Chen NaisiNAISI CHEN (Labour): This bill is for small businesses. It's to support the 97 percent of businesses in New Zealand who are hiring less than 20 employees. This bill is for our builders in our country. This bill is for the plumbers in our country. This bill is for the electricians in our country and all the other tradies in this country because not only are they businesses when we talk about their finances falling over and when they're not paid properly we're talking about families here. We're talking about people whose livelihoods depend on them being paid by a contractor. So this bill is to ensure the safety and the security of small businesses here in New Zealand but also to make sure that our country keeps building houses.I'm proud to be part of a Government and a party that has supported record numbers of consents being issued in this country. I'm proud to work alongside Ministers like the Hon Poto Williams who have actually reached consensus on this bill to make sure that industry supports this bill and we've actually listened to the real voices of industry when we were drafting this bill. That's why we can just slightly shorten the select committee process because we know that this industry the construction industry has already supported the bill.We've had people in the legal profession commending this bill saying that this is the right thing to do to close the loophole to clarify the legislation so that we can actually protect the most vulnerable and the most hard-working part of our construction sector—the small businesses our tradies and all of our sub-contractors—so that they can get the work done so that we can get on with actually solving this housing crisis.We need to build more houses and we are building more houses. Right now Statistics New Zealand is showing that there's a record of 41000 new homes—41000 new homes that have been consented to. That's a huge amount of houses. So we need to make sure that all of our contractors in New Zealand feel confident in the system so that they can work together with us with Government with all of the contractors together. We need to build more houses. So this bill actually helps to boost that level of confidence to attract more people into the trades. We've already attracted a record number of people into the fees-free training. We have now more carpenters we have now more plumbers in our workforce here in New Zealand to make sure that we work together to solve this housing crisis. This bill also gives them the confidence that they will be paid on time they will be paid for their work done in the housing construction sector and if they are a young person they will know that they will find security in their finances should they decide—and I hope that they will—to come and join the construction sector. We really really need them right now.We know that right now the construction workforce needs more people and we've seen a further 4000 people join it. And so today on this bill as we commend it into first reading we know that the young people out there the people who are looking at a career change will know that this construction sector is a well-regulated sector that they will find security in their finances and they will have a rewarding career getting the houses built getting the infrastructure that this country needs to keep moving on.It's not every day that I read something from Buddle Findlay to see that are absolutely 100 percent without reservation in support of a bill to the House. Usually we see them give different opinions. But today we see here on 1 June 2021 the Construction Contracts (Retention Money) Amendment Bill was introduced into Parliament for consideration and they've said that this is very very good in terms of actually supporting the construction sector especially in terms of the case we've mentioned on both sides of the House in terms of Bennett v Ebert Construction. We know that at that current moment when that case was brought to the courts the actual 2002 legislation didn't cover and was actually murky on—well the courts ended up ruling that it actually did not cover the fact and did not give instructions to construction industries to actually hold retentions on trust. So right now we need to legislate for that now to actually right that wrong.It's really interesting to see also how there are lots and lots of instances where we know that in the construction sector there will be companies that fall over that end up not paying for the smaller jobs that they have subcontracted to. So we need to make sure that we give them the legislative authority to set retention aside but at the same time we need to remind them what the best practice is. So once again we're holding up strong the bottom line of the industry to make sure that they actually do what's right. One of those things is to set the retention aside from other money as security and that can be held on a trust account. That needs separate legislation as well so that we can make sure that that money's kept aside so if in the very unfortunate event that the contracting company does fall over that these subcontractors are still being kept safe.Also this separate bank account right now we need to tell all of the board members as my colleague Greg O'Connor has mentioned as well that this is one of their duties as well as directors. We know that when we take on directorships of companies especially large construction companies we have to make sure we set the rules very very clearly. We need to set the standard high the bar high enough so that the whole entire ecology of our construction sector is maintained to a healthy standard. So to them their responsibility is to make sure that this separate bank account gets set up and the money gets retained as well.Also the payer's record-keeping obligations is a really important part as well where the payer must keep a proper accounting record of all the retentions held and that is to make sure that the money doesn't get mixed. It's to make sure that the money is there with clear accounting practices which should be a given in any well-governed and well-managed company anyway. But once again this bill makes sure that the bottom line is strengthened as well. Also where we know that in the unfortunate event of a receivership or a liquidation as well this bill with the retention held out separately actually makes life a lot easier. We know that often going into liquidation many lawyers many advisers and also accountants and liquidators all come into this but to make sure that there is a separate account for that retention makes the money going to the smaller businesses a lot faster because we know that cash flow is really important for small businesses. They don't have a lot of liquidity to wait for years and years and years until the lawyer's gone to court until there's a proper ruling by a judge. We know that these small businesses need the money here and now. They need to make sure they pay their employees. They need to make sure they put food on the table for their children.So it's very very important that this is also a logistically easier task as well for all of the larger companies so that in the unfortunate and hopefully unlikely event that they do fall over there is a liquidation or receivership process happening that this separate retention is in a separate account and can be paid out to the smaller businesses as soon as they can. I also note that there are other questions that we were asked in terms of a lack of enforcement mechanism or sanctions. We note and this once again goes back for company directors that they will be liable for a fine up to $50000 should they not follow this proposed bill.So could I use this platform just to remind all of the company directors wanting to make a submission on the bill but too to remember that should this bill pass hopefully in the next couple of months they are reminded that they have this extra responsibility—and also for firms it's another $200000 fine as well. This places a very very strong enforcement mechanism to make sure that these small businesses—our contractors our plumbers our builders—are being looked after. On that note I commend this bill to the House.