SpeechHon DAVID BENNETT (National): Thank you Mr Speaker. Thank you for the opportunity to speak on the Construction Contracts (Retention Money) Amendment Bill second reading. We all know that this is an area that does come to the fore in a time of economic decline and when companies that have invested heavily or have been led by certain market conditions to continue to progress their businesses very strongly—and no problem in them doing that; that's meeting market conditions and such like—there often comes a day of reckoning and the construction industry the history has shown that that does happen like in many other businesses.This bill is an attempt to deliver some certainty around that stage should a business unfortunately ever get in that position and so we are supporting the bill because we do need to see an increase in how we can help out any of the organisations that may be caught up in such an event and everybody involved whether the building company or the subcontractors all want to get a satisfactory resolution of the issue.I just think that in general terms we also need to look at this bill in the context of what's going on here in New Zealand at the moment. Traditionally when there is an inflationary spike reserve banks take the approach of increasing interest rates to curb that inflation. That's the normal process. The New Zealand reserve bank when they came to our caucus a few months ago declined to take that approach. They said that this was a different form of inflation and that they didn't need to do that. Those were their basic exact words and then months later we see them hiking inflation constantly. So we have gone back to the traditional form of dealing with the situation of inflation and that's to put interest rates up. And the whole reason you put interest rates up—not you Mr Speaker but the whole reason that interest rates are put up is to reduce the demand in the economy. That's the whole point of it. And that then means that we have a surplus of supply. Construction is often an industry that gets caught up in that point in time and we go to the opposite. We actually go to a position where people aren't engaging construction companies to do work. They're actually saying No we don't need you to do that thing that we could have done in the next six to 12 months. Hey we might put off building that new building." That's effectively what's going to happen in New Zealand. It's going to be a hard landing because the thing is we haven't gone up in little incremental interest rate rises over the last few months; it's been a huge increase. The quantum of that increase has never been seen before in the generation of many people in this House. The impact of that will be a hard landing. There's no other way you can look at it. To have the Government say that it's going to be all fine and next year interest rates will level out we'll still have low unemployment and things will be fine—it's a dream. It's an absolute dream. The reality is that when you put interest rates up that hard somebody is going to have to say no to a proposition. That's the effect of putting interest rates up and who's going to be the one caught out? It's going to be the building and construction industry. They're the ones that are going to get caught. They're the ones that will be out there working this out now. They're not silly; they've seen it before. They're not listening to the Government rhetoric. They know that they are at most risk. What does that mean for New Zealanders? It means we lose that capability to actually build things when we need to review—when we come out of that point of time when we need construction to be a growth angle for the New Zealand economy the people aren't there. They've gone to Australia. The capital is not there. Nobody's willing to risk it. And the business owners go "Well hey I've been burned. I'm only going to do a certain amount of growth in the next time when that growth cycle comes along." And we're slower. That means that New Zealand always takes longer to come out of a recession. That is the cycle that we are going to see. This bill actually will be very important. Unfortunately we don't want it to ever be used. The reality is that some of these things will become more important. But the real thing this Government should be doing today instead of doing bills like this which are just ambulances at bottom of the cliff is actually looking at its spending and saying "We're spending too much. We are creating more inflation than we need to." They should actually be genuine about trying to save businesses from going into the situation where they need this bill. They should actually be prudent in their economic management so that we don't have to have the excessive hike in interest rates; we don't have to have the excessive demand that has now built up that stops; and that we don't have to have that unemployment where we don't have to have those businesses saying no and we don't have to have that construction industry staying down longer than it needs to and New Zealand takes a harder longer recovery. That is the history of economics. The Government will not accept that for one moment and they'll be telling their members "Don't worry about this. Don't worry about that speech. We'll be fine. You'll be at election time and unemployment will still be low. Interest rates will be coming off their edge." They're dreaming. I'll tell you what's going to happen in a year's time. Interest rates might come off the edge inflation might but unemployment's going to go up. There's going to be people losing jobs and it's going to be the very young people that have been told to get a trade to go into this career to get in there. They're the ones that are going to lose their job. It's not going to be these guys in Wellington sitting in their offices. They're still going to get paid by the Government. It's the hard-working young men and women that have gone into the industries that actually build a country like the construction industry. They're the ones who are going to get hurt and they're ones who are going to bugger off because they'll say "We've had enough of this. We don't want a country that can't manage itself." that can't manage the conditions so that they can actually get ahead. That's what will happen. And Labour members will lose the election on the basis of that because the people see that the building companies see that. They've been through it; they know that's what's going to happen. So if Labour seriously wants to do something about this area get rid of that Budget take a couple of billion dollars of crap spending out of it and actually do something to stop the inflationary aspect stop giving money away for nothing just to create inflation and look at some fundamental things out there. How do you actually make it so that the construction industry doesn't have to go through these troughs and peaks? How do we actually give them some long-term construction contracts in the next couple of years like building some roads that actually means that there's actually some work for people out there in the recession that's coming up? There is a recession coming. There is no way of avoiding it when you put interest rates up that high that quickly. It is the reason you have a recession because you've done that for that reason to cool the market. This is an opportunity for New Zealand in the next year to actually look at how we deal with that situation that's coming. We can be blind hide from it and expect an election just to cover it like the Labour Party is. Well you can actually go out there and look at some fundamental things that actually grow business—providing infrastructure providing that tax incentive for people to get ahead—and let people employ people. Don't be afraid of having the private sector do well and actually make sure that we have a robust economy going for the dark days that have not been created from overseas but we have created ourselves. This is created from our own spending. OK it's the environment we all live in. But it's the choice you have of how we react to that environment. Do you spend more put fire on the flames build it up and then have to deal with it; or do you actually go "Well hey this is coming in a year's time. Let's make sure those kids that have made an investment in our construction industry aren't the ones on the pile and aren't the ones that have to leave."? So let's get a Labour Government that actually looks for the real issue and looks for solutions in that and not one that's feathering its own nest trying to just ease through to an election year and hope it'll get through an election and do a deal with the Greens. That's exactly what's happening in New Zealand at the moment. This bill—we'll support it. We don't want to have it happen to any business but there's a better way out there and that's prudent economic management that should be done now and not in two years' time."