Fletcher Building has slashed its pay rates for Christchurch painters and plasterers as changes to the Earthquake Commission's (EQC) opt-out rules make it harder for quake-hit homeowners to go with different contractors.

The EQC project manager, Fletcher EQR, has inducted more than 13,000 contractors to repair Canterbury houses with between $10,000 and $100,000 of damage.

In the first review of what it pays those contractors, Fletcher cut the square-metre rate for painters and plasterers from $25 to $19.

Master Painters New Zealand Canterbury branch board member Gary Spence said Fletcher had "pulled the rug" on painters who had expanded their businesses for the anticipated work based on a rate that was not now being paid.

Businesses had taken on more staff and increased their overheads for the looming work, most of which was still not under way, and to suddenly lower the rate was unacceptable, Spence said.

About 80 per cent of a painting business's costs was their staff and many had been employed on wages that were too high for what Fletcher was now paying, he said.

Some painters were laying off staff, and staff were being lost to Australia because of reduced workloads in the city, he said.

In earlier discussions, Master Painters had told Fletcher it disagreed with the decision to lower the rate, Spence said.

"Our point of view seems to be have been ignored."

Fletcher spokesman Barry Akers said the firm had looked at benchmark data and rates paid through Fletcher's non-quake work in Christchurch and around New Zealand for the review. It also took into account the price of paint and other materials, he said.

Although this was the first time contractors' rates had been changed, they would continue to be reviewed under the principle of good management, he said.

Much remained to be done and there were painters there to do the work. The lower rates would encourage painters and plasterers to do more work, he said.

Homeowners can opt out of the EQR programme and manage repairs themselves, but last week the EQC changed its payment rules, meaning people have to pay the repair bill up front and wait to be reimbursed.

The Commerce Commission is considering a Canterbury contractor's allegation that the new rules are anti-competitive and likely to stop people opting out of the EQR programme.

Canterbury Registered Master Builders Association president Clive Barrington has said there was now little sense in people opting out because of the financial risk and hassles of project management.

- © Fairfax NZ News

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