The Green Party is welcoming new financial protections for subcontractors as a win for the building industry after years of struggle following the collapse of Mainzeal in early 2013. Today, Parliament will pass the Construction Contracts Amendment Bill.
“I’m really pleased to see the Government has finally listened to the building industry and put in place new protections for subcontractors, because for a long time it didn’t look likely,” Green Party MP Julie Anne Genter said.
“The Green Party has been calling for a solution similar to the one the Government is now putting in place to hold retention moneys in trust.*
“This is a win for subcontractors and the industry as a whole, who can move forward with certainty knowing that financial risks will be better managed, like they have been asking for since the reviews of industry legislation began in 2009.
“Subbies were being left out of pocket following events like the collapse of Mainzeal Property and Construction.
“It’s great to see the Government finally taking action, albeit years after the Mainzeal collapse which raised the profile of the unfair ways subcontractors are often treated,” said Ms Genter.
*Retention moneys are the portion of the contract price that are withheld from the subcontractor by the principal contractor and not paid until after the construction work is checked and found to be free of defects. Some principal contractors had been using retentions to fund other projects, rather than holding them aside for their purpose, leading to late or even non-payment to subcontractors. The new legislation will see retentions held in trust.
