Genter Julie Anne: Taxation (Bright-line Test for Residential Land) Bill — In CommitteeText is incorporated into the Bound VolumeGenter Julie Anne: Taxation (Bright-line Test for Residential Land) Bill — In Committee[Sitting date: 10 November 2015. Volume:710;Page:7838. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): I think the heart of the issue in this debate is really about fairness. We have a problem with our existing tax law in that it is not entirely fair and it favours investment in property over other types of work and income. It is a problem that we all acknowledge and we all need to address.Of course Treasury the Reserve Bank and many economists have been calling for action on this issue for a number of years and understandably Governments have had a hard time taking the steps to close the tax loopholes on property because it is going to affect a number of people. But there has never been a more urgent time for us to come together across the Chamber to find a constructive solution to this problem.I note that even just this week the IMF came to New Zealand on a mission. It made some specific statements about tax measures. It stated: “The newly introduced measures to deter speculative investment are welcome and further steps in this direction should be envisaged. In addition a more comprehensive reform to reduce the tax advantage of housing over other forms of investments could be warranted. This could include reducing the scope for negative gearing.” That is what the Green Party is saying here tonight.I know a number of my colleagues on this side of the Chamber agree that this legislation could be improved to deal with this problem and I am sure there are a number of members on the Government side who agree that this legislation could be improved to have a beneficial impact on all New Zealanders in the long term.I have asked them to consider tonight these very very humble Supplementary Order Papers. They are not particularly ambitious. They are pretty minor changes but they would significantly improve the bill. We have Supplementary Order Paper 138 extending the time frame from 2 years to 5 years as originally advised by Treasury. This is a compromise measure. I am putting this forward as a compromise. This is not the Green Party’s policy. We would like to see a comprehensive capital gains tax excluding the family home which we think would be better because it is only fair that income whether it is earned by a job or whether it is earned from the sale of a property should be taxed in the same way. We think that is fair.But I have come tonight with a compromise measure—it was Treasury’s compromise when it put it forward in 2010—to have the brightline test apply for a 5-year period so that it is much more effective. I know that Mr Bennett has said tonight: “Oh well you’re still going to have the problem that speculators will hold on to 5 years and 1 day.” Well I think we can all agree that there is a big difference between holding a property for 2 years and holding it for 5 years—in fact there is a 3-year difference; it is more than twice as long. It would be substantially more effective at slowing the churn and that is important to limit the fast pace of the growth in house prices in Auckland.It is true that speculators can be land bankers and they can hold property sometimes for very long periods of time but slowing the churn will slow the growth which slows the damage that could potentially be caused when the bubble finally bursts. So it is not a dramatic move. It would just be in line with the vast majority of OECD countries that have holding periods of at least 5 years. There are very few that have less than 5 years and they also have problems with property bubbles. So I ask the Government to consider this constructive contribution from the Greens—I know that other parties will be supporting it—so that we can have a better bill.The other change of course that we are proposing tonight is that this applies to all land not just to residential land. It will be more coherent there will be fewer loopholes and we will not have to deal with this extremely tricky problem of how we define residential land because ultimately land can be used for residential purposes. Even if it is not currently being used for residential purposes even if it is not currently zoned for residential purposes it can in fact be used for residential purposes.So to clean up this legislation there are minor improvements proposed tonight by the Green Party. I hope that the Government will consider listening to us because we do want to have the best outcome for New Zealand. If we are going to go through the steps of passing this legislation it may as well be as good as it can be.Even if it is not our policy we are willing to support this bill. We are voting for it but we think that it could be improved. In line with many of the submitters’ comments that we heard at the Finance and Expenditure Committee our proposals are not particularly drastic and they are not even out of line with the advice that the Government itself received from Treasury a number of years ago.I will make one final comment about this package of bills because this is the final piece of legislation in a package. We tried to make constructive improvements to the previous law—