Regulatory Systems (Building and Housing) Amendment Bill, Regulatory Systems (Commercial Matters) Amendment Bill, Regulatory Systems (Workplace Relations) Amendment Bill

I move, That the Regulatory Systems (Building and Housing) Amendment Bill, the Regulatory Systems (Commercial Matters) Amendment Bill, and the Regulatory Systems (Workplace Relations) Amendment Bill be now read a second time. The three regulatory systems amendment bills are omnibus bills that contain small regulatory amendments to legislation administered by the Ministry of Business, Innovation and Employment.

The Government is committed to maintaining and repairing existing legislation to respond to changing environments and citizen needs. Regulation, when implemented well, underpins markets, protects the rights and safety of citizens and their property, and assists the efficient and equitable delivery of goods and services. Regulation is an important tool for preserving and advancing the public interest.

I would now like to comment on a few main points raised in the reports from the three select committees. The Regulatory Systems (Building and Housing) Amendment Bill—in relation to this, of course, it is in two parts. Part 1 proposes amendments to the Building Act 2004 that are largely targeted at fixing minor drafting errors. Part 2 proposes amendments to the Unit Titles Act 2010 that clarify and reduce unnecessary compliance burdens. For example, clause 20 of the bill deals with reassessing ownership in utility interests in unit plans. In clarifying reassessment dates, the Local Government and Environment Committee recommends that clause 20(4) be amended to make it as clear as possible when the reassessment date takes effect.

The committee also noted that the Ministry of Business, Innovation and Employment is currently working on a wider review of the Unit Titles Act and that many of those submissions received recommended changes outside the scope of the bill. I want to commend the committee’s decision to ask officials to invite submitters to submit on the ministry’s wider review of the Unit Titles Act.

We then come to the Regulatory Systems (Workplace Relations) Amendment Bill, which is also in two parts. The first part proposes amendments to the Employment Relations Act 2000, while the second part proposes amendments to the Parental Leave and Employment Protection Act 1987. The Transport and Industrial Relations Committee recommends amendments to the Employment Relations Act 2000. The amendments correct two incorrect cross-references to the personal grievance provisions that arose when certain amendments to the Employment Relations Act 2000 were enacted in 2016. The committee also recommends amendments to the Parental Leave and Employment Protection Act 1987 that clarify and improve certainty of the Act in relation to pre-term and parental leave payments.

In the third bill, the Regulatory Systems (Commercial Matters) Amendment Bill, amendments are being made to 16 Acts and the bill is in four parts. Part 1 relates to commerce and consumer affairs matters and proposes numerous changes to 12 Acts that relate to corporate governance, insolvency, financial markets, competition, and consumer law. Part 2 relates to communication matters and makes technical changes to the Postal Services Act 1998. Part 3 is concerned with energy and resources and makes minor changes to the Energy Efficiency and Conservation Act 2000 and the Gas Act 1992. Finally, Part 4 concerns building and housing matters, and it makes technical changes to the Construction Contracts Act 2002.

The Commerce Committee report has focused on the main recommendations to four Acts. They are the Companies Act 1993, the Financial Markets Conduct Act 2013, the Takeovers Act 1993, and the Construction Contracts Act 2002. I will highlight two of the committee’s recommendations. Firstly, under the Companies Act 1993, the committee recommends that the application of audit requirements allows large overseas companies with small New Zealand businesses or group businesses not to be subject to an audit requirement if there is no audit requirement in the home country. This amendment would remove excessive compliance costs and promote entity neutrality.

Under the Construction Contracts Act 2002, the committee has noted that from 31 March 2017 the Construction Contracts Amendment Act 2015 will require retention money withheld under commercial construction contracts to be held on trust. Clause 138 of this bill clarifies that the trust obligations will only apply to contracts entered into or renewed on or after 31 March 2017. It is because of the date of the provisions that the three omnibus bills must be enacted before that date.

The second change to the Construction Contracts Act recommended by the committee is providing payers with two options if they choose to withhold retention money. The options are the default option of holding retention money on trust, in the form of cash or other liquid assets readily converted into cash, as is currently the case under the Construction Contracts Amendment Act, or obtaining an instrument, such as an insurance or payment bond, to provide third-party protection of retention money.

