that funding to go after people who do that. So the allegation he made right at the end of his speech is completely incorrect.In my brief contribution to the debate this afternoon I want to focus on just a couple of points of contention that have come up so far in the discussion just before from Mr Robertson and from Miss Genter from the Greens. The first issue I want to just briefly canvass is this issue of why the main home is exempted from the requirement for people to supply their Inland Revenue Department information when a property transaction takes place. Miss Genter was very perplexed by this. She spent basically her entire speech with this quizzical kind of querulous look on her face and she kept saying: “I don’t understand why the Government’s doing this. It makes no sense. It makes no sense. Why are they doing this? Why are they doing this?”.Well there are a couple of good reasons why the Government has done this and actually those reasons have been pointed out in the first reading debate in the second reading debate during the Committee of the whole House and indeed in the third reading debate. Here they are again. The first and the most fundamental reason is that this legislation is companion legislation to the Taxation (Bright-line Test for Residential Land) Bill which was sent to the Finance and Expenditure Committee only a couple of days ago. The brightline test will not apply to people who are buying and selling the main home. It is just not necessary for people who are buying and selling a main home which means in the vast bulk of circumstances in New Zealand ordinary people buying and selling the family home moving from one suburb to another and moving from one city to another—not buying and selling investment properties but buying and selling their main home. The brightline test does not apply to them and it is not necessary for them to rock up every time they make a property transaction and supply their information to the Inland Revenue Department.That would lead to—and this is the second reason—having information supplied to Land Information New Zealand and to the Inland Revenue Departmenton hundreds and thousands of transactions. There are real concerns about how those organisations would be able to cope with that information and it is just simply not necessary. It would also mean that a lot of people would needlessly worry when they supply that information that they may be taxed on that transaction when in the vast bulk of circumstances they are not going to be taxed on that transaction. That is the reason for the main home being exempted from the requirement to supply the IRD number.The second issue I want to briefly canvass is this issue of what the term “greatest connection” means. We heard some slightly strange assertions made by Grant Robertson before in the House and indeed I have been reading back through the Hansard of the first and second reading debates and members consistently misrepresent this position. Grant Robertson said that this is an invention—that this is a new term and it is an invention. Well that is a little bit trite I have to say because I suppose that new law—all new law all bills that are not on the statute book already—and new phrases and new words that do not exist already on the statute book by definition are all inventions. I mean that is actually the way Parliament makes law. We put a bill before Parliament and if it does not exist on the statute book already then I guess it is an invention. So OK maybe it is an invention but you know that is actually Parliament. Grant has been here a while so it is slightly strange that he does not know that.Then we heard in relation to this the allegation that there is no case law behind it it is just an invention the Government has just come up with this out of the middle of nowhere there is no case law behind it and it is absolutely unprecedented. Well yes it does not exist on the statute book already but what Mr Robertson is ignoring—and members have consistently ignored this point—is that we heard advice in the Finance and Expenditure Committee that the phrase “greatest connection” although it does not exist literally on the statute book now has been carefully crafted to reflect existing case law that underlies that test. I have actually checked this with officials. There is a plethora of case law that will be used by the courts and used by the Inland Revenue Department to interpret this section. So it is not true for members opposite to say that there is no case law—it is not true for members to say that there is no case law. There is case law and it will be used.Then we heard from Mr Robertson that people will interpret this differently and it is really going to be a disaster. Dr Clark went so far as to say: “I think that people like property speculators will interpret the ‘main home’ and the ‘greatest connection’ as the one where they make the most amount of money.” Well if speculators do that if speculators try to game the law by saying that the house that they are buying and selling is where they have the greatest connection to and therefore is the main home and therefore exempt from the legislation they will very quickly find I suspect that the Inland Revenue Department will come down on them like a ton of bricks because that is not going to be a way of getting around the legislation. They will very quickly find that that is not a particularly smart thing to do. That suggestion is just really redolent of the inaccuracies from Dr Clark and others in their contributions today.Finally there is the suggestion that the Inland Revenue Department has suggested one thing and the Government has taken a different course. Well actually we do not have Government by the bureaucracy in this country. I made this point in my second reading speech. It was very rich sitting here to hear Julie Anne Genter saying: “Well the IRD says this and the IRD says that and Treasury says this.” Look Labour and the Greens have been ignoring Treasury advice about the economy for pretty much the entire time that Treasury has been in existence. Dr Cullen used to come down to the House all the time and talk about ideological burps and how the Labour-led Government could not follow Treasury advice and all sorts of things. Labour members made a virtue out of not following it so it was bit strange to hear them lauding the work of the officials and lauding the work of the bureaucracy saying: “Oh my God! You must do this. The Government has been advised to do this and shame on the Government for not following their advice.” If they were true to their word then Labour and Green Party policies would certainly be in a lot different shape if they did actually follow the official advice on a range of matters.Look the point is that we do not have Government by the bureaucracy in this country. Ministers and Governments are entitled to take a different course. That is exactly what we have done. You weigh up the competing options. That is why we have Parliament; that is why we have Cabinet. This is good legislation and I commend it to House.