Barclay Todd: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — Third ReadingText is incorporated into the Bound VolumeBarclay Todd: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — Third Reading[Sitting date: 26 March 2015. Volume:704;Page:2686. Text is incorporated into the Bound Volume.]TODD BARCLAY (National—Clutha-Southland): It is a privilege to speak on the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill in its third reading.Hon Maurice Williamson: That’s the one we’re on actually.TODD BARCLAY: Yes this is the bill we are talking about. As we all know this taxation bill introduces amendments to the KiwiSaver Act 2006 and the Income Tax Act 2007 that will allow KiwiSaver members to withdraw their member tax credits when purchasing their first home. It corrects the tax social policy and KiwiSaver treatment of veterans’ income placement payments as well.I have been listening since the start of today’s speeches on this bill and it has been quite interesting hearing the Labour Party and the Greens speak about their views on what should be happening in the housing market. Firstly it is quite interesting to hear that they think $521 in tax credits on top of the other contributions—including their own and the employer’s—that they can access to buy or build their first home is insufficient. I would have to say that for anyone in the category of first-home buyer anything is better than nothing and $521 on top of the other benefits that the Government has been introducing is sufficient. I think it would be welcomed by any homebuyer who had any sense.The Labour Party and the Green Party also think that first-home buyers should not get to choose where they live. As David Bennett pointed out that is just an absolutely communist point of view on the world. People should have the ability to decide where they want to live and where they want to bring up their children. They should have the choice to be able to do that wherever they want to do that.One point I probably would make—being of the younger generation and a couple of generations behind the previous speaker Clayton Cosgrove—is that perhaps people of my generation have quite high expectations around first home ownership. I think that many of my peers enter the housing market with an expectation that they can enter at the point at which their parents currently are. I think it is probably worth remembering that people of our parents’ generation and that age group have bought their way up the home-market ladder to the point they are at now. I think a point to make to first-home buyers—and I would be included—is that they maybe should lower their expectations where appropriate.Obviously the Auckland situation is a different kettle of fish from other areas in the country. Queenstown—in my area—is similar as well. But as we look around we can see that a significant amount of homes are being built and a lot of them are targeted at first-home buyers. Paula Bennett and Michael Woodhouse were down a couple of weeks ago and we looked at the work the Queenstown Lakes Community Housing Trust is doing to work with developers to secure a portion of new development land to be targeted towards first-home buyers. There are a number of schemes that are focused on that.The other point that the Labour Party made was that the changes in this bill are inconsequential. Well if anyone in their right mind thinks that the 90000 people who will benefit from this are inconsequential I am not too sure exactly what they are considering because 90000 people benefiting from the change that this Government is making is significant and it should not be brushed over. It is also probably worth reminding members of the public of Labour’s track record when it came to affordable housing. Over the 9 years that Labour was in Government house prices went up by 96 percent but in the 6 years that we have been in Government they have gone up only 27 percent which shows that we have got a greater handle on how to manage the economy and how to manage all the different levers that have an impact on the cost of housing.Another point around Labour members’ views on what we are doing with regard to affordable housing is “What exactly would they know?”. We had an election last year where the public clearly voted with their feet and backed our view on how we should be tackling the issue of housing affordability. The Labour Party thinks that a capital gains tax is the answer. The public rejected that. The Labour Party thinks the answer is building 100000 houses at a cost of $300000 on sections that will cost $325000 in Auckland. Anybody who has even considered any form of economics would know that that is economically illiterate.Hon David Parker: $325000 for a section under your Government—are you proud of that?TODD BARCLAY: It was actually that member over there who made up that policy. It was widely rejected by all members of the public.I will move on to what the Green members have been saying. They do not want people to own their own homes at all. In fact they want the Government to own their homes. They want around $300000 to build a home not taking into account how they will buy the land or account for the land and they think they will charge people $200 a week. I think the economics behind the Green Party policy are even looser than what is behind the Labour Party’s policy. And then they were talking about the intensification of housing. The Green Party thinks the intensification of housing is the answer. However intensification in every other respect is for the Greens not the answer so it is contradictory for them to say that we should intensify in this area but not intensify in other areas that are the more productive areas of the economy such as the use of farmland and the use of other productive assets in this country.Just while we are on the subject of the Green Party I have to say that we would not trust the economy in its hands anyway given its previous leadership candidates. Here is what they think the state of the economy is. Vernon Tava thought that the official cash rate—The ASSISTANT SPEAKER (Lindsay Tisch): Order! That is not part of the bill.TODD BARCLAY: OK; sorry Mr Assistant Speaker. Talking about inflation then which is contributing towards—The ASSISTANT SPEAKER (Lindsay Tisch): No no.TODD BARCLAY: OK. We will go back on to this bill then. This bill as we know is about supporting first-home buyers and honouring our election pledge. As we know it is in relation to the HomeStart package which was announced during last year’s election and it comprises a number of components that will come into effect on 1 April this year. The first is replacing the KiwiSaver first-home deposit subsidy with a KiwiSaver HomeStart grant. That doubles the support for first-home buyers and increases the house price limits which is significant in many areas across the country including my own area.The second component of that is enabling larger KiwiSaver first-home withdrawals. This is being done by including a member’s tax credit which is included in this bill meaning that first-home buyers will now be able to draw on their KiwiSaver savings except for the $1000 kick-start. So the components that they can draw on are their contributions which they have put in over the years that they have been a member of the scheme and also their employer’s contributions.Thirdly we are expanding the eligibility for the Welcome Home Loan by aligning the house price caps with the new KiwiSaver HomeStart grants. So we are roughly doubling the number of people who are receiving Government grants to buy their first home from 10000 people a year to 20000 a year and it is doubling the Government’s grant that they are eligible for if they are buying or building their first home. Currently first-home buyers are eligible for a grant of $3000 after 3 years in KiwiSaver $4000 after 4 years and $5000 after 5 years. Under KiwiSaver HomeStart this grant will double to $6000 after 3 years $8000 after 4 years and $10000 after 5 years for purchasing a newly built home. So on the top of the $521 which is “insufficient and inconsequential” we have actually taken other steps to increase the facilities and the means for first-home buyers and first-home builders to access capital and make their first step on to the housing ladder.I just want to remind members of the public of what the Labour Party’s position is. I am not too sure whether I have got it clear yet given that quite a few conflicting views have been set out over the last week or so. I understand Labour’s position to be that we need large-scale urban developers backed by private sector developers and community housing organisations and such developments cannot happen without the Government playing a role—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member is slightly unlucky in that I was in the House when my predecessor warned him about sticking with the bill and not talking about other parties’ positions. It was yet another party that he was warned about but I will warn him that if he continues down that line his speech will be terminated.TODD BARCLAY: I go back to the nature of this bill which is that first-home buyers are able to access their tax contributions for the purchase of their first home or more likely to go toward their mortgage. It is in the context as I was saying of a number of other changes that have been made by this Government including allowing first-home buyers to be able to access their contributions and their employers’ contributions to their KiwiSaver scheme. And we are sort of seeing the effects of that already as part of the wider implications which this bill will only help to advance. It has seen residential construction increase by 21 percent already in that more than 24000 building consents were issued the highest number since 2008.I want to touch on what was discussed in the Committee stage of this bill and where the amendments were made. They primarily focus on the KiwiSaver scheme rules relating to members’ withdrawals. One particular amendment was a move to ensure that membership in a complying superannuation fund for 3 years may count towards qualifying for a first home. Thank you. I commend this bill.Bill read a third time.