Can I just thank very much the three select committees for their consideration of the bills. They have done so in a timely manner, which is important here. The committees have considered changes to 20 Acts and reflected on submissions covering technical and detailed information. I commend the three committees, as I say, for reporting back early enough to ensure that the amendments to the Construction Contracts Act are made before the new retention money scheme that was enacted in 2015 comes into force on, as I have said, 31 March this year. I commend these three bills to the House.

Let me say at the outset that the Labour Opposition supports all three of these regulatory systems amendment bills. These are bills that are entirely technical in nature and are designed to tidy up legislation and to ensure that the legislation that they are amending works efficiently and effectively and, in most cases, as it was originally intended to operate.

I will address the Regulatory Systems (Workplace Relations) Amendment Bill, which was the bill considered by the Transport and Industrial Relations Committee. This bill amends both the Employment Relations Act 2000 and the Parental Leave and Employment Protection Act 1987 to clarify certain provisions. The bill is so technical in its nature that we received just one submission at the select committee—that being a submission from the Law Commission, which predominantly related to drafting. So there were no questions raised by submitters about any of the policy intentions of this bill.

However, what is probably most interesting for the House is that, in their work on this bill, our officials, whom we must thank for the fine work that they did on this legislation, identified some additional areas where the Employment Relations Act and the Parental Leave and Employment Protection Act could be further tidied up. I want to particularly address the changes that were identified by the officials to sections 103(1) and 67B(3) of the Employment Relations Act. These arose as a result of amendments to the Employment Relations Act made by the Employment Standards Legislation Act.

The Employment Standards Legislation Act added additional grounds upon which an employee dismissed under a 90-day trial period may take a personal grievance. The changes suggested by officials and recommended by the select committee simply ensure that the new provisions under which an employee may take a personal grievance under a 90-day trial period are appropriately cross-referenced.

Due to incorrect cross-referencing, it was possible that workers dismissed under a 90-day trial period had their ability to appeal that dismissal diminished. Specifically, we are talking about three additional clauses affecting, firstly, employees who have been treated adversely for refusing to perform work, in the absence of a valid availability provision; secondly, employee’s employers failing to pay employees the compensation they are entitled to when a shift has been cancelled; and, thirdly, employee’s employers treating employees adversely for a prohibited health and safety reason that contravened section 92 of the Health and Safety at Work Act 2015.

The issue that exercised us a little at select committee was whether or not the changes proposed in this legislation ought to be made retrospectively, going back to the date on which the employment standards legislation came into force and those new grounds for taking a personal grievance came into force. I was particularly concerned about that, not because I thought there was a great risk of an employee having their ability to take a personal grievance diminished but, specifically, because we are dealing with the 90-day trial period.

I want to refer to the judgment made in the case of Smith v Stokes Valley Pharmacy Ltd in relation to the implementation of 90-day trial periods. The judgment states that sections 67A and 67B of the Employment Relations Act, which are the sections that implement 90-day trials—“Sections 67A and 67B remove longstanding employee protections and access to dispute resolution and to justice. As such, they should be interpreted strictly and not liberally because they are an exception to the general employee protective scheme of the Act as it otherwise deals with issues of disadvantage in, and dismissals from, employment.” In other words, the 90-day trial period is something of an affront to people’s natural justice. It is an affront to their ability to take a personal grievance when they have been treated unfairly in the workplace, and, therefore, must be dealt with to the very letter of the law. There must be no leeway at all.

We had some discussion at the select committee about whether we needed to apply these changes retrospectively in order to be absolutely certain that no employee dismissed under a 90-day trial period would have their right to appeal that dismissal in any way diminished. Officials assured us that because of other grounds upon which a personal grievance can be taken, specifically, the—

💬 Jonathan Young: Section 103.

Yes, what the member just said. Other provisions in the 90-day trial period sections of the Act do allow employees to take a personal grievance for unjustified dismissal. Just to be absolutely clear: in the unlikely event that the judiciary has to deal with one of these cases, it is Parliament’s intention—it was certainly the select committee’s intention—that should an employee be dismissed and should there be any suggestion that they have the right to appeal on any of those three grounds afforded to them by the amendments made by the Employment Standards Legislation Bill, it is Parliament’s intention that it would be possible for an employee to take a personal grievance on those grounds, notwithstanding the fact that we are not intending to apply this legislation retrospectively.

