Bishop Chris: Taxation (Land Information and Offshore Persons Information) Bill — First ReadingText is incorporated into the Bound VolumeBishop Chris: Taxation (Land Information and Offshore Persons Information) Bill — First Reading[Sitting date: 25 June 2015. Volume:706;Page:4811. Text is incorporated into the Bound Volume.]CHRIS BISHOP (National): Clearly with Ria Bond’s move from the backrooms of New Zealand First into the front lines the research unit quality has declined. Contrary to what the previous speaker Denis O’Rourke just said this bill does not actually introduce the brightline test that has been talked about on investment property sales. It does not do that. That has been signalled but that is coming in a consultation document later. So nice try Denis. Read the bill better next time or get your staff to read it better.This is a good bill can I say. This is a good bill and an important bill. It is slightly mistitled though I have to say. It is titled the Taxation (Land Information and Offshore Persons Information) Bill but it really should just be titled the “Make Phil Twyford Really Really Really Really Angry Bill”. In fact I may well move an amendment at the Committee of the whole House stage for that very purpose.I want to talk about the context in which the bill arrives at the House before I move on to the substantive parts because the context is important. I think actually despite the heat and the light—mainly heat—that comes from members opposite on this issue I actually think there is reasonable consensus in the House that we have a housing affordability issue in this country and it is something that we need to deal with. There is actually consensus on that. There is actually also consensus on why we need to deal with it. It is an equity issue for New Zealanders because homeownership is important particularly for young New Zealanders and National is the party of homeownership and backs getting Kiwis into homes.There is also an economic effect and as Phil Twyford rightly points out—Phil Twyford: Lowest homeownership in 60 years.CHRIS BISHOP: Listen up Phil. I am actually complimenting you—at the start of my speech anyway. There is actually an economic effect from the housing issue that we have which is that interest rates are higher than they otherwise would be and arguably there is a financial stability effect as well if you talk to the Reserve Bank of New Zealand. One of the things that often does not get mentioned is the effect on the Government’s books of house prices rising very quickly. As Russel Norman rightly pointed out that does flow through to rents eventually and that is an effect on the Government’s books through income-related rents and of course the accommodation subsidy. So there is actually consensus that we need to do something about this issue.And if you actually look at the issue there is reasonable consensus about some of what we need to do. For example we need to free up more land supply—there is reasonable consensus on that. Actually despite the anger and the fury and the venom directed by Mr Twyford and members opposite towards my colleague the Hon Nick Smith on the issue of better utilising the large amounts of Crown land that the Government owns in Auckland for housing actually the Labour Party agrees with that because its KiwiBuild policy is predicated on that exact point. So there is consensus about better utilising Crown land. There is consensus about freeing up land supply.And we even heard from Russel Norman that he now accepts that supply is an issue—that this is fundamentally a supply and demand problem. We did actually hear some sort of concession on that. He says: “Well we just need to increase density inside Auckland.” I would say that is true. We do need to build up but we also need to build out. It is a little bit ridiculous that New Zealand is one of the least densely populated countries in the world. We do not utilise as much land as we could do. There is no reason why we cannot utilise more land and that is exactly what the Government is trying to do through our special housing areas. It is within that context that this bill is advanced and it is an important context.Also before I move on I want to mention the Productivity Commission report that was released the other day. It was actually a very very useful study and one that I think is going to illuminate the debate about housing in New Zealand for years to come and it was actually good to see some acknowledgment by members opposite of the comprehensive nature of that report when that came out. I have to say it was a little bit in stark contrast to the response from Carmel Sepuloni to the Productivity Commission report about services which was to sort of go back to trite clichés about neo-liberal dogma and vouchers and that sort of thing. So it is good to see the Labour Party actually endorsing some rational economics for once. It is within that context that the bill has been brought forward.It is an omnibus bill—slightly unusual for New Zealand legislation that it is an omnibus bill but introduced under the Standing Order 263(a) I believe. There are two important things that Mr English signalled in the Budget that this bill implements. Firstly buyers and sellers are being required to provide IRD numbers at the time a property is transferred and that tax information is to be collected by conveyancers and provided to Land Information New Zealand as part of the conveyancing process and then forwarded to the Inland Revenue Department. People who are tax resident in another jurisdiction will also be required to provide their foreign equivalent of an IRD number. That is the first change.Secondly the bill requires offshore persons defined in the bill to have a New Zealand bank account before they obtain a New Zealand IRD number. This ensures that offshore persons are subject to our anti - money-laundering rules. Tax evasion as my colleague David Bennett rightly pointed out—he is no longer in the Chamber unfortunately but as he rightly pointed out—tax evasion is a predicate offence for money-laundering. So having greater certainty of the identity of the taxpayer will bolster the effectiveness of the compliance system as well as the anti - money-laundering regime generally. Of course people who are not offshore persons buying or selling their main home will be exempt from having to provide that tax information and that is to protect families in their main home.Denis O’Rourke: It doesn’t do that. It doesn’t do any such thing.CHRIS BISHOP: These changes are useful changes. They will improve the information that the Government has and they will improve the compliance that people have to make with the Income Tax Act 2007. People often forget—including Mr Denis O’Rourke and members opposite—that the current Income Tax Act 2007 contains provisions that impose income tax on certain property transactions. But we are concerned that compliance in particular by non-residents is relatively low so that is the context in which this bill is being introduced and will be examined by the Finance and Expenditure Committee.As a member of that committee I am looking forward to examining that bill in detail. Often with tax bills they are reasonably complex. They are technical in nature. In fact on the Finance and Expenditure Committee we are dealing with a current bill that deals with the cashing out of research and development tax credits which is highly complex. We have gone through that bill in quite some detail and I am looking forward to doing so on this bill as well.You often hear a lot of anger and venom from members opposite about housing in this country. Phil Twyford is probably the worst offender but we are still waiting for Phil Twyford to apologise to this House and actually to the social housing sector as well for misleading the social housing sector before the election. Phil turned up to the Social Housing Annual Conference and told them that the Labour Party was committed to income-related rents to capital grants and to stock transfers—to stock transfers. He is grinning away. Now he turns up in the House and he rails away about privatising social housing and privatising State housing. Well the Labour Party before the election was committed to stock transfers. He said that “we know that you can build good quality homes at affordable prices and you can leverage private sector investment.” Well when is Phil Twyford going to stand up in this House and apologise for misleading the social housing sector? I am awaiting it with bated breath but I do not think it is going to happen.Where is the Labour Party when it comes to these sort of tax policies? Having taken a comprehensive capital gains tax to the 2011 election and to the 2014 election and having been comprehensively drubbed where is it now on capital gains? Well we do not know. It is pretty clear that Phil Twyford wants to introduce a comprehensive one but his leader won the leadership—with four of his colleagues voting for him—on the basis that the Labour Party would not have a comprehensive capital gains tax. So the Labour Party is completely all over the place on this issue. We are looking forward to the next speech from the Labour Party which will no doubt announce a different policy altogether on property taxation or property more generally.This is an important bill. It does make small changes. They are technical. They are important for the Government’s wider programme of improving housing affordability in this country. Because of that I commend the bill to the House.