2014 Master Builders New South Wales Magazine Apr-May by arkmedia4217

Official Magazine of the Master Builders Association of NSW | Issue Two | Apr - May 2014

MASTER BUILDERS ASSOCIATION AND THE NSW GOVERNMENT SIGN ABORIGINAL EMPLOYMENT AGREEMENT ■ STRATA BOND PROPOSAL POSES MORE PROBLEMS THAN SOLUTIONS ■ CONSTRUCTION MEGATREND: LIVABLE HOUSING ■ MANAGING CASH FLOW IN THE CONSTRUCTION INDUSTRY

■ FEMALE TRADIES IN THE BUILDING INDUSTRY

■ AN INTRODUCTION TO LED

■ WHEN THE HOME WARRANTY INSURERS COME KNOCKING

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contents

IN THIS ISSUE: Official Magazine of the Master Builders Association of NSW | Issue Two | Apr - May 2014

REGULARS

Master Builders association and the nsW GovernMent siGn aBoriGinal eMployMent aGreeMent ■ Strata Bond ProPoSal PoSeS More ProBleMS than SolutionS ■ ConStruCtion Megatrend: livaBle houSing ■ Managing CaSh Flow in the ConStruCtion induStry

■ FeMale tradieS in the Building induStry

Contact list

President’s Viewpoint

Executive Director’s Viewpoint

Newsbrief

Dates for your diary

Regional Roundup

The way we were

FEATURES

■ an introduCtion to led

■ when the hoMe warranty inSurerS CoMe KnoCKing

Special Report Master Builders Association and the NSW Government Sign Aboriginal Employment Agreement

Housing Strata Bond Poses More Problems Than Solutions

Legal When the Home Warranty Insurers Come Knocking

Legal News from Gillis Delaney Lawyers

EDITOR: Kirra Smith

Industrial Relations

LAYOUT: Carol Taylor GRAPHIC DESIGN TEAM: Aniko Gaspar, Andrew Crabb and Byron Bailey

Fair Work Amendment Bill 2014 Introduced into Federal Parliament

NATIONAL SALES AND MARKETING MANAGER: Trish Riley SALES MANAGER: Peter Shepherd EMAIL: peter.shepherd@crowtherblayne.com.au ADVERTISING SALES: Elizabeth McDermott

A Lifetime of Livability

PRODUCTION: Brooke Travers

Mentoring

PRINT: Newstyle DISTRIBUTION: Newstyle

Female Tradies in the Building Industry

CONTACT DETAILS PO Box 824 Surfers Paradise QLD 4217 TEL: 1800 222 757 FAX: 1800 063 151 EMAIL: publications@crowtherblayne.com.au WEB: www.crowtherblayne.com.au

Disclaimer: The Publisher and the Master Builders Association of NSW, their employees and agents take no responsibility for any inaccuracies or omissions. The opinions are those of the contributors and not necessarily of the Publishers nor of the Association. No warranty is given and no liability is accepted. Products and Services appearing in Master Builder are not necessarily endorsed by the Publisher or the Association. While every care has been taken during production, the publisher(s) do not accept any liability for errors or omissions that may have occurred.

Training 34

Finance Managing Cash Flow in the Construction Industry

MEMBERSHIP New members

GENERAL FEATURES Fleet Management – Tax, Utilisation and Optimisation

An Introduction to LED

Building Software

Directory/What’s New

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

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Accounts Payable + Receivable

Analytical Reporting

Milestone Scheduling

Plant + Fixed Assets

Security Levelling

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contact list MASTER BUILDER MAGAZINE MASTER BUILDERS ASSOCIATION OF NEW SOUTH WALES 52 Parramatta Road, Forest Lodge NSW 2037 Private Bag 9, Broadway NSW 2007 Tel: 02 8586 3555 | Fax: 02 9660 3700 Email: enquiries@mbansw.asn.au Website: www.mbansw.asn.au | ABN 96 550 042 906

HEAD OFFICE CONSTRUCTION APPRENTICESHIP MENTORING PROGRAM - (CAMS)

EXECUTIVE BOARD Paul Maginnity Ross Mitchell Gordon Leggett Scott Nash Martin Patience Simon Pilcher Chris Calderbank Park

State Manager Apprenticeship Mentoring Officer

President deputy President immediate Past President Vice President Vice President Vice President Vice President

Director, Operations

Brian seidler amanda de Vries

8586 3503 8586 3507

Peter Meredith Kraig Butler

8586 3513 8586 3549

edwina lyall Malcolm Foung adam Myers erroll wong daniel Vine Jayne Pan Bill Korakis Julie hilder

8586 3570 8586 3556 8586 3501 8586 3568 8586 3566 8586 3528 8586 3541 8586 3565

MBA INSURANCE SERVICES Senior Account Manager Account Executive - General

Account Executive - Home Warranty Development Manager - Specialist Products Development Manager - Corporate

MASTER BUILDERS FINANCIAL SERVICES Broker

Craig donovan

8586 3537

arthur Johnson sharon eakin strebre delovski leon Kopcikas Frank Chevell rheannon Vea Vea Bridget delmore

8586 3508 8586 3510 8586 3511 8586 3509 8586 3567 8586 3527 8586 3527 8586 3526 8586 3530 8586 3546

FINANCE & ADMINISTRATION

HOUSING Director - Housing Government & Media Advisor

8586 3539 8586 3524

OPERATIONS

EXECUTIVE Executive Director Executive Assistant

omesh Jethwani Jack long

ogarit Kelley

0414 919 194 1300 760 366

Peter glover david solomon rod grace nicholas arends Chris schultz Judy Macgregor Beverly glover

8586 3535 8586 3552 8586 3574 8586 3573 8586 3522 8586 3531 8586 3523

Michelle Bass dean edser simone Craswell Carson gao stanley wu andrew turner gemma willoughby stacey Betar william louie timithy rolls

8586 3579 8586 3548 8586 3576 8586 3559 8586 3544 8586 3578 8586 3577 8586 3521 8586 3563 8586 3560 1300 884 315 8586 3553

Director Finance & Administration Accounts Payable Accounts Supervisor Credit Control Manager Credit Officer Training Accounts Officers Reception #2 Fishbowl #2 Charles Martin Room

IT SUPPORT IT Support/Webmaster

alexander ashley-Carrington 8586 3525

MATES IN CONSTRUCTION hotline

8586 3575

steven swan

8586 3562

Joanne Papageorge daniela Fraumeni

8586 3555 8586 3555

MARKETING AND COMMUNICATIONS Marketing and Communications Manager

RECEPTION Receptionist

INDUSTRIAL RELATIONS AND SAFETY Director Construction Senior Safety Officer Industrial Relations Officers Safety Officer IR Administration Officer Secretary

TRAINING Skills Development Manager Cert IV-VI Coordinator Cert IV Administrator Cert III Coordinator Cert III Administrator Cert III Head Trainer Short Course & Development Coordinator Diploma Administrator Administration Assistant Compliance and Quality Officer MBA Skill Recognition Centre NWDF

LEGAL Head Solicitor Solicitor Legal Assistant

robert Collings hannah shephard renee McKeown

8586 3517 8586 3517 8586 3517

susan Manning helen harris Juliet Pratley amanda Kelly

8586 3506 8586 3564 0421 050 395 8586 3504

Manager Member Services Membership Services Coordinator

graham Mcguiggan Paul love

Membership Representative Membership Representative Member Services - Administration Member Services - Administration

Mark shearwood Paul Madden Joan ah-hen Brooke williams

8586 3554 8586 3540 0413 306 556 8586 3520 8586 3572 8586 3515 8586 3581

Karen Kellock leonie lowder Maria-luisa Branezac Paulo atienza Position Vacant Frank luppino Philippa oâ&#x20AC;&#x2122;rourke donna seidler Perry wynn

8586 3538 8586 3542 8586 3536 8586 3550 8586 3551 8586 3505 8586 3558 0413 316 407 8586 3533

EVENTS & BUSINESS DEVELOPMENT Awards Coordinator Assistant Awards Coordinators Special Projects Officer

MEMBER SERVICES

APPRENTICESHIP SERVICES Apprenticeship Services Manager Apprenticeship Payroll Apprenticeship Payroll Supervisor Apprenticeship Recruitment Officer Apprenticeship Recruitment Officer Apprenticeship Safety Officer Apprenticeship Safety Officer Apprenticeship Mentor Apprenticeship Services Coordinator

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

REGIONAL OFFICES NEWCASTLE OFFICE Level 1, 165 Lambton Road, Broadmeadow NSW 2292 Tel: NSW Regional Manager len Blakeney Office Administrator sarah Croft Receptionist amy Porter Industrial Relations Officer Ben Ziolkowski Safety Officer John Mcghee Trade Events & Divisional Coordinator haley tibbetts Membership Officer luke reeves Events and Training Coordinator Kerri richards

(02) 4953 9400 4979 0101 4979 0103 4953 9400 4979 0107 4979 0112 4979 0106 4979 0109 4979 0105

MBA INSURANCE SERVICES Business Development Manager NSW

leeanne Farmer

4979 0115

NORTHERN REGIONS Shop 1, 97 Tamar Street, Ballina NSW 2478 Tel: Northern Regions Manager Administration Officer Membership Officer

(02) 6681 4266 0421 050 395

Juliet Pratley susie Bell graham Marchant

0428 412 784

Peter Meredith helen tinson lesley Potter

(02) 4323 4588 0412 694 001 4323 4588 4323 4588

lynn smith debbie Mcdonald

(02) 4454 1955 0418 633 297 4454 1955

steve donaghey lesley donaghey Pauline Meade

(02) 6058 2000 0402 044 075 6058 2000 6058 2000

GOSFORD Unit 7/4 Stockyard Place, West Gosford NSW 2250 Tel: Director - Housing Office Manager (Mon/Wed) Office Manager (Tues/Thurs)

SOUTHERN REGIONS Unit 1, 171 Princes Highway, Ulladulla NSW 2539 Tel: Manager - Southern Regions Administration Assistant

ALBURY/WODONGA 35 Hovell Street, Wodonga VIC 3690 Tel: Regional Manager Office Manager Administration Assistant

PORT MACQUARIE Unit 3, 12 Jindalee Road, Port Macquarie NSW 2444 Tel: Administration Officer Kerrie Clark

(02) 6581 4033 6581 4033

WOLLONGONG Unit 3, 29-35 Princes Highway, Unanderra NSW 2526 Tel: Illawarra Manager Michael hart Administration Assistant ruth Billington

(02) 4272 9409 0419 140 126 4272 9409

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president’s viewpoint

PresiDenT’s VieWPoinT The first few months of this year have been very busy and eventful for the Association. We have embarked on a number of exciting projects, which include the establishment of a building and construction industry specific training facility in Western Sydney. The establishment of this training and skills centre is one of the most significant events in the Association’s history. We will keep the members informed as we progress with this exciting and important venture.

President Paul Maginnity

Members may have seen or heard recent media coverage announcing an agreement between the NSW Government and the Master Builders Association of NSW to provide more jobs and training opportunities for Aboriginal people in the building and construction industry in NSW. In early April the NSW Minister for Aboriginal Affairs, Victor Dominello and the then Minister for Finance and Services, Andrew Constance, joined with the MBA to sign an Industry Based Agreement (IBA) – the first such agreement for the building and construction industry in NSW. The Agreement’s objectives include: • Increase sustainable employment opportunities for Aboriginal people including within businesses servicing the construction industry; • Increase employment opportunities for Aboriginal people in management including senior management level positions;

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

• Increase retention rates for Aboriginal employees; • Increase engagement with and development of Aboriginal enterprises; • Increase organisational awareness of Aboriginal culture; • Increase Aboriginal education and training pathways that position the construction industry as a career of choice; • Improve monitoring and auditing of NSW Government contracts that require Aboriginal employment. Also this year the MBA signed an agreement with Women NSW, a NSW Government department to enter into a partnership piloting initiatives aimed at increasing the number of women and girls in non traditional trades. The partnership with Women NSW will focus on initiatives designed to promote apprenticeships, employment and support for women in the building and construction trades. The Association will promote this initiative widely throughout NSW. I commend these very important initiatives to all members and encourage the industry to take up the challenge of providing opportunities and making a difference.

executive director’s viewpoint 7

eXeCuTiVe DireCTor’s VieWPoinT There is a significant amount of reform currently being undertaken at a State level in respect of legislation impacting on the building industry. Changes to the NSW Planning Legislation, Strata Legislation, Home Building Act and Security of Payment Legislation—not to mention changes to certification, licensing and certifier accreditation—are just some of the matters that will impact on our industry.

Executive Director Brian Seidler

It must be a nightmare to review one piece of legislation in NSW and have to cross-reference other building regulations, simply in the effort of providing consistency and avoiding the creation of unintended consequences elsewhere. Looking long-term, what is needed for NSW is a consolidated Building Act that comprises all those building and technical related matters, which are currently scattered across various pieces of legislation. A consolidated Building Act, would go hand-in-glove with a centralised authority for the building industry such as a Building Commission. Interestingly, the creation of such an industry body was the first recommendation of the 2012 Collins Inquiry into Insolvency in the building industry. The Building Commission is a most important issue and if the industry is to be seriously considered as critical to the economic and general wellbeing of the State, then the

duplication and silo structure that currently exists across numerous bureaucracies needs to be seriously addressed. Most States in Australia have moved to a Commission or centralised authority, which specifically looks after the building and construction industry. It is accepted that it is a large undertaking to move to a consolidated Building Act, however looking to the future the process should commence. At a national level, you would all recall from previous editions of Master Builder and other MBA articles that we have consistently argued for a strong industrial relations regulator to be in place in the building and construction industry. The recent very serious allegations in the media (from building union whistle blowers), which highlight criminal behaviour in the building and construction industry and demand a thorough investigation, are most concerning. While these criminal matters do not necessarily fall within the jurisdiction of the proposed regulator, their presence would no doubt assist in changing the culture where corruption can thrive. Currently, the ALP and Greens control the Senate, and it is envisaged that it is unlikely that legislation needed to introduce the “tough cop on the beat” regulator for our industry will be passed.