Beyond that, otherwise, the changes are, as I say, largely technical. Other members from the Labour Party will address other bills and other sections of this bill, but just to reiterate, the Labour Opposition supports these three bills.

I rise to support the second reading of the regulatory systems amendment bills. As chairperson of the Commerce Committee, I will be speaking very briefly on the Regulatory Systems (Commercial Matters) Amendment Bill, which the Commerce Committee worked on. Some of the major issues that we were concerned about and where the amendments fall are things like allowing trusts to set up amounts they owe against amounts owed to them in derivative contracts, thereby reducing the cost of capital and also providing powers to the Official Assignee to better the interests of creditors by widening the powers to challenge sham trusts.

There were 13 submissions and we heard three major submissions from the Registered Master Builders Association of New Zealand, the New Zealand Financial Markets Association, and the New Zealand Bankers’ Association. The key amendments to the bill that were deliberated on by the Commerce Committee were, firstly, in regard to the Companies Act to allow large overseas companies with small New Zealand business or group business not to be subject to an audit requirement if there is no audit requirement in their home countries. We also discussed the belief that the bill amendment would have benefits of removing excessive compliance costs and promoting entity neutrality.

One of the things that really took the committee’s time was in relation to the changes to the Construction Contracts Act to broaden the way in which payers can protect the retention money that they hold. They used to only hold cash but the committee recommends clarifying how payers will hold retention money on trust to allow payers the flexibility to protect the money so that it is either a default option of holding retention money on trust in the form of cash or other liquid assets that can readily be converted into cash, or that they obtain an instrument such as insurance or a payment bond to provide third-party protection of retention money. That made good sense to us. As other members and the Minister have actually said, there are a lot of technical corrections in these bills. Although the changes are small, they will make for effective and efficient regulatory systems. I commend the bills to the House.

E Te Māngai o Te Whare, tēnā koe, otirā, e ngā mema o Te Whare nei, tēnā tātou katoa. I am pleased to take a call and support the previous speakers in the second reading of the regulatory systems bills. As a member of the hardest-working select committee—the Local Government and Environment Committee—I am going to focus my contribution on the Regulatory Systems (Building and Housing) Amendment Bill. Clearly, we support it. For me, it is an oil and change-up. It is a time to look at our regulatory system, particularly around the building and housing sector, to make sure that we have a regulatory system that is fit for purpose, is updated and, like it says, is trying to reduce compliance costs.

We in Labour are supporting the bills to improve the regulation of the various pieces of legislation. I do want to acknowledge the submitters who came before the Local Government and Environment Committee and the issues they raised. I do want to touch briefly on some of them. Can I say that the Unit Titles Act was, I guess, the focus of what we at the select committee addressed, and many of the submitters came and submitted on that particular Act and made some suggestions.

I want to note that the Government, just recently, I think, has completed a wider-ranging review of the Unit Titles Act. I am hoping that maybe one of the Government members can perhaps shed some light—given the work that we have undertaken and the support we are doing in terms of this part of the legislation—on whether the review that was recently completed throws up any other anomalies that we need to consider in the passage of this legislation. Maybe it might be useful if one of the Government members could shed some light on that.

I just want to point to, again, like I said, some of the contributors to this piece of legislation. I want to particularly acknowledge the Auckland Council, which obviously supports anything to do with housing. Obviously, the housing crisis that this country is experiencing means that we need to ensure that our regulatory system does not inhibit the need for high-rise buildings. The Auckland Council submission absolutely supports the amendments in these bills, but it believes—again in its submission—that the unit titles area does not go far enough. So, again, I am just interested to hear what the wider review has thrown up in relation to Auckland Council’s submission.

We also heard submissions from the New Zealand Law Society, again supporting what the Government is trying to do here in terms of checks and balances on our regulatory systems. Again, their comment was that it did not go far enough in terms of the unit titles work, but, in all honesty, the submitters who did come were heard by the select committee. The amendments were made, and I am confident that those who submitted were well received, and where we did make changes, those changes have been presented in the legislation here today.

Changes, obviously, to the Unit Titles Act, are needed. There need to be much more broader structural ones than the bill provides for, and it addresses the body corporate operational rules, common property licences, and unit plans generally. The residential apartment sector is growing, as we all know, and we need for it to continue to grow. It is worth something like $40 billion now, and any improvements to the Unit Titles Act are most welcome for those working in there.

