Bishop Chris: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeBishop Chris: Oral Questions — Questions to Ministers[Sitting date: 19 May 2015. Volume:705;Page:3357. Text is incorporated into the Bound Volume.]1.CHRIS BISHOP (National) to the Minister of Finance: How will Budget 2015 progress the Government’s commitment to manage the Government’s finances while delivering better public services?Hon BILL ENGLISH (Minister of Finance): We will follow the same approach of stable and predictable management of the Government’s finances with the objective of better public services for New Zealanders. We know that this is working because there are today 42000 fewer children living in benefit-dependent households than 3 years ago and 194000 new jobs compared with 4 years ago. Core Crown expenditure this year will be around $4 billion lower than we thought it would be back in 2011. These changes are making a real difference to people’s lives.Chris Bishop: How will Budget 2015 help New Zealanders and their families?Hon BILL ENGLISH: The member will have to wait until Budget day to see the whole plan but we have already made some announcements that will benefit New Zealand families. ACC levy cuts will bring about $500 million worth of savings to New Zealanders. We have announced $98 million for more timely elective surgery and improved orthopaedic treatment and also $32 million to strengthen compliance with minimum employment standards. And we are putting $33 million towards more immigration officers because New Zealand is such a success story that we are getting more visitors migrants and tourists and need more capacity at the border.Chris Bishop: What other Budget 2015 decisions have been announced?Hon BILL ENGLISH: We are providing the Inland Revenue Department with an additional $29 million for greater property tax compliance. We already tax the gain that people make when they sell a property that they bought with the intention of reselling it and that is fair. We are sharpening up those rules to make it easier for the Inland Revenue Department to enforce them and help ensure that people understand their liabilities. So everyone will have to provide their IRD number on every property they buy other than their main home and everyone will know there will be a 2-year brightline test meaning that gains from property sold within 2 years of purchase will be taxed except if it is the main place of residence or inherited or part of a matrimonial settlement.Grant Robertson: Does he recall saying in the 2014 Budget speech “There will be a small surplus next year and increasing surpluses are forecast over time.” and now having broken that promise will he be using exactly the same sentence in this year’s Budget speech?Hon BILL ENGLISH: I do remember making that statement as part of the 2014 Budget and it indicated significant progress from an $18 billion deficit to what will turn out to be a $500 million or $600 million deficit. It falls short of the surplus that was budgeted by a bit and that means we will achieve surplus next year.Chris Bishop: What particular measures in Budget 2015 apply to property investors who may be based overseas?Hon BILL ENGLISH: As well as having to supply a New Zealand IRD number all non-resident—that is non - tax resident—buyers and sellers must also provide their tax ID number from their home country along with a current ID such as a passport. This will enable the Inland Revenue Department to share tax information with overseas authorities. Also to ensure that our full anti - money-laundering rules apply to non-residents they must have a New Zealand bank account before they get a New Zealand IRD number. Finally we will be looking at introducing a withholding tax for non - tax residents which if adopted means we will take the tax off immediately when the property is sold and the foreign owner will have to square up with the Inland Revenue Department later.Andrew Bayly: How does the increased compliance on property gains fit within the Government’s response to escalating Auckland house prices?Hon BILL ENGLISH: The real issue in Auckland is that there are too few houses to meet demand. So the problem is pretty simple but ensuring more supply is the most effective long-term tool for bringing some order to the Auckland property market. So we are working on a number of fronts: changes in the tax regime which may dampen demand; setting up special housing areas to free up more land; and concentrating on redeveloping extensive Government landholdings in Auckland—for instance transferring Housing New Zealand properties to the Tāmaki Redevelopment Company.Andrew Bayly: How do those decisions sit within the Government’s commitment to control its spending?Hon BILL ENGLISH: These commitments are all being financed by a relatively low level of new Government initiatives. So for instance the total annual cost of new initiatives in this Government’s last six Budgets is around $3 billion. The last six Budgets of the previous Government had $20 billion of new initiatives and at the end of that time even supporters of it such as the Salvation Army were led to conclude that despite all the spending there were no better outcomes for New Zealand communities. With less new spending we are getting better outcomes.