Cunliffe David: Taxation (Land Information and Offshore Persons Information) Bill — In CommitteeText is incorporated into the Bound VolumeCunliffe David: Taxation (Land Information and Offshore Persons Information) Bill — In Committee[Sitting date: 09 September 2015. Volume:708;Page:6450. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to take a first call in this Committee stage of the Taxation (Land Information and Offshore Persons Information) Bill and I trust it will be the first of a number that will assist the Committee in finding a way through this. There are two areas that I wish to address. The first is the rationale for the bill. The second is the implementation issues that the bill throws up. To bring the public into the rationale issue can I pose a rhetorical question: what do the housing shortage the refugee issue capital gains tax and the overseas buyers register all have in common? The answer is that they are all examples of a particular mojo or operating method by this Government. In the face of overwhelming public pressure and an overwhelming policy case for change the Government concedes a very small usually ineffective amount so that it has got something that it can say to the public. Never mind whether it will work or not never mind whether it will solve the problem at issue never mind whether it is actually practically able to be implemented; it is good enough for the press release and the public relations campaign. That is why we have special housing areas with no houses. That is why we have got a temporary and very reluctant increase to the refugee quota. That is why we do not have a capital gains tax that will work but we may have a partial brightline test to accompany this. That is why we do not have a valid operable offshore buyer register but why this bill brings in a partial system for registering offshore persons.To explain the difference let me drop down to the implementation issues. My colleague David Clark and my colleague Stuart Nash have both quite rightly lampooned the idea that in the 21st century we are having a paper-based set of records of anything let alone anything as important sophisticated and high value as overseas property transactions. If that were known in the international press I daresay New Zealand would be an utter laughing stock. The second implementation issue is that as the Hon Peter Dunne well knows—and he did not have silver-grey hair before this—the Inland Revenue Department computer system is not easy. He was there. I used to do the job that he was doing as the Minister of Revenue and it is a worry. You cannot make a change to one part of the Inland Revenue Department computer system without the rest of it threatening to fall over and time is agin it. The answer seems to be a billion-dollar computer upgrade—let me say that again: a billion-dollar computer upgrade—with a contingency margin of $500 million. It is hard to believe that anybody could put through Cabinet a project with a contingency margin—that is an overrun—of $500 million. Good luck Peter Dunne. I hope it works. If it does not well we will be sending you flowers in whichever retirement place you elect because it probably will not be in the House.Look this bill makes it worse. We are asking for bespoke changes to the Inland Revenue Department’s operating system eventually because at the moment it is just pencil and paper for a system that will not and cannot work. Why can it not work even if we could get the Inland Revenue Department system to change? Well that is because it does not actually separate out what the register should be doing which is identifying offshore speculative pressure and separating that out from the legitimate purchases of New Zealand citizens and permanent residents. If Joe Bloggs in my electorate or yours Mr Chairperson moves overseas and decides to sell or buy a property in New Zealand good luck to him. He is as much a New Zealander as you or I who live in New Zealand. And actually one out of five Kiwis does not live in New Zealand. We have the second highest diaspora in the OECD after Ireland. One in five of us lives overseas; we should be able to trade property in our home country—not an issue. Likewise we should treat permanent residents equally. So that leaves us with non-residents and the whole issue here is that most other countries including Australia have a very simple rule: if you do not live in New Zealand and you do not plan to you should not be able to speculate on property unless you actually build a house. New Zealand houses should be for Kiwis to live in. This register ought to be an opportunity to make a small but incremental gain on that issue. If we were validly identifying speculators who have no intention of living here and separating them out from Kiwis who may well come back and in any case have a right to trade property then we would have a so-what that was worth the paper-based angst. Not only is this probably not implementable according to the Inland Revenue Department and Land Information New Zealand but even if you could implement it there is very little point because in its current construction it will not actually do anything useful. So why why why are we here?Simon O’Connor: Existential.Hon DAVID CUNLIFFE: The answer is I am afraid buried in the first part of—we are not going that deep tonight but I know how it feels being a Government backbencher. When you ask “Why are we here?” you are saying “Why am I here?” because you do not get to do anything. At least in Opposition we get to get stuck into issues. This bill is here—Tim Macindoe: You’re welcome to stay in Opposition for a very long time.Hon DAVID CUNLIFFE: You know I say this to the whip opposite—he is a decent guy and I will be honest with him—that we are getting good at this but we do not want to stay here for ever so we will be happy to trade you in 2 years’ time and we are pretty sure that is what is going to happen.To round off the reason this bill is here is that it is part of a public relations gimmick by the Government. Faced with overwhelming public pressure to do something about the insane Auckland property market and the increasing influence of foreign speculation it has bowed to pressure and it has finally started to build some kind of register. Albeit partial albeit ill-defined and albeit difficult to implement it is in fact contradicting the earlier words of leaders of the Government. Nick Smith the Minister for Building and Housing said a register would be a distraction that would cost mega-millions without doing a thing to tackle house-price inflation. I hope that he was wrong not for the sake of the Government—it would hurry them to Opposition—but for the sake of New Zealand. I hope that he was wrong.