Sorry, I missed the point that the Auckland Council raised, and that was around staging. In its submission, it said that it believes that we also need to make sure that what we are saying in the Unit Titles Act is not contradicted in the Resource Management Act (RMA), particularly when it comes to staging. So it raised the very important point, but we do not address it, I believe, in this legislation, but it is an important point for us to remember—we cannot have conflicting bills. Under the unit titles legislation, they were allowed to put staged building, whereas in the RMA the expectation is that when building proposals go up, they need to know exactly what is going to be built. So it is an area that I think the Government should look at if we are going to encourage more buildings to go up.

Most noticeable is better protection and accountability requirements for body corporate managers, better disclosure rules for those purchasing apartments, and better rules around long-term maintenance plans. Those are both a welcome part of this particular part of the bill. The amendments to the Building Act appear non-controversial and probably could have formed part of a Statutes Amendment Bill.

I do want to acknowledge the attempt by the Government to give us a look at our regulatory system to make sure that it is fit for purpose. We are reducing compliance costs and we are making sure that the adjoining Acts, Acts that impact on this particular legislation, are not in competition, because at the end of the day it is around ensuring that our building and housing sector is fit for purpose. I do not want to go on much more, but, just again, I reiterate the support for this particular bill, and I am sure other colleagues on this side of the House will address the other bills that form this legislation. I commend this bill to the House.

As chair of the Transport and Industrial Relations Committee, I want to speak on the aspects of the Regulatory Systems (Workplace Relations) Amendment Bill that came before our committee. I want to just commend the comments that Iain Lees-Galloway made. I think he has very succinctly brought the issues to the House, and I think, as the chair of the committee and speaking from this side of the House, that it is important to reiterate some of those comments so that we do have that on the record.

As a result of the changes made to the Employment Relations Act by the Employment Standards Legislation Bill, there are two incorrect cross-references that this amendment bill now corrects. Currently, section 67B(3) of the Employment Relations Act allows employees on a trial period to make a personal grievance claim on the grounds set out in section 103. The cross-reference range unintentionally excludes three reasons that an employee may take a personal grievance claim set out in section 103, and Mr Lees-Galloway mentioned them.

One of the issues that we did raise and discuss was whether a person who might have a personal grievance in one of those three areas, because of the error in cross-reference, would have the ability to actually proceed with a claim if they felt justified in doing so. We were informed by the officials that employees who suffer any consequence as a result of the breach of the relevant sections would still be able to make a personal grievance claim on the ground of unfair disadvantage, which is in section 103 of the Employment Relations Act. As such, we consider those errors currently having little impact on the enforcement of the Act.

However, the intention of the legislation was to allow aggrieved employees to take grievances specifically for the grounds listed—those three particular areas—to ease the burden of establishing an unjustified disadvantage. So, just for the record, that is exactly the information and the advice that we received as a committee, and we adopted the recommendations presented to us through this bill on those grounds. So I am happy now to commend this bill to the House. Thank you.

I am rising to support, on behalf of the Green Party, these three bills. I want to start off with the Regulatory Systems (Commercial Matters) Amendment Bill. From our perspective, this makes some improvements in terms of tidying up previous legislation, and particularly deals with a number of key issues. The first issue is netting. We accept the case for netting that was discussed within the Commerce Committee, and we think that has the potential to reduce costs to counter-parties and it is a sound amendment to make.

Secondly, the committee looked, in particular, at the requirement for auditing on small branches of large overseas companies. Again, we looked at the equivalence in the way that branches and subsidiaries were treated. As a Green Party, we were satisfied with the explanation that this would prevent a bias towards subsidiaries and away from branches on the grounds of auditing requirements. We thought that equivalence is important, and we do not feel that there would be a significant loss of accountability by reducing the threshold for audit requirements for branches.

The third issue was, I think, a very important one. It is important to the Green Party. It is the issue of retention of money under the Construction Contracts Act. We supported the introduction of retention moneys. The effect of the changes in this amendment bill would be to allow some flexibility in the form that that retention money could be held. We were concerned that there would be a loss of integrity over the retention moneys. We had considerable dialogue, and there were some changes in the provisions under the bill. Eventually we were satisfied that the integrity of the funds would be protected so that where funds are retained, pertaining to a construction contract, those moneys would be safeguarded through credible schemes with credible institutions as issuers.