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

newsbrief

Workplace Relations

Landmark Judgement against CFMEU On 31 March 2014 Justice Cavanough of the Victorian Supreme Court handed down a landmark judgment against the CFMEU. The decision concerned the CFMEU’s blockade of Grocon’s Myer Emporium site in 2012 and the picketing of other sites. The CFMEU was fined $1.25 million. In a first in an industrial relations context, the CFMEU was also found guilty of criminal contempt. This may affect the future of CFMEU officials, for example in determining that they are fit and proper persons for the issue of right of entry permits. The judge indicated that the CFMEU had been openly defiant of court orders and therefore specific deterrents loomed large in his judgment. The CFMEU must also pay the costs incurred by Grocon and that will be an additional $1 million impost. In a related media release, Master Builders commented that the building unions should hang their heads in shame and that their behaviour should be condemned rather than being worn as a badge of honour. The CFMEU announced on 7 April 2014 that it would appeal the judgment.

Changes to Gender Reporting Obligations

Newsbrief

The reporting obligations relating to workplace gender equity have been the subject of debate. The Government has now changed much of the law in this area. The Workplace Gender Equality Act 2012 defines an employer who employs 100 or more employees as “relevant”. Once “relevant” an employer remains “relevant” unless its number of employees falls below 80. An employer which is “relevant” for at least six months in any reporting year must report about matters such as their gender demographics, remuneration flexibility policies and consultation together with strategies for preventing sex discrimination and harassment. The WGE reporting year is 1 April to 31 March with reports due 31 May each year. The 1 April 2013 - 31 March 2014 year was transitional with fuller reporting obligations starting in the 1 April 2014 – 31 March 2015 reporting year.

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

The Workplace Gender Equality (Matters in relation to Gender Equality Indicators) Instrument 2013 (No 1) which was made 28 February 2013 prescribes the full reporting details. Some time ago Master Builders participated in consultations about these and other reporting obligations. On 27 March 2014 the Minister advised that the start of the new 1 April 2014 – March 2015 obligations were to be deferred to allow for further consultation aimed at streamlining reporting so that it drives results in the workplace. The existing 2013 – 2014 reporting obligations continue for 2014 – 2015. With effect from 1 October 2014, there is also a new “Minimum Standard” requiring employers with more than 500 employees to put in place a strategy directed at one or more of the following: • Improving gender equality; • Advancing equal remuneration; • Flexible working arrangements for employees with caring responsibilities; • Preventing sexual harassment and discrimination. Compliance will need to be reported for 1 October 2014 – 31 March 2015 and then each 1 April – 31 March reporting year following. The Workplace Gender Equality (Minimum Standards) Instrument 2014 was made on 26 March 2014.

Fair Work Ombudsman Agrees With Master Builders’ Apprentice Travel Position The Fair Work Ombudsman on 24 March 2014 indicated that it agreed with Master Builders position that where an apprentice

newsbrief 9

legal and contracts

attends block release training, payment for reasonable expenses incurred while travelling are restricted to expenses incurred while in transit. Master Builders appreciates the fact that the Fair Work Ombudsman is able to be convinced on the basis of reasoned argument through submission making.

Government Launches New Guide for Small Business Hiring On 25 March 2014, Employment Minister Eric Abetz launched a six-page guide to assist small business in the hiring process. The Minister said it would build on the successful introduction of the Small Business Hotline. The guide provides information on IR laws, particularly on the NES, discrimination, wages and record keeping, and tips on hiring the right people for a small business. It also includes a one-page hiring checklist. Small business owners can also take part in a 30-minute interactive learning course to improve their skills in hiring and inducting new workers. Fair Work Ombudsman Natalie James said in a statement recently that the FWO has set up a small business strategy team and a dedicated small business web page. Small businesses seeking to use the FWO’s small business helpline can get “priority service” by calling the Fair Work Infoline on 13 13 94 and asking to be connected to the helpline. These services are good but do not provide the comprehensive guide to human resources published by Master Builders.

Royal Commission Into Trade Union Governance and Corruption The activities of the Royal Commission are now in full swing. Master Builders will provide regular reports during the course of the Royal Commission. The first hearing of the Royal Commission was held on 9 April 2014 in Sydney. At this hearing, the Commissioner the Hon John Dyson Heydon AC QC made a formal statement outlining the broad direction of the Royal Commission. Counsel assisting also made an opening statement. No witnesses were called at this preliminary hearing. The Royal Commission also issued a Practice Note which sets out how material may be provided to the Commission and which contains its hotline number for the answering of queries

Federal Court Quashes FWC Full Bench on Vital AgreementMaking Provision On 27 March 2014 Justice Siopis of the Federal Court quashed a decision of a Full Bench of the Fair Work Commission on agreement making. The judge indicated that the Full Bench had been in error in determining that it should not approve an agreement because it could not assess whether a group of employees was “fairly chosen”. Part of the flawed basis of the Full Bench’s view was that it could not know for sure how many employees would be covered by the agreement so the original group was not “fairly chosen”. The judge labelled this as a misapprehension of the Full Bench’s statutory task and they had made an error. The judge found that FWC tribunal members must be satisfied that a group of employees is fairly chosen based on the personnel who made the agreement. The judge stated the question is whether the parties that made the agreement acted fairly in choosing the employees to be covered by the agreement. The CFMEU had argued that the three employees who had made the agreement had not been “fairly chosen” because to permit the agreement to contain classifications in which the three employees were not engaged, and because the employees that would ultimately be covered by the agreement could not be specifically identified, the process meant that the three personnel were chosen in a manner.

Master Builders Supports Minimum Wage Restraint Push Master Builders, as a member of ACCI, provides input to that organisation’s submissions in each year’s minimum wage case. This year ACCI has urged the Commission not to increase the national minimum and award rates by more than $8.50 or 1.3 per cent on the National Minimum Wage. The claim by the ACTU for a $27-a-week increase has been labelled as irresponsible and completely disconnected from the real conditions facing employers – particularly small businesses who would be hit the hardest by an increase of that magnitude.

Privacy Policies – Urgent Need to Update Members need to be aware, the Privacy Act 1988 was amended by the Privacy Amendment (Enhancing Privacy Protection) Act 2012. The amendments took effect on 12 March 2014. One area that is not immediately apparent as a change is where credit provision occurs. Some companies were bound by the old regime but may not have been aware of that issue. The new law makes the obligations starker. The amendments overhaul the prior law. Following consultations with the Office of the Information Commissioner on 4 April 2014, Master Builders renews its call for all members to update their privacy policies. Master Builders’ members often provide goods and services to individuals with delayed payment terms, in a sense of providing a “line of credit.” This could be under a standing contract or via an invoice for a specific amount. These companies would be considered to be credit providers under the Privacy Act. Part IIIA of the Privacy Act, dealing with credit reporting, is from 12 March 2014 replaced in full by new credit information provisions. There are important changes to the prior framework as to credit information policies, the collection and recording of credit related information, and disclosure of credit related information to overseas entities. Banks, retail businesses that issue credit cards, entities who carry on businesses which substantially involve the provision of credit, suppliers of goods and services on credit/payment terms, equipment lessors and hire purchase credit providers are ‘credit providers’ and must comply with the new framework. That framework is then expanded through a revised Credit Reporting Privacy Code prepared by the Australian Retail Credit Association, registered by the Australian Privacy Commissioner on 22 January 2014 and also taking effect on 12 March 2014. Companies that provide lines of credit should seek advice if unclear as to their obligations.

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

newsbrief

legal and contracts

work health & safety

General Conditions of Contract Industry Forum 2014

by the Department of Employment on the issues to be confronted and lodged a comprehensive submission on 4 April 2014.

Standards Australia in March conducted forums in Melbourne and Sydney. The Melbourne forum was attended by a representative of Master Builders in Victoria on behalf of the National Contracts Advisory Committee. The forum was part of the revision process for the General Conditions of Contract suite of Australian Standards and was an opportunity for all stakeholders to engage with the Standards Australia Technical Committee on three key topics from a number of prominent key speakers in the industry: good faith provisions (Hon David Byrne QC); dispute resolution management (John Sharkey AM & Assoc Prof Paula Gerber); and extension of time and programming (Andrew Stephenson & David Watson). The forum heard and vigorously discussed each of the topics with input from industry. Of most controversy was how and if a good faith provision should be introduced and how this would contrast with the often used “termination for convenience” clause introduced by addendum into contracts. The majority of the forum believed that the introduction of a good faith clause would lead to uncertainty and would have the potential to increase disputes. Good Faith was also contrasted against obligations of co-operation, reasonableness and honesty/fairly clauses. Dispute resolution was also discussed with its key aim of avoiding disputes in the first instance. It was proposed that the new contract should encourage parties to avoid disputes in a collaborative way so as to avoid the traditional adversarial model. There was also comment made that traditional ADR was a “waste of time”, and that more focus should be placed on risk management meetings (similar to what was used with construction contracts associated with the London Olympics). Of note was the Chairman’s comment that the new form of General Conditions of Contract would not be known as AS4000 nor as AS2124, but will have a completely new name, along with the entire suite. The Chairman stated that the Standards Committee would be looking at moving through the consultative process very quickly with the objective having a draft available in around two months and a final contract published by the end of the year.

In the submission Master Builders makes 23 recommendations for change to the Scheme. Master Builders concludes that the many criticisms of the Scheme made in the submission should not be interpreted as a withdrawal of Master Builders’ support. Rather, Master Builders is motivated by a strong commitment to improving the building and construction industry’s work health and safety performance.

Workers’ Compensation – Comcare to be Opened to Large Employers On 19 March 2014 the Government introduced the Safety Rehabilitation and Compensation Legislation Amendment Bill 2014 to permit businesses that satisfy a national employer test to apply for a licence to self-insure their workers’ compensation and gain access to work health and safety obligations under a single national regulator, Comcare. Currently, only one large construction company is within the Comcare scheme. The Bill would, in effect, overturn the former Labor Government’s moratorium on private companies joining the Comcare scheme. That moratorium had been in place for the period since shortly after the 2007 election. Master Builders Lodges Major Submission in Federal Safety Commissioner Review The Government, following Master Builders’ lobbying, agreed to a targeted review of the Australian Government Building and Construction OHS Accreditation Scheme administered by the Federal Safety Commissioner. Whilst the Government supports continuation of the Scheme, it has established the review to identify specific options to reduce red tape and compliance costs, without compromising safety outcomes. The review is expected to be completed by 30 June 2014 and Master Builders responded to a discussion paper published

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

As the Scheme has been one of the Government’s key mechanisms for working with industry to achieve improved work health and safety performance and culture change, it is important that the Scheme wrestle with the practical realities of building and construction industry safety rather than be focussed on paperbased systems. Master Builders indicated that part of the review process must be a demonstration that the Scheme has facilitated improvement in building and construction industry safety outcomes.

Prior Conduct May be Considered in Stop Bullying Orders In early March a Full Bench of the Fair Work Commission led by the President Justice Ross, considered a submission that the Commission had no jurisdiction to deal with a bullying claim because that claim involved bullying conduct which had occurred before the commencement of the new anti-bullying regime, i.e. before 1 January 2014. This was considered to have required retrospective application of the legislation. The Full Bench rejected the objection on the basis that what the legislation was concerned to address was future action based on past events and hence no retrospectivity of the legislation arose. Accordingly, the conduct could be taken into account.

newsbrief 11

Economics and Taxation

Builders Confident of Housing Recovery As expected the number for dwelling approvals fell back five per cent in February after strong growth in the past six months. The industry is seeing through the expected monthly volatility and remains cautiously optimistic about the strengthening upswing in residential building. It is important that building approvals continue to strengthen in coming months to exert downward pressure on house prices by overcoming the undersupply of housing. The positive trend remains encouraging with dwelling approvals up 23.2 per cent through the year. However, despite the good news of the budding recovery in residential construction there is a long way to go before the sector can fill the gap left by mining related engineering construction. Business confidence remains the X-factor, particularly in non-residential building, which the Government must address in the May Budget.

Solid Recovery in Housing Finance Continues The latest Housing Finance data released by the Australian Bureau of Statistics supports the picture of a strengthening housing recovery painted by other indicators. Housing Finance data for January 2014 recorded a 5.8 per cent increase, seasonally adjusted, in commitments for the construction of dwellings. The recovery is largely underpinned by low interest rates and it is important that the Reserve Bank maintain current rate settings. It is equally important that the May Budget sets out a clear strategy to underpin business and consumer confidence to maintain the momentum of the housing recovery.

next year as some financial analysts believe, rates will still be low and supportive of building and property markets. Inflation is expected to remain consistent with the 2-3 per cent target.

Economy in Transition The Reserve Bank is confident that economic growth will strengthen from here although their positive view on consumer demand contrasts with its expectation for a significant decline in mining investment and a very slow and tentative recovery in non-mining business investment. The mixed outlook in key sectors will keep a lid on profits as companies delay new investment - including building works - until there is a sustained pick up in demand.

Employment Surge Labour market figures for February showed a very strong 47,300 increase in employment, led by an 80,500 rise in fulltime positions. In spite of the upswing in new jobs in the month, the unemployment rate crept 0.1ppt higher to 6.0 per cent. The surge in employment was offset by 57,100 new job seekers leading to the uptick in the unemployment rate. Year-end employment growth, from being flat in January, moved modestly higher to 0.6 per cent as the nearterm trend in employment improves.

Construction Jobs – Roller Coaster Ride to End?

Rates to Stay Low

Builders are becoming more confident that the emerging building recovery will flow through to the jobs market, ending the roller-coaster ride seen over recent years. Nationally, the latest ABS data revealed a seasonally adjusted two per cent lift in building and construction industry employment during the February quarter.

The Reserve Bank of Australia left the cash rate unchanged at 2.5 per cent for the 8th straight month and the statement by the Governor repeats last month’s guidance that “the most prudent course is likely to be a period of stability in interest rates”. Even if rates do begin to edge higher sometime

In trend terms, the February quarter result saw building and construction employment surpass the previous peak reached in mid-2011, with the industry now the third largest and accounting for 9 per cent of total Australian employment. However, the patchy and fragile nature of the building

and construction recovery is highlighted by state and territory employment figures that show extreme variation over the year to February 2014: • NSW added 29,200 to construction employment as the building upswing gathered force due to an overdue resurgence in residential building as well as improved commercial building. • Victoria construction employment was flat, a nonetheless solid result given the record phase of building activity experienced in that state over the past decade. • Queensland lost 11,200 jobs in the year with the nascent residential recovery yet to translate into jobs growth and with resourcerelated construction about to peak. • South Australia added 2,400 jobs in the year but the level of employment in the industry remains well below the peak level reached in early 2011. • West Australia added 2,600 jobs during the year as strength in residential building offsets losses in mining-related construction. • Tasmania lost 1,700 or nearly 10 per cent of its construction workforce during the year as the lagged effect of the state’s downturn comes through. • Northern Territory added a massive 3,200 due to Inpex-related impetus and the industry’s workforce has now risen to a level that surpasses both Tasmania and the ACT.

