Twyford Phil: Taxation (Bright-line Test for Residential Land) Bill — In CommitteeText is incorporated into the Bound VolumeTwyford Phil: Taxation (Bright-line Test for Residential Land) Bill — In Committee[Sitting date: 10 November 2015. Volume:710;Page:7832. Text is incorporated into the Bound Volume.]PHIL TWYFORD (Labour—Te Atatū): Thank you.Stuart Nash: Stuart Nash?PHIL TWYFORD: Mr Chairman did not say “Stuart Nash” actually. As colleagues have pointed out in the last few contributions this bill demonstrates what has become a classic pattern with this Government. We see it particularly in relation to the housing crisis where for several years the Government has denied denied denied that property speculation is even part of the problem in the Auckland housing crisis. It has denied it in this House. It has denied it in the media. What we see—and it is a hallmark of this Government—is that it waits and waits and waits denies denies denies and then when the focus groups and the polling tells it that it cannot credibly maintain that position any longer it just does the bare minimum.This bill is yet another bit of legislation that the National Government has brought to this House that does just the bare minimum. We are in this incredibly frustrating position of actually voting for it because it is at least an acknowledgment that speculators are part of the problem in Auckland. It is at least something but it is not much. So we support it but we want to make it absolutely clear to this Committee that it is a completely inadequate response.In the course of this debate we will go through this legislation clause by clause with reference to some of the very trenchant criticism that credible expert submitters made to the Finance and Expenditure Committee about just how pathetic this bill is. The first is that and we can see this in the advice from Treasury this bill is expected to net $5 million—$5 million. There are billions of dollars of tax-free capital gain happening as we speak and every year in the Auckland property market. There are billions of dollars of tax-free capital gain going on right now in the Auckland property market but this Government does not care about that. It does not care about the loss to the economy. It does not care about the social consequences of an entire generation of young New Zealanders locked out of the housing market.This Government does not care about that because John Key has made a political calculation. He has been very candid about it. He has made the calculation that he has more votes to gain by pandering to property owners who are watching their net worth go up by about a thousand dollars a day at the moment in Auckland. He does not care about Generation Rent. He does not care about the generation that is locked out of the housing market. He does not care about all of the downstream effects on people right through to people who are living in cars and garages because the housing crisis means that they cannot afford decent housing. The National Government does not care about that.Treasury said that this bill would at best net about $5 million in new revenue and it said that the small amount is primarily due to the fact that there will be a great deal of avoidance. Because under the bill—it is almost like it was written to encourage avoidance—all that people have to do is hold on to a property for 2 years and 1 day because avoidance is so easy. If that avoidance was not possible then this bill would net something like $40 million. But it will net only $5 million according to Treasury. Because avoidance is so easy why would you not?There is some interesting information that the Ministry of Business Innovation and Employment provided based on core logic data that shows that currently in Auckland there is a huge amount of churn going on in the real estate market but properties that sold within the first year accounted for 8.4 percent of all sales. Within a 2-year period it is 17.4 percent—only 17.4 percent of sales within that 2-year period.That is why it is going to generate only a measly $5 million because subtract all of the people who will hold on to that property for 2 years and a dayfrom that 17.4 percent of all sales and you will see this will make very little difference. And that is why when the Government announced this prior to the Budget John Shewan one of its most respected tax advisers said then and there: “This will not deter speculators”—Jacinda Ardern: “Professionally confused”?PHIL TWYFORD: “Professionally confused”—there are a lot of great quotes that we are going to share with the House. But that is why he said it will not make a blind bit of difference to house prices and it certainly will not deter speculators.