Tabuteau Fletcher: Taxation (Bright-line Test for Residential Land) Bill — Second ReadingText is incorporated into the Bound VolumeTabuteau Fletcher: Taxation (Bright-line Test for Residential Land) Bill — Second Reading[Sitting date: 03 November 2015. Volume:709;Page:7606. Text is incorporated into the Bound Volume.]FLETCHER TABUTEAU (NZ First): Mr Bishop I have held you in too high regard for such a long period of time—either that or your heart just was not in it tonight. It just fell flat mate. I can understand why. I can understand why. This is a terrible piece of legislation. It really is. I was waiting at the start of the contribution from the Minister—David Seymour: So bad the Professor could tell.FLETCHER TABUTEAU: Do not start Seymour—you were saying the worst things about this during the select committee. I could not believe it. It was amazing. The Minister started off and I was waiting I was listening I was paying attention looking for something I could comment on. But in the end he just laid out the speech that was given to him and then spoke to the generalities and spoke to the executive summary about just how wonderful it all really is. And then I at least had the excitement of hearing Mr Bennett contribute to the debate. At least that was entertaining—it was not very good but it was entertaining. His abuse of people never fails to entertain this House night after night. As the chairman of the Finance and Expenditure Committee he will not mind if I do not refer from now on to a single word he said and instead refer to the experts who contributed to the select committee process.Hon Maggie Barry: Winston Peters.FLETCHER TABUTEAU: Miss Maggie Barry $918000 is the average price of an Auckland house as of today according to the data.Hon Maggie Barry: Did Winston tell you that?FLETCHER TABUTEAU: So you know Miss Barry might be able to afford a property in Auckland but new homeowners cannot. They are struggling. It is not even new homeowners any more—the reality is that it is harder and harder for everyday New Zealanders. This is intergenerational theft. She needs to acknowledge that and National needs to acknowledge that and do something more meaningful and tangible than this vacuous and empty piece of legislation.There were three minority reports written for the select committee report on this piece of legislation. I am sure there would have been a fourth if Mr Seymour had been so inclined. But there were three and that speaks to the majority that is written about in the select committee report. I am just going to take a snippet from the first reading of this bill to highlight New Zealand First’s stance. We would normally say to the House: “You’ve got it wrong. You’ve kind of missed the point. But what we’ll do is support it going through to the select committee and let’s see if you take on what was contributed from the experts.”What we found when the draft legislation originally came out was that there was nothing. There was absolutely nothing in this piece of legislation which is so facile—I have said the word “vacuous” already—that it serves no point whatsoever. It will achieve none of the stated objectives so eloquently spoken to tonight by the National Government. This is another token gesture.I will quote from some of the submitters just to reinforce the point. This is not New Zealand First simply opposing legislation for the sake of it. Unlike Mr Seymour and the Government we actually listened to the experts. Chartered Accountants Australia and New Zealand said quite simply that this is not sound tax policy. They recommend a stocktake or review and said that in the absence of this review the “overall package of reforms will lack the coherence it requires and will not provide taxpayers with an appropriate degree of certainty”. The New Zealand Law Society said that this legislation should not be enacted as it would not meet the stated policy objectives. One submitter KPMG stated categorically that the bill does not address many of their concerns. They further said that the brightline rule is not required and that it should be sufficient for the Inland Revenue Department to enforce current legislation which is what New Zealand First said right from the start. Chapman Tripp stated that there is no integrity in what is proposed and spoke specifically then about the avoidance rule for company or trust ownership structures. The New Zealand Property Investors’ Federation stated that there is no need for this bill. It will not change the value of house prices. It will not lower them. The federation then pointed out that it is possible that properties bought under a company or a trust ownership structure could circumvent the brightline test rule yet again. It noted that speculators will simply change their behaviour and that this is piecemeal and the Government should simply enforce current legislation.In my words the Government should simply enforce the current capital gains tax Mr Scott. National members and those sitting opposite deny there is one but it is a tax that is enforceable given circumstances where owners of property dispose of said property and make a financial gain on the sale of capital. It is a capital gains tax and it simply needs to be enforced.There is a real problem in Auckland and it is not just local commentators. Commentators from around the world are taking time out to note the impact that the housing market is having. Let us hope that it is not too significant or bad but if the pop of the housing bubble in Auckland comes about it will not just affect those who have been buying homes in Auckland speculating in property in Auckland it will affect the whole New Zealand economy. This is the real problem and this is why we need more than what is being offered by this Government tonight. These are empty words that will change nothing about the real problem that we have in the Auckland housing market.The point is that this is a national issue and the National Government refuses to do anything about it. I noticed on a news article tonight that Rotorua prices are increasing. For me that feels good being a Rotorua lad and it is great to be a part of that. The difference is that the fundamentals in the Rotorua economy are improving and people are making choices to not so much speculate in the Rotorua economy but to move there because of real job decisions and choices. So the market grows.This is not what we are seeing in Auckland. We are seeing New Zealand speculators and more important and perhaps more disastrous we are seeing overseas speculators coming in and compromising the lifestyle choices of everyday New Zealanders. That National does not want to bring this problem to a close perhaps is a fair summary of this legislation. It does not seem to want to solve the problem. Is it that feel-good factor? National does not want its voters in Auckland to suddenly be worried about the prices of their homes and so start to panic about what is going on there and all of a sudden they are asking questions about what this National Government is or is not doing. It is an observation. Whether it is fair or not is another question.Here is the lunacy of the situation though. The current finance Minister said: “I am sure there will be discussions about how the brightline test actually falls. We would expect that. But people need to understand”—and this is where it gets good—“if it may be taxable under the brightline test then it probably should be paying tax anyway under existing law.” That was from the Minister of Finance. The irony of ironies is that I completely agree with him. He could not be more right and yet the argument from that side of the House tonight is that it is not doing the job it was intended to do. Mr Robertson did speak to that with some eloquence although I would suggest to Mr Robertson and to this National Government that there are fixes under the intention tax rule that would see it being enforced and applied in a fair and reasonable manner so that we could actually fix the problem that we are observing in Auckland.Ten minutes is simply not long enough to speak about all the problems in this legislation. People who simply buy property do it up and then flick it off are exempt. Trusts and companies are exempt. The definition of what is land or property falls within the purview of this legislation and is so vague as to be meaningless. New Zealand First has said it before and we will say it again. This legislation does not fix the housing problem in Auckland. We need something sound we need something substantial and we need it now. Thank you.