06 April 2017

Policy Update – 6 April 2017

Our fortnightly policy updates keep you up-to-date with the industry.

Retention money provisions of the Construction Contracts Amendment Act 2015 are now in force

On 30 March the Regulatory Systems (Commercial Matters) Amendment Bill received Royal Assent. The Bill clarified requirements for protecting retention money in construction contracts to ensure payment of retention money to subcontractors, even in the event of insolvency.

The Commerce Select Committee considered the Bill and recommended two options for protecting money:

  • holding retention money on trust in the form of cash or other liquid assets readily converted into cash – the default option
  • ·obtaining a financial instrument, such as insurance or a payment bond, to provide third-party protection of retention money. There would be strict requirements on the financial instruments to ensure repayment of retention money.

The provisions in the Bill will only apply to contracts entered into, or renewed, on or after 31 March 2017, one of the key recommendations put forward by IPENZ and ACENZ in our submission on the Bill.

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Havelock North drinking water inquiry report-back delayed

Attorney-General Christopher Finlayson has announced the report-back from the independent Inquiry into Havelock North Drinking-Water has been delayed. The Inquiry will now be reported on in two stages:

  • Stage 1 will address matters relating directly to the Havelock North water contamination incident and the response to that incident, including findings of fact and fault. Report-back is now due by 12 May 2017.
  • Stage 2 will address systemic issues and provide recommendations about managing water supply across New Zealand, including potential improvements. Report-back is due by 8 December 2017.

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Productivity Commission releases report on urban planning

On 29 March the Productivity Commission released its final report following its inquiry into New Zealand's urban planning system.

The Commission had been tasked with reviewing New Zealand’s urban planning system to identify, from first principles, the most appropriate system for allocating land use to support desirable social, economic, environmental and cultural outcomes.

The final report Better urban planning recommends a future planning system that would look quite different to current urban planning and resource management arrangements. The report’s 105 findings and 64 recommendations would result in a system that copes far better with the stresses of growth, while affording more effective protection of the natural environment.

The recommendations include:

  • replacing the Resource Management Act and other statutes with a single new planning law that governs both the built and natural environment
  • clearer central government stewardship of the planning system
  • using statutory principles to set expectations for fair, efficient and proportionate planning decisions
  • making greater use of targeted rates and alternative infrastructure funding tools.

Finance Minister Steven Joyce noted “The report is a comprehensive study of the workings of New Zealand’s current urban planning regime and it proposes major changes to it. The issues raised in the report cross over a significant number of ministerial portfolios. The Government shares the Commission’s view that well-planned urban areas and cities that function effectively are hugely important to the wellbeing of New Zealanders. Ministers will carefully review all of the recommendations and opportunities identified in the report.”

Lyttelton’s Timeball tower rebuild to start in July

Following the Canterbury earthquakes the Lyttelton’s Timeball Station was dismantled and heritage material was put into storage. Heritage New Zealand has now announced the rebuild of Lyttelton’s Timeball tower and mechanism will begin in July.

According to Heritage Destinations General Manager Nick Chin, "the tower will be built first to accommodate the Timeball mechanism. The stonemasonry work will take place in the spring and summer months when the weather is at its best to ensure proper curing."

The project’s budget is around $3 million raised and the plan is to return the Timeball tower, mechanism, flagpole and landscaped grounds with interpretation to the site.

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Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill becomes law

On 30 March the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill received Royal Assent and became law. The Bill proposes changes to a number of pieces of legislation which, among other things, relate to insurance and depreciation recovery income for property destroyed or badly damaged by the Hurunui/Kaikoura earthquake.

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