Scott Alastair: Taxation (Land Information and Offshore Persons Information) Bill — First ReadingText is incorporated into the Bound VolumeScott Alastair: Taxation (Land Information and Offshore Persons Information) Bill — First Reading[Sitting date: 25 June 2015. Volume:706;Page:4820. Text is incorporated into the Bound Volume.]ALASTAIR SCOTT (National—Wairarapa): I was a little surprised to listen to the contribution of the last speaker Damien O’Connor and hear his rail against foreign capital given that he has been around long enough and should know that this country is desperate for foreign capital. But that is another story—that is another story. Today I would like to talk about the bill before the House the Taxation (Land Information and Offshore Persons Information) Bill.This bill is not a silver bullet. This bill does not bring in a register. This bill is part of a comprehensive housing package that enables and encourages homeownership which is so important to the people of New Zealand. It increases the equity and the fairness around taxation. It is part of a suite that is reducing demand. This bill focuses on the demand side of the housing market and we also have a suite of policies that increase the supply side. Those are the two things that matter. Those are the two things that determine the price of a house: the aggregate demand and the aggregate supply. One of the things we have done to date despite the Opposition’s assertions that we have done nothing is that we have introduced 100 special housing areas across the country including 84 in Auckland—Phil Twyford: How many houses?ALASTAIR SCOTT: There are 40000 new homes and sections as part of those special housing areas. We have almost doubled the number of housing consents since 2011. We have increased the building work to over $14 billion. That is 21 percent up on last year so things are heading in the right direction. There are eight housing accords agreed with local councils—Auckland Council Christchurch City Council Wellington City Council Tauranga City Council Western Bay of Plenty District Council Queenstown Lakes District Council Tasman District Council and Nelson City Council. There is plenty of action there is plenty of initiative there is plenty of policy which are all contributing to the housing issue. Ninety thousand people are expected to benefit from the KiwiSaver HomeStart loans scheme. An increase in another part of the policy is the KiwiSaver access to the $20000 maximum grant. That is a relatively new policy. Those in KiwiSaver are able to access and withdraw their total amount including the tax credits but excluding the $1000 kick-start. So there is a lot going on in this housing space. The Reserve Bank of New Zealand is also contributing by introducing loan-to-value ratios which will affect the demand side. That is part of the demand side. It is not Government led; it is Reserve Bank led.From the other side we have a lot of criticism but no real alternative policy except of course for the KiwiBuild programme—the KiwiBuild programme that is going to solve the country’s home-supply issue. Apparently 100000 homes will be built by a Labour Government. Where will it build them? How will it build them? Who will pay for those 100000 houses that are proposed in the KiwiBuild programme? They will be designed by Grant Robertson to his liking and the colour scheme no doubt will be chosen by Phil Twyford. Such is the central control of these people over here because they are sanctimonious in that they do not understand that those in the private sector are quite willing and able and capable of choosing where they want to live how they want to live and the design of the house that they want to live in. In previous contributions Mr Robertson has even suggested that the Government’s Superannuation Fund get involved in the New Zealand housing market and build some of those houses. Of course it would just be a disaster having Mr Robertson involved in the governance of the Government’s Superannuation Fund which is already well weighted into the New Zealand market and of course giving an outstanding performance. In fact it is the highest performing Government superannuation fund on the planet. Imagine if Grant Robertson got hold of it—just imagine.The Greens’ option is also to create a fund to subsidise young people who would like to build their first home in Meadowbank Ponsonby or Parnell. But who would be paying for that? Who would be subsidising those first-home buyers in Auckland? Well I tell you that asking Wairarapa taxpayers to fund a housing scheme suggested by the Greens to allow first-home buyers to build houses in Auckland would be offensive to them.This bill strengthens existing taxation law. Just to clarify for Mr Cosgrove’s benefit what the existing law says it says that if you purchase something—whether it is a house or in fact anything as my colleague Mr Bayly pointed out like shares or widgets—for the purpose of resale that profit or loss is assessable. So that is the current state of play. The example Mr Cosgrove gave of an Auckland family buying a place in Queenstown with the intention of moving down there but who for some unforeseen circumstance was not able to go to Queenstown demonstrates his total lack of understanding of what the current legislation is. It is the intention at the time of purchase Mr Cosgrove; that is key. So this legislation strengthens what is already current legislation. It does this because the current legislation is difficult to measure. It is difficult to gauge what people are doing without the available information. It is an honesty system. The taxation system in New Zealand is based on trust and of course people abuse that trust at times.This legislation is aimed at strengthening the ability of the Inland Revenue Department to capture what is trading income. So first of all the legislation is proposing that the IRD number is collected and notified when the sale or the purchase of a house takes place. Second the bill requires offshore people to have as well an IRD number a bank account. This will strengthen the laws that already exist around money-laundering and that is a good thing. There will be exemptions. The family home is essentially exempt—unless of course that family home is sitting in a trust in which case it would not be exempt. The home exemption falls away if the family home is purchased and resold purchased and resold more than a couple of times. That is because that family home is not really there for the purpose of living in as a family home; it is obviously there for the purpose of trading and should therefore be captured by the bill.There are further developments in the pipeline including the brightline test. Some of the Opposition members suggest it is in this bill. It is not. There is a brightline test assuming a 2-year period is the appropriate period of time to hold a home before it is taxable. There are withholding tax proposals coming forward later on this year. This bill strengthens the existing law. It clarifies the assessability of income that is already determined in the Income Tax Act. It tightens law around money-laundering. I look forward to supporting this bill and supporting further legislation around withholding tax and the brightline 2-year determination. I support this bill and commend it to the House.Bill read a first time.Bill referred to the Finance and Expenditure Committee.