Bond Ria: Construction Contracts Amendment Bill — In CommitteeText is incorporated into the Bound VolumeBond Ria: Construction Contracts Amendment Bill — In Committee[Sitting date: 22 September 2015. Volume:709;Page:6843. Text is incorporated into the Bound Volume.]RIA BOND (NZ First): I am pleased to rise on behalf of New Zealand First and take this call on the Construction Contracts Amendment Bill. I have trawled through Hansard and I have read the Supplementary Order Papers. This was in order for me to completely understand that the intentions of the bill are clear what it is hoping to achieve and also what effect the Supplementary Order Papers may have in improving this bill. I found the commentary from the Commerce Committee very informative—in particular the commentary regarding retentions; and this has been a real concern. I would like to quote the commentary: “We were concerned to hear that many head contractors may be misusing retentions as working capital delaying payment or holding retention amounts disproportionate to the contract prices. This behaviour undermines the sector’s growth and productivity. While it is outside the scope of this bill we are encouraged to hear the Ministry of Business Innovation and Employment is giving priority to addressing these issues. We urge the ministry to continue to work with industry players and look forward to policy solutions in legislation in early 2014.”Then I read the debate pack provided by the Parliamentary Library and in the legal commentary—which again I will quote—it says: “It is long-established practice in New Zealand and internationally for retentions to be held under construction contracts to ensure that if there are defective works the head contractor or principal is able to recover the cost of fixing these defects. In the wake of the Mainzeal collapse where subcontractor’s retentions were unsecured debts in Mainzeal’s liquidation amendments were seen as necessary to protect payment of retentions to subcontractors and head contractors.”What these two commentaries tell me is that the biggest losers here were in fact the subbies—the plasterers the painters the bricklayers the drainlayers the plumbers and the electricians. Where has their protection been these past 2 years? It is the subbies who have been shafted and left out of pocket all because developers and contractors withheld the retention money and moved it to other projects. This placed even further risk on that money because they actually turned round and used it as working capital. As I mentioned earlier the millions of dollars lost in the collapse of Mainzeal and the subcontractors having no legal protection whatsoever was of real concern. We have seen with the Canterbury rebuild that homeowners have had two options available to them: one to go through the Earthquake Commission and use the Government contractors or two to opt out do their own research and select a private contractor or company.Another issue that this bill does not address is the substandard work that has been carried out that has in fact left some homeowners unable to seek a remedy from the contractors or companies because they have disappeared. They have been struck off the New Zealand Companies Register but then the next day like a pop-up shop they come along as a new company with a new name and open for business subjecting more homeowners to be left with no apparent way to take possible legal action because not only the contractorsbut also the companies have avoided responsibility.This bill has taken 2 years since its first reading in June 2013 to get to the Committee stage. My question to the Minister is: why has it taken so long? Everyone knows that for small to medium sized businesses time is money—time is money. Perhaps spending more time on a real issue such as this bill and not changing our flag would have—The CHAIRPERSON (Lindsay Tisch): Order! That is not part of the bill.RIA BOND: Sorry Mr Chair. I am pleased to see that the Minister has sought further advice and has listened to the concerns raised earlier this year by members of the House. New Zealand First is pleased with Supplementary Order Paper 106 introduced to amend the Construction Contracts Amendment Bill. It replaces Supplementary Order Paper 52. This will make provisions in the Construction Contracts Act 2002 the principal Act for retentions—that is money withheld by one party to a construction contract from money payable to another party to the contract as security for the performance of obligations under the contract. New Zealand First supports this bill.