So those three points for the Green Party were perhaps the three standout important issues. We feel that many of the other issues in the Regulatory Systems (Commercial Matters) Amendment Bill would benefit small companies in particular. As I said, a number of them were changes as a result of correcting previous legislation, which is sometimes disappointing but a necessary task for us to do. Therefore, we are happy to support the commercial matters bill.

We also support the second bill—the Regulatory Systems (Building and Housing) Amendment Bill. I understand that these three bills are being taken together, but it is important for us to understand the issues in each of the three bills separately. We consider that the changes to the building and housing amendment bill are not particularly material and do register as improvements.

We have heard from previous speakers about the Regulatory Systems (Workplace Relations) Amendment Bill and we have strong support for the changes within that bill, particularly for clarifying the grounds under which an employee may take a personal grievance—we think that is important—and also the changes to the Parental Leave and Employment Protection Act. So with that, I commend these three bills for approval. The Green Party will be supporting them. Thank you.

I rise on behalf of New Zealand First to speak to this package of three omnibus bills regarding regulatory systems. The purpose of this package, as presented for first reading in October last year, is to make and progress small regulatory fixes in a timely and cost-effective way. These bills are a response to the New Zealand Productivity Commission’s report that was dated June 2014. It noted at the time that it can be difficult to find time on the parliamentary calendar for, in their words, “repairs and maintenance of existing legislation”. Not finding the time to address the raft of minor legislative changes, as identified in these three bills, means that any flow-on benefits to businesses and the wider community are not delivered as intended.

There are too many mistakes, cross-referencing errors, unintended consequences, or overreaches when legislation in the form of these three bills comes before the House. I would, however, like to commend the three separate select committees that reviewed all three of these bills. New Zealand First will continue to support these bills and the recommendations made by the Local Government and Environment Committee, the Commerce Committee, and the Transport and Industrial Relations Committee.

I would like to make one or two statements about each individual bar 2 bill on their return to the House. Firstly, with regard to the Regulatory Systems (Workplace Relations) Amendment Bill, New Zealand First is happy that employees undergoing a 90-day trial period will now be covered under the personal grievance grounds already available to other employees—for example, when compensation is not paid, when shifts have been cancelled, or when employers contravene health and safety regulations. We are also pleased to see the clarification within the bar 2 bill that the ability to recover overpaid parental leave payments applies only to paid parental leave. New Zealand First also congratulates the committee on correcting the unintended consequences for primary carers of pre-term babies. We also note the select committee’s comments on giving businesses time to prepare for these changes and giving the Ministry of Business, Innovation and Employment (MBIE) the time to communicate the required changes to employers and employees.

I turn to the Regulatory Systems (Building and Housing) Amendment Bill. Part of this bill proposes amendments to the Unit Titles Act 2010. The Local Government and Environment Committee noted that the MBIE has been consulting on a wider review of this Act, and that the changes proposed in the first draft of the bill pre-date those discussions. The committee received submissions outside of the scope of this bill, and asked the officials to invite submitters to contribute to the ministry’s review.

The committee also recommended adding a “status of examples” provision to avoid any further confusion. The Law Society advised that clause 20 is inconsistent with similar provisions in the Unit Titles Act, as this is the part where there is a wider policy issue outside the scope of the bill. The committee expressed its intention to make that clause as clear as possible and to reduce any confusion or inconsistency.

The clauses that deal with bodies corporate and extraordinary general meetings sit more appropriately as regulations, so the bar 2 bill amends those clauses as MBIE intends to provide new regulations addressing these time frames and notices for extraordinary general meetings.

I turn to the Regulatory Systems (Commercial Matters) Amendment Bill. New Zealand First is actually really heartened to finally see changes within the Construction Contracts Amendment Act (CCAA) that broaden the way retention money for subcontractors is protected. The committee proposed several changes that would make it quite clear how to apply the retention obligations. From the end of this month the Construction Contracts Amendment Act 2015 requires retention money withheld under commercial construction contracts to be held in trust. This bill must be enacted by the end of the month to ensure that these provisions are aligned and enforced at the same time. This ensures that developers and head contractors must protect retention money for the benefit of subcontractors or payees rather than using it as working capital. However, some submitters advised that it would be expensive and difficult for some payers as the CCAA requires retention money to be held in the form of cash or liquid assets.

