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

 

Also, Loan Interest: Productivity Commission On Tertiary Education

Key recommendations include better quality control; making it easier for students to transfer between courses; abolishing University Entrance; enabling tertiary institutions to own and control their assets; making it easier for new providers to enter the system; and facilitating more and faster innovation by tertiary education providers... More>>

ALSO:

Higher Payments: Wellington Regional Council Becomes A Living Wage Employer

Councillor Sue Kedgley said she was delighted that the Wellington Regional Council unanimously adopted her motion to become a Living Wage employer, making it the first regional council in New Zealand to do so. More>>

ALSO:

Scoop Images:
Dame Patsy Reddy Sworn In As Governor-General

This morning Dame Patsy Reddy was sworn in as the New Zealand Realm’s 21st Governor-General. The ceremony began with a pōwhiri to welcome Dame Patsy and her husband Sir David Gascoigne to Parliament. More>>

ALSO:

Ruataniwha: DOC, Hawke's Bay Council Developer Take Supreme Court Appeal

The Department of Conservation and Hawke's Bay Regional Investment Company (HBRIC) are appealing to the Supreme Court over a conservation land swap which the Court of Appeal halted. More>>

ALSO:

With NZ's Marama Davidson: Women’s Flotilla Leaves Sicily – Heading For Gaza

Women representing 13 countries spanning five continents began their journey yesterday on Zaytouna-Oliva to the shores of Gaza, which has been under blockade since 2007. On board are a Nobel Peace Laureate, three parliamentarians, a decorated US diplomat, journalists, an Olympic athlete, and a physician. A list of the women with their background can be found here. More>>

Gordon Campbell: On The Key Style Of Crisis Management

At Monday’s post Cabinet press conference Key was in his finest wide- eyed “Problem? What problem?” mode. No, there wasn’t really a problem that top MPI officials had been at odds with each other over the meaning of the fisheries policy and how that policy should be pursued... More>>

ALSO:

Mt Roskill: Greens Will Not Stand In Likely Post-Goff By-Election

“The Green Party’s priority is changing the Government in 2017, and as part of that we’ve decided that we won’t stand a candidate in the probable Mt Roskill by-election... This decision shows the Memorandum of Understanding between Labour and the Green Party is working." More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news