Consumer Confidence Dips The Westpac-Melbourne Institute Index of Consumer Sentiment edged lower in March, slipping 0.7 points to 99.5 led by deterioration in near-term expectations for the economy. Confidence peaked in November following the election result at 110.3 but has ground lower in the months since. Expectations about the economy are weighing heavily on the index, with households increasingly pessimistic about the outlook for economic conditions over both a twelve month and five year time horizon. The major countervailing factor is the willingness to spend on major household items, largely as a result of low interest rates.

Business Lending Holds Up Total lending to the private sector grew by 0.4 per cent in February, a modest pace by historical standards but slightly improved on

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

newsbrief

Economics and Taxation

the 0.3 per cent monthly rate experienced in 2013. Business credit is holding up better, growing by 0.4 per cent but still only 2.4 per cent higher on the same period last year and with little sign of acceleration. Personal credit edged 0.2 per cent lower in February and lending for housing was up by a solid 0.5 per cent.

Australian Government Guide to Regulation The new Australian Government Guide to Regulation has been released and sets out the Government’s Ten Principles for Australian Government Policy Makers as well as a new regulatory impact statement process (RIS). The Guide, which outlines the Government’s approach to policy making, emphasises that regulation should not be a default option but rather a means of last resort.

Financial Incentives for States to Up Infrastructure Spend Treasurer Joe Hockey announced an inprinciple agreement with state and territory Treasurers to provide financial incentives to privatise assets where the funds from those sales were re-invested in new infrastructure. Under the proposal, the Commonwealth will provide an incentive payment to a State or Territory equal to 15 per cent of the total value of the asset sold provided the funds are invested into productive infrastructure. The “partnership would only be available for agreed, bilateral transactions with the Commonwealth through until 30 June 2016. Incentive payments will only be available for five years through to 30 June 2019”.

Taxation Barriers to Small Business Growth The Abbott Government has directed the Board of Taxation to undertake a review to identify the “features of the tax system that are unreasonably or unnecessarily hindering or preventing small businesses from pursuing and achieving their commercial goals”. The terms of reference for the review task the Board of Taxation with identifying “short and medium-term priorities for small

business tax reform in Australia”. Treasury and the Australian Taxation Office will work with the Board of Taxation to prepare the report, which is to be delivered to the Government by 31 August 2014.

Tax Fraud Criminals are targeting tax practitioners to steal details of businesses. They are using this stolen information to create false payment summaries, lodge fraudulent returns and obtain fraudulent GST refunds. Consequently this can result in financial loss for businesses so there is a need to take care to safeguard information, particularly given the trend to working online.

ATO Small Business Panel The ATO is inviting Australia’s small business owners to apply to join its new small business consultation panel to help cut red tape and boost the agency’s small business expertise. The consultation panel will bring together small business operators with at least two years’ experience running a business; taxation, consulting or accounting experience is not necessary. The panel will help the ATO to better understand the way small businesses interact with the Tax Office and other government agencies. The objective for the panel is to explore opportunities to reduce the time it takes for business operators to comply with their employer, super and tax obligations so they can get back to the important job of running their small business. Business operators joining the panel may be contracted on a short-term, asneeds basis to participate in consultation activities including workshops and user testing to provide feedback from a small business perspective. Successful applicants will be paid for their services. Interested small business operators with an annual turnover of less than $2 million should email smallbusinessconsultation@ ato.gov.au to request an information and application pack, or download the information from www.tenders.gov.au (search for ATM 14.008a).

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

Training

Training Committee Talks Apprenticeships, VET Reform The Master Builders National Training Advisory Committee met in Brisbane on 9 April 2014 with a packed agenda including new models for apprenticeship training, opportunities for closer collaboration between the six Master Builders RTOs and the Government’s Review of the Australian VET System. The Head of the VET Reform Taskforce, Ms Peta Furnell, joined the meeting by videoconference to discuss key concerns about training quality and regulation for the building and construction industry.

NWDF Application Remains on Hold The National Workforce Development Fund (NWDF), the main Commonwealth co-funding mechanism for training places, was officially closed to new applications on as of Friday 28 March. The Government is still considering in the Budget context what to do with the 200 applications currently on the books, including a substantial submission from Master Builders. Any funding provided in the Budget would probably not be available until the 2014-15 financial year.

New COAG Council Shapes the Future Agenda Industry Minister Ian Macfarlane chaired the inaugural COAG Industry and Skills Council meeting last week, which replaces the previous COAG ministerial council SCOTESE. Advisory bodies sitting under the former council such as the National Skills Standards Council are also being reformed. Priority areas for the new council include identifying growth sectors of the future, cutting red tape and enhancing workplace productivity. There is also pressure to do more with less and significant cuts to training are expected in the Federal Budget.

CAMS has Contract Extended to June The Department of Industry has renewed the CAMS contract by three months to the end of June this year, allowing a smoother

newsbrief 13

phase out of the Government funded element of the program. A very positive external evaluation of the scheme by consultants Courage Partners has recommended that Master Builders find ways to keep aspects of the CAMS apprenticeship advisory and mentoring going beyond June, given the significant benefits to MBAs and the industry more broadly. On the capstone question of whether CAMS was making a difference to apprentice completions, 84 per cent of CAMS apprentices and 80 per cent of CAMS Mentors agreed or strongly agreed with that statement.

Housing Supply Housing supply conditions continue to tighten across all capital cities, both for house and for apartments. The effective supply of houses, according to RP Data, a consultancy, in both Perth and in Sydney is now less than two months, well down on the five and six months figures recorded at the end of 2012. For Canberra, Melbourne, Adelaide and Darwin the figure is around 2.2 months, while for Brisbane it is 3.4 months, and 5.3 months in Hobart. By contrast, effective supply of residential housing can be 12 months or more in some regional areas.

housing Population Growth National Residential Builders Council The National Residential Builders Council (NRBC) met in Sydney last week, under the (new) chairmanship of Master Builders’ Board member Gordon Leggett. Amongst the main items of business for the Council were: discussions of the economic industry conditions in the States and Territories; consideration of a draft form of the Burden of Regulation Survey being developed by National Office; a review of the submissions made, and the forward program of work, in the industry policy portfolio; and, reports on activity in the regulatory and technical area. The NRBC also met with the Hon Josh Frydenberg MP, Parliamentary Secretary to the Prime Minister, with special responsibility for regulation review and reform. In a wide ranging presentation, and discussion with members of the Council, Mr Frydenberg emphasised the Abbott Government’s ‘five pillar approach’ to regulation reform: reducing the volume of regulation; winding back regulatory duplication and overlap between the Federal and State Governments, and between Federal agencies; more effective consultation with key stakeholders, especially within the business community; mandating post-implementation reviews of new regulations, to take place at least every five years; and, reviewing the role and reach, and the number, of federal regulators.

Australia’s population grew by just over 400,000 people, to 23.2 M, in the year to the September Quarter of 2013, according to new figures from the Australian Bureau of Statistics. Natural increase (births less deaths) accounted for around 40 per cent of the growth in our population, with net overseas migrations (arrivals less departures) responsible for the other 60 per cent share. The additional 400,000 people imply demand for an additional 162,000 or so new dwellings. Western Australia had the fastest rate of population growth in the year to the September Quarter 2013, rising by 3.1 per cent (or more than 76,300 people), followed by Victoria (up 2 per cent, or just over 110,500 people). Elsewhere population growth in Queensland was 1.8 per cent (nearly 84,000 people) and in NSW it was 1.5 per cent (slightly under 108,100 people). These four States accounted for 93.4 per cent of Australia’s population growth over that period.

Environment

Greenhouse Gas Emissions The Australian Bureau of Statistics has released new estimates of the greenhouse gas emissions (GHGE) by Australian industry. According to their calculations, the construction industry produced 8.6 million tonnes (MT) of GHGE in 2010/11 (the latest available figures). This figure was well below

the nearly 205 MT emitted by the electricity, gas and water industry, and the almost 68 MT by the mining industry. Looked at another way, the construction industry produced just 1.3 per cent of the just over 522 MT of GHGE by industry as a whole.

Environmental Taxes The building and construction industry paid more than $1.24 B in environmental taxes in 2011/12. By comparison, the electricity, gas and water industry paid $5.3 B, and the transport industry $3.5 B, with households stumping up more than $48.4 B. Looked at another way, the construction industry paid 4.4 per cent of the total environmental tax take of nearly $27.7 B in 2011/12.

MBA Services

MBA Welcomes New Corporate Sponsor for Work Boots The MBA is pleased to welcome Steel Blue as a new corporate partner of the Master Builders Association of NSW and as a sponsor of its prestigious Apprenticeship Awards in 2014. Utilising the latest technology, Steel Blue boots are similar in quality and flexibility to high-performance sports shoes and have a high level of comfort. Steel Blue offer a 30 day money back comfort guarantee on every style in their range and are the only work boots in Australia endorsed by the Australian Physiotherapy Association (APA). Steel Blue’s comfort technology absorbs more shock, cushioning the feet from daily fatigue and assisting in protecting stress related injury to ankles, knees, hips and spine. Steel Blue will shortly be offering special deals available only to MBA apprentices and their employers that, if successful, may be extended to all MBA members. For further information, please contact Karen Kellock, MBA Apprenticeship Services Manager on 02 8586 3538.

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

diary

12 POINT CPD SEMINAR BALLINA MANLY

7-MAY-14 24-JUNE-14

TRADE SHOWS INNER WEST GYMEA TWEED HEADS GRIFFITH WAGGA WAGGA CENTRAL COAST

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For all events visit our website www.mbansw.asn.au

dates for your diary

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

7-MAY-14, 4-JUNE-14 14-MAY-14 16-JUNE-14 27-MAY-14, 24-JUNE-14 4-JUNE-14 28-MAY-14 1-MAY-14, 5-JUNE-14 20-MAY-14 8-MAY-14, 12-JUNE-14 18-JUNE-14 7-MAY-14 14-MAY-14 13-MAY-14 10-JUNE-14 15-APRIL-14, 19-JUNE-14 15-MAY-14 14-MAY-14 21-MAY-14, 18-JUNE-14 8-MAY-14 28-MAY-14 29-MAY-14, 18-JUNE-14 13-MAY-14, 10-JUNE-14 17-JUNE-14 12-MAY-14

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regional roundup

hunTer DiVision Pink Tie ChariTy gala ball The Hunter Division Master Builders held the 5th Annual Pink Tie Charity Gala Ball on the 28th February with over 170 guests attending the evening. The main beneficiary for the charity evening was the Hunter Breast Cancer Foundation and the funds raised would assist in purchasing a Cold Cap machine for the Hunter. This is a cap that freezes the hair follicle, reducing blood flow to the scalp, making it harder for cancer fighting drugs to harm the hair follicle.

Michael Morrissey, Marcus McCarthy - Nexus Lawyers

Hair loss is one of chemotherapyâ&#x20AC;&#x2122;s most despised side effects, not just because of vanity but because it fuels stigma, revealing to all that there is an illness that many would prefer to keep private. During the evening we shared laughter with the comedian, we had the pleasure of hearing the inspirational stories of Cass and Jonesy, Australian explorers who are the first people to ever complete an unsupported trek from the coast of Antarctica to the South Pole and back. We heard their amazing recollection of kayaking unsupported from Australia to New Zealand, and we witnessed many burley MBA members wearing pink for a great cause. People unaware of the event could have mistaken us all for the dress rehearsal at the Mardi Gras. The night was a great success with the people of the Hunter Region raising $18,000, which will be donated to the Hunter Breast Cancer Foundation. That brings the total amount raised by the MBA Hunter Division over the last five years to $136,000, all of which has been donated to Hunter charities. A big thank you to our sponsors for the evening Newcastle MBA Group Training & Personnel, Redicrete, Daikin, Air Extreme Air-conditioning, Winning Appliances, Eight Recruitment, IronBark Hill Vineyard and Kingston Building Australia. Without sponsors, these events do not happen so I ask all to support these companies where you can.

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Thank you to our sponsors.

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

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2014

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special report Brian Seidler, MBA NSW Executive Director, and the Hon. Victor Dominello MP, Minister for Aboriginal Affairs, signing the agreement.

Master Builders assoCiation and the nsw goVernMent sign aBoriginal eMPloyMent agreeMent The Master Builders Association of NSW has recently signed a landmark agreement with the NSW Government to provide more employment and training opportunities for Aboriginal people in the construction sector.

Minister for Aboriginal Affairs Victor Dominello and Minister for Finance and Services Andrew Constance joined with MBA Executive Director Brian Seidler to sign an Industry Based Agreement (IBA) on Aboriginal employment and enterprise development. The objective of the Agreement is to create sustainable economic development and employment opportunities in NSW. The construction industry is a significant economic contributor to NSW with regard to employment. Mr Seidler said the MBA had been supporting young Aboriginal people to find employment for over a decade through its Construction Industry Apprenticeships Scheme. “The building and construction industry is our nation’s biggest supplier of trade apprentices and MBA is a strong supporter of Aboriginal employment opportunities in our industry. “This partnership with the NSW Government will give us additional resources to enhance our strategic plan, helping us to improve our retention rates and offer better training services.

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

“We look forward to working with the NSW Government to encourage more Aboriginal students to start a career in construction and improve the pathways to full-time employment,” Mr Seidler said. Minister Dominello said IBAs, a key component of OCHRE – Opportunity, Choice, Healing, Responsibility, Empowerment – the NSW Government Plan for Aboriginal affairs, aimed to improve employment and job retention outcomes across industries including mining, construction and manufacturing. OCHRE was launched on 5 April 2013 in Parliament House. “Industry Based Agreements assist industry groups to enhance mentoring, training, employment and business development opportunities for Aboriginal people. “The agreement signed today is underpinned by an Action Plan in which the MBA will set out its objectives for Aboriginal employment and training over the next 12 months. “The Plan will outline how these outcomes will be achieved with proper planning, resources, oversight and governance.

special report 19

“MBA has a well established state-wide apprenticeship program and this agreement is about bolstering opportunities for young Aboriginal people interested in a career in construction,” Mr Dominello said. Minister Constance said the construction industry is a significant economic contributor to NSW and an important partner in job creation for Aboriginal communities. “I warmly welcome this Memorandum of Understanding because strong partnerships with industry are integral to increasing Aboriginal participation in employment, especially in rural and regional NSW. “As a member of the NSW Government’s Industry Advisory Group, the MBA is an ideal partner for us to work with to create better employment outcomes for Aboriginal people in the construction sector.

