Nash Stuart: Taxation (Land Information and Offshore Persons Information) Bill — In CommitteeText is incorporated into the Bound VolumeNash Stuart: Taxation (Land Information and Offshore Persons Information) Bill — In Committee[Sitting date: 09 September 2015. Volume:708;Page:6446. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier): I must admit I am a little bit more cynical than my colleague Grant Robertson. They have these things called rap wars. They are quite comical—politicians go against each other. I think what happened here is that it was Louise Upston versus Todd McClay. Todd McClay said that the Inland Revenue Department wants this to go ahead and Louise Upston said that Land Information New Zealand cannot deliver at the point in time when you want it and there was a little bit of a war that went on around who was the Minister who was going to win out here. Let us take it a little bit further. This actually has Steven Joyce’s fingerprints on it if we are honest. This really is a little bit of a mess.As my colleague pointed out Land Information’s Landonline system is actually acknowledged as one of the best in the world. It is an incredibly good system. It is held up by many in developed jurisdictions as the way to handle your land transfer process. As my colleague pointed out to go to a point where lawyers—it will be lawyers by and large—have to register everything by hand on paper is an absolute nonsense. I do not believe that Land Information said to the Government that it is happy with this situation.Hon David Cunliffe: Back to the 19th century.STUART NASH: Absolutely! I cannot believe Land Information said to its Minister: “This is acceptable to us let us go ahead with this—it is OK—paper for 6 months but we will cope.” I do not believe it did that because I know that a lot of people working for that department are highly competent.I think what happened was that this was a dictate from way above probably due to polling. Let us face facts. New Zealanders are concerned about who is owning our land—there is no doubt about that. They are concerned about the bogeyman of foreign speculators coming in and taking away our houses so that first-home buyers cannot get in. The Government said: “What shall we do about this? We’ve got an idea.” They went to Mr Joyce because he tends to be the ideas man although he does not think things through particularly clearly and said: “How about first of all we start collecting information?”. But the problem is they did not collect the information in a way that made any sense. The title of this bill is actually the Taxation (Land Information and Offshore Persons Information) Bill but it does not collect the level of information that is going to make any sense. This is the thing that we simply cannot understand right across this side of the Chamber.I know that Tim Macindoe when he thinks about this—and it is going through his head at the moment—thinks this is a little bit of a nonsense but unfortunately he cannot do anything about it. I know Mr Dunne who is a former Minister of Revenue must be looking at this and going “Oh goodness me. Thank God I’m not in charge of this.” because if he were it would be a hell of a lot more robust than it is at the moment. I know the Hon Peter Dunne would not have allowed this sort of legislation to come before the House like this at the moment.It would have been so easy to collect the level of information that is required to provide meaningful data to the people of New Zealand to the tax department to everyone. This is what is so astounding. It would have been easy to do. We were quite happy to reach across in a non-political way with a solution that allowed that to happen. In fact we suggested this at the Finance and Expenditure Committee. This was held behind closed doors so no one would have come out and gone: “Oh Labour has made this better legislation.” This was a classic case of a select committee that could have worked together to create a piece of legislation that provided a level of information that actually made sense.But the thing about it is that it is confusing. This is one of a number of pieces of legislation that is going to come through that is going to give effect to the Government’s policy. But the thing about it is that it is confusing. In fact it is so confusing that even the Minister herself stood up and started talking about a brightline test when she was answering questions. This is not about a brightline test. This is simply about collecting information.But the other problem I have with this legislation—and this is why the title is so wrong because it does not reflect the bill in any way shape or form—is that it creates what we call a moral hazard. This was brought up by the Green MP. By that I mean that the buyers and sellers of houses only have to give their IRD number after the third transaction. One of the earlier speakers stood up and said: “Well why do we think New Zealanders are actually going to do that?”. The reason that I put forward is that it is the law and we like to think that people will obey the law. But unfortunately when people think the law is a bit of an ass or they can get away with it or it does not really apply to them then they will not do it. That creates a moral hazard and it really concerns me. It is the sort of moral hazard that we all face. We drive down the road at 56 kilometres an hour in a 50 kilometre zone but it is OK. It is only a little bit over the law. This is the sort of bill that creates that sort of law: “It is not really applicable to me.”There are also a number of tests in here that come back to intent and this is the whole problem we have with this area of tax in this country. The other thing that is slightly offensive—offensive is the wrong word but I can see how it could create a little bit of offence—is that it classes New Zealanders who have been offshore for more than 3 years and have not returned as offshore persons. It puts New Zealand passport holders in a completely separate category from foreign investors. I do not think that is right. In fact it was queried in the select committee process so again we are talking about land information. That is why the bill is called the Taxation (Land Information and Offshore Persons Information) Bill. When you think of offshore persons you tend to think of foreign speculators but no this is about Kiwis as well.The other one that was quite astounding—quite amusing actually—was that before the select committee process we called for submissions. There were not that many submissions. I cannot remember how many—maybe 10 or 12 submitters appeared in front of the committee. But two of the submitters talked about a piece of legislation that is coming after this one. That is the one that is going to be debated in the House—I do not know when—next week. I think the first reading was this week actually. Even the submitters who had taken the time effort energy and no doubt quite considerable resources and money got it wrong when they were submitting to the select committee. We went up to Auckland to listen to them and we had to say that the points they were making were very interesting but unfortunately they do not relate to this piece of legislation.As my colleague Grant Robertson said we agree in principle that something needs to be done and we are backing this legislation. But the thing is it could have been so much better if we had worked together thought a little bit harder about it and come up with something that is much more robust. But as Grant said why is the Government so fixated with 1 October? Is there something we should know about that salubrious date? Is that the final of the Rugby World Cup or is it the middle of the Rugby World Cup? I am not too sure. But the fact that Land Information cannot even process the information online when this bill comes through just says that that date is wrong. It would have been so much easier just to change the 15 to a 16 or I do not know just work with Land Information.The chair of the committee understands this. The chair of the committee was exasperated with the level of complexity where complexity did not need to exist. There was a lack of efficiency when efficiency could have reigned supreme if only this had been thought through. But as I said what I think this came down to was an edict from upon high that said this is what must be done; now go ahead and do it. The relevant departments could not meet the compliance in time when this legislation came to the fore but that is just the way it is going to be. It is not the way to craft legislation and it could have been so much better.So who won? Did Louise Upston with Land Information win? Did Todd McClay with the Inland Revenue Department win? Do you know what? I do not think there are any winners. I do not think there are any winners. I do not think even Mr Joyce is a winner in this because Dr Clark knows—he has had dealings with Mr Joyce’s stuff-ups for a long time. This just has his fingerprints on it—it really does does it not? It really does. There are no winners. In the rap wars I think it is zip. Thank you very much.