Cosgrove Clayton: Taxation (Bright-line Test for Residential Land) Bill — In CommitteeText is incorporated into the Bound VolumeCosgrove Clayton: Taxation (Bright-line Test for Residential Land) Bill — In Committee[Sitting date: 10 November 2015. Volume:710;Page:7853. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour): Normally—and forgive me there may well be a wee bit of humour injected into the following speeches in respect of the title because I have got to say this bill could have a variety of titles. Most of them I have got to say are pretty negative. Todd McClay—this is the sort of “hospital pass” bill from Todd McClay. It seems that since the Hon Todd McClay got this portfolio from Peter Dunne we have had a litany of difficulties from substandard legislation coming in from cost blowouts around liable parent contributions to cost blowouts around—Chris Bishop: That’s unfair.Hon CLAYTON COSGROVE: —it is not unfair; I am actually defending your Minister—the Business Transformation project where money just flows like water or to use the biblical expression they are raking in the sheaves in the Inland Revenue Department. Mr McClay walks along—as I have said before the guy with the shovel behind the elephant to clean up the mess—and we are delivered this. I think this is a nonsense bill. It could be called the “Nonsense Bill”. It could be called the “Todd McClay Inconsistent Undefined Incoherent Bill”.It could be called a lot of things because as we have seen right through this debate and I note—to be fair to the Minister in the chair Paula Bennett she is not the portfolio Minister—that this is not the first piece of legislation but the third in the last 2 weeks where the portfolio Minister has refused to answer any questions and take any calls. To be fair to the Minister in the chair it is not her basket of goodies as it were in a legislative sense so she may not be well-briefed. She does have some eminent officials behind her but no questions have been answered. This is a prime example—a prime example—of where the Government has simply blindly wandered into the abyss. The design of this bill was designed to pull the wool over a few people and as other speakers have said make it look like they are doing something but not actually addressing the issue.Terry Baucher that eminent tax consultant whom we have quoted many times tonight—there is a headline that could be aptly used in respect of this bill. He asks “Is the brightline test an example of enactment in haste repent at leisure?”—enactment in haste repent in leisure I would wager as would other people. Or as Philippa O’Mara the director of Engine Room chartered accountants asked—the headline on her article was “Taxing land transactions: where’s the bright side?”—where is the bright side?It is interesting that very few apart from that learned colleague of mine David Bennett—learned colleague—have got up. I will say he took a call. It was an unusual call but at least he is consistent with his calls. He has got up and tried to defend the bill. But no one—consistent in his inconsistency. No Minister has got up and tried to defend this. No Minister has got up tonight and even proffered an answer to any of the questions and they have been legitimate questions.You could call this the “Drive a Bus Through It Bill” because if we talked about the definition of the exemption in farmland the definition of “main home” the great intangible connection to your main home—very psychedelic. That is a bit beyond me I know. But you know it is very psychedelic the sort of great intangible connection. We have got a change of the guard there. Maybe this Minister might answer some questions. No one has got up to even provide an intangible justification for the incoherence and the inconsistency or even to bat off the vast amount of criticism from the private sector accounting profession.I know the Inland Revenue Department cannot do it because it has to work through a Minister but it is surprising. This is supposed to be the great flagship Budget proposal to deal with property speculation. This is where Mr Key put a stake in the ground and said he is going to do something about it and then the whole thing just simply peeled like an onion as the Chartered Accountants of Australia and New Zealand Ernst and Young—you name it—and the Law Society all came in and opposed this and said basically that it was bunkum and that it will not achieve in any way shape or form any of the objectives that the Government seeks to go after. It will not do it.Five million dollars is the best estimate of how much revenue will be raised from this bill. Five million bucks when property speculators are making what a thousand bucks a day I think Mr Twyford said in terms of increased values and capital gains on property in Auckland and all it will raise is 5 million bucks. And Mr Bennett said: “Hey we are going after them.” He made a speech earlier today: “We’re going after them we’re going after the big fat boys the property speculators. We’re going after them with the big stick the big 10-year rule.” Well if that is the case if the best he can do is to claw $5 million of legitimate taxpayers’ funds out of them well I do not think the stick is that big at all. It is balsa wood—absolute balsa wood. You could call this the “Biggest Hoodwink Yet By the