Left to Right - Brian Seidler MBA NSW, Cameron Lyons, Apprentice Plumber, Minister Dominello, Richard Pitt, Construction Worker, and Minister Constance.

“This agreement builds on the inaugural agreement signed with the NSW Minerals Council last year and creates an impetus for new partnerships in other growth sectors of the economy,” Mr Constance said. Chief Executive of the Aboriginal Indigenous Education Foundation Andrew Penfold AM, said industry associations like the MBA had a crucial role to play in matching Aboriginal students with training opportunities and nurturing their professional development. “I congratulate the MBA for its leadership and commitment to growing the sector’s Aboriginal workforce. “Participation in the workforce is integral to self confidence for young Aboriginal people and it is pleasing to see the NSW Government supporting initiatives which focus on delivering real jobs in growth sectors of the economy,” Mr Penfold said. The parties will work towards the following outcomes: • Increased sustainable employment opportunities for Aboriginal people, including within businesses servicing the Construction Industry; • Increased employment opportunities for Aboriginal people in management (including senior management) level positions; • Increased retention rates of Aboriginal employees; • Increased engagement with and development of Aboriginal enterprises; • Increased organisational awareness of Aboriginal culture; • Increased Aboriginal education and training pathways that position the Construction Industry as a career of choice; • Improved monitoring and auditing of NSW Government contracts that require Aboriginal employment.

The Hon. Andrew Constance MP, Minister for Finance and Services, signs on behalf of the NSW Government.

For more information visit www.aboriginalaffairs.nsw.gov.au/ industry-based-agreements.

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

special report

The Hon. Victor Dominello MP, Minister for Aboriginal Affairs, Brian Seidler, MBA NSW Executive Director and the Hon. Andrew Constance MP, Minister for Finance and Services.

Cameron Lyons, 19, Apprentice Plumber, Boone & Willard

Richard Pitt, 42, Construction Worker, Watpac Construction

I’m 19 years old and currently in my third year of my plumbing apprenticeship. I left school in year 10 – I had reading and writing problems, I was getting into trouble with the police, and I needed to get out.

I am of Aboriginal and Torres Straight Island descent and a qualified carpenter by trade.

I got a call to do an eight-week ‘Career Job Ready’ program from a friend in my aboriginal community. I can be pretty shy and I wasn’t really sure about it, so I didn’t show up to two lots of the course. The third time I gave it a go and stuck with it. I learned about carpentry, scaffolding, formwork, gyprocking – heaps of trades – but I didn’t like them. The only one I liked was plumbing. Once I finished, ‘My Gateway’ helped me find an apprenticeship and I’ve been with Boone and Willard ever since. I love coming to work every day, the boys are all great. I started at One Central Park in my first year and was there for 2.5 years. I have learned so much – I can do a full bathroom, bath, shower, basin, the lot. It’s my last year at TAFE and I’ve received a lot of help, with the plumbers’ union paying for a tutor for two hours a week to help me with my studies. Once I finish, I want to go back and get my builder’s licence. I want to own my own business one day. I’ve been saving ever since I started my apprenticeship. I know that if I didn’t do the career ready course and have the help of the indigenous apprenticeship group, I’d still be getting into trouble with the police and on Centrelink. I won the Indigenous Apprentice of the Year; I have been invited back to speak to kids about how much the Job Ready Program has assisted me. My Mum and Dad are really proud of me and I’ve got a nice girl. Things are good because of the support I’ve been given to get my career started.

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

I received my ticket in carpentry in 2008 through the CDEP, an indigenous support program run in Kempsey on the New South Wales Mid North Coast. Before then, I was working on a farm for two days a week in order to receive Centrelink payments. The supervisor under the CDEP program called me to say they were running a course in which I could get my carpentry ticket. He encouraged me to do the course as I was good with tools. I decided to take the opportunity, as it would give me some qualifications to get a job. After I received my ticket I worked in Kempsey as a carpenter for 12 months before moving to Sydney in 2009. I know that having a trade was a big reason for me getting the job with Watpac Construction as sub-foreman. After two years with Watpac, I decided to try my hand in the mines. I only lasted three months of a 12 month contract before having to come back to Sydney for family reasons. Before I left Sydney, I was told that if it didn’t work out to give Watpac a call – I did make the call and I’ve never looked back. I’ve been back for two years and my employment with Watpac is great. I’m proud to have a trade and to work for a large, well known building company – no more Centrelink!

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housing

strata Bond Poses More ProBleMs than solutions Peter Meredith examines a new proposal requiring developers of strata units to lodge a bond of two percent of the contract price.

Included in the package of reforms to strata law in NSW is a proposal to require developers of strata units, which are exempt from current home warranty insurance requirements, (i.e. exceeding 3 stories) to lodge a bond of two percent of the contract price for a period of two years following completion of the project. The proposal is an attempt to provide highrise strata owners a substitute to being excluded from home warranty insurance cover. The release of the bond will be dependent upon satisfactory inspection reports to be provided by a so-called qualified building inspector, jointly agreed to by the parties and paid for by the developer. The intended outcome of the proposal is to not only provide secured funds for strata owners to remedy defects or incomplete work, but apparently is also seen as a remedy by certain developers to offset the problem of defect claims being lodged on the eve of the statutory warranty period and the expense of defending such claims. Master Builders has formally opposed the proposal and are concerned that the idea has developed to a stage of draft legislative provisions when much of the detail and practical application is yet to be decided or detailed. Furthermore, we cannot understand why NSW would want to be the “test dummy” in introducing a scheme potentially imposing added cost and red tape when compared to other states where no such scheme exists and at a time when NSW’s residential activity has been left in the wake of other jurisdictions.

However, we have been unambiguously informed that the policy has been made and it now comes down to the detail. Whilst in our view there currently exist a substantial lack of detail and the cost impact of the proposal has not been assessed, to our bewilderment the proposal has been given the support of developer groups, such as the NSW Urban Task Force who publicly criticised the Minister in delaying the Bills going to Parliament. The Bond The original owner of the strata scheme (the developer) is to provide a security or building bond of an amount of two per cent of the contract price of the development prior to the completion of the building work. At this time it has not been determined as to what is the definition of ‘contract price’, which is a critical issue, and it appears that this is to be left to the regulations. When the bond is to be paid is also not clear, other than prior to the completion of the building work and prior to an Occupation Certificate being issued. It is proposed that an Occupation Certificate for the project will not be able to be issued unless the bond has been lodged. This appears to establish a precedent to utilise an Occupation Certificate as a compliance tool for a particular building classification other than its core function which is to establish that the premises are fit for occupation or change of use, in respect of consent and of the requirements of the Building Code of Australia.

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

It is proposed that a Building Bond account will be established by the Fair Trading to which the bonds will be paid. The form of security, including cash or some other form (e.g. bank guarantee) is also to be determined later through regulation. The scheme is proposed to be cost neutral to the government so it’s expected that any cost in administering the Building Bond account will offset through interest generated by the account, with any interest proportioned between the developer and Fair Trading. It is also important to note that a separate retention trust fund is proposed to be established as a consequence of the Collins Inquiry recommendations which will generate its own costs and the aggregated costs to industry and development needs to be considered when separate accounts are arbitrarily established through separate departments and agencies. Inspection Reports Contingent of the release of the bond is a satisfactory inspection report to be provided by a qualified building inspector, appointed in agreement and independent of the developer and the owners corporation, or where agreement cannot be reached then the appointment is to be made by the DirectorGeneral, NSW Fair Trading. It is proposed that the inspection will be a superficial inspection, with the report to identify: • Defective or incomplete work; • Likely cause of any said defect;

housing 23

• Remedial measure required to rectify the defect; • The cost of such work; • A reasonable date when the work is to be completed. The process, as presented to date, is for an inspection is to be undertaken between twelve and eighteen months following the completion of the building work to identify any defects or incomplete work. A copy of the report is to be provided to the developer, the Owners Corporation and Fair Trading, and provides an opportunity for the developer to attend to those items on the report. A further and final report is to be provided by the same inspector within two years of completion and within the two year statutory warranty period for minor defects to identify if the items contained in the previous report have been completed. Fair Trading is to be provided with a copy of the final report together with a joint statement by the developer and the Owners Corporation giving agreement to either full or partial release of the bond. The inspector is also to provide an estimate cost of completing any outstanding work. The finding of the final report cannot be disputed other than a challenge brought to the NSW Civil and Administrative Tribunal (Tribunal) in relation to perceived bias of the report. The costs for the reports are to be paid by the developer and cannot be deducted from the bond. It has been proposed to place a $20,000 cap on the cost of reports. Qualified Building Inspector The so-call Qualified Building Inspector holds a key role in the scheme as their inspections and reports are contingent to the bond being released or bond money proportioned for remedial work. The competency and expertise of the inspector is consequently a critical factor of the scheme and furthermore in minimising potential disputes arising between the developer, builder (if not the developer), owners corporation and the inspector in regards to the content of the reports. The inspector will preclude from having any direct relationship with the developer and any indirect relationship will need to be disclosed. From the outset, it needs to be noted that the building inspections and the role of building experts is effectively unregulated. Persons undertaking pre-purchase property inspections in NSW had been previously required to be licensed but this was removed by the NSW government in 2009. The government has continually expressed no interest in reintroducing licensing for building inspections. Inspections undertaken by accredited certifiers, accredited by the Building Professional Board

is limited to specific functions related to compliance with planning consent conditions and compliance with Building Code of Australia and specifically not related to identifying a wide scope of building defects or assessing the quality of building work as proposed under the Building Bond scheme. There is little insight at this time as how such persons seeking to do inspections will be assessed; or who will undertake the assessment in respect of their experience and competency and other criterion (e.g. insurance) to perform such inspections. This is an important point given the government’s previous decision to remove themselves from the licensing of building inspections. At this time we are advised that the proposed criteria for the inspectors are limited to two points: • Must be qualified, but no minimum qualification set by the Act; • Hold a professional Indemnity Insurance Policy in excess of $2 million cover. Perceived Issues From the outset, it needs to be said that we have not seen a final draft of the Bill to go to Parliament and consultations in regard to the strata reform package, specifically in relation to the bond scheme have been extended by the Minister. It is commonly known that many major developers have exited NSW due to the fact that it is just too difficult to undertake strata developments in NSW when compared to other jurisdictions. It is therefore difficult to comprehend as to why the government would introduce a scheme unique to NSW which will potentially add costs and further red tape, especially when in Sydney housing affordability index and housing supply is a significant issue. Advice has already been given that the cap of $20,000 on the cost of reports may be unrealistic when considering larger strata developments. The upfront cost of the bond cannot be absorbed by the developer and will most likely be passed on through whatever means possible, most likely to the unit purchaser and/ or through increased retention sums from the builder to cover as mush of the cost of the bond as possible. This being the case, the bond or proportion of the bond so labelled as retention sums will likely be captured by the new retention trust scheme under recent amendments to the NSW Building and Construction Security of Payment Act. Therefore, there is the potential for the bond scheme to get caught up in security of payment claims and adjudications through attempts to get the security released or as a strategy to raise a challenge to inspections and related reports in another jurisdiction

other than the Tribunal. Such action would cause administration and costs to Owners Corporations not foreseen. We expect the some developers may simply treat the bond as an added cost to the development and would be prepared to write off the bond or a proportion of the bond as a cheaper and calculated option rather than engage in the cost of disputation or litigation to try and recover the bond or challenge the contents of the inspection reports. The cost would be proportioned to the end purchasers of the development. This is especially likely where special project company is established solely for a particular project. Furthermore we don’t see the scheme reducing disputes. A major curse of strata builders and developers is the practice of being served comprehensive defect claims on the eve of the statutory warranty period, encouraged by the commercial interests of strata managers, lawyers and building consultants. This is unlikely to change with the introduction of a building bond, as some proponents of the scheme seem to assume, because the bond will not substitute or extinguish the statutory warranty period. We foresee the bond rather as a bad idea, which is likely to fuel disputation and litigation as developers seek to recover their bond; or challenges are made by both sides to the

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

housing

content of the inspection reports. This will be despite that it has been said that the content of the reports will not be open to challenge! It is also proposed that the bond cannot be released if the matter is the subject of an application before the Tribunal. Where this occurs it will incur additional costs, including likely costs to the owner’s corporation in appearing in the Tribunal and delaying the release of bond funds to address defects. It should be noted that the bond scheme will not offset or extinguish the current statutory warranties (two years non-structural and six years structural) and therefore it is likely that prudent legal advice to Owner Corporations will still be to obtain a defects report prior to the end of the statutory warranty period. Furthermore, Owner Corporations will still be free to claim defects not covered by inspection reports– noting that the technical reports are superficial. Consequently, builders and developers will continue to receive defect claims irrespective that the bond scheme exits. It is proposed that if the developer and the Owners Corporation cannot agree on the appointment of the inspector, then

the Director-General, Fair Trading will appoint the qualified building inspector. We suggest that there will be a tendency for developers to default the appointment to the Director-General rather than going through the process of locating and independent inspector and getting consensus on the appointment by the Owners Corporation. This may also be a tactic to deflect and criticism or concern regarding the content of reports and the competency of the inspector at the feet of the Director–General as the onus will be on the Director General to establish that the inspector is competent and experienced to inspect and report on a particular class of building. We see this as a quandary for Fair Trading and the government whereby they have expressed no interest in a return to licensing for property inspections, but on the other hand having to appoint qualified building inspectors to support the bond scheme and this will come at a cost. There also appears to be little thought or recognition given to the proposals of the Planning Reform White Paper which proposes a wider scope and greater rigour in relation to certifier inspections, especially in the problem

areas of waterproofing and fire protection services and the potential benefit which may come from these reforms in relation to the quality of buildings. It is the continued concern that government departments and agencies appear to be working on regulatory reform virtually in isolation to each other which has the potential for unnecessary duplication, cost and red tape. In light of the potential for increased costs in ration to the benefits of the scheme a thorough cost and impact analysis needs to be undertaken. At this time there is no indication that this is being done. We understand that strata owners feel a disadvantage that they have no insurance protection should there be defects and/or incomplete work and the builder is insolvent, deceased or disappeared. However the bond scheme as it is proposed at this time raises more problems, cost and red tape than that which it seeks to solve. By Peter Meredith, Director – Housing, Master Builders Association of NSW.