New Zealand First supports the committee’s proposed amendments, which would give payers two options, with the second being an insurance or a payment bond as an instrument to provide third-party protection of retention money. The committee made it clear that any financial instruments obtained must meet strict requirements. Subcontractors must be able to claim from banks or insurers when head contractors fail to pay them retention money when it is due. New Zealand First supports this set of omnibus bills.

This is a largely uncontroversial and technical set of omnibus bills. I want to speak to the Regulatory Systems (Building and Housing) Amendment Bill portion of the suite of bills that we are considering this afternoon. The Local Government and Environment Committee has considered this bill, and we made a couple of amendments. Essentially, this portion of this bill relates to some changes to the Building Act of 2004, where the purpose of the Building Act and its amendments is to fix and improve some minor details of the Act, such as some cross-referencing errors and removing one redundant provision.

But there are also some changes to the Unit Titles Act of 2010 in the bill. The purpose of these amendments is to reduce some unnecessary compliance, to further clarify matters in relation to unit plans, and also to give further consideration to rules surrounding the operation of bodies corporate. The registration of easements and covenants is also covered. These are, as I said, largely technical matters.

The select committee heard a number of submissions. I want to commend the work of members and also submitters, who were able to move through these proceedings in a quick and prompt way to facilitate the timing of this legislation coming back to the House. One of the recommendations that we made as a committee was in relation to a “status of examples” provision to be included in the bill to avoid any confusion of any future examples being used in the bill. That is really just to give a bit of guidance and clarity to the legislation. Secondly, we suggested clarifying the reassessment date in clause 20(4), which deals with reassessing ownership and utility interests in unit plans. We suggested that those be amended to make it clear as to which reassessment date takes effect and which one takes priority. Finally, we further recommended that provisions in respect of calling extraordinary general meetings of bodies corporate, as in clauses 32, 33, and 48, be removed and included in the Unit Titles Act regulations.

I want to just note, also, that the committee is aware that the Ministry of Business, Innovation and Employment is working on a much wider review of the Unit Titles Act and that the submissions process for that is under way at this stage. I support these bills, and particularly the building amendment one. Thank you.

It is a pleasure to rise in support of the regulatory systems amendment bills. The bill that I particularly want to speak to is the Regulatory Systems (Workplace Relations) Amendment Bill.

First of all, can I start by congratulating the officials. In particular, I want to congratulate the officials who worked on the paid parental leave aspects of this bill. As the member who just resumed his seat, Scott Simpson, said, these are technical amendments. Actually, it is fascinating to watch how people’s lives, by virtue of living, are complicated. Trying to actually get a legislative fix to address all the issues about having a baby—making decisions about when to go back to work and when to not go back to work, and when your annual leave will be taken—and all of those complications are things that the officials worked incredibly hard on to make sure that no parent and, therefore, no baby would be disadvantaged because we did not have the law written quite as it was intended. My personal thanks go to those officials. I really look forward to working much more closely with them after September to bring about the things that this bill really should be bringing about—that is, extending paid parental leave to 26 weeks. We did not get there, but I think that this bill, with its technical amendments around paid parental leave, will mean that the legislation is in good shape so that when Labour takes over the reins in September, we will very quickly be able to introduce 26 weeks’ paid parental leave.

But I cannot actually even comment about that without putting on the record what a travesty it is that in a couple of weeks’ time we should be looking forward to paid parental leave actually being extended to 22 weeks. If Bill English had not used a financial veto to get in the way of the democratic vote of this Parliament—to vote to make sure that there was no vote on a bill that was winning in this Parliament to extend paid parental leave to 26 weeks—on 1 April this year we would have seen every eligible family being eligible for 22 weeks’ paid parental leave, not 18 weeks, as they currently are. So I want people to remember that it was the new Prime Minister who actually overturned a parliamentary majority to rob every baby born after 1 April 2017 this year of the 4 weeks’ additional paid parental leave they would have been entitled to—and should have been entitled to—if democracy had been allowed to run its true course in this Parliament. But instead—

💬 Andrew Bayly: Back to the issue.

