Twyford Phil: Taxation (Bright-line Test for Residential Land) Bill — First ReadingText is incorporated into the Bound VolumeTwyford Phil: Taxation (Bright-line Test for Residential Land) Bill — First Reading[Sitting date: 08 September 2015. Volume:708;Page:6343. Text is incorporated into the Bound Volume.]PHIL TWYFORD (Labour—Te Atatū): My grandmother was fond of saying that if a job was worth doing it was worth doing properly. With apologies to my granny this National Government believes that if the problem is worth addressing it is worth a grudging half measure because that is what the Taxation (Bright-line Test for Residential Land) Bill is. It is yet another grudging half measure. Property speculation is rampant in Auckland and the National Government does not need the polls and it does not need David Farrar and Curia Market Research to tell it that the Auckland housing market is totally out of control. Average house prices went up 24 percent in the last 12 months according to Quotable Value. According to Quotable Value also 41 percent of all mortgage lending in Auckland over the last 12 months went to speculators—41 percent. It is absolutely rampant. It is both foreign and domestic speculators—there is no doubt about that—and everybody in Auckland will tell you that.Under this National Government the policy settings are very clear. What they say to New Zealanders is that if you want to make a dollar and if you want to get rich in John Key’s New Zealand then become a property speculator. That is what this National Government’s policy says. It is not interested in the productive economy—it is not interested in people making things or in innovating the goods and services that the rest of the world wants to buy. This National Government thinks that we can get wealthy as a country by selling houses to each other—that is one of the defining qualities of this National Government over the last 7 years.There is a frenzy of property speculation going on in Auckland at the moment. It is unbelievable—buying and selling purely for the purposes of capital gain. The New Zealand Herald is full of it. You cannot pick up that newspaper without seeing stories of unbelievable windfall gains made by people buying and selling properties. But this National Government does not care. It does not care about that because the members of the National caucus including some of those sitting opposite on the National benches are multiple owners of residential rental property. That is what they do with their assets. They are big landlords over on the Government benches so they do not want to do anything about this problem. That is why this bill is a pretence. It is a charade.The bill is not intended to do anything serious about the rampant property speculation in Auckland. It is not just the fact that the National Party members in this House—so many of them—are major landlords with multiple properties; their donors also are making a killing at the expense of “Generation Rent”. I mentioned in the debate on the Taxation (Land Information and Offshore Persons Information) Bill that some National donors who donated $370000 to the last National Party campaign had amassed $26 million worth of Auckland property within a few years of being in this country. That is the other reason why National does not want to do anything about the problem of property speculation.But there is another reason and it is that the Prime Minister has made a cynical political calculation. He is happy to see house prices go through the roof in Auckland because he believes that there are enough votes to be harvested from Auckland homeowners who are happy to see their paper wealth increase day on day. He has made the cynical calculation that he can get more votes from those people than from the other half of the Auckland population who are renters—a whole generation of young Aucklanders who will never ever own a home of their own in Auckland unless these policies change and unless this Government is replaced.That is at the heart of this Government’s policy. It does not want to do anything about the flood of foreign money that is pumping up Auckland house prices. It does not want to do anything about the flick merchants who are buying and selling houses and who are bidding up prices beyond the reach of ordinary Kiwi first-home buyers. It does not want to do it because it is the party of speculators and land bankers. It is not a party that stands as we do on this side of the House on the side of young Kiwi first-home buyers. In a nutshell that is the difference between National and Labour—between the Government and the Opposition parties.Labour wants to rein in Auckland house prices. We believe that the Kiwi dream of affordable homeownership actually stands for something and that is why we will do something about itwhen the Government changes. We will crack down on speculators. Unlike this pathetic derisory little bill which will not make a blind bit of difference we will do something about property speculation. We will ban offshore foreign buyers from buying existing houses in this country. We will do that. We will have a register of foreign property ownership so that it is transparent and so that New Zealanders can see what is going on because Kiwis have had a gutsful of their land their property and their houses being sold out from under them under this National Government.This bill implements the so-called brightline test. It requires that anyone buying or selling residential property within a 2-year period pay tax. If the Government were serious about this problem and if it wanted to do something more than this insubstantial bill it so easily could have. Treasury’s own calculations are that this will net $5 million—that is all. John Shewan one of the Government’s most-trusted tax advisers said after the policy was announced that it would have little impact on house prices. He said that it would not deter property speculators. And it is plain for everybody to see because there is a loophole a mile wide at the heart of this bill that all that speculators need to do is hold on to the houses for 2 years and 1 day and then sell them.For goodness’ sake just be real with New Zealanders. Front up and admit that you do not want to do anything about this—when I say “you” I am talking about National Government members. Just be honest. Give up these pretences these media stunts these half-hearted grudging measures that the National Government announces day after day. Poor old Nick Smith; he cannot have any self-respect left—the indignity of standing in this House day after day and having to defend this charade of a housing policy.The game is up. No one believes this National Government any more. That is why on issue after issue on housing the polls say that 60 percent 70 percent or 80 percent of New Zealanders do not believe you any more. They want a register of foreign buyers. They want a policy that seriously cracks down on foreign property buyers. They want a policy that actually builds houses not this special housing areas policy that you have got. For goodness’ sake National Government members be honest with New Zealanders. They do not want this ridiculous pretence—one announcement one bill after another that are designed simply to convey the impression that you are doing something.The Reserve Bank has enacted more serious policy on curbing demand in the Auckland housing market than the Government has. This Government has outsourced its housing policy to the Reserve Bank. Listen to Grant Spencer’s speeches on housing. He gives one almost every week. What has he been saying for the past 6 months? He has been saying that the Government has not done enough about the shortage of Auckland housing. Speculators are a major problem. Just read his speeches—do not take my word for it. The Reserve Bank Governor and Deputy Governor—the mouthpieces of the central bank of this country—are hardly firebrand socialists. They are saying week after week time after time that this Government’s housing policy has failed. It falls woefully short.Speculators are a problem. They are driving up house prices. They are a threat to the financial stability of the banking system in the whole economy so do something about it—not this ridiculous bill which your own tax advisers say will not make any difference. This housing crisis calls for serious action. It is driving inequality between generations and between Auckland and the rest of the country. It is a social and economic disaster and this bill will not make a blind bit of difference.