2. KiwiBuild—Shared RiskHon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban DevelopmentKiwiBuild—Shared Risk2. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Does he stand by all his statements regarding the Crown's potential risk in relation to the insolvency of KiwiBuild developers?Hon JENNY SALESA (Associate Minister of Housing and Urban Development) on behalf of the Minister of Housing and Urban Development: Yes in the context they were made. Hon Judith Collins: When he announced five weeks ago that 1200 new State KiwiBuild and market houses were being built on the Housing New Zealand Northcote development did he have confidence that the builders Ebert Construction would be in business five weeks later to continue working on the project? Hon JENNY SALESA: On behalf of the Minister of Housing and Urban Development yes I did. Hon Judith Collins: Does he still stand by his statement last week in the House in relation to KiwiBuild: In the case of developer insolvency the Crown … carries no risk whatsoever."? Hon JENNY SALESA: On behalf of the Minister of Housing and Urban Development yes. In the Buying off the Plans initiative the Crown underwrite is only triggered on completion. Therefore there is no risk to the Crown in the event of a developer's insolvency. In some cases there may be progress payments in which case liability is limited to the progress payments made. The KiwiBuild unit advises me however that these contracts are rare and they have not entered into any so far. Hon Judith Collins: When he told his Cabinet colleagues that there would be "appropriate due diligence" what was the result of the due diligence for Ebert Construction that went into receivership this week? Hon JENNY SALESA: On behalf of the Minister of Housing and Urban Development—Hon Judith Collins: It was brilliant. Hon JENNY SALESA: I'm sorry? SPEAKER: Sorry I think the Minister can start the answer again and can I ask if it was Ms Collins—can she finish her questions before she sits down. Hon JENNY SALESA: On behalf of the Minister of Housing and Urban Development there was appropriate work that was done. In terms of the advice I've got from KiwiBuild things are done in terms of risk management on a development by development basis. Because of the inherent differences any individual development and the prices it might seek from the Crown to underwrite is taken on a case by case basis. I can give you the advice that I've been given which is how the risk is managed by the KiwiBuild unit: first an initial assessment is made; second shortlisting a second review of the proposal and a workshop with the developers. The KiwiBuild unit then evaluates the amended proposals. The opportunity to clarify any issues is done an evaluation panel then the evaluation report the chair prepares a final evaluation report and then the contract is negotiated. In addition CBRE Colliers and Jasmax are contracted to provide independent expert advice to the KiwiBuild unit for each development.Hon Judith Collins: If as he said on 26 March this year the Crown is sharing the risk with developers then what responsibility will the Crown be taking to ensure that subcontractors and workers are paid on KiwiBuild sites when the developer goes broke and whether or not they can even get their tools off the site?Hon JENNY SALESA: On behalf of the Minister we have asked for advice from the ministry on how it is that subcontractors can get some of their tools back. One of the things that we have asked our ministries to do is for the ministry to reach out to the receivers and to assist our subcontractors to get their tools back. We are waiting for further advice on this. We would like our subcontractors to be paid and the contracts are apt that were signed. All of those subcontractors that had their contracts signed before 1 July 2017 will get some payment in terms of the labour they provided.Hon Judith Collins: Which of his statements is correct: the Crown will be sharing the risk with developers as stated on 26 March or when he told the House on Wednesday last week that the Crown will take no risk whatsoever if a developer becomes insolvent during the KiwiBuild process?Hon JENNY SALESA: Further to my answer earlier on about insolvency the Crown underwrite is only triggered on completion of houses so the risk that the Crown takes is only in the event that a developer goes insolvent."