Seymour DavidDAVID SEYMOUR (Leader—ACT): Thank you Mr Speaker. I rise on behalf of ACT in opposition to this Taxation (Annual Rates for 2021-22 GST and Remedial Matters) Bill. As the title suggests this is a piece of legislation that sets the tax rates and makes some technical changes to the way GST is collected and makes some technical changes to the tax system. As anyone who's had the misfortune of spending some time on tax policy knows—or having to pay it more to the point—it is fiendishly complex and every year the Government has to introduce a bill to Parliament to fix up the things they got wrong last year. But the most important thing is setting the rates so we'll talk a bit about that. And then the next most important thing is that it's also got a Supplementary Order Paper a late addition to the bill that would add some extra changes. It's going to add a mortgage interest deductibility change so you can't deduct your mortgage interest from taxation if you're a landlord. And it's going to extend the brightline test to 10 years. We'll talk a bit about that too. But let's start with those tax rates. The most significant change is that the tax rates stay the same as last year except one. There's a new tax rate of 39c only on income over $180000. And what's wrong with that? Some people would say You know what? Stuff them. There's not many of them. They're earning lots of money. Let's just take it." Well actually there's everything wrong with that. We tell people—especially young people in this country—that working hard and getting good qualifications and succeeding and saving their money and investing carefully is the right thing to do. And we tell them that it's wrong to pick on people and take their stuff especially if there's only a few of them—that it's wrong to pick on minorities. Then this Labour Government comes along and says "Well there's a small group of people with some money and we're going to take a bit more of it because we just can." Well I think that is absolutely morally and ethically wrong and we should say no to it. We should get rid of that 39c rate that's being introduced here. And that's one of the things that I'm campaigning for.And then they'll say "Oh but we get so much money. We need it for health and education." Oh really? Well in the last year the Government's income—from income tax and GST and excise tax on petrol that keeps going up with the oil price—well that's gone up $14 billion. How much do they think they'll get from this new 39c tax on income over $180000? Well the estimates are about $400 million. So $14 billion—that's just the extra in the last year—versus $400 million. It's not about paying for things; it's about punishing people and it's wrong. The ACT Party stands against punitive taxes that pick on people just because we can take their money. That is the opposite of what we tell young New Zealanders and it's the opposite of the values that should be in our tax code. It's the opposite of the values that will make this country a prosperous and joyful place to live. It's picking on people because you can. Then there's the GST change. Well look no major truck there. It's mostly kind of I guess technical stuff and that's needed to be done from time to time. You know technically if you buy something for a few hundred bucks at Bunnings you're required to give your name and address for GST purposes. No one does that and the idea that that requirement's being removed to fit with actual reality is a good thing. But then you come to this brightline test the idea that if you buy and sell the same house within 10 years you have to pay income tax at your marginal rate on any capital gain you make. Now this is a very good lesson in tax policy and frankly it's a good lesson for the National Party because the National Party is jumping up and down saying "Oh my god the brightline test is now 10 years." Well I remember someone saying in 2015 when the National Party introduced the brightline test that this tax is the acorn of a capital gains tax. It's a measure that will grow from two years to five to 10 to 15 years. You watch it will eventually apply to a wider range of homes. It's the acorn the National Party has planted that will grow into a full-grown capital gains tax. That was me in 2015. And guess what! Now it's a 10-year brightline test; we're halfway there already after just a few years. And my message to anybody including the National Party is: if you don't want a new tax don't introduce a new tax because you see taxes are like acorns; they grow. You know King Dick Seddon the rather portly man who has a statue out the front in 1891 he stood in a house not literally this one but one like this and he said "We're going to have a 5 percent income tax." Well who could be opposed to a 5 percent income tax? The ACT Party would love a 5 percent income tax now. But taxes are like acorns; they grow. From 1891 5 percent; 2022 39 percent; and at some points in our history 66 percent. If you introduce a tax it grows and the right thing to do with the brightline test is get rid of it because at the end of the day there is no way that putting taxes on housing is going to make them more affordable. There's no way that putting a capital gains tax on housing has solved a housing affordability crisis anywhere in the world. It hasn't worked in LA or Vancouver or Sydney or London. And it's pretty easy to understand why: house prices go up when there's too much demand and not enough supply. A capital gains tax just means that the Government gets to be a silent partner taking some of the capital gain for itself. It doesn't change the prices; it just changes where the capital gain goes. And if you think the Government's better at spending it than people then you haven't spent enough time in Government understanding how this place works. So we should just get rid of the brightline test not as the National Party just said "Oh it's OK if it's two years not if it's 10." If you introduce it at two you get 10 and we've seen that. But the worst part of this new bill is the mortgage interest deductibility. It's such a good lesson in how tax and policy works with this Government. You know we've got a new phrase coming out. It's called "Jacindanomics". Jacinda Ardern the Prime Minister said when this idea was introduced we are going to "tilt the market towards first-home buyers". And what she meant is: if landlords can't deduct their mortgage interest then maybe it'll be cheaper for someone to live in their own house than own it and rent it out. So you can understand what she's thinking. But here's the problem: first of all a lot of very poor people can't afford a house. They need a landlord; they need a house to rent. So we forgot about them in this equation. But here's the other problem: the main effect of this policy is that we're going to take more money out of housing and put it into the Government's coffers through the Inland Revenue Department. And on average a landlord is going to pay another $4000 a year in tax because they won't be able to claim back a deduction for their mortgage interest.Now the average New Zealander is much smarter than the Labour Government. They can sit there and ask the simple question: if the tax department takes $4000 or $80 a week off my landlord what might happen to my rent? And we heard Brooke van Velden ACT's housing spokesperson question Megan Woods the housing Minister and Megan Woods did everything she could to avoid the basic conclusion any tenant in this country can work out: well if the Government takes four grand off my landlord my rent's going to go up—and that's what's happening. And here's the real kicker and the problem with "Jacindanomics": you see most first-home buyers will by definition if they haven't bought a home yet then they're first-home buyers and if they're first-home buyers they don't own a home and if they don't own a home they're either homeless or they're renting. And I hope they're not homeless. So if they're renting what does it mean to have a policy that taxes landlords and puts rents up? It's going to take money away from landlords who are going to pass it on to tenants who are first-home buyers. So when this Government tries to tilt the market towards first-home buyers it taxes first-home buyers and makes them worse off. And the problem is: this Government doesn't know how to solve any problem other than putting up tax and taking more money away. There is a better way for our country and it starts with values. It starts with something I said in my maiden statement to this House. The simple question is: do you believe wealth is a zero-sum game or do you believe that in the right conditions people can grow wealth make everybody better off by trading value for value and getting stronger together? If we stopped regulating and taxing and punishing groups of people from this Government in this House I think we would find that many more flowers would bloom. We would find it's possible with good infrastructure funding and planning to build a lot more homes and solve that problem. We could be a much better and more prosperous country but not with this punitive tax legislation. Thank you Mr Speaker."