Bayly AndrewANDREW BAYLY (National—Hunua): Thank you Madam Chair. First of all I'd like to congratulate Minister Nash for standing up. There are a couple of things that he just said that I'd like to pick up on and it would be very nice to hear his comment.Hon Stuart Nash: I'll come back and comment.ANDREW BAYLY: Very good. The first thing is he said that this will only affect roughly 3000 properties or about 0.13 percent of all properties. So the question is if you're going to put this bill in if those are actually the figures that you're talking about why on earth would you be putting this in? I think there's a logic break in terms of what the Minister's just said and I think actually it's because he's incorrect about the number of houses his Supplementary Order Paper (SOP) 13 potentially affects. Because if you look at the make-up of the market at the moment of all the houses in New Zealand roughly 40 percent are owned by mums and dads in New Zealand who own those second houses quite legitimately and for a number of different reasons. I've talked about the people who have baches and things like that or outright investors but I will also refer to mums and dads who buy a property often for their children to live in or to at least support them into that house. Under the rules at the moment I'm not sure if you have an investment in a second home where you've been providing support to offspring—whether in fact this is going to be captured by this Draconian bill. I think this is the issue that I'd like to hear back from the Minister on because first of all I think he's erred in his facts because I think what he was in fact referring to was of all the houses potentially the small number that Treasury and officials have assessed may enter into the situation where they are sold under a speculation-type regime.But there are many other houses that are bought and sold within five years for quite legitimate reasons. I think this brings me to the second point. Yes of course the National Government brought in the brightline test for two years and we were very judicious about it because of course we wanted to stop speculators flipping houses—to use the common parlance. That's what the brightline has been very very successful on and has been recognised by officials to be exceptionally successful on. What this SOP has done is extend it to five years. What I haven't heard is any logic to that because we actually unfortunately haven't had the ability to have an open conversation around it. Why take it from two years to five years? The implications of that are incredibly significant. Going back to the example I said earlier under the two-year brightline test if you are a mum and dad and you get into financial difficulty something—CHAIRPERSON (Hon Anne Tolley): I hope I don't.ANDREW BAYLY: No. Madam Chair I hope not and I know you wouldn't.But for those who get into financial difficulty under a two-year time frame that's manageable. But under a five-year time frame we have now entered a realm where the unintended consequences are quite significant. The issue with that is as noted in the summary the officials haven't been able to assess the impact of this change. So if you cannot assess the impact of this change why on earth be proposing it with all the potential downside of the unintended consequences? These are the issues that we haven't had discussed with us. What we've had during the election was a sort of a nice mantra about stopping speculation with no one actually sitting down and doing the hard thinking behind this policy. It sounds great but what it ultimately does is potentially effects many New Zealand people who for the correct and honest reasons decide to buy a second property who are now potentially going to be in a situation where they have to pay tax. I think that's a travesty around that.The last thing: I do not think the Minister has properly addressed the issue of the stranding or the abeyance of those tax losses for those unfortunate people who do have to sell their property. They will sit there in abeyance where no one can access them—only the people who are lucky enough to be able to get back into the property market and to be able to access that they'd have to get back in and re-trade property. All that does in incentivise people if they've got tax losses somewhere to at some point start trading again which is actually counter-productive to the whole intent of this bill. This bill and the SOP lack an incredible amount of logic.