SpeechHon MICHAEL WOODHOUSE (National): Well I credit Ingrid Leary for her deeply socialist roots being so clearly on display there because what she's basically said is that she hates rich people—she cannot stand success and innovation and people getting ahead; she thinks it's something that happens by accident. And that's the sort of theme that we've had permeating this debate all the way through. But I want to start with something that hasn't yet been said about the Supplementary Order Paper (SOP) that has been implemented into this bill and that is about a broken promise because by any measure a 10-year brightline test is nothing more or less than a capital gains tax on every property but the family home. And what did we hear from the Prime Minister in the previous Parliament? That she would resign before a capital gains tax was implemented. Well I've got a suggestion for her: she can do just that because that is exactly what this bill is. It is the implementation of a capital gains tax.Now we've had some—and it's customary actually with Dr Deborah Russell and today with Barbara Edmonds—really interesting philosophical discussion about tax jurisprudence if you like. One of the things that neither of them said about this whole idea that tax is made on income account is the question of intent. And I think we got a good description from Barbara Edmonds about that and the case for a capital gains tax on capital account as opposed to income account—that's true—but in order to have an income account one needs intent; one needs to sell a good for a profit with the intention of making a profit and paying a tax on that profit. And for so long the question of housing and profit and intent has gone to the intent on purchase and that's generally the same with any capital good. We already have a tax on that capital gain if the intention was to sell it for a profit. Developers know this. People who do up and sell houses know this. People who claim that when they purchase a rental property that was their goal—they weren't up until the brightline test having to pay tax.A two-year brightline test—and I go to the point that David Seymour made in criticism of the previous National Government. A two-year brightline test was our flipping" rule. You were deemed to have purchased it with the intention of selling it for a profit if you sold it within two years and that actually caught quite a bit of the activity that was going on there. Five years and then 10 years is a capital gain tax because the average length of time a person holds a property is about seven years. So there's a huge net being cast here. And despite Ingrid Leary's criticisms of the so-called landlords that own 25 or 30 properties that is not the picture of the rental market in this country—90 percent of those properties are owned by mum and dad investors nurses police officers teachers Labour voters or at least they were till this came in this year. Because what they tended to do was keep rental as low as they could; they knew there would be some upside on capital gain and there was interest deductibility.And if—well I did this analysis about a year ago; so it's probably completely out the window now. An average priced house in Auckland with the average mortgage charging the average rental would if interest was deducted probably generate no income—no taxable income that is—and be cash neutral. Now because the interest deductibility is removed that mum and dad investor that teacher that police officer that nurse has to find about $7000 in order to pay a tax bill they didn't previously have. Now that by coincidence happens to be the increase in rental in Auckland—$7000 in the last year—and so this idea that I think one of the speakers said that this wasn't going to affect renters is nonsense. Rents have gone up already because of this bill and it hasn't even been passed yet. That's outrageous.Now the Minister on behalf of the Minister of Revenue talked about the benefits to existing housing supply and I've already rejected and refuted that but he then went on to talk about the exemption on new housing supply being a benefit in terms of how many houses are going to be built. Well were that the case I would applaud it. Even if it is on this policy the Minister of Commerce and Consumer Affairs has through the Credit Contracts and Consumer Finance Act legislation made it so hard now for people to actually get finance to buy new houses that he's actually offsetting any benefit that might have accrued from that. I had a call from a developer in Dunedin in that Minister's home city who is trying to build a 24-apartment block—the only new properties in the city that will qualify for the housing supports threshold—and he can't get anybody to sign up because new-home buyers first-home buyers are having so much difficulty in obtaining mortgage finance. And there's nothing here in benefit if that Minister doesn't get off his butt and fix the problem he created last year through the punitive regulations that were designed to stop loan sharks but that have actually slowed down sensible lending to first-home buyers.Now let's talk about the tax thresholds because we've had "Oh fat cats!" and "Other countries have got 47 percent and 53 percent." My question to Dr Duncan Webb in that regard is: who's actually paying it? How many people are paying it? Because the moment you get that differential tax planning kicks in. It kicked in under the Clark Government when we last had a 39c top tax rate. It's kicking in now and so very little revenue will be generated by this. It is an envy tax and it needs to go. I note Barbara Edmonds in referring to page 7 of the select committee report described the Finance and Expenditure Committee's concern at high inflation rates and their effect on interest deductions. It's a pity the committee didn't talk about high inflation rates and the impact on people's taxation thresholds. In the first reading on this bill I talked about a senior nurse at Middlemore Hospital; 10 years ago his or her salary would have been 10 percent below the 33 percent tax threshold. Now it's 10 percent above the 33 percent tax threshold and that nurse is paying $2000 a year more in tax not because his or her salary has gone up but because that's how much more tax to pay on the equal number of dollars.That's the cost of bracket creep and we know that minimum wage workers on 44 hours a week are now going to have a marginal tax rate of 30 percent. And this Government doesn't think that matters. In fact Dr Russell told us what we all know: that the Government thinks they can spend the taxpayers' money better than the taxpayer can. And the Prime Minister in question time today tried to dance on the head of a pin to say it's not inflationary when we do it but it would be inflationary when the individual does it. What a load of nonsense. The reality is that this is punitive. The only beneficiary of inflation at the levels that we're seeing now is Grant Robertson and the coffers are filling and he's spending like a drunken sailor—only that's an insult to drunken sailors because at least they spend their own money. He is spending the taxpayers'. And the reaction that we've heard from the socialists at the very suggestion that modest increases in taxation thresholds is somehow favouring the rich is crazy crazy socialist economics.We will be introducing a number of amendments to this bill because we believe that the public know better how to spend save and keep their own money than Grant Robertson and this socialist Labour Government do. They will be defeated but we will make it very clear that we back New Zealand taxpayers to spend their money better than these guys."