17 December 2019
Retentions regime providing protection for subcontractors, but more work to be done
A recent review into the construction retentions regime shows most of the sector is complying with the requirements, but
there is more work to be done to ensure the protection of subcontractors, says Ministry of Business, Innovation and
Employment, General Manager, Building System Performance, Anna Butler.
The report indicates a strong level of compliance and reasonable levels of knowledge. However, the report findings raise
some concerns around enforceable penalties, co-mingling retention monies, and a lack of guidance for construction firms.
“More work is required to ensure subcontractors are protected across the board,” Ms Butler says.
“The Minister of Building and Construction expects to make further announcements next year about what this work will
entail.”
An independent review, conducted by KPMG, was commissioned by the Ministry of Business, Innovation and Employment to
look into the effectiveness of the retention money provisions in the Construction Contracts Act 2002.
“Ensuring our builders, plumbers, electricians, and other tradies are protected in the unfortunate event of construction
firm insolvency remains a top priority.
“Government and construction industry leaders are working together through the Construction Accord Transformation Plan
to tackle the long term issues in the sector, including better risk management and fairer risk allocation,” says Ms
Butler.
A full copy of the review of the retentions regime is available on the Building Performance website.
ends