Woodhouse Michael; Parker DavidHon MICHAEL WOODHOUSE (National): Thank you Mr Chair. I thank the Minister in the chair the Hon David Parker for that. I think what I heard there is that the Government doesn't trust the public. I'm having a flashback actually to 2008 when Annette King was transport Minister and passed changes to road-user charges under urgency and virtually overnight on the basis that truck drivers couldn't be trusted not to go out and load up their road-user charge credits at a lower price. Actually their lack of trust in people acting rationally led to some major protests in cities up and down the country and it was a precipitating feature of the Labour Government's demise. I think we could be seeing something analogous to that with this. But I didn't hear the answer to the Minister's question about: when actually did the Supplementary Order Paper (SOP) start being drafted? How long did Treasury have to provide advice on the regulatory impact statement?I'll add a few questions to that particularly in respect of the transition now but firstly one other thing I think is a fascinating summary of the brightline test exemption contained in page 60 of the regulatory impact assessment around the degree to which other options were considered—10 years is what we're going for; 15 years was also considered. Indeed Treasury's preferred option was for a 20-year brightline test. Well that walks wobbles and quacks like a duck frankly; it's called a capital gains tax even at 10 years but Treasury was talking about 15 and 20. My question to the Minister is: did he ask for that advice? It's very unclear. Did Treasury just simply give him advice he didn't ask for or did Cabinet consider a raft of options including a 15-year brightline test and a 20-year brightline test?My question on the specific transitional provisions as set out on page 7 of the SOP Subsection (1) applies to a person's disposal of residential land if the person acquires an estate or interest in the land on or after 27 March 2021."—now I think it's actually in the SOP that there are a series of scenarios—actually it's in the advice to the Minister the commentary on the SOP and it basically talks about a scenario where if the offer is made and it's revocable then the 10-year brightline test applies if the offer is not accepted before 25 March I think it is. So we have this quite unusual scenario where somebody who wants to buy a house perhaps made an offer on 21 March has effectively their fate put into the hands of the vendor who doesn't have to—so there might not be a deadline or the deadline might be after 25 March. The only recourse the purchaser has is to withdraw the offer and I find that quite punitive.Andrew Bayly: They may not be able to.Hon MICHAEL WOODHOUSE: No it is a revocable offer Mr Bayly. There are various scenarios including when there is a non-revocable offer. But if the only way to respond to the tardiness of the vendor is to withdraw the offer on a property that somebody actually quite likes to buy their fate is in the hands of the vendor and if the vendor is tardy by as little as 48 hours in accepting the offer the brightline test doubles from five years to 10 years and the practical cost of that could run in to the tens of thousands of dollars. So I wonder if the Minister could explain why he didn't or his officials didn't recommend that even with revocable offers that then put the ball into the court of the vendor—why that's the purchaser's problem. I simply don't understand why it would be that punitive.Hon DAVID PARKER (Minister of Revenue): In respect of the question about did Cabinet consider longer periods than the 10 for the brightline test that this bill legislates for yes we did. The member the Hon Michael Woodhouse is correct in his reading of the papers that have been released that Treasury recommended up to 20 years but Cabinet chose not to accept that advice preferring the 10-year period that is in the bill. Why was that advice being tendered by Treasury? Treasury of course has an advisory role to the Government and I think like quite a few of the bank economists and other parties who have expressed opinions on the New Zealand housing market including some of the international agencies like the IMF and the OECD they have been worried about the steep rise in prices and worried about whether there is a bubble developing and whether it would pop. In respect of the point that the member asks a question on in respect of transitional arrangements I will seek advice from officials on that point and respond in a moment but I would note that of course it doesn't apply in any event to an owner-occupied home."