Roche Denise: Construction Contracts Amendment Bill — Third ReadingText is incorporated into the Bound VolumeRoche Denise: Construction Contracts Amendment Bill — Third Reading[Sitting date: 20 October 2015. Volume:709;Page:7359. Text is incorporated into the Bound Volume.]DENISE ROCHE (Green): I rise to take a short call for the Greens on the Construction Contracts Amendment Bill. I am going to talk as well about retentions and retention payments.I want to just make a few notes. One is that this bill when it was introduced on 29 January 2013 by the then Minister for Building and Construction then Maurice Williamson it had nothing in it about retention payments. It has been made a much better bill as a result of the process that it has gone through over the last 2½ years. Just to recap a retention payment is the portion of the contract price that is withheld by the principal contractor and not paid until after the construction work is checked and found to be up to scratch. It is actually used to pay off the subcontractors once that work has been checked.However what we have learnt and what the Commerce Committee heard as well during the process of this bill is that over time it had become common practice in many instances for the late payment of retentions or for those principal contractors to retain that retention payment and use it as cash flow for other projects. Certainly I think this is what happened with Mainzeal and what it did so that when it went bust in February 2013 there was no money there to pay the subcontractors who had already been doing work on their projects so they could not be paid. As other people have said it was a total of $18 million that was owed to subcontractors who had already undertaken work for Mainzeal.In my community on Waiheke Island one of our largest-ever projects that we have ever had was the construction of our library by the Auckland Council. It was being constructed by Mainzeal. But all the subcontractors there were local people. They were the local plumbers the local bricklayers the local—just the locals. They were locked out the day Mainzeal went bust and they could not even get to their tools. It was a shocking shocking example of a company that basically left a whole bunch of other people in the lurch and it certainly had a huge impact on my community.But back to this bill. The original purpose of the bill according to the Bills Digest was basically to enact the findings of reviews of the Construction Contracts Act that had happened in 2010. There were about four different things that this bill set out to do originally. Those were to remove the distinction and treatment between residential and commercial contracts to extend the Act to include contracts for design engineering and quantity surveying to remove the distinction between enforcement of payment determinations and of those relating to rights and obligations and to make the enforcement process more efficient. But it really took the Mainzeal collapse to get the whole issue of retention payments addressed eventually.It has been an interesting progression. The bill was introduced in January 2013. The first reading was on 11 June 2013 and the submissions closed about a month later. The select committee report came back to the House in December 2013 but the second reading was not until March 2014. It was around that time that the Minister in charge of the bill actually changed. So it was not until 18 months later that the Committee of the whole House actually heard and considered the bill.I have to acknowledge the Supplementary Order Paper 446 put forward by my colleague Julie Anne Genter at the time which has now actually been adopted by this Government and will be part of this final bill when it is enacted. So it took a change of Minister to actually get a piece of legislation that does address some of the issues that were actually highlighted during the submission process. I think that is a real tribute to those who submitted and to the tenacity of the people who were affected by the Mainzeal collapse who very clearly stated their case. It shifted the Minister to a position where we now have a bill that is actually a lot more fit for purpose. We will be supporting the bill.