McKelvie IanIAN McKELVIE (National—Rangitīkei): Thank you Madam Assistant Speaker. Before I start I want to remind James Shaw that some of us are older than 1987—one or two other speakers as well—and what in fact Judith Collins said was quite true. It was also true of 2007 of course when the finance companies collapsed and there were a whole lot of New Zealand investors caught up in that. So the diversity of our opportunity in New Zealand is not great. I also want to take the Green Party's speaker up on one other point. There are some very good parts of this legislation and there are some pretty average parts and that's why we can't support the legislation. Not because of the very good bits—which we do support we fully support them and we realise they'll get passed—but there are some parts of this legislation that we don't like and I want to talk about two bits really. One is Supplementary Order Paper 193 which I don't know whether I like or not because it effectively gives Inland Revenue or the commissioner the prerogative to change some tax rules I suppose. That's the first time that I know of where this House has effectively given the power to tax to an outside body. Now there are some safeguards around that in that it's got to be put into legislation after three years if that does happen but none the less it is a first and it's an interesting proposition. I suppose given the kind of democracy we have it does speed things up from that perspective and also corrects things much quicker than they otherwise could have been corrected but whether that's sound or not I'm not so sure because it does take some of the power away from the Parliament. I now want to go to the bit that I really think is extraordinary and that's the ring-fencing of losses and the way it affects some people in the market and not others. It effectively has an impact on the small rental investor; it doesn't have an impact on the larger rental investors because those businesses are self-sufficient. So even someone with say 10 houses can very well be self-sufficient. They won't be affected by this tax at all because they won't need to be writing off their income against their rental property expenditure because a portfolio of that scale will deal with the issue for them. So that's the first thing: I think it's unfair. The second thing that I think is very likely to happen is that—because about I think something like 40 percent of the rentals in New Zealand are held by small investors—this is likely to force the rental price up further. The ironic thing about that is that the small investors will still be penalised in the way they were. They'll get some more rent but the big investors in the property market will get a free ride basically on the back of that. So they'll have a bonus that they wouldn't have anticipated. Again it's an ironic effect and it's not an effect I think is at all sensible. So there are some anomalies I think that will be created by this. The other thing I just want to briefly mention was the issue that again Judith Collins touched on to some extent—the issue in New Zealand of the diversity of our market. We're unique in the world almost because we're a well-off small country with a very small market. We don't have opportunity in New Zealand of large sharemarkets and large alternative markets. So the effect that has is to force people to invest in New Zealand and New Zealanders because we're so isolated from the rest the world tend to trust themselves more than they'll trust anyone else so they'll invest at home. What do they invest in? They invest in property because it's the only thing that they can touch and see and be secure with. So you look at the two crashes that are being talked about 1987 and 2007 both of those had a significant impact on New Zealanders who had no alternative investments from property; it didn't have an impact on the property investors. So it is an anomaly. I think it's unfortunate and I think that that piece of legislation contained in the bill that otherwise is pretty good—in fact I think most of the bits of the rest of the bill we support. I think containing this piece of legislation in there is unfortunate because we need to vote against it for that reason. So Madam Assistant Speaker that's my lot thank you. I commend the bill to the House—don't support it though.