Swarbrick ChlöeCHLÖE SWARBRICK (Green—Auckland Central): E te Māngai tēnā koe. Tēnā koutou e te Whare. It was fascinating to hear a speaker from the National Party just before talking about all of these university students whose parents are buying houses for them. It really was an insight into the world or social hierarchies within which the National Party are rubbing shoulders and it's definitely not representative of the 1.4 million New Zealanders who rent in this country. But I digress. My content of this speech today will focus primarily on the large Supplementary Order Paper 64—which many have already addressed—on tax deductibility and brightline changes because there is a housing affordability crisis in this country but it is not one that is being felt equally. We know that because we know from Statistics New Zealand data that it is the case that those who rent spend a higher proportion of their income on housing and of course also on other essentials. Those on the other hand who have speculated on housing like they are playing a game of Monopoly have profited handsomely particularly over the last two years while New Zealanders on the other end of the spectrum are frankly being screwed. They're not being screwed in a vacuum though. They are being so by intentional decisions by that Economics 101 rational man who exploits the system. Those who have land banks those who have speculated and sat on inflating assets without breaking a sweat—they have been let off the hook. That hook is the social contract. It is recognising that capital gains don't come about by virtue of one individual's genius but in fact as a result of the investment that all of us as ratepayers and taxpayers and New Zealanders make in our communities and our neighbourhoods and in our country in the infrastructure of the transport projects in the water internet and energy infrastructure in schools and in hospitals and in walking school buses māra kai and community gardens. Some people say to me Don't hate the player; hate the game." Well unfortunately the legislation that we are passing through its second reading this afternoon continues to leave largely unaffected those rules which entrench exactly that game. According to CoreLogic since March 2021 when the Government announced these policies of removing interest deductibility and extending the brightline test the average house price in Aotearoa has increased by 22.5 percent—over $190000. Those gains alone are over three times the median income before tax and we know that most of those massive capital gains will not in fact be taxed. Those on the right—my literal right and the right of Parliament—would like to argue that we shouldn't tax wealth like work because it hasn't been realised. But then they'll turn around and say that even when it is realised we also shouldn't tax it then—surprise surprise—which is why it's worth pointing out that the Income Tax Act 2007 was actually always supposed to enable taxes to be paid on income regardless of where that income came from which is why it was the case that originally the National Party when in Government made amendments as others have alluded to in 2015 to introduce that brightline test to simplify and ensure IRD's rightful collection of tax on capital gains income. But of course it did not go far enough and neither will the changes in this bill with the extension of this brightline test as proposed because at this point this advance into this crisis we are not addressing the fundamental problem. The fundamental problem is one of a feudalistic wealth divide supercharged by political decisions and intentional neglect by virtue of an over-reliance on particularly unconventional monetary policy over the last two years. In the early 2000s some reckoned that house prices were radically increasing or escalating because some people were engaged in what we called then "flipping properties"—that is buying them quickly doing some minor improvements and selling them on. But the crisis we have today is far worse. No one is really even pretending to improve properties that they're sitting on any more or too much. The crisis now is one more so of affording—that is the hoarding of wealth and more capital gains in the hands of a few while more and more New Zealanders those 1.4 million New Zealanders who rent struggle to pay that rent let alone get into a first home. Since the Government ruled out a capital gains tax in April 2019 CoreLogic shows that the average price of housing has increased by over 50 percent—by almost $350000. This recent surge shows that merely tilting the balance as indeed these changes were heralded as doing does not take us far enough. It shows that an over-reliance on economic policies intended to steady the ship in the midst of a global pandemic instead of directing support to those who are disproportionately exposed resulted in exactly the disproportional impact—that is inequality—as predicted by the Reserve Bank of New Zealand and Treasury back in early 2020. A recent Newshub - Reid Research poll showed the highest public support yet for the Government revisiting a capital gains tax with almost 55 percent of New Zealanders agreeing and only a third disagreeing. It's no secret in this Chamber that the Greens have long called for a comprehensive capital gains tax and of course wealth taxes. We know that tax is not a silver bullet and we know that we need to also have more public housing rent controls and a rental warrant of fitness to ensure everybody in this country regardless of whether they own or they rent has a warm safe dry secure home. But tinkering simply will not cut it because even if house prices were to fall by 10 percent this year as some economists are indeed predicting we would still be only back to where we were about six months ago. The Greens know that we must learn lessons from the past because a house price crash could in fact lead to a credit crunch and higher unemployment with people losing their houses and over time wealth concentrating even more so at the top end of town. This cannot go on but we cannot let these potential issues scare us into ignoring the problem and potentially making that risk far worse were it to just happen to us. The Government must act and intervene to protect people as we take the heat out of this housing market. Despite hearing a lot from members of the National Party about how they are opposing this bill today they have no real ideas for addressing this housing crisis. In fact they actually propose those which would continue to exacerbate it. "More supply" they keep saying "but no not State houses—not that supply." "We need less regulation." they say "Unshackle the market." Well look where that free market has got us. With their ideas and their track record back when they were in Government the rich just got richer. We in fact heard very similar noises from former National and I might add Labour Governments back in the 1980s and 1990s responding to inflation concerns at the time. The devastation of that historical deregulation the funding cuts and the tax cuts are scars that are still evident in our country today. You'd think that all of us would want to learn from that history but a recent snatch from the Leader of the Opposition demonstrated that he can't quite distinguish between capitalism or socialism. Business as usual simply will not cut it. This bill is not too bad and it's not too good. The sky won't fall in—as members of the Opposition are screeching about—but unfortunately it is not quite the Goldilocks zone either because this is not just right. I am and the Greens are really hoping that the work programme under way with the Minister of Revenue the Hon David Parker on fair tax gives us a little more than just another Government report to gather dust but in fact we hope it leads us to far greater action to not just tinker or tilt to rebalance the scales but to properly engage and support all in the team of 5 million. Thank you Mr Speaker."