Robertson Grant: Land Transfer Amendment Bill Tax Administration Amendment Bill — Third ReadingsText is incorporated into the Bound VolumeRobertson Grant: Land Transfer Amendment Bill Tax Administration Amendment Bill — Third Readings[Sitting date: 10 September 2015. Volume:708;Page:6541. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): Well what better testament to a Government that is not straight-up with New Zealanders and is out of touch with New Zealanders could there be than this piece of legislation? It is the ultimate in window dressing. It is the ultimate in appearing to do something while doing as little as possible or as some colleagues have said it is deliberately doing that—deliberately making sure that the regime put in place through this legislation will not work. That is probably the less charitable interpretation—that it is deliberately being put forward so that it will fail to achieve the goal that the Minister just told us she had which is to get more information about who is buying and selling houses in New Zealand—or it could be just pure incompetence.We saw this from the get-go with this piece of legislation. It was brought forward at the time of the Budget when the Government was under significant pressure to do something about housing. What the Government realised was that there was nothing in the Budget on housing and so at the last minute it had to come up with two ideas—two ideas to scratch the political itch but not do too much lest it offend the Property Investors Association or whoever else it is that National was worried about offending.This piece of legislation should have been the legislation that did give New Zealanders accurate information about who is buying and selling houses so that we can use that to make better public policy. Today at the Finance and Expenditure Committee the Reserve Bank Governor himself raised his concerns about the number of property purchases being made by speculators—the fact that it has increased over the last year from 33 percent to 41 percent according to the Quotable Value data. It is a problem. Everybody in this House knows it is a problem. The piece of information missing is how big a problem and these bills would have been the piece of legislation that could bring that information in front of New Zealanders and give us that information. But this Government has failed to do that. It was rushed. There was nothing in the pre-Budget documentation that was released in July about this piece of policy work because it has not been thought through properly.Just how bad it was was revealed last night in this House when my colleague Dr David Clark and I tabled information released to us by Land Information New Zealand that showed that the implementation date of 1 October—the commencement date of this legislation—means that for 3 months all information collected for the Landonline database will be done by pen and paper. It is not the 1960s; it is actually the 2010s and the members on that side of the Houseare not ready. Land Information New ZealandI suspect—and actually this is being generous—may not be ready by 1 December either. So now we have this great advance in the information about who is buying and selling houses in New Zealand and Land Information New Zealand has to do it with pen and paper because it is not ready. This is half-baked poorly thought through and it is not being straight-up with New Zealanders.This legislation was a knee-jerk reaction to what is a significant problem. So what do we have left in front of us then in such poor lawmaking? We have an inching grudging step by the Government in the right direction—the idea that people actually can contribute their IRD number.An exemption was put in place by the Government. The exemption is for the main home. The justification for that exemption was outlined in the Government’s commentary on the original bill and I want to quote from it: “… the majority of us accept that not making such an exemption for the main home would greatly increase the volume of information to be managed by Land Information New Zealand at the Inland Revenue Department and could lead to people worrying needlessly that the transaction will be taxable even though in most cases it would not be.” That is complete rubbish. Virtually everybody in New Zealand buying their main home already has an IRD number. It is a simple moment for the conveyancing lawyer a new box on the form—there it is IRD number written in information provided—but instead a giant loophole has been set up in this law by the National Government by exempting the main home.It then made that exemption even worse by using the definition for “main home” to be the place with which people have the “greatest connection”. Again in the Government’s own commentary on the bill it said: “We note that the term ‘greatest connection’ is not used in New Zealand tax law at present. … We recognise that there could be some confusion about the rules”. This is the Government’s own law and it is saying in the commentary on the legislation that was brought before this House that there is going to be confusion. That is not the point of making law—do I need to say that to the Government benches? The point of making law is to clear up confusion not create confusion but that is what it has managed to do with this exemption.We had it clarified for us by Alistair Scott the member for Wairarapa. He clarified that the greatest connection for him was the feeling. He said that the main home was where the heart was. He said that in the House last night—the main home is where the heart is. So not only do we have confusion; we have the Hallmark card guide to lawmaking: take it from the vibe the feeling—that is where you main home is.This is a complete farce. The exemption for the main home is unnecessary it creates a loophole it means we do not have the kind of data that we should and the definition of that being the place where someone has the greatest connection is as the Government itself acknowledges confused and is poor law. Mark my words: we will be back here changing that and correcting that because the definition simply will not be adequate.But having had such deep concern about the bureaucracy and the added compliance of people having to provide an IRD number for their main home purchase at the other end of this legislation the Government has managed to put in unnecessary compliance by asking offshore persons making purchases to provide both a bank account number and an IRD number. The advice that was given to the Ministers by the Inland Revenue Department was that this was of limited benefit because the Inland Revenue Department has the power to require relevant identity verification upon application for an IRD number. So that was the advice that the Inland Revenue Department gave to the Government—it does not need the bank account number. Interestingly the Inland Revenue Department also said that it should not exempt the main home either. Two pieces of very sensible advice from the Inland Revenue Department ignored by the Government.It is interesting because I suspect that Todd McClay and possibly Louise Upston actually went to their Cabinet colleagues and said: “Listen we’ve had this advice from the Inland Revenue Department. We think it’s pretty sensible. We’re going to go through with it.” That is what I think probably happened here but then they were rolled. They were rolled at Cabinet by those who thought: “We’d better be a bit careful about those property investors who support us. We’d better watch out for them.” So they rolled over and ignored the Inland Revenue Department’s advice and now we have a situation where we have unnecessary bureaucracy on one hand and a failure to get the correct information on the other.New Zealanders do deserve to know more about who is buying and selling property in this country. Speculators be they both onshore and offshore are forcing young New Zealanders out of being able to buy their first home. That core element of the New Zealand dream of being able to get in there and buy your piece of property is now priced far out of the capability of many people. In Auckland we have a house price to income ratio of 9:1—of 9:1. That puts Auckland in amongst the top 10 most expensive housing markets in the world. That is the situation we are facing here at the moment. That is what happens when property speculation runs riot.We need good quality information so that we can make the judgments about what public policy response we should have and how we can crack down on speculators but this Government does not want to know about that. This Government has put up the weakest possible law that it could in this area. It is hopeless. It is one small tiny step towards what we should be doing and therefore we will vote for it because it is one small tiny step towards what we should be doing but we could be doing so much better than this. We could be giving New Zealanders the information that they need. We could be creating a system that is low on compliance and high on quality of data but that is not what this legislation is.