Well, they do not want to speak about that on that side.

💬 Mr DEPUTY SPEAKER: Order! The member must remember that she is here debating this bill, not what is not in this bill and what was not even promoted as part of this bill in this package of legislation. I allowed an aside, which is fine, because it is Thursday afternoon and I am feeling generous, but the member now needs to come back to the bill that we are debating.

Thank you, Mr Deputy Speaker. Instead, we are here debating this very dry bill. Although it fixes up some technicalities, it will not support families to get any more paid parental leave than what they are currently entitled to. So I look forward to a time when we can be debating exactly those measures.

I want to place on record how difficult it is to get the technicalities right. In particular, we worked on the technicalities via a new provision that came in last year, which was the idea that the parents of pre-term babies get an additional entitlement to the parents of babies who are born full term. That change has helped some of the most vulnerable families in our community. So I want to recognise—and celebrate, actually—what I think is a great step forward for those families. It is a bit sad that the Government had to be pushed into doing that, but, none the less, it got there in the end. The parents of pre-term babies are now entitled to an additional week of paid parental leave for every week that that baby is born pre-term. I have certainly personally heard from a number of families for whom that has made a great deal of difference. When baby unexpectedly comes early, they have the right and the eligibility to take additional paid parental leave and not have to worry about going back to work before baby is even out of hospital, for example. Those things make a real difference to people’s lives.

So there were some technical changes that have taken place in this regulatory bill to get that right. This is a new feature of our law. We did not recognise a different eligibility for pre-term babies and their parents before; we now do. The officials have worked hard to make sure that the additional leave does not disadvantage families in other ways in terms of their decision making about returning to work, and in particular with working out how to integrate the keeping-in-touch hours, which I still think is the wrong phrase. I just do not like that idea of the keeping-in-touch hours. Again, that is the relatively new notion that a parent can be on paid parental leave and work a certain number of hours back in the workplace just to keep their hand in, if you like, and perhaps keep up to date with some training that might be going on during their period of paid parental leave, so that when they come back, they are not disadvantaged and are able to apply for a promotion or do those things that their workmates would have had an opportunity to do in the meantime.

I want to commend this bill to the House. I want to recognise that we are making some progress on the issue of paid parental leave and supporting families in that way, but not nearly enough for Labour’s liking. In September we get to fix that.

It is a pleasure to be talking on the regulatory systems bills, but, as you can probably hear, I am losing my voice. I was just a little bit disappointed hearing the previous speaker, Sue Moroney, state that this is a dry bill. This is not a dry bill at all; this is a very important bill. These are the types of bills that the Government puts forward to make sure that we cut out waste and improve efficiency. We are like a blowtorch.

I do not think I will speak for much longer, but I just want to quote some examples. There are the Companies Act changes—reducing time frames for people to have their audits done; reducing the need around when annual reports need to be available; allowing the registrar to remove companies, particularly if they are overseas companies; changes to the Financial Markets Conduct Act, and also to the Takeovers Panel—a whole raft of good stuff. I am going to sit down at this point because I am losing my voice, but I do commend this legislation to the House.

Mr Deputy Speaker, I am sure that the House would rather listen to my dulcet tones. I presume that people remember the events of Waitangi Day 2013 when Mainzeal began to collapse. There was a massive repercussion from that, resulting in more than $150 million owed to creditors, and a very major flow-on effect to much of the construction industry. It sent a ripple of horror, really, through our construction industry as to how this could happen and what could be done to ensure that it did not happen again. As a result of that, the Construction Contracts Act was passed in this House in 2015, with the support of the House—with the support of the Labour Party members. In fact, we had pushed for a bill around retention moneys to be put forward much sooner to ensure that contractors had some protections should there be collapses in the future. That bill was passed, but the story was not over.

The reason that this bill is being pushed through now—and the Government, I know, is very keen to pass it—is that this bill, the bill that went through the Commerce Committee, the Regulatory Systems (Commercial Matters) Amendment Bill, contains clause 138, which provides for the retention moneys to be held in trust from 31 March this year, which happens to be the end of next week. That is a very important clause, and it has led to a lot of uncertainty with the construction industry as to what the impact of that will be. So there is a lot to be discussed in these three cognate bills, or however they are being described, and they are all very different: my colleague Sue Moroney was talking about paid parental leave before, and here am I talking about retention moneys and trying to ensure that there are protections for the construction industry. But the reason why this bill must pass is to ensure that that provision, which is in the bill that was passed in 2015, can actually be legal, because there is another piece of legislation that provides how that will happen.

