Clark David: Taxation (Land Information and Offshore Persons Information) Bill — Second ReadingText is incorporated into the Bound VolumeClark David: Taxation (Land Information and Offshore Persons Information) Bill — Second Reading[Sitting date: 08 September 2015. Volume:708;Page:6312. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): Labour will support this bill because we back the policy objective that is behind it which is to collect information on offshore residential homebuyers. However as my colleague Grant Robertson has already begun to canvass there are a large number of loopholes and weaknesses in this bill and that is as a result of a Government obsessed with wanting to look like it is doing something and actually making sure that it is not. There is no clearer example of that of course than the paper boy tax legislation that we saw in a previous Budget where the Government shifted things around to make it look like it was doing something but it actually created a grey economy where there was none before and created extra red tape and overheads for many who were doing those part-time jobs and for employers as well. Likewise with child support—requiring employers to collect child support arrears where they did not previously is an extra red tape burden that this Government has imposed on employers.Here we have an example of additional red tape but it is red tape applied without an offsetting assurance that we are actually achieving the policy objective. That is worrying because poor legislation does introduce costs to an economy and places an individual burden of costs on people on ordinary citizens. When no offsetting gain can be guaranteed that is a worrying thing. It is Parliament’s job to try to get this legislation right to make sure that we do make sensible decisions that do not cause extra compliance for ordinary citizens and to try to solve the problems that we see as a country. But no one these days would say that offshore property speculation is not a problem in New Zealand. I think even the Government acknowledges that offshore property speculation is a problem. At least that is the rhetoric and at least that is the driving reason behind bills like this one. But as to actually doing something about it in a sensible measured way and in a way that answers the questions of policy advisers well that is a different matter altogether.What we saw in the regulatory impact statement and in the advice from the Inland Revenue Department was advice that it was unable to estimate the compliance costs or consult on this legislation because there was not enough time to do that. So the department has not estimated what the cost of this legislation is what the overhead that goes with it is and whether in fact it is going to be as effective as it could be because the Government has placed time constraints on this legislation in order to rush it through Parliament to be seen to be doing something about the problem that we are facing as a country. The Inland Revenue Department also recommended to the Government that it not exempt main homes from the register because that will not reduce compliance costs for purchasers of a main home as almost all would have a New Zealand IRD number anyway and it would make rules more complicated for purchases and conveyances and create loopholes.There is a whole set of reasons why this legislation should not have been rushed through why it should have been given a second look and why the Government should have taken its time to make sure that it was right and was actually achieving the stated goal of cracking down on overseas property speculation. But of course what we on this side of the House suspect is a certain amount of cynicism from the Government opposite. We know that the Government is not particularly interested in cracking down on property speculators. We have seen little evidence of it. National has been willing to take a bit of a political hit on it over the years whereas it has been so responsive in other areas to polling and to its focus groups and so on. In this area we begin to suspect that it has other interests at play and so it is not wanting to crack down in this area in the same way. So it seems to be quite happy to let some of those loopholes remain and I think people can probably draw their own conclusions as to why that might be.We will support the bill because it is a first step towards achieving the goal. We recognise that when we are in Government a Labour-led Government will have to tidy this up and tighten it up to make sure that it does what the stated policy intention originally was.A Government that is not straight with New Zealanders is going to run into problems over the longer term. I think it is fair to say that this theme of the Government saying it is going to do one thing and then not delivering on it is wearing a little thin with New Zealanders who are now seeing this Government as being increasingly out of touch.The bill says that it supports the Government’s yet to be introduced legislation to create a new 2-year brightline income tax test for Auckland—the test that is not a capital gains tax but supports that tax on property gains over time. We will be debating that later I believe; in fact it might be the next bill on the Order Paper. We see it as part of a package that the Government is putting together to be seen to be doing something in this area. But we are mindful on this side of the House that although these new measures will improve the current complete lack of information regarding overseas house purchases they are but a part measure. They are needlessly weak and as Grant Robertson said in his contribution those on the select committee heard ways in which the legislation could be made stronger and we can deduce only that the select committee itself by burden of a Government majority decided against putting that recommendation through to Parliament and opted instead to adopt the weakened bill that we have before us.It is disappointing that Parliament and the select committee will need to visit this legislation again in the future to amend the inadequacies of this bill. Implementing a full and proper overseas homebuyers register the first time around would save wasting a whole lot of parliamentary time. The cost of putting a bill through this Parliament is quite extraordinary. I remember seeing an estimate. It is hundreds of thousands if not millions of dollars to put a bill through this Parliament when one takes into account the staff time all of the salaries sitting in this room the lighting the advisers for the select committee process and so on.It is a huge amount of money to put a bill through this House so that is why we find it frustrating that the Government wants to put through a half measure that will almost certainly have to be revisited. It is so obvious as we put it though this House that it is a half measure that it is needlessly weak and kowtows perhaps to property speculator interests rather than taking a principled stance and saying: “How do we rebalance the New Zealand economy? How do we make sure that we tackle the issue of a housing market in Auckland that has been out of control for some time where we have homelessness in our streets and growing social issues as a consequence? How do we make sure that the market is set to respond? How we make sure we actually have a country that is focused on productive activity that sets the incentives up right and that makes sure that overseas speculation does not drive our currency and our housing and our economy? How do we get focused on the issues that matter and on generating a better New Zealand?”.So for all the cost involved in putting this bill through Parliament we would have liked to see proper strong robust legislation. Instead we have the kind of legislation that you might expect from a Government that is arrogantly pressing ahead saying: “We’re not going to listen to anyone. We just want to be seen to be doing something. Tick that box. Move on.” We have a Government that is increasingly out of touch with ordinary New Zealanders. Those in the middle are getting squeezed and here again they will get squeezed by this legislation. Middle New Zealand will be the ones who comply with this legislation while the speculators find the loopholes and carry on as they were.Mr Bishop I am sure is going to stand up shortly and say that this is all wrong. But if he addresses the questions that have been raised by both Mr Robertson and me adequately now it will be a wonder to many that he did not do that in the select committee.