Twyford Phil: Taxation (Land Information and Offshore Persons Information) Bill — First ReadingText is incorporated into the Bound VolumeTwyford Phil: Taxation (Land Information and Offshore Persons Information) Bill — First Reading[Sitting date: 25 June 2015. Volume:706;Page:4803. Text is incorporated into the Bound Volume.]PHIL TWYFORD (Labour—Te Atatū): It is always a pleasure to follow the member David Bennett. He is a man whose rhetorical skills allow him to make even a taxation bill coma-inducing. I want if I could to begin by just putting on to the record some words of welcome to the eight members of the Myanmar Young Leaders Programme who are in the gallery today and will be around Parliament for a couple of days this week. They are eight young leaders who have come from various backgrounds in Myanmar who are in New Zealand for a 6-month period learning about our democracy and our system of government. Many members around the House today have interacted with them and spent time with them. So I want to welcome those visitors and say how pleased we are to have them here in the New Zealand Parliament.The Taxation (Land Information and Offshore Persons Information) Bill applies the 2-year so-called brightline test that the Government announced as one of its two Budget housing policies. What it does is it requires anybody who buys and sells a residential property within a 2-year period to pay income tax on it. Furthermore it requires all purchasers of residential property including offshore speculators to provide the Inland Revenue Department with a New Zealand bank account and to register with the department and get an IRD number. I think it is a curious thing for a Government that has spent the last few years denying denying denying—first that speculators are even a problem in the Auckland housing market and secondly that offshore speculators are even worth gathering information on.I have lost count of the number of times I have stood in this House and heard the housing Minister Nick Smith get up and say: “Oh it’s the oldest trick in the book—the oldest trick in the book—to blame the foreigner.” I cannot count the number of times Nick Smith has said that in rubbishing the views of 85 percent—according to the most recent opinion survey—of New Zealanders who think that offshore speculators should not be allowed to buy residential property in New Zealand because they are driving up house prices out of the reach of ordinary New Zealanders. This Government has been in denial complete denial that it is even a problem. Government members have stood here in this House and accused us on the Opposition benches of xenophobia because we have had the audacity to suggest that offshore speculators should not be allowed to buy and sell New Zealand homes for capital gain and make a profit—make a killing—at the expense of young hard-working Kiwi first-home buyers.It has been very clear not only to us but to the rest of New Zealand that this National Government stands fairly and squarely on the side of speculators both domestic and foreign. It does not stand on the side of hard-working young Kiwi first-home buyers. We have heard the most incredibly litany of excuses Mr Deputy Speaker. I agree—it is funny. I cannot believe the Government policy. I share your mirth.Mr DEPUTY SPEAKER: Do not bring me into the debate Mr Twyford.PHIL TWYFORD: All right—thank you Mr Deputy Speaker. I will not. We have heard Nick Smith say that a register would be a distraction that would cost mega-millions without doing a thing to tackle house price inflation. And yet as my colleague Clayton Cosgrove points out the requirement for offshore speculators to register with the Inland Revenue Department and provide a bank account is as the Minister himself has conceded all about gathering information. What is that if not a register? The Minister of Finance is on the record saying that the point of this policy is to gather information. After Government members had rubbished the idea for 2 years and had said consistently in this Parliament that foreign speculators are not a problem we got this very curious backflip in the Budget with the announcement of this policy and this bill.So why I hear members ask did the Government do such a backflip? Well it is a very consistent pattern that we have seen time and time again from this Government. It denies and denies and denies it is a problem until the polls get to a certain point and Steven Joyce says to Cabinet: “Look we better do something about this. The overnight groups are pretty worrying on this. Clearly we’re losing support in Auckland.” In fact we know that 85 percent according to the most recent poll—the most recent poll says that 85 percent—of New Zealanders want to see foreign buyers banned from buying housing in New Zealand. So deny deny deny the polls get to a certain point and then the Government does a little backflip but it is just the bare minimum to make it look as if it is doing something—just the bare minimum.Denis O’Rourke: Not even that.PHIL TWYFORD: No not even the bare minimum. How would you describe it?Denis O’Rourke: I would say it was utterly inadequate.PHIL TWYFORD: Well it is. It is completely inadequate. In fact the Government’s own senior tax adviser John Shewan was in the paper a couple of days after this policy was announced saying it would not do a thing to deter speculators and it would not have any impact at all on Auckland house prices—Todd Barclay: I’d believe him over Denis O’Rourke.PHIL TWYFORD: —which by the way Mr Barclay went up $115000 in the last 12 months on your Government’s watch. That is $115000. The average Auckland house price is now in the region of $830000. Under this Government the dream of affordable homeownership has completely gone down the gurgler. It is gone. It is a “gone-burger”.So the question is—as inadequate as this bill is as hopeless as it is—whether this bill will make a difference. After all we are voting for it so it is a fair question to ask whether it will make a difference whether it will have any impact. I have already quoted John Shewan one of the most senior tax advisers whom the Government usually listens to saying that it will not have much impact. Based on Treasury analysis from the last 3 years our modelling shows that at best the so-called 2-year brightline test will capture about 1000 speculators. It will pull 1000 speculators into the Inland Revenue Department’s dragnet. The same modelling suggests that it might bring in $18 million—$18 million—in extra revenue. That is pathetic given the tens of thousands of houses that are sold every year in Auckland. It is a tiny fraction. So I think you have to conclude that it will not do much but it is better than nothing—but not by much. It is better than nothing but not by much. On those grounds we will support it because at least it is something.Why does this matter? Why is it an important issue? Why do 85 percent of New Zealanders think that this is a problem and that the Government should regulate to ban offshore speculators? The reason is that the Auckland housing market under this Government has been allowed to get completely out of control. The other day I learnt about a house in Massey in west Auckland that was bought 4 months ago for $385000. The purchaser slapped a coat of paint on that house and sold it 4 months later for $588000. That is what is happening every day in the Auckland housing market. The census data showed there were 22000 houses vacant on census night. If you take out the houses that were in between tenants if you take out the houses that were in the process of being bought and sold on that night that would mean that there were about 15000 to 16000 houses vacant. These are what Aucklanders call “ghost houses”. I am not talking about Nick Smith’s ghost housing policy; I am talking about ghost houses that are lying vacant in Auckland because the speculators many of them offshore simply cannot be bothered renting them out to tenants because they are making such a killing under this National Government just by sitting on those houses for capital gain. That is how bad it has got in Auckland.I want to point to a story that appeared in the New Zealand Herald this week reported on by Anne Gibson. The pre-eminent international Chinese website Juwai.com markets international real estate in countries like New Zealand to Chinese investors. Juwai.com reported that based on the Chinese Government’s progressive dismantling of foreign exchange controls which is something the Chinese Government is committed to doing—has already begun and is committed to doing over the next 10 years—it predicted that $15 billion of Chinese investment will be heading the way of the New Zealand real estate market over the next few years. New Zealand is set to get more than 3 percent of all the Chinese investment. There is a tsunami of Chinese investment coming into the Auckland real estate market. This Government is in denial. This measure will not make the slightest bit of difference but we will vote for it going to the select committee because at least it is a tiny step in the right direction.