Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Labour to protect subbies in construction failures

Clayton Cosgrove
Commerce Spokesperson

17 April 2014

Labour to protect subbies in construction failures

Labour’s Commerce spokesperson Clayton Cosgrove will introduce a supplementary order paper to the Construction Contracts Amendment Bill to ensure subcontractors are paid for the work they’ve done when construction companies collapse.

“As we’ve seen with the likes of Mainzeal, the biggest losers in construction company failures are subcontractors,” says Clayton Cosgrove.

“The hundreds of subbies affected are at the back of the creditor queue and are the last cab off the rank when it comes to payments.

“Last year Labour said it would work with industry to develop a solution to protect the payments that subbies are rightfully owed.

“As a result of consultation, we are proposing a simple fix to protect subcontractors working on big commercial projects as the major problems with collapses tend to exist within the commercial sector. This policy will not apply to the residential sector.

“The proposal will require developers to set up an independent trust to receive progress payments that would normally go directly to the lead contractor. In the event of a lead contractor’s collapse the money in that trust will be ringfenced from receivers to ensure subbies get paid.

“The trust will be a secure holding station and payments will pass through it. It will not in any way interfere with contractual obligations and will not interfere with payment timing.

“In practice this means money will flow from the developer through the trust to be paid out to subcontractors and the lead contractor under whatever contractual arrangements are negotiated by them. In the event of a lead contractor’s collapse monies held within the trust will be ringfenced from the receiver and be paid out to subcontractors for work they have done.

“These arrangements are now in place in New South Wales at minimal cost to the industry. We will work with business to fine-tune any regulations as needed.

“If the developer does not want to establish a trust they can utilise the facilities of the Public Trust Office rather than setting up their own,” says Clayton Cosgrove.

The SOP is available here.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Mt Albert Aftermath

Personality politics – Jacinda is great! Jacinda is not so great! – have dominated the coverage of the Labour Party’s fortunes this week...

Still, this is a relatively new and welcome problem for the centre-left. Labour has seemed so bereft of crossover talent for so long that it seems almost embarrassed by this latest development. More>>

 

State Sector: Government To Apply Pay Equity Principles

Legal changes are not yet in effect but the State Services Commission, on behalf of the government, and the Council of Trade Unions on behalf of unions, have agreed to apply the principles to current pay equity claims. More>>

ALSO:

Throwing Stoners: English Blames Failed Drug Tests For Unemployment

Bill English’s diversionary tactic of condemning of a generation of Kiwi workers as a bunch of drug-takers cannot hide his government’s failure to create opportunities for decent work, says Labour’s Employment spokesperson Grant Robertson. More>>

ALSO:

Conservation: Central Govt Takes Over 1080 Regulation

“This new approach standardises the rules for using such poisons rather than the current system of different rules in different regions. This change will reduce costs and delays for operators, ensure consistent conditions throughout the country, reduce mistakes from misunderstanding rule differences and allow best practice approaches to be used." More>>

ALSO:

Election Entertainments: ACT Has Prison Plan, Greens Have Water Bill

Green Party launches Member’s Bill to protect our freshwater The Green Party has today launched a member’s bill that will keep water from underground sources, called aquifers, safe from pollution and contamination. More>>

ALSO:

2040 Target And Lower Standards: “Swimmable” Rivers Five Times More Likely To Make You Sick

Forest & Bird has condemned the government’s new water quality standards, warning New Zealanders that they lock in current levels of water pollution and allow for a 5-fold increase in the chance of getting sick from swimming in a river. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news