Robertson Grant: Taxation (Land Information and Offshore Persons Information) Bill — In CommitteeText is incorporated into the Bound VolumeRobertson Grant: Taxation (Land Information and Offshore Persons Information) Bill — In Committee[Sitting date: 09 September 2015. Volume:708;Page:6444. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): Thank you very much Mr Chair. There was a lot of competition for that call. I want to focus particularly on clause 2 the commencement clause and towards the end of my contribution I am going to table a document released to us by Land Information New Zealand under the Official Information Act.We need to go back in time a little—in this case to 11 May 2015 in fact—to when Land Information New Zealand was advising the Minister in charge of this bill Louise Upston about when this bill could actually come into force and to when Cabinet was considering it. Interestingly the context around thisis of course that both this measure—the creation of a “not register” for the purchasing of property because the Government does not want to call it a register and it has successfully established it in such a way that it will not be an effective register—and the brightline test were both initiatives that were announced in the Budget. It is quite clear that they were rushed through because the Government did not have anything that it wanted to do in the housing space.Land Information New Zealand found itself advising its Minister about prospective commencement dates for this legislation. In a note dated 11 May 2015 which I will put in front of the Committee shortly Land Information New Zealand advised the Minister that it did not see any reason why it could not implement the legislation either by 1 July or indeed from Budget night which seems quite ambitious. It put some pros and cons in the note. It said that if it got the legislation in place by 1 July it would mean earlier compliance with the Government’s policy and it would “be seen to be moving quickly” which is clearly the main purpose of this legislation: being seen to be doing things.The cons of the legislation coming into effect on 1 July were that there would be a very short amount of time to consult on the changes with conveyancers and to develop guidelines. This is where things get interesting. The other con was that conveyancers would need to manually record information via a form until Landonline was in a position to be able to manage this. Now that is a bit of a worry. A significant change to the process of registering land purchases and to the website Landonline is not ready. That is the information that Land Information New Zealand provided. It said that by 1 September it was pretty confident that it would be able to get the legislation into position but that it was a bit worried about that.Land Information New Zealand also noted in the same note that if it were to try to get this legislation to commence on 1 September it “may lead to a rush of transactions by persons wanting to avoid the IRD number requirements and avoid tax.” I would be interested to know from the Government side of the Chamber whether or not this has actually occurred but I am not aware that it has. But obviously that was one of the risks. To get the legislation in place by 1 October which is obviously what we are now faced with in the commencement clause of this bill there was the suggestion that the Government was going to need to use urgency to get the regulations in place by 14 September. Of course the way that the Government got around all of this was by truncating the select committee’s consideration of the bill. So they come to us today with a clause 2 that has 1 October as the date by which this bill will commence.The consultation with stakeholders and the process that was gone through has been rushed and we have already seen in this House—in fact in the debate earlier today—that actually it is confused. We have got the commentary on the bill from Government members of the select committee saying that they know that it is confusing that they do not know exactly how it is going to be implemented and that that is the effect of rushing legislation through and of not having a proper process. But the kicker in the advice from Land Information New Zealand is this: they will have to use manual or paper-based systems to record transactions from 1 October until the computer system is ready in December. So when this comes into force from 1 October commencing as it does under clause 2 it will involve paper-based transactions.Hon Ruth Dyson: Carbon paper?GRANT ROBERTSON: Well possibly—in triplicate. The Gestetner will be working overtime down at Land Information New Zealand because unbelievably the Government has put itself in a position where a fundamental change that it is making—Government members stood up here today and told us that this was going to give clearer information objective tests etc. and Land Information New Zealand has been telling its Minister that a manual paper-based system will be in place. Is this the 1960s? What is going on here? What is the risk here that lots of information will actually get lost in the system—that actually we will not be able to start creating the database that the Government tells us it will create because for 3 months it will all be done with pen and paper. Maybe it will be done on slate? I do not know how far back Land Information New Zealand is going to have to go to find a technology that is actually ready to do this.I have to note that the information that I am working off which I have said I am going to table at the end of my call could be out of date. It is possible. This was a memo from May released to us under the Official Information Act. But to me this is an absolute debacle. This bill is being held together by string and sticky tape. It is absolutely poorly thought-out. It does not do the things that it was meant to do. On the one hand it makes things more complicated when they do not need to be—in terms of forcing people to have a bank account and an IRD number when they really only need an IRD number—and on the other hand it fails because the Government exempts under this legislation the main home from having to be part of the register which creates an enormous loophole when there is no additional compliance cost. This is an utterly confused piece of legislation.Most parties—in fact I think all parties in this Chamber—support the principle of the bill and support the idea that there be a register. We are voting for it because it is a tentative incremental little tiny footstep in the right direction towards giving New Zealanders information.Hon Christopher Finlayson: But it’s good?GRANT ROBERTSON: It is OK Mr Finlayson. I think “good” would be pushing it a little far; “great” would be completely out of the question in hyperbole. But it is OK. What we are facing looking at clauses 1 and 2 is a bill commencing on 1 October which was the grand date put in place by the Government and the agency charged with collecting the data—Land Information New Zealand—is advisingits Minister through its system Landonline that a manual paper-based system will be required until December of this year in order to make this work. Goodness only knows why the Government thinks that this is a good way to make law. It is not. It is a shambles it is a debacle it is half hearted and it is full of holes. How ridiculous it is when you have support for the principles of legislation like this right around the Chamber to then put up such a flawed piece of legislation. If only we had had longer at the select committee if only there had been more time to consult and if only the Government had actually wanted to do this and get a meaningful outcome as opposed to the window dressing that this clearly is.We go back to the Budget when this document was put out and we see that it was rushed. When the Budget papers were released in July we discovered that none of the housing initiatives that the Government was putting up which are buttressed by this legislation and the brightline test had had any work at all done on them last year in the normal course of the Budget process. They were stuck in early in 2015 when the Government was on the back foot on housing. It is still on the back foot on housing. When the Government was on the back foot on housing it had nothing in the Budget to show so it thought that it would come up with something to deal with the concern that New Zealanders have that they do not have the information they need to be able to understand who is buying and selling houses in the New Zealand housing market. And equally for people who are speculating the intention test is completely not working so the brightline test has been brought in. When we come to debate the brightline test in this House we will similarly discover the perils and dangers of rushing legislation through with inadequate consultation.I believe that clause 1 and clause 2 of this bill highlight perhaps more than almost any other clause just how poorly thought-out this process has been. The fact that Land Information New Zealand told the Government that it could get the system up and running but that it would have to be paper-based from 1 October until December is a complete farce. I seek the leave of the Committee to table an aide-mémoire from Land Information New Zealand to Hon Louise Upston Minister for Land Information dated 11 May 2015.