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

 

Parliament Today:

Werewolf: The Defence Pretence

Last year, the world began spending more money on weapons again, for the first time since 2011... New Zealand belongs to a region – Asia and Oceania – where military spending rose sharply in 2015, by 5.4 per cent. More>>

ALSO:

Gordon Campbell: On Not Crying Foul, Argentina

So a couple of guys found to be criminally liable of environmental pollution in Argentina lodge an application with the Overseas Investment Office… in order to buy some prime New Zealand rural land. Seems that their factory back home had carelessly and/or intentionally discharged toxic waste into the Lujan river. Bummer... More>>

ALSO:

Urban & Rural: $303m To Merge And Modernise New Zealand’s Fire Services

Internal Affairs Minister Peter Dunne today announced funding of $303 million over five years to combine urban and rural fire services into one organisation from mid-2017. More>>

ALSO:

High Trust Regime: What Did The PM Tell His Lawyer About Foreign Trusts?

The Government stopped the IRD from reviewing New Zealand foreign trusts shortly after the Prime Minister’s lawyer wrote to the Revenue Minister claiming John Key had promised him the regime would not be changed. More>>

ALSO:

Road Crime: Wicked Campers Vans Classified As Objectionable

The definition of publication includes any "thing that has printed or impressed upon it, or otherwise shown upon it, 1 or more (or a combination of 1 or more) images, representations, signs, statements, or words", The Classification Office has previously classified such 'things' as billboards, t-shirts, and even a drink can. This is the first time the Classification Office has classified a vehicle. More>>

ALSO:

'When New' Repairs: Landmark EQC Settlement

The Earthquake Commission has cut a deal with 98 Canterbury homeowners that affirms the government entity's responsibility to repair earthquake-damaged property to a 'when new' state, as well as covering repairs for undamaged parts of a property and clarifying its position on cash settlement calculations. More>>

ALSO:

Gordon Campbell: On Kiwirail’s Latest Stint In The Dogbox

The denigration of Kiwirail continues. The latest review (based on a 2014 assessment) of the options facing the company have enabled Kiwirail to be hung out to dry once again as a liability and burden on the taxpayer. More>>

ALSO:

Royal Society Report: Good Opportunities To Act Now On Climate Change

There are many actions New Zealand can and should take now to reduce the threat of climate change and transition to a low-carbon economy, a report released today by the Royal Society of New Zealand finds... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news