Robertson GrantGRANT ROBERTSON (Labour—Wellington Central): Thank you very much for the opportunity to contribute in the debate on new Part 4 of this bill. It is worth noting that this is a critical element in terms of the overall scope of this bill which is about how we improve the affordability of housing for New Zealanders. I want to take people back to the origin of the 2-year brightline test which is being extended in new Part 4 of the bill in front of us today and it takes us back to Budget 2015. In the build-up to Budget 2015 New Zealanders' concerns about the housing market about the affordability of housing were rising. It was a time when price rises that had never been seen before in Auckland were starting to get into the consciousness of New Zealanders. The Government was flat-footed because what we came to discover was that there was actually nothing in the Budget on housing. It did not have anything in the preparation for the Budget that had taken place to deal with this emerging housing crisis with 20 to 25 percent annual increases in the price of houses in Auckland. We know this because once all the documentation from Budget 2015 was released there was nothing in it about the brightline test. Officials had not done any modelling. Just reflect on that for a minute. The Government introduced under urgency and around the time of Budget 2015 this brightline test but it never modelled what it was actually going to do. In fact it got to a completely farcical point which some people might recall with Bill English admitting on television that he had no idea whether this brightline test would have any impact at all. Eventually some work was done—well actually it had been done earlier in 2010—and it was eventually released. It said that the 2-year brightline test that the Government brought in would net at most 1000 of nearly 80000 house sales and raise just $18 million per year in revenue for the Government. The test was a weak and half-hearted measure. It came in because the Government had had its hand forced. The Government kept saying there was this thing called the intention test: if you purchased a property with the intention of selling you would have to pay a tax on the capital gain. Of course no one admitted that. No one said Yes that is my intention." despite the fact that thousands of homes were being flipped over quickly for profit. So the Government in a corner said: "All right. We'll do a 2-year brightline test." I sat on the select committee when we addressed the issues that are contained in this part and relate to the brightline test. Treasury was very clear. It said: "If a Government is going to do this at least make it 5 years because the behavioural impacts will be much higher if you say to somebody that if you try to sell a house an investment property within 5 years you will be taxed on that." The advice that we got from officials was that 2 years was not enough. Someone who was speculating in the housing market would wait out the 2 years and 1 day and then they would flick off the property. That was the advice that we got in the committee. I do want to be absolutely clear. The existing brightline test and indeed what is contained in new Part 4 do not apply to the family home. They do not apply to the family home. This is only about speculators—about those who own more than one property and then move them on within the 2-year period as it is now and the 5-year period that we want it to be. This is a vitally important measure around housing affordability. Speculators have a disproportionate impact on the housing market. They are pushing out first-home buyers from getting in and building up the Kiwi Dream which we know has been so important to New Zealanders. The Government got that. It got that to the extent that it needed to be seen to be doing something. As with all of the Government's initiatives in housing this is about how little it could do to get away with being seen to be doing something. The Government rushed this out in May 2015 and said: "This is what we're going to do." It was an inadequate response then at a time when the level of investor activity particularly in the Auckland housing market was lower than it is now. Now we know that nearly one in two purchases in the Auckland housing market are being made by investors or speculators. When the brightline test came in it was just under 40 percent. The Government has put this in place. It has been an inadequate measure. It is a step forward in terms of cracking down on speculators. There are more things to be done. But this is an opportunity. I want to make clear that we are deadly serious on this side of the Chamber about these amendments we are putting forward. These are the policies we think are needed to get more affordable housing and we want to have a debate about it because the Government has had its head in the sand for too long about the importance of these issues."