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legal 25

when the hoMe warranty insurers CoMe KnoCKing Home warranty insurers in NSW have paid out over $400 million since 2002. Premiums would have been only a fraction of that. It is a small wonder that private insurers want out, and that for the foreseeable future consumer protection for residential building defects will have to be provided by the state government through its public insurance arm SICorp. It has been bad business for private insurers, it still is. Now the premiums have stopped, but the claims go on. Private insurers face the prospect of receiving further claims up to 1 July 2016. Even then it could take three to four years to flush their backlog of claims through the system. Private insurers want this business off their books. With no future interest in selling home warranty insurance, it might be expected that they will be less concerned with their reputations amongst consumers of the product, and take an even harder line in denying liability, and keeping payouts to a minimum. Their preference will increasingly be to settle claims on a basis that releases them from future liability, rather than

committing to programmes of defect rectification. The logic of cost benefit analysis would suggest a settlement strategy which pays out using available easy money from someone else, rather than incur the expense of experts and lawyers to arrive at a rigorous assessment. Often the easiest money available is the bonds and guarantees directors (or members of their friends or families) have put up to secure home warranty insurance for their companies. The idea of insurers paying out more than they have to runs counter to common experience; yet in some cases where bonds and guarantees have been called up we have found this to be so. If you have offered a personal guarantee, to secure home warranty insurance for a company, and a call is made against it you should immediately request that the insurer provide full details of the relevant claim including the claimant’s alleged rights of recovery, the defects, the rectification and cost. You should consider

obtaining legal advice as to whether the insurer’s assessment of the claim has been rigorous, and fully taken account of matters such as: • Time limitations; • Any failure by the insured to enforce statutory warranties; • Rights of subrogation to hold other parties liable; • Exclusions under the relevant policy; • Taking account of common property / lot owner property distinctions; • Mitigation and maintenance issues; and • The basis and calculation of quantum. Of course the terms of the personal guarantee must also be reviewed, together with the circumstances it was entered into (e.g. duress). Do not take it for granted that the insurer is entitled to have recourse to the guarantee or bond. Seek advice. By David Bannerman and Tony Earls.

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legal

Legal News from Gillis Delaney Lawyers Will The Proportionate Liability Laws in Australia Change in 2014? Between 2002 and 2004 proportionate liability legislation was enacted in each State and Territory throughout Australia imposing a regime where proportionate liability would apply to claims for pure economic loss and property damage. Personal injury claims were excluded from the proportionate liability regime. The effect of the regime was to limit a wrongdoer’s liability to their proportionate share of responsibility for a loss. The differences in the proportionate liability regimes in each State and Territory make it difficult for businesses that operate nationally to manage risk uniformly across all jurisdictions. There have been moves afoot to rationalise the regimes to create national consistency. The Federal Government’s Standing Council on Law and Justice in 2011 released model proportionate liability provisions for public comment in an attempt to develop provisions that could form the basis of a harmonised scheme across all States and Territories. After much consultation the Standing Council on Law and Justice released model legislation in October 2013. The States and Territories have agreed to consider introducing the model proportionate liability legislation in each jurisdiction and we will have to wait and see whether or not the changes will be implemented in 2014. The changes are significant in this article we examine the effect of the model provisions if they are introduced. Firstly, for there to be an apportionable claim, that is a claim that involves concurrent wrongdoers where proportionate liability will apply, it will be necessary for an action to have as an element of the claim a failure to take reasonable care. Examples of what amounts to “a failure to take reasonable care” have been provided and those examples are: • A breach of duty of care; • A breach of an express contractual term to take reasonable care; • A breach of an implied contractual term to take reasonable care; • A breach of a director’s civil obligation to act with reasonable care and diligence;

• A breach of a statutory warranty to render services with due care and skill; • A breach of an implied warranty to render services with due care and skill. The wrongdoer must also give a copy of that information to the Court as well as to the other person who is believed to be a concurrent wrongdoer. If a defendant is unable to give the information to the concurrent wrongdoer he will be obliged to take reasonable steps to bring it to the attention of that wrongdoer. Where a defendant fails to comply with the notification obligations, a Court may, if it is just and equitable, determine the defendant is severally liable for the award of damages (rendering them liable for all damages) and may be ordered to pay costs thrown away as a result of any failure to provide information. In pleadings the material facts and circumstances that make a person a concurrent wrongdoer will need to be pleaded.

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

If a claimant chooses not to proceed against all concurrent wrongdoers in a claim, the claimant will be entitled to bring a further claim but only with leave of the Court. The Court will only be permitted to grant leave if it is satisfied there were reasonable grounds for bringing separate proceedings. Interestingly, if there are a second set of proceedings commenced, any judgment in the first proceedings will determine, for any subsequent proceedings, the maximum amount of the claimant’s notional damages and the minimum proportionate liability of each concurrent wrongdoer who was a party to the first proceedings and the minimum contributory negligence of the claimant. The claimant will not be entitled to costs in any subsequent proceedings unless the Court determines it is just and equitable to order costs. There is little doubt that the proportionate liability regime is here to stay, however it will be interesting to see whether or not there will be one regime that applies throughout Australia.

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PrinCiPals & ConTraCTors – relaTionshiP beTWeen insuranCe & inDemniTy Clauses If a contract between an insured contractor and its principal contains multiple indemnity and insurance clauses, how should these terms be construed? Are there any key factors that can provide an insurer with assistance to make the correct determination regarding whether or not to extend cover to the principal? In GIO General Limited v Centennial Newstan Pty Ltd [2014] NSWCA 13, the NSW Court of Appeal considered the above scenario and, in a unanimous decision (Gleeson JA, Meagher & Hoeben JJA agreeing), provided a helpful analysis for the insurance industry. Centennial operated a coalmine near Newcastle. It entered into a contract with Longwall Advantage Pty Ltd (Advantage) for Advantage to supply labour to perform work at Centennial’s coal mine. Advantage, in a separate agreement with one of its related companies, Longwall Labourforce Pty Ltd (Labourforce), arranged for Labourforce (which employed the workers) to supply workers to Advantage which, in turn, supplied those workers to Centennial. Centennial’s contract was only with Advantage. It contained the following clauses: • An indemnity clause by Advantage in favour of Centennial for any claims relating to death, personal injury or property damage to personnel of Advantage and to any employees, subcontractors and agents of Centennial but limited only to the negligence or breach of contract by Advantage. • An insurance clause requiring Advantage to take out insurance for workers compensation, public liability and professional indemnity cover for the personnel of Advantage. However, in the Site Regulations which formed part of the contract, there also appeared the following clauses: • Public and Products liability policies taken out by the contractor must note the Principal and all subcontractors as interested parties and must cover the respective liabilities of each of those parties to each other and to third parties. Such policy must cover each indemnified party to the same extent as it would if each of the parties had a separate policy of insurance. • If the contractor neglects, fails or refuses to obtain any insurance as required by the contract, the contractor must indemnify the principal for any loss or damage

suffered by the principal arising out of or in connection with the contractor’s failure to obtain the required insurance. Advantage supplied a worker, Mr McDonald, to Centennial and during the course of his work he suffered significant injuries. Mr McDonald sued Centennial, Advantage and Labourforce who were each found to have breached their duty or care but the trial judge (Marks ADCJ) found Centennial to be 100% liable. His Honour also found that Centennial was entitled to indemnity as a principal under the GIO policy issued to Advantage. GIO appealed the decision and argued two propositions, one of which was whether the Site Regulations formed part of the contract but that argument was quickly eliminated when the Court observed that GIO had admitted that fact in its pleadings before the Trial Judge. The primary argument advanced on appeal by GIO was that the obligation on Advantage to effect insurance in favour of Centennial did not include cover for Centennial’s own negligence. Gleeson JA, who delivered the leading judgment of the unanimous Court, emphasised two important principles: • All of the indemnity and insurance clauses in the contract must be read within the context of the contract as a whole. The words of every clause must, if possible, be construed so as to render them all harmonious with one another. • Careful consideration of the insurance clauses requires that the relevant liabilities, for which cover is sought to extend, be identified. Here, His Honour held that although the indemnity and insurance clause first appearing in the contract worked harmoniously together and did not include Centennial’s own negligence or breach of contract, that was not the end of the matter. Those clauses must be read with the other indemnity and insurance clauses appearing later in the contract. Interpreting the contract in that manner, Gleeson JA held that the liabilities appearing in the later insurance clause were different to the liability for which insurance was required to be effected by Advantage under the earlier insurance clause. In the latter insurance clause, the liability was wider and included the liability of Centennial (as principal) and Centennial’s

employees and agents who were required to be noted as interested parties in the Advantage policy effected with GIO. Further, Gleeson JA observed that the indemnity in the Site Regulations was different to the indemnity appearing earlier in the contract, the latter indemnity being granted in favour of Centennial if Advantage failed to effect the insurance covering Centennial as principal and Centennial’s employees and agents for their respective liabilities to each other and to third parties. As a result, Gleeson JA held that the latter indemnity and insurance clauses supplemented the earlier clauses. The Court of Appeal rejected GIO’s submission that the obligation on Advantage to insure Centennial was limited to the negligence or breach of contract of Advantage. Rather, the obligation to insure imposed on Advantage by the Site Regulations section of the contract required Advantage to insure Centennial as principal. This was without limitation as to whose negligence caused Mr McDonald’s injury, provided it occurred as a result of Advantage supplying labour to Centennial, which was the case here. GIO’s appeal was therefore dismissed. This case serves as useful reminder, firstly to identify all indemnity and insurance clauses in a written contract between principals and contractors, and secondly, to identify the actual liabilities which the insurance clause requires the contractor to insure. These liabilities will not always be confined to the terms of an indemnity clause which limits that liability to the insured’s own negligence. Insurance clauses should be given careful scrutiny to determine whether the insured was required to effect insurance covering the principal’s own negligence. The failure to do so can have significant implications for the insured if the contract provides a further indemnity clause, the operation of which is enlivened by the insured’s failure to insure the principal but which is frequently excluded leaving the insured vulnerable to being uninsured in those circumstances. Here the GIO policy was liable to respond to the claim made by Centennial as it covered the liability that was required to be insured under the contract by virtue of the principal’s liability extension in the definition of insured in the GIO policy.

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

legal

Worker, Contractor Or Deemed Worker?

alone was not determinative of whether Mr Malivanek was a worker. In relation to the provision of tools, whilst Mr Malivanek did not carry a ladder and he only had hand tools, there was no persuasive evidence that Mr Ring had provided any tools or equipment for the task carried out by My Malivanek. On balance, the Deputy President was not prepared to overturn Arbitrator Haddocks determination that Mr Malivanek was an independent contractor. Deputy President Bill Roche then went onto to examine the legislative provisions a claimant must establish in order to be considered a “deemed” worker. These provisions are: • He or she was a party to a contract with the respondent to perform work; • The work exceeded $10 in value; • The work is not work incidental to a trade or business regularly carried on by the worker in his or her own name or under a business or firm name; and • The worker has neither sublet the contract nor employed workers in the performance of it.

It is often a fine line as to whether an independent contractor will be considered to be a worker for the purposes of the NSW workers compensation legislation. To further complicate matters, specific provisions exist in the legislation to “deem” contractors and other potential claimants as workers when they might otherwise fail in demonstrating an employment relationship. An example of this type of situation was recently examined by Deputy President Bill Roche in Malivanek v Ring Group Pty Limited (2014) NSWWCCPD 4. In March 2007, Alan Ring, the managing director of the purported employer, Ring Group Pty Limited, engaged Mr Malivanek to assist another person to install a skylight at a house in Willoughby. Whilst performing that work on 22 March 2007, Mr Malivanek fell from the roof and suffered serious injuries. Originally, Arbitrator Haddock determined Mr Malivanek was neither a worker nor a deemed worker. Mr Malivanek appealed this decision. On appeal Deputy President Bill Roche firstly examined the various indicia that are relevant in determining whether Mr Malivanek was a worker including the level of control exercised by Mr Ring who was the purported employer. The Deputy President commented that apart from a direction that Mr Malivanek was not to go onto the roof, which may be seen as a general direction from a head contractor in control of a particular site, there was no other persuasive evidence that Mr Ring exercised control over how Mr Malivanek was to carry out his work. Indeed, Mr Malivanek firmly denied any such control. Other indicia indicating that Mr Malivanek was an independent contractor included: • He had his own Australian Business Number (ABN); • He operated under a business name; • He issued invoices for the work he performed for Mr Ring; • He charged GST on his invoices; • There was no evidence that Mr Ring was entitled to Mr Malivanek’s exclusive services; • Mr Ring made no deduction for income tax from the payments made to Mr Malivanek; • There was no evidence that Mr Malivanek was entitled to sick leave or annual leave. Whilst there was conflicting evidence as to whether Mr Malivanek either employed or could employ other workers in the fulfillment of his tasks, in any event it was noted by the Deputy President this indicia

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

It was agreed between the parties at the appeal that the only issue in dispute was whether the work being performed on the day of the injury was work incidental to a trade or business regularly carried on by Mr Malivanek in his own name or business or firm name. The Deputy President weighed up the evidence and noted that in recent years Mr Malivanek did not perform work successively or concurrently for his customers in the course of a trade or business. For a number of years Mr Malivanek had no customers or independent business outside of the work he conducted for Mr Ring. This was sufficient in isolation to enable Mr Malivanek to succeed on the deemed worker issue but the Deputy President highlighted additional reasons in support of this conclusion: • There was no clear evidence Mr Malivanek employed any other workers on 22 March 2007 or at any other time; • Although he had a business name and an ABN, the circumstances in which Mr Malivanek was required to obtain regular work was that he had been required to set up a business name; • Except for one job in July 2004, he worked exclusively for another of Mr Ring’s companies for approximately five years; • The business had no tangible assets (other than hand tools) that were used by or in support of the business; • Although car expenses wee claimed in Mr Malivanek’s tax return, there was no evidence that the business owned the vehicle nor was there any evidence that the business had a specific business phone number or home office; • Mr Malivanek did not advertise for work and his vehicle (a sedan) had no name nor advertising on it; • There was no identifiable goodwill in the business; • Although the business issued invoices, they were all handwritten. They had no letterhead, no business address or phone number on them and apart from the ABN, no other information one would normally expect from a business. Accordingly, Deputy President Bill Roche was satisfied that Mr Malivanek was a deemed worker for the purposes of the Act and was entitled to compensation. This decision clearly indicates the generous nature of the legislation. Although the claimant failed to demonstrate he was a worker within the Act, the “deemed” worker provisions allowed him to succeed. The type of arrangement used by the worker in this case is similar to many contractors within the construction industry and is a poignant lesson as to the wide-ranging reach of the deemed worker provisions. Contact Gillis Delaney Lawyers on 9394 1144 and speak to David Newey, email dtn@gdlaw.com.au or visit www.gdlaw.com.au.

