POLICY >> Government
Stronger response is needed to fix regulatory issues Good regulatory practice must be institutionalised and not left to the discretion of individual ministers and their departments
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he government’s response to the March 2013 Productivity Commission’s report “Towards Better Local Regulation” doesn’t go far enough according to LGNZ President Lawrence Yule says that the proposed action plan is unlikely to make a material difference in the quality of local regulations, nor does the government’s response appear to do justice to the rigour and depth of the Productivity Commission’s work. “We need a close working relationship with government agencies when new regulations are being developed, one where local and central government sit at the policy setting table and consider effective regulation and implementation together at the earliest
opportunity,” says Mr Yule. “In particular, we’re disappointed that the government has not implemented the development of a “partners in regulation” protocol and a forum to ensure both spheres of government agree and understand intended regulatory outcomes” as recommended by the Commission.” Local government is pleased to see the announcement of the Rules Reduction Taskforce and also asks that a joint central local government taskforce be established to review the framework of statutes and regulations impacting on local authorities to remove unintended consequences and unnecessary regulatory costs. In its comprehensive report the
Productivity Commission highlighted the problems caused by poorly designed legislation which sets out processes that councils must comply with when putting in place local regulations. The result is that local regulation is often seen as inefficient and unresponsive, and creates unnecessary compliance costs for communities. The Productivity Commission wanted to see real change in the way government departments go about developing and evaluating legislation which gives councils regulatory responsibilities and to ensure local government is closely involved in the design of such legislation – a key area where the government’s response i falls short.
We need a close working relationship with government agencies when new regulations are being developed says President Lawrence Yule
Greater protection for subbies Sub-contractors have welcomed a recent decision by the government to change the law to provide them with greater protection from the collapse of construction companies
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uilding and Construction Minister Nick Smith says the government will introduce changes to the practice of construction firms withholding payments, known as retentions, from firms working on projects. Sub-contractors lost over $18 million in retention payments owed to them following the collapse of Mainzeal last year. The retention system allows the main contractor to hold up to 10 per cent of the sum due to a contractor, interest free, for up to two years as a guarantee of the quality of the work. Since the Mainzeal collapse, the Specialist Trade Contractors Federation (STCF) has been pressing the government to change the law to ensure the retention is held in trust for the sub-contractor. “We hope these changes will help prevent a repeat of the losses sustained by many sub-contractors working on Mainzeal projects,” says Graham Burke, President of the STCF, which represents more than 5,700 local contracting firms. “It will mean retentions cannot be scooped up by the bank or receiver if the principal
Building and Construction Minister Nick Smith says the government will introduce changes to the practice of construction firms withholding payments, known as retentions, from firms working on projects runs into financial trouble.” The federation has been working closely with the government on a pragmatic and reasonable solution to address this problem and subcontractors across New Zealand will be overjoyed to hear of the changes, Mr Burke says. “It will not only offer certainty for sub-contractors, but also
their employees and families.” He says the change is “long overdue” and was pleased the government has acted. “The timing is also important because of the surge in construction activity, especially in Auckland and Christchurch.” During economic upswings, firms often grow rapidly to meet demand
and may over-extend themselves, Mr Burke notes. “If the bank refuses to loan them money, then there is the opportunity to use the retention payments they are holding as working capital,” he explains. “If the company fails, then those retentions will be used to pay secured creditors such as the bank or IRD.” i
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