van de Molen TimTIM VAN DE MOLEN (National—Waikato): Thank you Mr Speaker. That was a remarkable comment at the end there from Shanan Halbert the previous speaker. He was trying to suggest that the previous Government took no action. It's understandable that he wouldn't have listened but we've had five years of failure. We've seen absolutely nothing infrastructure-wise delivered under this Government. It is absolutely outrageous for that member to stand up and try and suggest that this Government is doing better when clearly they are not and they are failing across the board time after time on key infrastructure that really matters for New Zealanders.It is a relief to see this bill the Construction Contracts (Retention Money) Amendment Bill now at its third reading. It is disappointing that it has taken so long; it needn't have. I think it's quite interesting actually when you consider the time it takes for the Government to put through a piece of legislation like this. It has some meaningful benefits for those that are impacted yet on the other hand they're prepared to rush through with urgency without proper consultation or any meaningful consultation other pieces of legislation that have less beneficial outcomes for Kiwis. It's a bit of I guess an indictment on this Government because we've seen this a number of times sadly.But this particular piece of legislation is something that we've supported. We've been trying to make some improvements to it throughout the select committee process initially and coming right through now to its final reading here in the House. Unfortunately we do see too many instances of builders or tradies being caught out when a lead contractor or some other entity that they are working as a subcontractor who ends up defaulting or going into liquidation or insolvency or whatever it may be and the issue is of course that those at the bottom of the chain often end up missing out. Sadly I've seen that in my own electorate of the Waikato a strong thriving growing electorate. It could be doing better if it had a National Government but nevertheless it's doing OK. With a number of builders there we've had some challenges. You always see these sorts of things but no one goes into business expecting to fail or to have their business not work out but unfortunately these things can happen. So it is critical that we have a clearer process around the retention money aspect and the flow-through of that money for contracts or services delivered projects delivered by those subcontractors across what can often be quite complex and multifaceted contracts or construction projects over a long period of time and so it is important to ring-fence some of that from the perspective of helping to give some certainty to those further down the chain. So requiring the retention money to be held in trust is not necessarily a new aspect. What this bill is really achieving is tightening up the understanding of how that process works ensuring better accountability and monitoring of those funds so that they can't simply be held in the general bank accounts of party A—or the lead contractor—for example but must instead be held on trust in a separate account noted as such specifically for the purpose of retention money making it quite clear that that is the requirement because what we had seen previously although there a requirement to keep the money on trust for the subcontractor was that it could be and was in some instances part of general cash flow or indeed in some cases part of work in progress or assets or whatever it may have been. It didn't create the distinction and when the lead contractor or party A in that party A - party B arrangement then went insolvent we saw the cash not being available for party B the subcontractor. So obviously they get caught out and that can impact their businesses. In many cases we saw the subcontracting businesses failing as a result of being unable to obtain the funds they were entitled to having completed the work on behalf of party A but simply not receiving the proceeds for that.So those sorts of things needed to be ironed out. The intent of the previous legislation was good but unfortunately it just wasn't quite tight enough to ensure that money was being followed through and properly accounted for. So this gives a little bit more confidence I would suggest to the subcontractors or party B doing the work for the lead contractor or party A. It gives them a bit more confidence that they can see the flow of funds. It has to be regularly reported to them so that they can have confidence because these contracts can be quite long. They can extend over significant periods of time and so being able to see on a regular basis a quarterly basis at least that those funds are still held on trust still set aside and retained for the purpose of paying once their contract or their work is complete will help to give a little bit more confidence.We still have some issues though around examples where aside from the retention aspect a lead contractor has perhaps gone insolvent and the tools or assets of the subcontractor are still on site on that location. So there are still some challenges to be ironed out in my view around giving greater confidence to those subcontractors that they can access their tools and any assets they may have bought for that project if the lead contractor is failing or there's an insolvency issue or whatever it is with whomever they're contracted to directly and they should then be able to of course carry on their own business. We've seen examples in the media and members may be aware of that where there have been situations where that hasn't been able to happen and so the subcontractor has been unable to access the products they might have bought for that job and obviously with that project not continuing they want to limit their exposure as much as possible and get those assets back and they haven't been able to but also in some extreme instances they haven't even been able to access the tools they had on the job which then means they can't take those tools to do work elsewhere whilst that unfortunate situation is being worked through. So that is an area that I'd like to see a stronger focus on in order to give a bit more confidence. Of course you can look at going down routes with the Personal Property Securities Register (PPSR) but that's not what most tradies get into business for. They get into business because they're competent in carrying out the function delivering the practical work of their trade rather than looking at the banking or security arrangements that they might consider in terms of providing themselves adequate protection. It gets a little complex if you start going there the PMSI route—purchase money security interest—or the PPSR. It's all a little beyond what most tradies would be wanting to put their business through in terms of a productive consideration.But I think what we've achieved here under the Construction Contracts (Retention Money) Amendment Bill is a reasonable step. We had a good range of submissions. There were some concerns around exactly how that would flow for example with the third parties maybe being able to be involved in that acting on behalf of party A holding that retention of funds and managing that process providing adequate reporting through party B and then of course an independent third party potentially giving more confidence to party B as well. Ultimately we have seen an increasing level of professionalisation I would suggest in the industry around requiring this sort of reporting. To an extent that's good but there's also a risk as we have seen in a lot of areas that we end up with more and more compliance and more and more red tape that makes it harder for people to get on and do business. So we have to minimise that wherever possible whilst at the same time getting the balance around giving some of those subcontractors a bit more confidence that they will indeed see that retention money flowing through at the completion of the contract assuming of course that the standard of work they have delivered is as agreed and that there are no quality issues discovered or I guess objected to by party A or the lead contractor in the contract as it may be from case to case.So the quality aspect aside this is really focusing on ensuring that those people out there doing the hard work at a time in the New Zealand economy when we desperately need more and more workers can have a bit more confidence to get on and do the hard yards. So on that basis we're happy to support this bill. As I say there are still a few extra steps that need to be taken to give a little bit more confidence around those assets held by party B or subcontractor on a particular construction site. But aside from that it's a reasonable step. We were delighted to be able to participate in that and I look forward to hopefully seeing some more work from the new Minister to try and tidy that up a bit more in what is an important part of our economy. Thank you Mr Speaker.