Brownlee GerryHon GERRY BROWNLEE (National—Ilam): I rise to support the Hon Amy Adams in her motion calling on the House to instruct the committee that they should take no further action or have no further consideration of Supplementary Order Paper (SOP) 13 laid on the Table by the Hon Stuart Nash extending the brightline test on residential property from two years to five years.The reason for the brightline test in the first place was to remove speculators from the market to get rid of people who come in and buy a chunk of perhaps a residential offering—whether it's a new apartment building or a new subdivision or whatever it might be—and put them into the category of being a trader in property because those who do trade in property do pay tax and always have and then effectively tax them if they sell that property within the five-year period.Now you might say that actually that's not an unreasonable thing. Why shouldn't someone who does trade in property have to be caught this way? But then what we do know is that people do make investments and those investments can be quite reasonably made and there is a trade-off because at the moment while they don't pay a capital gains tax they don't get depreciation on that and the extent of their write-offs was somewhat limited by tax changes in recent years. So it seems to me that that is a matter that needs to be discussed by the wider community rather than just the narrow position that would be taken inside the House. We all know that there are ma and pa investors across the country particularly people who might get to their late 50s who decide that they want to do a little bit with the equity that they have in order to enhance their position in retirement. This will be a huge impediment to those people being able to make that sort of progress. You'd have to ask what the advantage is to any community in that particularly when it's lined up against the Overseas Investment Amendment Bill that's currently going through the House—currently before the select committee—Hon Shane Jones: I raise a point of order Mr Speaker. I direct your attention to the actual legislation before us. It is not dealing with overseas investment rule changes or law changes and if we're going to continue with this time-wasting direct the member to talk about what's in front of us.Hon GERRY BROWNLEE: Speaking to the point of order this is a debatable motion and material relevant to the debate on this motion is most certainly able to be introduced into the debate. I'm simply making the point that we have here a proposal that brings in a brightline test for property purchases in New Zealand that prohibits people selling them without a tax consequence for five years. At the same time we have an investment act going through the Parliament that allows exactly that.ASSISTANT SPEAKER (Adrian Rurawhe): Thank you. I thank the member.Hon GERRY BROWNLEE: Can I finish my speech?ASSISTANT SPEAKER (Adrian Rurawhe): I'm going to rule on the—Hon Members: Point of order.ASSISTANT SPEAKER (Adrian Rurawhe): No I'm going to rule on the point of order thank you. I thank the members. This is a debatable motion. It is restricted to the instruction and it's my opinion that the member has traversed within the instruction. There's a little bit of latitude within that but the Hon Shane Jones is correct; it is not a debate on the content of it but on the instruction.Hon GERRY BROWNLEE: That is quite true and thank you very much for that ruling Mr Assistant Speaker. The point though that I was making is that the instruction in fact is to allow the public time to try to line up these two very very different positions that have been taken through the legislative programme of the current Government.It's not an attempt to say that we want to encourage property speculation. By and large that's not a good thing but it should be a point that we recognise that those who do engage in legitimate property speculation—in other words people who invest on a large scale frequently regularly and in very vast numbers of properties—do in fact get caught by our current tax laws. There's no need for the brightline test in those cases. Anyone for example who's registered for GST and has claimed GST against a property because it is going to be part of future development is caught by our current tax laws and untroubled by the brightline test. The people who will be caught by the brightline test extended particularly to five years will be those people who in a very small way have decided to use the equity that they have in their property or perhaps some inheritance that they've got to invest in a property—which of course does add to the pool of rental properties available in the market—and then of course now are finding that if they were to exit that property to a buyer perhaps a first-home buyer in those first five years they would be subject to tax.Now it's not unreasonable that the committee accepts the instruction and says OK we will send it back to the select committee for the one-month period. We'll call for public submissions on this do the work that's necessary to hear from either those who are in favour of it or the many who I know will be opposed to it and then consider whether or not it's still worth pushing through the House." Even today this House has had questions asked about the availability and supply of new property into the market and I would like to suggest that one thing this instruction does is allow consideration of what the brightline test has done so far to inhibit some of the development of new property in this country. You can't have a Government going around saying "There's a shortage of 70000-odd residential dwellings." but then at the same time bringing in tax provisions that prevent an expansion of that particular supply in the New Zealand market.So I think what the Hon Amy Adams has done today is present a fair opportunity for this Parliament to pick up the concerns that some New Zealanders have to tidy those up inside a consideration of all the other factors that are going on at the moment in a constrained housing market and to see what is going to be good for that housing market to expand. It would be unfortunate if this House were today to simply go about its business and push through this piece of legislation and inflict the five-year test upon New Zealanders without ever hearing what those New Zealanders thought about that particular proposal.And it's not acceptable six months after an election to say "Well we said we would do something about it." If it was so important it would have been done in that 100 days and it would have I think at that stage when the Government had a view about being a little more transparent and open and up front with people probably had a short select committee period. It could have been sent to the select committee at any time when they were having hearings over this particular taxation bill but it was not. It slipped into the House because everyone who is promoting this bill knows it is not a good thing for housing supply in this country. So I would hope that the House this afternoon can say "One month is not going to make a huge difference. One month is not going to make or break." We've had six months with no new affordable housing being built by the current Government so one more month won't be such a bad thing but it could be that by going hard at it today it is many many many months before hard-working New Zealanders who have small amounts of capital to invest in the housing market don't decide not to do anything because of the pernicious regime that this particular measure brings in.I certainly hope that those who are listening to this debate are not going to be just dyed-in-the-wool do-as-they're-told follow the—Hon Amy Adams: Sheep?Hon GERRY BROWNLEE: —well I've got to be careful about my words here. I don't want to be insulting to anyone—follow the ideological lead of some in Government who believe that anybody who buys any asset other than the State is somehow out to rip everybody else off. That is simply not the case. Everyone knows—and particularly I would expect Mr Nash to know—that if you really did get stuck into the residential property market in this country in the way that we suspect the tax working group wants to do then the supply of that housing to New Zealanders who need it would almost certainly either dry up or become massively more expensive and I think it would be well worth taking that one month for that broader consideration about the wisdom or otherwise of this particular initiative."