National Government Bill”—Hon Member: “Smoke and Mirrors Bill”.Hon CLAYTON COSGROVE: “Smoke and Mirrors Bill” my colleague says because it is typical of the National Government. It is a bit like the refugees thing. Suddenly we are against it we are against it we are against it then Crosby/Textor andthe pollsters come back and say the position is unsustainable—Chris Bishop: Here we go.Hon CLAYTON COSGROVE: Mr Bishop in his former profession would know all about that of course. He would know all about that and a few of his mates who are not here now. And suddenly the feet are put to the fire. Mr Bishop gets together with Steven Joyce and a few of the gurus and goes: “Oh we cannot sustain this position because the people have woken up. They have woken up from their slumber and worked out we are having them on so we had better do something.” “Now we do not want to do too much because that is against our ideology” says Mr Bishop “but we had better do a bit just to make it look good around the edges.” You know a few refugees here there and everywhere as they did with that issue and then they come in with a big stick saying “We are going to make a decisive move to deal with property speculators especially in Auckland.” and we get this bill.And Treasury says: “Look it is not going to work Minister and Prime Minister. You need a 5-year rule not a 2-year rule.” That is rejected. Ernst and Young Chartered Accountants Australia and New Zealand—all the best experts come in and say: “Minister it’s not going to work. It’s going to do the opposite of what you want. It’s not going to go after the property speculators because they will just hold for 2 years and 1 day. It is going to go after mum and dad Mr and Mrs Smith who fall on hard times have no choice but to sell the house and they are going to get pinged by it.”And the Prime Minister and Mr Bishop because he is a tactician of great note and Steven Joyce and Todd McClay are in the room and they go: “Oh don’t worry about it. We’ll flick this one past the keeper. We’ll fire one out the back line. The people won’t know. We’ll hoodwink them again.”Well the problem is that it is very rare especially in a piece of tax legislation that you abrogate the generic framework and you get almost the entire profession coming out saying that this is a load of the proverbial—you know bull. Except it is quality bull for the National Government. This is what the National Government is up against. So you could call it—I know the Chairperson is looking slightly worried but I will not continue that analogy. Trust me I am not that bad. But this is the “Smoke and Mirrors Bill”—this is the “Smoke and Mirrors Bill”.For all those young people sitting out there hoping even as they listen tonight or saw the announcement about this bill thinking “Hey maybe for once the Government is going to do something to deal with the speculation and get a bit of a handle on the property prices in Auckland and around the place so that young people can get a fair go.”—they really probably wanted this thing to work but people are going to be sadly and tragically disappointed.I will make Mr Bishop a bet whatever he wants. I will make him a bet that we will be back here before the next election putting elastoplast over this. We will regurgitate the Hansard such that it is because Mr Bishop did not take a call Mr Muller did not take a call the guy there whose name I cannot remember who is on Finance and Expenditure Committee—“Dick Cheney” or whatever his name is. He did not take a call—The CHAIRPERSON (Hon Trevor Mallard): Order!Hon CLAYTON COSGROVE: A memory lapse.The CHAIRPERSON (Hon Trevor Mallard): Order! No no. I ask the member to sit down. It is an old habit but not a good habit to treat people in that way. If the member genuinely does not remember peoples’ names then just do not refer to them in that way at all.Phil Twyford: A senior member having a senior moment.Hon CLAYTON COSGROVE: I am having a senior moment—yes indeed. But we will regurgitate the Hansard such that it is but it speaks volumes that not one Minister could get up here and even put up a tacit defence on this—Phil Twyford: Not even one.Hon CLAYTON COSGROVE: Not even one. Normally they will get up and have a crack and poke a bit of borax at us and at least defend the principle. The Minister of Revenue must have gone down a burrow in this Chamber somewhere because he has not taken a call on the bill throughout the whole debate. It has been left to other Ministers. Obviously officials are not needed because they were not asked for any advice because the Government is not going to answer any questions. So we will regurgitate the Hansard as we come back to try to stitch this thing up.I lament in some ways that we are supporting this bill but as Mr Twyford and others have said I suppose anything anything even this feeble attempt this whitewash this con to the New Zealand people—I suppose even that is better than nothing. But as I have said occasionally over the years the National Government has got to realise that people are not dumb. People work it out. They will work it out—even that member over there. I give him a bit of credit. People are not dumb. They will work this out. They will work out that it is the big end of town that is getting the advantage here. Let us examine this. Let us make a prediction—