Genter Julie Anne: Overseas Investment (Protection of New Zealand Homebuyers) Amendment Bill — First ReadingText is incorporated into the Bound VolumeGenter Julie Anne: Overseas Investment (Protection of New Zealand Homebuyers) Amendment Bill — First Reading[Sitting date: 25 May 2016. Volume:714;Page:11319. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): The Green Party supports the bill which is pretty non-controversial and is in line with longstanding Green Party policy to restrict the sale of property and land to residents and citizens. I would just like to start by saying very generally that this would be only one part of solving the housing affordability problem. There are a number of issues on both the demand side and the supply side that affect house prices. But that said there is no question that this would do no harm.I think it is really important to address some of the objections to this bill that have been raised by the Government—the National Party and the ACT Party—because rather than engaging with the substantive issue which is whether foreign capital impacts the value of property prices in New Zealand it says that to raise this question is xenophobic and racist. Of course that does not logically follow. That is not a logical argument; in fact it defies all economic logic.Any economist will tell you that foreign capital flows do have an impact on property prices. In fact I have pulled up a paper here that was published at one of the conferences at the London School of Economics. This paper was written by a professor of economics from the University of Auckland and co-authored by a professor from the University of California San Diego. It is all about global capital markets and housing prices. I will just read the first few lines of the introduction for the benefit of the House: “The experience of the past decade has demonstrated the challenges that international capital flows can pose for financial stability. [Indeed] the build-up of global imbalances … was one of the preconditions for the recent financial crisis.”Deficit countries such as the United States Spain the United Kingdom Ireland Iceland Poland Greece Estonia New Zealand and Australia attracted lots of foreign capital and exhibited large run-ups in house prices while surplus countries such as Germany Switzerland China and Austria exported capital and they in fact experienced flat or slow house price growth. So it is just a distraction on the part of the Government not to address the fundamental economic issue with foreign capital inflows which do not in fact benefit New Zealand’s productive economy. If we have a fairly limited supply of dwellings the inflows of foreign capital lead to large run-ups in prices. This is a consequence of global financialisation and deregulation and inequality. I mean really it is the growth in global inequality that is leading to the ability of people who have captured a large portion of the surplus in some of these surplus countries to bid up house prices all around the world. If we look at the cities that have the most unaffordable housing in the world it is no accident that most of them are Pacific Rim cities. So it is Hong Kong Sydney Melbourne Auckland—Phil Twyford: Vancouver.JULIE ANNE GENTER: —Vancouver. They are all Pacific Rim countries.It would not be surprising given the huge amount of capital outflows coming from China that that was having an impact on New Zealand’s property market. Of course it is not just China and there is nothing racist about saying that that is happening because that is a fact. But there is also money coming into New Zealand from Australia from the United States and from other countries where you have vast amounts of income inequality and wealth inequality and that of course bids up house prices. It is no surprise that the second-most unaffordable city in New Zealand is Queenstown. Why do you think that is? Is there a lot of foreign ownership of property in Queenstown? Yes there is.Chris Bishop: Neo-liberalism! I blame neo-liberalism.JULIE ANNE GENTER: I just have to point out that the Government is trying to distract New Zealanders from the real issues. Why will its members not debate the merits of their policy? If they really think there is no problem with it why do they distract with accusations that people are racist?I am an immigrant and the Green Party supports immigration. We also support providing more houses. The State should be building more State houses. The Government should be more involved in the provision of housing in New Zealand and there is a lot it could do on the demand side because there is no question that investors are having a disproportionate impact on house prices in New Zealand. That fundamentally is not good for our economy and it is not good for our people. The National Party is being incredibly misleading by not addressing the actual economics of the issue and by distracting in order to try to get votes.