However, when we were hearing submissions on this in the select committee, there was a lot of confusion and consternation from the players within the construction industry about what that clause would mean, particularly around the definition of “liquid assets” and how that would actually apply. The Ministry of Business, Innovation and Employment (MBIE) had to go back and do further consultation with stakeholders, including head contractors, subcontractors, lawyers, accountants, banks, insurance providers, and the Parliamentary Counsel Office, which, ultimately, has resulted in an amendment coming out of the select committee as to how that trust requirement will be enacted, ultimately providing an alternative arrangement to that trust requirement.

What it means is—and this is quite important; it might sound boring to people but I am sure, going back to Mainzeal and how that actually occurred, that if you cannot have a system that works and operates effectively for retention moneys to be collected, then we do leave ourselves open to more risk. So it was important that we got the legislation right. Labour supports it, but I do think it is important to hear the history of it and the fact that it is now 2017, we are 4 years on from the Mainzeal collapse, and we still have not quite sorted it. It does show how long and involved these processes can be. Perhaps they could have been dealt with more quickly but, hopefully, this piece of legislation will address it and actually ensure that there is protection for all of those levels of contractors should there be a failure by the main contractor so that the ones below do not end up going out of business, having their tools locked up, losing thousands, hundreds of thousands—and, in some cases millions of dollars—and having a really severe effect on the whole of the construction industry.

Going back to the alternative arrangement for the trust requirement—I will go to the policy intent, which was to allow payers the flexibility to protect retention money in ways other than holding cash. MBIE’s discussions with stakeholders assisted in the development of a workable proposal, and that was only after they had to go back to the stakeholders. The new proposal—the amendment in this piece of legislation before us—is to have two options. The primary option was to hold the retention money on trust in the form of cash or other liquid assets that are readily converted into cash, and that is basically what the 2015 legislation provides for.

Alternatively—and that is what the difference is in this legislation today—MBIE proposes that payers will have the option to purchase a narrow class of financial instruments such as insurance products or bonds to provide third-party protection of retention money. These proposed financial instruments will not be held on trust but will be subject to strict requirements. That is the difference in the legislation. One of the reasons for that is that we had the Registered Master Builders Association and other submitters—Civil Contractors New Zealand—who came before the select committee and virtually begged us to remove the ambiguity that they perceived was in the 2015 legislation and was proposed to be in this legislation, which was bringing into action this clause that all of the retention moneys be held in trust from 31 March, which is at the end of next week.

The clarifying thing about 31 March is that it means that anything before 31 March—so it is not retrospective—is not covered; it applies only to retention moneys held in trust after 31 March. But the ambiguity that they asked us to sort out was around what liquid assets meant and how that would apply. Their concern was that they would have to go and borrow money, basically, to ensure that there was retention money, and that it was going to be an extra cost to them if they were the lead contractors.

This is actually only one part of these quite extensive bills that are before us today. But the reason why it is so important for it to pass is that that clause in that 2015 contracts bill, which is now an Act, requires that from 31 March retention moneys have to be held in trust, and therefore the legislation has to be in place. That is my understanding of it anyway, and it is quite important. I think it is important that the House understands the history of it and how this goes back to a really significant collapse in one of our major industries, which it has taken 4 years to sort out.

I rise to speak to the amendments to the Construction Contracts Act 2002 under the Regulatory Systems (Commercial Matters) Amendment Bill. As Ms Curran has pointed out, the major change within the area that we were looking at is clause 138—the one that clarifies obligations around the holding of retention moneys. The clarification is that it will apply only to contracts that are entered into or renewed on or after 31 March 2017. It is a simple clarification simply to determine that the date would apply only to new contracts or contracts that were renewed—not contracts that remained in force. That was an important piece that the committee looked at. The other matters, although of some import on their own, were more minor than that. I commend this bill to the House.

Regulatory Systems (Building and Housing) Amendment Bill read a second time.

Regulatory Systems (Commercial Matters) Amendment Bill read a second time.

Regulatory Systems (Workplace Relations) Amendment Bill read a second time.