Cosgrove Clayton: Construction Contracts Amendment Bill — Third ReadingText is incorporated into the Bound VolumeCosgrove Clayton: Construction Contracts Amendment Bill — Third Reading[Sitting date: 20 October 2015. Volume:709;Page:7348. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour): The Labour Party will support this bill and I have to say we support its aims and objectives in terms of ensuring that the construction sector is processing its affairs faster it is more cost-effective it is more efficient and those subcontractors especially are protected. But I do say in passing that if you look at the history of this legislation it is interesting.As it proceeded before the Commerce Committee we had of course the Mainzeal collapse. I think the Minister holding this portfolio at the time was one Maurice Williamson. We know with the Mainzeal collapse that hundreds of people—hundreds of subcontractors—lost money and that millions and millions of dollars went down the toilet. One—the Rt Hon Jenny Shipley of course who vacated her seat on the board of Mainzeal just prior to that collapse—is still chairman I believe of Genesis Energy which is one of our leading State-owned enterprises. She has to date supplied no explanation as to what her role was or what her accountability should have been in respect of that.Hundreds of subbies lost work and lost their livelihoods. Millions of dollars was put at stake and lost. Tools were tied up and people were aggrieved. I remember a quote from Maurice Williamson because Maurice Williamson brought some kind of Cabinet review to the House and basically on the issue of retentions he said there was no problem and no need to do anything. In fact officials told us that in respect of the wider issues that the Minister has now included in the bill all of those things were out of scope.And then an interesting thing happened. The Labour Party went out with a discussion document—an option modelled on the New South Wales example—which was very similar I have to say to what the Minister has put in. I think he is 90 percent right. I think it could still have been improved but I support where he has gone with it. But we went out and we proposed a number of solutions on the back of the Mainzeal collapse. In essence we proposed a construction trust similar to New South Wales which had had an inquiry and the construction trust essentially was a drop-box where moneys would flow into the holding pen if you like that was the trust. It is extremely cost-effective and the moneys would be paid out under whatever the contractual arrangements between the lead contractor and the subcontractors that they had put in place were. There would be no interference in any of those issues and no interference with timing. If there was a dispute the trust would say to the two parties: “Go away and sort it out and tell us who to pay.”But in the event of a Mainzeal-type collapse it became very important that those moneys would be quarantined off. That proposal at the time by I think it was by Nick Smith or Maurice Williamson—I cannot recall who was actually in the chair—was pooh-poohed: “No no unnecessary. Rubbish. There’s no problem to be solved.” Again there was total inactivity after the Mainzeal collapse. I see the Minister has had a road to Damascus experience because he now acknowledges the pain and suffering and economic hurt that occurred through that collapse. At the time it was sort of: “Well you know these things happen. Commercial risk is commercial risk.” And then after we had gone out and consulted with the building sector and we firmed up these proposals hey presto officials came to the committee and said: “Ah the Ministers have now got this on their radar screen.”I find it interesting that at the same time as we are looking at quality work and we are talking about retaining and improving the building sector—and my comments do not relate in whole to all builders and all subcontractors and all practitioners within that sector; they pertain to the small minority of cowboys who exist. At a time when we have just had questions today—and we know that some builders have done extremely shonky work in respect of the Earthquake Commission repairs. We know that that has happened. There has been a lot of pain and suffering for earthquake victims in Canterbury who thought the nightmare was over. At the same time as that is happening—and we are talking about quality work and raising standards—the Government’s so-called loopy rules taskforce is proposing that we turn the clock back and that builders self-certify.I remember when I was the Minister for Building and Construction and we introduced the licensing building practitioners proposals. I will be the first to admit they were not a silver bullet but it was people like the Registered Master Builders and the Certified Builders Association and others that wanted licensing regimes in place because those organisations—eminent as they are—wanted the cowboys out of the system because they gave the good folks and the good practitioners a bad name. It was all about lifting standards proving that you could do what you said you could do and standing by your work. One of the deficiencies we found in all that process was the good old building inspector. There were some good building inspectors and some who specialised in what they call the drive-by inspection—but the last line of defence of course was the building inspector and those other independent parties that would certify that work had been done correctly.And for the homeowner off the back of the leaky building crisis that Ms Bennett is quoted as saying is all over it is all done and dusted—you know moved on to the next phase. Well for many thousands of people they have not moved on they cannot move on and it is still a crisis for them. We are talking about turning the clock back and getting rid of certain checks and balances under the guise of getting rid of “loopy rules”. Well there used to be a day—and I know many fine builders who would stand by their work regardless of whether there was a contract or not. They would be around in 20 years to put some oil on the hinges of your kitchen if they squeaked because it was done on a handshake and they were quality practitioners and they stood by their work.Sadly when the Government under Nick Smith and Lockwood Smith at the time deregulated the building industry in the 1990s anybody could strap on a tool belt—I know what Nick Smith will do. He will get up and seek leave to table a Hansard quote from George Hawkins. Well learn by your mistakes Minister learn by your mistakes. When they deregulated the building industry anybody God help us—even my good self and I would be lucky to be able to build you a dog house let alone a house—could strap on a tool belt call themselves a builder and go around and claim to be able to build your home. And off the back of that with other systemic failures—you know the free market. I am a free-marketeer but I think there should be checks and balances in place. Nick Smith of course says you know that anything goes. That was his position in the 1990s; now he has changed it of course.But as we talk about quality in this bill—we support many of the aspects most of the aspects—we would have done a few things differently in this bill. The loopy rules committee talks about turning the clock back and self-certification as if we can get rid of a bit of paperwork—and the question then is who watches the watchers? Who then ensures that the standards that are being self-certified are up to scratch or have we learnt nothing from our history in respect of leaky buildings?Well it is obvious that the Government has because it has come a gutser over the Earthquake Commission repairs. We were told by Minister Brownlee that with the Earthquake Commission repairs there would be the highest-quality standard monitors in place and no need for any competitive tension and that we do not need two companies; just Fletcher’s would be OK. Why? Mr Brownlee said that having one company a monopoly allegedly kept the price down—I do not know how that works under School Certificate economics; I thought that was the competition party over there. No competitive tensions and the highest-quality standards would be maintained and then hey presto what happens? We have what we have today which is a whole series of building failures—and not only building failures but other failures.Yet again we have good solid professional building practitioners who stand by their work. When they make a mistake they stand up and say: “We’ll go and fix it.” But oh no they are dragged down into the political swamp and the economic mire through the shonky work of others. The Government’s framework is simply: “Oh well Fletcher’s or the subcontractor will pay. We’ll wash our hands of it.” Well we were given assurances in respect of that work. Those assurances have never come to pass.So I say to the Minister that we support this legislation. We support its intent. We are glad that he has piggybacked on the back of our policy and that we could put some steel in the political spine in respect of his following our policy. We would have done it differently but you know we got there first. We actually propelled the Minister to take an interest in some of these issues because he did not want to be seen to be tail-end Charlie.That aside we think that this bill will strengthen the industry but we just wonder. On the one hand as the Government passes this bill on the other it proposes to loosen rules turn the clock back and get rid of checks and balances in other areas of the industry. Again it would be good if the Minister could have provided some sort of explanation on behalf of his former leader the Rt Hon Jenny Shipley as to her role and responsibility for Mainzeal as she purports to lead and chair Genesis Energy. We support the bill but we do support it with some reservations.