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firsT assessmenT of The fair Work Commission’s neW anTi-bullying JurisDiCTion

commenced dealing with most applications on the day they were lodged. The media release reveals that some applications had already been dealt with by a Commission Member, while others were being expeditiously dealt with through the process outlined in the FWC’s case management model.

A media release issued by the Fair Work Commission (FWC) in early February 2014 reveals that it received 44 anti-bullying claims seeking orders to stop bullying at work within the first month of its anti-bullying jurisdiction. A worker is “bullied” at work if an individual or group repeatedly behaves unreasonably towards the worker and that behaviour creates a risk to health and safety. The FWC considers each application at an early stage to assess whether or not it falls within the jurisdiction, the parties involved, the nature of the alleged bullying and the manner in how the application should be dealt with. Of those 44 applications, six were withdrawn during the preliminary assessment process and as required by the newly enacted provisions in the Fair Work Act, 2009, the balance of applications were commenced within the 14 day period. In fact, the FWC claims that it

The FWC President, Justice Ian Ross considers it too early to say whether the figures released in early February 2014 were indicative of the likely number of applications the Commission would receive throughout the year but noted, having regard to other individualbased rights disputes such as unfair dismissals and general protection claims, that January and February traditionally see a smaller number

of lodgements with the Commission. Late last year, and prior to the commencement of the new regime, the FWC predicted about 3,500 applications could be made in 2014. Justice Ross said while it was still early into the year, the process for dealing with anti-bullying applications was achieving its intent of engaging with the parties in a timely manner and progressing matters promptly and practically. Statistics as to the number of applications made to the FWC and in relation to its timeliness in dealing with anti-bulling applications will be published on the FWC website in quarterly reports. The statistics for January 2014 are as follows: • 44 applications lodged; • Six applications withdrawn; • 28,049 number of unique hits to the FWC website seeking information; and • 100 per cent of applications commenced within the 14-day period. The FWC has also released a “Benchbook” which deals with the new statutory provisions in more detail as well as a summary of the way the FWC deals with applications. It is designed to assist parties lodging or responding to antibulling applications made under the Fair Work Act 2009.

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M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

industrial relations

Fair worK aMendMent Bill 2014 introduCed into Federal ParliaMent Master Builders Director Construction, Peter Glover, reports on the latest industrial relations legislation currently before the Federal Parliament. The Federal Government has introduced the Fair Work Amendment Bill 2014 into Parliament giving effect to a number of election commitments made in ‘The Coalition’s Policy to Improve the Fair Work Laws’. The Bill seeks to amend the current Fair Work Act in a number of ways, set out as follows: Greenfields Agreements The Bill will remove the effective union veto power over greenfields agreements, which have enabled them to frustrate the making of these agreements and delay the commencement of major projects worth billions of dollars. As the former Labor Government’s own Fair Work Review noted, these practices ‘potentially threaten future investment in major projects in Australia’. Under the amendments, employers will have the option of taking a proposed greenfields agreement to the Fair Work Commission if agreement has not been reached after three months. These amendments demonstrate again that Australia is once more open for business and the government is concentrating on job creation.

These changes will restore right of entry rules to largely reflect the rules as they stood prior to the Fair Work Act – consistent with Labor’s 2007 election promise. The Fair Work Amendment Bill will reverse the previous Government’s most recent amendments to right of entry rules, allowing union officials a default provision to use lunch rooms for union meetings and for employers to pay travel expenses for union officials to travel to distant/ remote worksites. Individual Flexibility Arrangements (IFAs) IFA’s were first promised by Labor in 2007 and should have been an important tool for workers and businesses to mutually agree on conditions that suit their needs, while ensuring that employees have to be better off overall under the IFA. When first elected, the previous Government had been clear that Individual Flexibility Arrangements are not individual statutory agreements:

Union Right of Entry The Bill will also deliver on Labor’s 2007 election promise in relation to right of entry – a promise that it subsequently broke.

“Fair Work, in complete contrast to Work Choices, allows for Individual Flexibility Arrangements (IFAs) which ensure that employees are always better off overall against the underlying award or enterprise agreement. Individual Flexibility Arrangements are not individual statutory agreements.”

In 2007, then Deputy Opposition Leader Julia Gillard promised:

Julia Gillard Media Release Individual Flexibility Arrangements – 17 September 2009

“We will make sure that current right of entry provisions stay. We understand that entering on the premises of an employer needs to happen in an orderly way. We will keep the right of entry provisions.”

The Bill introduces amendments to provide clarity and certainty for workers and their employers around Individual Flexibility Arrangements (IFAs). IFAs were included in the Fair Work Act since its commencement, but have fallen well short of the previous Government’s 2007 election policy, which was to introduce IFAs:

• Provisions that certain award conditions may not apply where an employee is paid above a fixed percentage as set out in the award; and • An arrangement to allow the employee to start and finish work early to allow them to collect their children from school without the employer paying additional penalty rates for the early start.” (ALP “Forward with Fairness Policy Implementation Plan” August 2007 page 11) The current protections for employees making IFAs will be retained and there will be an additional protection put in place. These protections include: • An IFA cannot be a condition of employment; • Only a worker can approach an employer for an IFA; • An employer cannot force an employee to sign an IFA; • The employee must provide a statement to the employer saying how the IFA meets their genuine needs and how they consider themselves better off overall. The Bill will seek to deliver genuine IFAs, in line with Labor’s initial promise in 2007. Fair Work Act Review Panel Recommendations

This Bill will restore the sensible arrangements that were previously in place, whereby union officials must comply with a reasonable request by the employer to hold discussions in a particular room. Employers will continue to be prevented from nominating locations with the intention of intimidating, discouraging or hindering employees from participating in discussions.

“Under Labor’s new system, awards will provide the parameters within which flexibility arrangements can be made under an award flexibility clause. This may include matters such as: • Rostering and hours of work; • All up rates of pay;

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

The Bill also delivers on the Coalition’s election policy to implement a number of other amendments to the Fair Work Act recommended by the 2012 Fair Work Act Review that were ignored by the previous Government. Australian Building and Construction Commission The Federal Government has also introduced separate legislation which seeks to reintroduce the ABCC with its previous powers. This legislation is currently stuck in the Senate with the Labor Party and the Greens refusing to pass this important Bill to put a ‘Tough Cop on the Beat in the Building and Construction Industry’.

MeMbers Car searCh and FinanCe ■ Significant fleet savings on new and demo vehicle purchases ■ Maximise the value of your trade-in ■ Huge savings in time and effort by avoiding dealer shopping ■ Try us to get the best deal on price and finance Using the combined strength of your MBA membership we would like to introduce you to a powerful new member service. Talk to us today, exclusively through:

OGARIT KELLEY M: 0414 919 194 PH: 1300 760 366

MASTER BUILDERS

Financial Services

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New Members A & E Ford Pty Ltd ALBION PARK

Brenton Wilson GYMEA BAY

Frank O’Leary Kitchens BATHURST

A B C Homes (NSW) Pty Ltd CASTLE HILL

Brett Chandler RUTHERGLEN

Gene Pregal TORONTO

A F Concrete Pumping Pty Ltd ROOTY HILL

Brown Constructions NSW Pty Ltd GYMEA

Gillco Pty Ltd SMITHFIELD WEST

Adam Lumb ABBOTSFORD

Buildsmart Group Pty Ltd CENTRAL COAST MC

Go Tech Security Trust SOUTH HURSTVILLE

Advance Waterproofing Services BEECROFT

Builtex Pty Ltd GREENACRE

Greg Thistleton BUCKAJO

Aidan Diab PARRAMATTA

Burns Built Constructions OLD BAR

Hamilton Marino Builders SYDNEY SOUTH

AIM Building Contractors Pty Ltd SEAFORTH

Cap’s Remedial Pty Ltd AUBURN

Happy Homes Construction WARNERS BAY

Albion Design & Construction Co Pty Ltd NEUTRAL BAY

Carl Robson QUAKERS HILL

Hayden Matwijiw LILLI PILLI

Andre Ferraina SUMMER HILL

Censeo Pty Ltd ST LEONARDS

High Q Trades MOUNT VICTORIA

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Houspect NSW Pty Ltd WARRIEWOOD

Arranson Pty Limited BELROSE WEST

Christian Volpi ROCKDALE

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CJBOM Pty Ltd NORTHBRIDGE

Isopro Pty Ltd SANS SOUCI

Ascott Carpentry Services ROSEVILLE CHASE

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Atlantis Building Constructions BARDWELL PARK

Dancing Tables DENILIQUIN

Jack Bassett CLOVELLY

Audeco Pty Ltd HURSTVILLE

Dane Neville FRESHWATER

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Becton Residential Constructions (NSW) Pty Ltd ALEXANDRIA

Dennis Tieppo MERIMBULA

Jangho Curtain Wall Australia Pty Ltd CHATSWOOD

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Eleven Straight Building Co Pty Ltd LIVERPOOL

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Ben Ferris GLENHAVEN Benjamin Schofield MARSFIELD Betabuild Services Pty Ltd ST ANDREWS Brenke Building Services MANNERING PARK

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New Members Lakari Building WOOLWICH

Priority Business Lawyers CHITTAWAY BAY

Titan Waterproofing Pty Ltd PITT TOWN

Laperecon Services Pty Ltd HURLSTONE PARK

Putta Bucca Landscaping & Concrete Supplies Pty Ltd MUDGEE

Todd Chown LALOR PARK

Lennox Homes LENNOX HEAD M M Reddie & P G Reddie ENGLORIE PARK Mason Craig MERRYLANDS Matchell Dawson PORT MACQUARIE Matthew Yopp SUFFOLK PARK Maximus Concrete Constructions Pty Ltd JEWELLS Metropolitan Group Pty Ltd FIVE DOCK Michael Cook OURIMBAH Mink Building Group Pty Ltd KELLYVILLE RIDGE Motif Co OORABELL MRL Projects FAIRLIGHT N.E McCudden & T McCudden BONNY HILLS Nadin-West Joinery Pty Ltd BENNETTS GREEN Neil Shaw GLENORIE Newoak Contracting Pty Ltd HALEKULANI Nicholas Ritchie WHALE BEACH Northcroft (Australia) Pty Ltd NEUTRAL BAY P White Pty Ltd ROOTY HILL

Realta Enterprises Pty Ltd WOLLONGONG Rhys Best Building Services Pty Ltd GRIFFITH Richards Palmer WODONGA

Tori Peter Group MENAI True North Projects Pty Ltd ABBOTSFORD Unique Carpentry Construction & Design BATEMANS BAY Warwick Ede BONDI

Robin Calleja WODONGA Rudd & Co. Construction Pty Ltd BELLEVUE HILL Saley Group Pty Ltd BAULKHAM HILLS

Winning Builders Pty Ltd HURSTVILLE Xtreme Makeovers Pty Ltd GRAYS POINT Zipmate Pty Ltd GREEN VALLEY

Samuel Bringans ECHUCA Site Security and Traffic Control Pty ALLAWAH Skynach Consolidated Pty Ltd NORTH PARRAMATTA Smith and Sons Baulkham Hills Pty Ltd BAULKHAM HILLS Smith and Sons Castle Hill KELLYVILLE RIDGE Smith and Sons Lake Macquarie East BUFF POINT Stephen Whiteman BEECROFT Steve Board BLAYNEY Stevens & Carline Constructions Pty Limited ALLAMBIE HEIGHTS T D Building Pty Ltd MIRANDA Tim Richards NOAMA

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training

a liFetiMe oF liVaBility New technologies, an ageing population and consumer demand for more flexibility and choice are just three of the megatrends that are set to transform the residential development sector.

At the intersection of these megatrends are homes that are livable, versatile and able to adapt to the changing circumstances of residents. The companies that are able to capitalise on these trends will gain market advantage, and will also deliver more livable homes for future generations of Australians. Livable Housing Australia (LHA) champions homes that are safer, more comfortable and easier to access – for everybody, every day, at all stages of life. Australia’s largest diversified property group, Stockland, has recently signed on as LHA’s first Corporate Partner with the aim of improving industry understanding of Livable Housing Design. “We design with real people in mind,” Stockland’s Stephen Bull has said. “A livable home is designed and built to meet the changing needs of residents across their lifetime.” LHA’s commonsense Livable Housing Design Guidelines outline simple and straightforward design features that can be incorporated into any new or existing home, whether a detached house or apartment dwelling. The designs of more than 250 individual dwellings have already achieved the seal of approval that attests to enhanced livability.

International research has found that it is 22 times more efficient to design and construct a home to meet residents’ changing needs upfront, than it is to undertake an expensive retrofit. And yet, few people consider livability when they are buying or building a new home. Michelle Prange and Casey Ford are a perfect example. An occupational therapist for almost a decade, Michelle is passionate about accessible design. Casey, a tradesman and builder, was less keen – until a horrific motocross accident left him immobile for months. After a week in intensive care and extensive rehabilitation, Casey returned home fully dependent on a wheelchair for mobility. He needed assistance for every simple task. “It was only when he was confronted with the barriers presented within our rental home that he understood how vital a ‘livable’ home is – as the unexpected can happen to anyone, at any stage of their life,” Michelle says. Casey has now recovered from his injury, and is a strong advocate for livable design. The couple, who are preparing to welcome their first child, are in the process of designing and building a livable home that meets gold level certification from LHA. “We know the livable features will make our lives so much easier,” Michelle says. “The step-free entries, wider hallways and larger bathrooms make access with a pram

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

and moving children and toys around the home simpler to manage and less stressful. We also won’t need to worry that a child will fall over sliding door extrusions or down steps as the home won’t have any.” “The wider spaces in our home will also make it easier to move and place furniture,” Michelle explains. “We will be able to welcome any visitor without worrying about whether they have safe access to our home. We are both fortunate to have both sets of grandparents still with us and they will be able to visit us without fear of falling over steps. They’ll be confident in using the bathroom while managing a mobility aid. These minor considerations add to an improved quality of life not just for us, but for friends and family too.” The bottom line is simple. A livable home is really about good design. People’s needs change throughout their lives. Their priorities shift from ensuring their home is safe for small children to allowing them to live independently as they age. A livable home caters for all stages of a person’s lifecycle. As a home is the most important investment that most Australians will ever make, it’s important that we consider our needs not just today, but every day. By Andrew Aitken, Executive Director, Livable Housing Australia - www.lha.org.au.

advertorial 35

Perfect Contracting A tradition of innovation and excellence across the Construction and Demolition Industry.

