ConstructionCast - Retentions and The National Site Standard

Um, few things that we'd like to look at, but the first thing is that the government has announced that it's gonna ban, um, during this parliament, retention payments.

Um, so I guess this covers both of you.

I'll have to put my glasses on 'cause I've got to read what I was gonna s- ask you.

But, um, are retentions a big concern for you, Renee? And do you think banning them is gonna work or help? Is it gonna be a good thing?

It's not a good thing.

No, not at all.

I mean, I understand the consideration about smaller contractors, but we have to ensure that we've got the capability of, of, of snagging work and making sure that, you know, if something's not right on a job, that we can get the, the series back.

And, um, if we've not got retentions in place, then how are we gonna get them to come back and f- and, and deliver the work that, that we've, we've promised to be delivered? So I, I think, y- you know, ring fencing is probably a much better way to do it.

I understand that a lot of contractors use retentions in their cash flow, and that's not, that's not sustainable, is it, for anybody? Um, but ring fencing and, and having that retention in place for a, a certain amount of time would definitely support everybody and support the projects and the, and the, the flow of the projects.

You seem to disagree.

[laughs]

I was gonna say yes.

No, no, I, I thought-

Bill, what's your view? Yeah

...

I thought it's very interesting that you mentioned cash flow.

Um, retention shouldn't, shouldn't be part of a company's cash flow.

And, you know, I've, I've been qualified for thirty-eight, thirty-nine years.

I've seen a lot of businesses, and it's normally men who come into a business, take over from their father, and they...

And what they did was payments were made on time, and then they had thought, "Oh, actually, if we keep the payment for sort of fourteen, twenty-one days, oh, look, we have more cash flow." Which is, I know this isn't quite retention, but it's the principle.

And that has, um, eroded, destroyed relationships because people were used to being paid on time.

And so this happened over a, a long period of time.

I actually agree that retentions are [clears throat] thinking that you can change things by leg- legislation is, to me, shows a lack of understanding of industry problems, and it touches on a variety of things.

So, for example, you said you went to Parliament to launch national standards, and you didn't realize the uptake there would be.

In it...