van de Molen Tim; Woods MeganTIM VAN DE MOLEN (National—Waikato): Thank you Mr Chair. Look I'd just like to come back to the example I gave at the start and I'm just interested in testing whether it's the Minister's understanding that there is the risk here of seeing significant cash flow amounts tied up through the trust process that is effectively one of the two options here for retention money—either being held in trust or a complying instrument being sought. So I'm interested in whether that example as I explained it is the Minister's understanding too where you could end up with potentially more than double the amount of retentions being held that should be held in an overall contract and the implications of that because when I was looking at the regulatory impact assessment I didn't see any information pertaining to potential cash flow costs to the industry off the back of possibly having $3.5 billion dollars' worth of constrained cash flow and the impact that might have on those businesses. Secondly alongside that I'm also interested in whether the Minister can shed some light on the potential costs of these complying instruments—whether there is any indicative range that she's sought or obtained from insurers or banks to give some insight into the additional cost we are imposing on these participants within the building industry. Obviously there is a cost and we accept that to try and better secure those retention funds—there will be a cost. I totally am on board with understanding that but I'm interested in whether she can give an indication of what those costs might look like because that could influence a head contractor's decision to either potentially look at retaining money on trust in the separate bank account as proposed and all the different requirements around that or taking the alternate option of a complying instrument. So some insight into those costs and also the impact or the example I gave around whether that cash flow could be tied up through numerous participants in having these multiple party A party B agreements where you end up with additional retentions.Hon Dr MEGAN WOODS (Minister for Building and Construction): I think we've dealt with the multi-party question several times. What I will point the member to—and I think that this would be well understood from the examination that I know that it did receive at select committee—is that holding retention money is voluntary here. So I think that's one of the critical things to understand. There is nothing prescribed in the bill that has a set amount to it—that is going to be for the parties to determine themselves when they're entering into an agreement. So I think that is one of the things that has to be understood about this legislation. The other that I would point to—I understand the anxiety that members have around unnecessarily tying up working capital and I think it is a good question to be asked but we must remember and go back to the principle of why it is that we are passing this legislation and that is because there have been times when head contractors have used retention moneys which should have been protected from their everyday business from their working capital and it is their subcontractors that have paid the price for that and that is the whole purpose of the legislation.TIM VAN DE MOLEN (National—Waikato): Thank you Mr Chair. Yes look I absolutely accept that and that's the intent here of what we are trying to achieve. But by locking up more than double the amount of retention surely that is an unintended consequence and that's where I want some clarity. The Minister hasn't addressed that yet and I would like it if she could give some insight into whether or not that is also her understanding of it. I think it's also important to understand that it is very normal practice in the construction sector to retain money through these contracts and the typical level is 10 percent. So therefore I'm interested in some insight around the potential cost of that because I think it's a bit flippant to say that Oh well it's entirely up to them whether they have retentions." Yes to an extent that is the case but it is standard practice that retentions are held—that's why we're passing this legislation—because it is normal business for these retentions to occur and so on that basis there must be some insight into their potential cost imposition on those businesses.Hon Dr MEGAN WOODS (Minister for Building and Construction): I will answer this one more time but I think we are at the risk of repeating ourselves here. This is a voluntary system. Nobody has to enter into it. There is no prescribed amount; it is up to parties to determine how much is going to be put aside if it is going to be put aside."