Understanding first-hand the nature of the industry and the need for a flexible and dependable workforce, Mateusz Jedruszek founder and Managing Director, established Perfect Contracting as a labour hire company. Recognising the needs of a growing construction industry and volatile economy however, Mateusz diversified and the company’s services were expanded to include the Skip Bin Hire division with restrictive waste management policies, as well as a comprehensive plant and equipment hire service. Perfect Contracting is now a recognised leader in the supply of reliable and efficient professional services to clients across New South Wales that include but are not restricted to: precision, selective demolition to the complete removal of buildings and foundations, restrictive waste management via a wide range of skip bins and side bins, the supply of professional, qualified and reliable staff together with a range

of equipment necessary for the task, and a wide range of heavy-duty plant and equipment hire.

Perfect Contracting is located at 4/8 Lillian Fowler Place, Marrickville NSW 2204.

With clients more concerned about cost and value, Perfect Contracting’s philosophy of “Time is Money” continues to deliver the right solution for the right job with the right equipment, at the right price.

For more information contact: Phone: 1300 737 332 Mobile: 0431 189 637 Fax: 02 9517 1555 Website: www.perfectcontracting.com.au

Perfect Contracting’s strategy is built on three key foundations; being innovative, diversified and focused on long-term goals. Perfect Contracting is investing heavily in research and development to try to understand how to provide exceptional services to Australian families. Striving to exceed even the highest expectations, Perfect Contracting’s hallmarks are great customer service, professionalism, innovation and excellence. They are not simply promises; they form the basis of Perfect Contracting culture.

PeRFeCT CoNTRACTING - SeTTING The STANDARD AS ToP CLASS INNoVAToRS ACRoSS The CoNSTRUCTIoN AND DeMoLITIoN SeCToRS, eSPeCIALLY DURING ToUGh FINANCIAL TIMeS. Perfect Contracting continues the tradition of providing superb quality, innovation and performance, boasting a diverse portfolio of services:

DeMoLITIoN

WASTe MANAGeMeNT

LAboUR hIRe

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Professional services ranging from precision, selective demolition to complete removal of buildings and foundations.

Restrictive Waste Management policy with wide range of skip bins and side bins in all different sizes and shapes.

Professional, RISI qualified and reliable staff with a range of necessary equipment for the task.

Range of heavy-duty plant and equipment for hire so you can complete your small and big projects.

4/8 Lilian Fowler Place, Marrickville NSW 2204 PhoNe: 1300 737 332 Fax: (02) 9517 1555 Mobile: 0431 189 637

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finance

Managing Cash Flow in the Construction Industry Complacency about cash flow management can put pressure on even the most successful and profitable businesses.

Cash flow planning is the lifeblood of any business, and one that can easily be overlooked. Proper cash flow forecasting will ensure that a business can anticipate its profits ahead of time and can identify any cash shortfalls. In our experience, a surprising number of construction companies, from the very large to the very small, do not focus enough attention on cash management. Since the GFC, BRI Ferrier has worked on the restructure of numerous construction companies of varying size and complexity across urban and regional New South Wales. Reflecting on this recent experience, and on restructures we have achieved in other industries, it has become apparent that cash flow is all the more critical to the construction industry as contractors and subcontractors typically have patchy and variable revenue patterns, historically low margins, fixed costs and, for smaller operators, there is the additional impediment of having limited access to traditional sources of financing. Operators in the construction industry should therefore ensure that they understand the mechanics of and the timing of cash flow around their business to ensure that cash is being used in the business’ best interest, and that business-critical expenses (typically payment to employees, landlords and suppliers) are met whilst borrowing requirements are minimised. This is especially relevant in an environment where recent, well-publicised business failures in the construction industry have caused financiers to insist on more restrictive lending criteria. The components of cash flow are the sources and the uses of cash. Sources of cash In the construction industry receipts primarily consists of progress payments, variations and retentions but can also include inter-company loans as well as asset sales. The timing between making a sale, billing and collecting the payment is crucial and should be made a short as possible through effective debtor management. Keeping abreast of the pipeline of work will allow for effective forecasting of future cash inflows. It is important to note that receipts are not the same thing as sales – sales reflect the contract price of the works you have committed to perform for your customer, whilst receipts refer to the cash inflows that result once the customer has been billed and made payment. It therefore follows that even though your financial accounts and sales ledger may show that you are making a profit

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(i.e. that sales exceed expenses), you can still experience cash flow shortages if those sales are not efficiently billed and turned into cash. Uses of cash In the construction industry payments primarily consist of fixed labour costs (i.e. permanent staff), variable labour costs (i.e. contract staff), equipment costs, materials costs and overheads (e.g. rent, insurance, utilities) as well as borrowing costs. Whilst fixed costs generally have static payment times (i.e. they are due monthly, fortnightly or weekly), payment of variable costs should be well-considered, negotiated and prioritised according to necessity, without effecting relationships with suppliers. A carefully planned and monitored cash flow procedure can provide a business with the crucial financial information required to make effective budgeting decisions that can ultimately enable a company to successfully expand and efficiently deliver new projects. The cost of not efficiently and effectively extracting cash from your business’ operations can include unnecessary increases in overdrafts and borrowings, raising capital from shareholders and the sale of business assets and personal assets to sustain cash flows. Cash control is the first principal of successful business – even before contracts are negotiated with customers and suppliers – and is a cultural mind-set (the “Cash Culture”) that needs to be part of the daily operations of your company. Below are some practical and effective strategies to assist contractors in forecasting, managing and conserving cash. Lay the foundation for a cash culture Contractors need to ensure that appropriate procedure are in place to monitor cash, this includes ensuring that the roles and responsibilities of those who update financial information are appropriately assigned and someone in the business has ‘ownership’ of monitoring and reporting the cash position accurately and on a timely basis (weekly reporting is generally appropriate, however in more challenging times the cash flow may need to be updated daily). However, businesses cannot rely on the finance function alone to manage their cash flow. Part of a good cash culture includes an open dialogue and partnership between the finance function and front-line staff (i.e. project managers). Project managers

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must be held accountable for ensuring that any changes in project outcomes, as well as discrepancies against forecasts, are identified early. It is worthwhile considering introducing Key Performance Indicators (“KPIs”) to focus project managers’ attention on cash collection (not just measures relating to the project pipeline and profitability) which, could then be tied to performance bonuses, to be more effective. Understand your rights The Building & Construction Industry Security of Payments Act (“the Act”) provides subcontractors with a quick means of enforcing progress payments in order to improve the cash flow of all parties in the contract chain. Contractors should ensure that they implement effective procedures to ensure that they comply with the Act. Contractors should also be aware of the amendments to the Act which were passed by the NSW Parliament in November 2013. These amendments aim to enhance the flow of cash from principals through head contractors to subcontractors and suppliers. Contract monitoring Contractors often fall into the trap of assuming that the cash flow from a contract will be the original contract price, in an otherwise changing environment. However, once a contract is agreed it is vital to continue to regularly monitor the progress of the project and to note the impact of variations in the forecast cash flow as variations can have dramatic positive and negative effects on the cash position of your business. Regular review (generally weekly) of the contract position will enable unforseen changes to be captured on a timely basis and assessed in the context of the broader business cash flow. Variance to budget will often highlight a problem on a contract. Set cash flow target One way of controlling cash flow is by preparing and maintaining a cash flow forecast. The forecast does not have to be complicated or fancy (we have found that excel spreadsheets work just as well as, if not better than, packaged software) but the key is that any forecast must be based on accurate and timely data. The cash flow forecast should be updated regularly in order to give an accurate outlook for the next 6 to 12 months. Agree payment terms up front This applies equally to customers and suppliers. For customers, make sure that your credit terms are clearly established so that you can gauge when you will be paid and by whom. There should be a clear and documented procedure to follow up and collect any late-paying debtors. For suppliers, ensure that you are clear about the payment terms before accepting terms and conditions from any kind of supplier so that you can forecast when payments are due and that you understand all of the costs which you will be responsible for such as the cost of dismantling and transporting equipment. This is important

from both a cash flow perspective and for maintaining sound working relationships with your suppliers. If payment terms slip, consider the impact. Invoice quickly Invoice as soon as work is completed and ensure that you allow for direct payment methods (i.e. EFT) as opposed to cheques which can easily get lost and take time to clear (thereby adversely affecting your cash flow). It is common sense but worth noting that every day you delay invoicing your customers, is an extra day that you must wait for cash to be received. To avoid any delays in resolving disputes, ensure that all contractual documentation and certification is up to date and easily referenced. Keep your financiers informed Should a cash flow shortage arise it is important to be able to accurately predict the timing of the shortfall and its quantum. This will make any requests to a bank for funding more compelling by demonstrating that you understand the drivers of your business and any request you make today will not be followed by a further request in the near future due to unreliable forecasting and errors in estimating the cash position. Furthermore, a financier responding to a funding request will likely require a cash flow forecast anyway so having one prepared and updated on a regular basis will be advantageous in showing both your current cash position as well as the historical cash management trends in your business. Use specialists Whilst running lean operations is a good way to save costs in a competitive environment,

operators need to take caution in trying to perform all business function in-house, if the skill-set is not available and/or well developed. Especially in matters of finance and accounting, periodic assistance from accounting professionals to review your cash flow procedures and assist you in setting up robust and user-friendly cash flow monitoring tools (i.e. building financial models tailored to your company’s needs, which can then be easily updated from week to week to report your cash position). Relying on specialists who have exposure to industry best practice can often take the pressure off operators and provide greater peace of mind from additional transparency about the business’ performance. Operators must appreciate that the inability to manage cash can cause even the most successful and profitable businesses to become insolvent, and therefore it is critical to not be complacent about cash and to constantly monitor and analyse your business’ cash position. Unfortunately, if a construction business doesn’t recognise and address potential cash flow issues early, it is very likely that the company will experience consistent financial management problems and even risk business failure. As restructuring and turnaround specialists we may be able to give your business the best opportunity for financial strength and long-term success by reviewing how you collect and use cash and assisting you in implementing cash forecasting and monitoring strategies. By Costa Nicodemou – Director at BRI Ferrier — www.briferrier.com.au.

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mentoring

Female Tradies in The Building Industry “My buildings will be my legacy…they will speak for me long after I’m gone” – Julia Morgan

Omesh Jethwani, NSW State Manager CAMS, interviewed four female tradies who started their own trade businesses; Victoria Waring, a painter from Ms.Fix, Sheree Canham, a bricklayer from Dolly Bird Bricks and siblings Penny Petridis, a carpenter and metal fabricator, and Anna Kay a licenced builder from Female Tradie, to find out why they decided to pursue a career in the building and construction industry. What attracted you to the building and construction industry? Victoria: The attraction to the trade was definitely making something better. Knowing that you have improved a building to enter a new chapter for its new owners or old owners wanting a change. It is also the freedom of being your own boss and creating your own destiny. Sheree: I guess the first reason I got involved with bricklaying is because my father is a bricklayer who also apprenticed both my brothers. I also love working outdoors and keeping fit. It is very rewarding to see the finished product at the end of the day whether it is a pizza oven or even just a retaining wall. Penny: I have always been intrigued with the architecture and structures of buildings. I would just stop and stare at the heritage buildings as they have so much history to them. Each and every one of them is telling a story. My passion grew stronger and stronger with the newer modern houses built over the last decade or so. Some of the buildings just blow me away with their grand designs. We have taken the building and construction industry to another level in every aspect from design and engineering to builders. This makes me want to be a part of it more and more and alongside that holding a vision of building my own dream home one day. Anna: It all started when my husband and I decided to build our own house. The plans were all approved and the challenge was to find a good honest builder. That was a challenge on its’ own. With both not knowing much about the building trade and whether the tradies were carrying out the job the right way, I decided to go to TAFE and complete a Diploma in Building. This really helped me learn about the construction industry and I was able to make sure everything was constructed correctly. Watching and working on our house from a big hole in the ground to an architecturally design house was the very exciting and the most important, very satisfying. I was so proud of what I had achieved and thought to myself that a licenced builder is what I wanted to be. I found the construction industry was very exciting, challenging, and it changes every day in design and construction. That is why I was so attracted to it.

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What were some of the memorable projects you worked on? Victoria: I would have to say the historic restoration projects are always amazing, restoring a piece of history. Also painting my own home which has been the most challenging and memorable to date as it was done be myself and reflects my personal tastes in painting. Sheree: At Milton Park (Bowral) the job involved various arches and brickwork to blend into the already existing old style buildings. There was also a brick spa bath. Completing my first house on my own. Competing in the World Skills Bricklaying competition in my first year. Having a personal best amount of bricks or blocks laid in one day and the signing of my first apprentice. Penny: When I first finished my carpentry trade my first biggest project was to transfer a friends’ garage to a one bedroom apartment for her sick grandma. All that was there was half a concrete slab and a flimsy corrugated roof. I managed to convert it into a modern brand new apartment. I designed every single part of it, plumbing, electrical, floor design, kitchen and cabinetry, which was all very new to me. I then went ahead and built it and was very impressed with the finished project — definitely a memorable project. Another memorable project was being involved with the refurbishment of the second level of a bar/nightclub called Ruby Rabbit on Oxford St. This was exciting, as I had previously mostly worked on residential so to be involved with the design and construction of the second level was also a memorable achievement. Anna: My house of course as it was the first projected I had ever worked on and it is my special baby. My two uncles at Nexus Architecture designed it and Penny Petridis my sister, Female Tradie, helped build it so it is a special family affair project that we all enjoyed. What are some of the barriers you experienced in your trade? How did you overcome them?

