Willis NicolaNICOLA WILLIS (National): This bill breaks an election promise. It imposes a new capital gains tax it puts a new capital gains tax on family homes and it increases these taxes it breaks these promises without any clear evidence about who will benefit. In the last election campaign members opposite—the Rt Hon Jacinda Ardern the Hon Grant Robertson—were definitive. They said Labour will not introduce a capital gains tax. In fact the Hon Grant Robertson went one step further. He was very definitive and made an absolute commitment that Labour would not adjust the brightline capital gains tax.Now despite the revisionist history we have heard in this House today that is exactly what is happening. Under urgency this Government is ramming through a breach of its commitment to New Zealand voters and those opposite should hang their heads in shame. We have had an argument that this is simply an extension to something that was already there. Let us be very clear: when National introduced a brightline test at a two-year limit it was specifically for the purpose of stopping speculation and property flipping. But what we see in the law that is being passed in this House tonight is something that will target a broad sweep of New Zealanders. It will impose a capital gains tax on people who are choosing to own a residential property to rent it out to be good landlords to save for their retirement. They have no intention of becoming property speculators of becoming flippers of becoming developers. No they are just good landlords providing a rental property. They will now be captured by a capital gains tax and that is Labour's doing and to say that this is somehow a policy that National introduced is farcical and it's desperate. So we have to ask ourselves: why is Labour taking this step? Why are they breaking an election promise? Now what we've heard from members opposite is that this is to make housing more affordable and it's to give first-home buyers a better start. OK. So let's see: is that actually what this new capital gains tax will achieve? Because actually there's very inconclusive advice on what impact the tax will have on the two main components of housing affordability.The first is house prices. Well actually we haven't had a single definitive statement from the Minister of Finance or any member opposite about what impact this new tax will have on house prices. So the jury's out on that one.The second component of housing affordability is rents. And I'll tell you what if you're a first-home buyer this matters a lot because rent determines how much money you have left at the end of each week to save for your deposit. So when rents go up—as they have under Labour; $120 a week since Labour came to office—that affects housing affordability. So we turn to what the officials say about what the impact of this capital gains tax will be on these two core issues: house prices and rents. Now the first thing that is shocking about this is that the regulatory impact assessment of this bill which gives us a window into what officials think about it is that Treasury say they didn't have time to form a view on what this new provision will do. That is shocking. Here we have a major breach of an election promise on an issue that will affect tens of thousands if not hundreds of thousands of New Zealanders and our main Treasury advisers haven't even been given time to form a view. But what they do say is that tax settings are not the primary driver of problems in the housing market". Now we know that. New Zealanders know that. New Zealanders know that actually what needs to happen here is that a housing shortage needs to be addressed with new houses being built. But Labour stuffed that up. KiwiBuild which was their idea of how to get houses built—the grand promises; you remember Michael Wood. You remember promising 100000 homes. Well you mucked that up didn't you? You actually only managed to build just under 800.ASSISTANT SPEAKER (Hon Jacqui Dean): Order! The member will not bring the Speaker into the debate.NICOLA WILLIS: My apologies Madam Speaker. So Labour know that they're not really very good at getting houses built. So instead they've turned to tax. And the officials say that this tax policy—to quote Treasury—"may put upward pressure on rents." They then go on to say that it's very difficult to see how this policy will interact with the other components of Labour's housing package and what impact that will have on house price affordability. So what we have is a broken promise grand objectives in terms of what this new tax will achieve and yet no evidence that it will have an impact on the two major indicators of housing affordability. You'd think you'd have better grounds for breaking a promise.The other area that is very significant and that we have chosen to highlight is that this breaks a promise that has been longstanding on the family home. Just yesterday Grant Robertson said in no uncertain terms that the brightline test does not and will not affect the family home. Yet at the very same time as he was making that promise to New Zealanders he was also introducing a specific change in this bill to ensure that thousands more people's family homes will in fact be captured by the brightline capital gains tax. I want to step you through the change he's made because I think that it is an absolute case of a finance Minister sneaking something in hoping people won't notice. Well we've noticed and New Zealanders need to know about it.The rules used to be that you were only captured by the brightline test if you rented out your home for more than 50 percent of the time to which that test applied. So if the rules had stayed the way they were and the Minister hadn't snuck through his change what that would have meant is that New Zealanders who bought a house from next week and held that house would only be subject to the brightline test if more than half the time they owned it they rented it out. So in the case of someone who owned a house for nine years if they rented it out for 4½ years they would have faced a tax obligation under the 10-year test.But what Grant Robertson has done is he's said "No no. I'm going to be far more punitive. Anyone who rents out their house for more than 12 months will now be captured by my brightline test." Now members opposite have been dismissive about this but let's think about the thousands of families the new homebuyers who are going to be buying houses in the next few months and the impact it will have on them. They will be brought into the capital gains tax regime. Let's talk about who these people are. It's people who relocate for a temporary period for work maybe because they have to work on an emergency management scenario or help out at a managed isolation and quarantine facility and in order to make ends meet while they're doing that they rent out their family home. Well too bad. Bad luck. Under this Government they will face a capital gains tax. Let's talk about the family in tragic circumstances whose child needs medical treatment at Starship Children's Hospital the family need to relocate for a period they need to stop work—Hon Poto Williams: 12 months?NICOLA WILLIS: —and they have to rent their house out for 13 months to make ends meet. Well what the Hon Poto Williams wants to see happen is that family face a capital gains tax. Well we say on this side of the House that that's wrong. The Government shouldn't try and sneak through that sort of a change.This bill is a breach of an election promise. It imposes a new capital gains tax it puts a new capital gains tax on family homes and there is no clear evidence about whether it will actually fire a bullet at the goals this Government has. What we do know is that when the five-year brightline test was introduced by Labour in 2018 here's what the impact on house prices was: house prices between when that five-year test was introduced and today went up $230000. So the evidence about what the impact of this will be is scant. What this bill shows overall is that when Labour is in doubt when they're facing a difficult and complex problem their instinct is tax it. Their instinct is when in doubt don't trust New Zealanders with their own money; take some for yourselves. When faced with a problem when faced with a housing shortage when faced with the inability to build houses put a new tax on it cross your fingers hope it works. Don't worry about assembling evidence. Don't worry about the commitments you've made to people in the election campaign. Break your promise. Who cares about the risks? Take the money. Tax it. Hope and pray. Well we'll see. The jury is out."