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Victoria: My first barrier was that I could not even get a start in the building industry. I was told it is not a place for girls you do not want to do that! As I was not a confident girl I did not begin my chosen career as a builder. I did other jobs until 10 years later I finally found my place in the trade industry, painting. I overcame that barrier by not giving up as soon as I had confidence I asked for a job in the trade again and the answer was yes! Sheree: Some builders are reluctant to give a girl a start on their jobs. You just have to keep on trying; eventually you will get a start. Luckily for me, they were impressed by my work and speed so word of mouth soon got around. Penny: One of the barriers you do experience in the builders trade is trying to get a break in a male dominated industry. I first completed my metal fabrication trade when I finished school, lets just say many years ago and was lucky enough to gain an apprenticeship, building racecars. Unfortunately the old man fell sick only just after my first year and had to shut up shop and unfortunately I did not have a job left. I rang every single metal fabrication business there was and there was no chance anyone would take me on for a few reasons but simply for the plain fact that there were not even any female facilities. Luckily enough a training company came along and swooped me up and I was able to finish a metal fabrication engineering construction trade. Now, almost 20 years after the completion of my carpentry trade, I want to move towards the building trade and it still amazes me that we only have a few women in trades. I too struggle to find contract work with bigger building companies as I feel they still seem to hold this barrier between us and I sense that they still are not quite sure. Luckily enough now these companies are starting to open their minds to female tradies and gradually more and more opportunities are coming our way. I overcome these barriers by working in my own business, Female Tradie, alongside my sister builder Anna Kay. We prove ourselves through our hard work and quality completed projects. We keep moving forward from job to job because every project I complete creates another believer that female tradies are completely capable of doing the job and everyday I still get to fulfil my passion within the building industry. Anna: There is no doubt that the construction industry is still maledominated, and there are many who will not give women a chance to progress. That was the biggest barrier I had to face. I had plenty of experience dealing with this problem from my previous career. I was an Avionics Aircraft Engineer, yes very male dominated. My experience in this area gave me the opportunity to become a leading hand, so I knew that I could do it again. My aim was to try and focus on being a professional in the industry, rather than a woman, and I never shied away from a challenge. I showed everyone that I was capable of carrying out my duties by forming a good relationship with my fellow workers and building a strong bond with them. That would help them build a trust in me and accept me as one of the crew. Do you think having a mentor plays a significant role in helping female apprentices?

Victoria: Yes I think so. They have the opportunity to speak to a third party about issues or for advice. It is always easier to speak to someone who has no connection with your work place and it is a valuable experience to be able to talk to an industry professional. Sheree: I never had a female mentor and I believe it would help for sure. Penny: Yes I definitely think a mentor will play a significant role in helping the girls; someone to keep them inspired if the going gets tough or to even share some tricks of the trade. Mentors are a great thing no matter what industry you are in or level you are at. If you want to grow its always so much more easier and more enjoyable with a mentor alongside you. Anna: Yes I think it is important having a mentor with the female apprentices. It helps motivate them, teach them in a specific way to work hard to uncover their true potentials, and overcome their barriers, especially that barrier of being a minority in such a male dominated trade. Mentors give inspiration and the drive needed to direct them, or better yet show them the example by which we will change for the better. They help them become a stronger person. People who are constantly striving to improve themselves will tell you one thing for sure, something they all have in common is having role models in their lives. Did you have a mentor? If yes, how did they contribute to your career? Victoria: No but I wish I did it would have been great! Sheree: Yes. It gave me goals and made me strive to be as good as them. Penny: Apart from my sister I also have a personal mentor/coach not only for work related issues but also who helps me in all areas of my life. Without them lets just say I would not be the person I am. Anna: Yes I had and still have my sister Penny as my mentor in the construction industry. Penny has been in the industry for over 10 years. This has given her an extensive amount of experience in a number of trades. Working together gives us a different perspective when trying to solve problems or trying to come up with new ideas on how things are going to be built. As a role model she changes my outlook on certain issues. She has helped me have a positive outlook, that all problems can be resolved with time and of course money. She has this saying, â&#x20AC;&#x153;It canâ&#x20AC;&#x2122;t be that hard!â&#x20AC;? She is my rock and always works so hard to help and satisfy others needs. She is a great person to have in my life as a mentor. If you could change one thing in relation to your current trade what would it be? Victoria: I would not change anything about my trade, I love my job. Sheree: There is too much red tape. Time taken to do tool box meetings, risk assessments, safe work method statements and site inductions use bricklaying time that we do not get paid for when it all just comes down to common sense.

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mentoring

Penny: The most obvious I guess. Give the females a GO, not only in the earlier stages such as apprentices but also in the higher building/supervisors positions. Do not second guess just get us on board. You will be pleasantly surprised Anna: The construction industry is so diverse and offers so many options and variety. That is why our company (Female Tradie) is trying to get out there to the public and inform other females to give it a go and find a career in the construction industry. Let us not be a minority, our aim is to see more women running businesses in our industry. What is one advice you would give to the next generation of female students considering a trade in the building and construction industry? Victoria: I would say go for it, do not give up. Follow your heart and the trade will be the best job you will ever have. Sheree: Make sure you enjoy and take pride in what you achieve and do not give up at the first roadblock. Penny: My motto is never to give up. If you want it bad enough there is nothing stopping you. If you are finding it tough and think you’re at your lowest, keep positive and push through because I am sure through hard work and dedication no one can deny your dreams. Just go out there and grab them. Anna: The construction industry is great industry to be part of. It gives you a very practical view on the world. You learn to recognise problems and figure out how to solve them. It is a very dynamic one with new projects, new technologies and methods being announced regularly. The construction industry is not just about building. It has so many avenues to pursue a career in such as engineering, site surveying, interior design, quantity surveying and even landscape. They are all highly technical and interesting. There is a job to suit everyone. Working hard may lead down so many paths, running your own business or travelling interstate or around the world. The Master Builders Association will run a pre-apprenticeship course and mentoring program for female building apprentices in June 2014. If you are interested in employing a female apprentice contact our CAMS Team: Omesh Jethwani, NSW State Manager or Jack Long, Apprenticeship Mentoring Officer on 02 8586 3555 or email ojethwani@mbansw.asn.au or jlong@mbansw.asn.au The NSW Government through Women NSW supports the Women in Construction project.

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Fleet ManageMent â&#x20AC;&#x201C; taX, utilisation and oPtiMisation Providing, running and maintaining a vehicle fleet is a considerable expense, second only to salary and wages, for many businesses.

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Whilst vehicles give rise to many taxation issues, fleet utilisation and ongoing expenses are unfortunately not often analysed in depth, and opportunities to significantly reduce costs may be missed. In this article, BDO summarises the common tax requirements and suggests ways to examine fleet utilisation and cost data in a more strategic way, based on several fleet reviews the team has recently completed. Taxation matters While one of the most common tax deductions claimed in business is for car expenses, the income tax legislation relating to motor vehicles is one of the most complex. Depending on the business structure and size there will not only be income tax implications, but also GST and Fringe Benefits Tax (FBT) matters to consider. Generally, if you operate your business as a company or trust you will be able to claim a full tax deduction for the running expenses associated with operating business purpose vehicles such as trucks, vans, utilities, wagons or panel vans. Some of the typical expenses are fuel, maintenance, insurance, registration and depreciation/lease costs.

For other vehicles, such as sedans, station wagons, or SUVs you will also be able to claim tax deductions, however these will be limited to expenses associated with business use; that is, expenses relating to personal or private usage will not be deductible, subject to the FBT implications. Where a business provides cars to employees and allows private usage there will often be FBT consequences. Private usage not only includes using the car on weekends and outside business hours, but also includes travel to and from work, which is often forgotten about when considering a business’s FBT liability. Generally commercial/work-horse type vehicles, e.g. trucks, vans, utilities, panel vans and some dual cabs, are exempt from FBT where private use is restricted. This is an important consideration when assessing a business’s fleet, particularly with regards to dual cab utes, as the false assumption is often made that all dual cabs are exempt from FBT. Each year the Australian Taxation Office publishes a document on its website call “FBT – exempt motor vehicles”, which provides guidance on specific vehicles that may be eligible for the exemption. The ability to claim GST input tax credits generally follows the business’s ability to claim income tax deductions, e.g. running expenses incurred on a vehicle that is 100 per cent business usage will allow you to claim 100 per cent of the GST input tax credits, whereas if the vehicle is used 50 per cent of the time for private purposes you will generally only be able to claim 50 per cent of the GST input tax credits. A business will also be able to claim the GST input tax credits on the acquisition of commercial/work-horse type vehicles, however this will be limited to the car depreciation limit of $57,466 for cars, e.g. sedans, station wagons, and SUVs.

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Recently the Federal Government announced it would repeal the provision allowing small business an accelerated initial deduction for motor vehicles purchased from 1 January 2014. This means a small business will no longer be able to claim an immediate depreciation deduction of $5,000 for vehicles purchased that cost more than $6,500. While this concession is considerable, all is not lost for small business as it is anticipated they will still be eligible for accelerated depreciation in the general small business pool. With the FBT statutory method percentage progressively moving toward 20 per cent regardless of kilometres travelled, the higher FBT cost associated with low-use business vehicles (those less

than 15,000km pa) is moderating. However, just because FBT costs might be less now than several years ago for low use vehicles, the more fundamental question to be asked is “why are vehicles that are supposedly provided for genuine business reasons being driven less than 15,000km per year?” The case study below of a vehicle fleet comprising more than 400 vehicles for one of BDO’s clients, highlights how a thorough analysis of cost and utilisation data (which the organisation concerned was already keeping), identified several opportunities for significant reductions to its fleet costs, as well as its FBT costs.

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Fleet utilisation and optimisation The following charts and analysis are based on an organisation that was running a diverse fleet of more than 400 vehicles, some being pool cars, some being executive vehicles and the majority being tool of trade utilities and other work vehicles. BDO worked with this client to extract all vehicle running, maintenance and accident repair costs and added depreciation costs as well as (annualised) distances recorded on FBT declarations to prepare the summary chart shown below.

Although it took time and effort to pull records from the organisation’s fleet and finance systems, the analysis above enabled two key trends to become immediately apparent as shown in the next chart. From the second chart, it can be seen that: • There were many vehicles (approximately 22 per cent of the total fleet) that were being driven less than 10,000km per year [“A” on the chart]; • Around 15 per cent of vehicles had significantly higher running costs than similar vehicles driven by other staff [“B” on the chart].

As can be seen, the small 4-cylinder vehicles were about $4,000 to $4,500 cheaper to provide and run (across all distances travelled) than the medium size or larger utility and 4WD vehicles.

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As a result of considering the implications of these key findings, our client took steps to: • Review the real business need for all low use vehicles; • Tighten up business case requirements; • Require logbooks for tool of trade vehicles to be completed to get a much clearer picture of business/private usage; • Replace utilities and 4WD vehicles with smaller less-costly vehicles where this was possible; • Examine the fuel records and accident statistics of vehicles that were significantly more costly to run than other vehicles of the same make and model, to assess the causes of such cost blowouts. As a result of these initiatives, our client was able to save close to 10 per cent of its projected vehicle and FBT costs over the following two years. Summary Managing a vehicle fleet is a major expense (and occasionally a headache) for many businesses. In optimising your fleet there is a need to get the taxation, fleet composition and fleet utilisation dimensions right to realise significant savings over time.

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BDO believes most businesses are already collecting all the data needed to provide the foundation for a more systematic analysis of fleet costs, utilisation, and FBT liabilities, although the data needed may not be in the one computer system or database. For a fleet of more than 50 vehicles the potential savings will far outweigh the time and effort involved in putting together a comprehensive vehicle information table that will then allow straightforward fleet-wide comparisons to be drawn. For more details or information how to manage tax and optimise your fleet please contact Randall Bryson or Chris Leck at BDO — www.bdo.com.au. Chris Leck, Principal Consultant, BDO, chris.leck@bdo.com.au Randall Bryson, Associate Director, BDO, randall.bryson@bdo.com.au

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an introduCtion to led What every residential and commercial project manager should know about LED lighting and meeting the regulations.

Since its invention in 1963, LEDs have become highly evolved lighting solutions that offer excellent efficacy, usability and reliability. LED is now considered a proven lighting technology and the adoption rate over other technologies is considerable. The transition from conventional or traditional forms of lighting to LED has been spurred on by a combination of factors including the availability of new lighting and control technologies; government policy change; corporate needs; and customer expectations. The greatest challenge for builders however is ensuring the lighting solution specified for residential or commercial projects strikes a balance between aesthetics, and reducing energy and maintenance costs. LED lighting supports achieving this important balance desired and expected by purchasers and lessors, but also makes a critical contribution to achieving compliance with Australian building regulations and standards associated with energy efficiency. LED: key specifications to consider Through advances in LED lighting technologies, there is now an LED equivalent for just about every conventional light application, both indoor and outdoor. However not all LEDs are created equal. Performance can vary significantly across different brands so lighting should be approached like any other building product specified on a project; by comparing products on performance as well as price, and most importantly ensuring products meet local electrical safety regulations. By understanding key product performance indicators for LEDs, builders can ensure projects both meet the appropriate regulations as well as qualify for energy efficiency ratings and energy savings certificates.

When comparing LED lighting performance builders need to consider factors including energy efficiency, operating life and lifetime, light output/distribution, quality of light, upgradability, compliance and cost. Energy efficiency The final energy efficiency of any lighting system depends on more than the efficacy of the light source itself. It is important to consider the entire system: the efficiency of the LED device itself (source efficacy); and how well the device and fixture work together in providing the necessary lighting (luminaire efficacy). Because LEDs are sensitive to thermal and electrical conditions, they must be carefully integrated into lighting fixtures. The efficiency of a poorly designed fixture that uses even the best LED will be only a fraction of what it would be if the fixture were well designed. Use metrics such as watts per square metre (W/m2) to compare LED lighting solutions as this takes into account all of the components of the LED system and the system design. Lifetime Similar to conventional light sources, LED light sources diminish in output over their operating life. When comparing the light output and energy efficiency of different types of light sources and fixtures, it is important to consider end-of-life efficacy, and not initial efficacy. Lumen depreciation is an essential consideration in evaluating the design life of LED lamps, which typically do not fail like some conventional light sources. Instead, design life ends at the point where light output is projected to drop below useful levels. The most common lifetime specification is L70, which represents the estimated operating hours before light output falls to 70 per cent of initial levels.

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A well-designed LED luminaire delivers up to 70 per cent of initial lumen levels over 50,000 hours of use, providing savings on expensive labour costs and replacement lamps or luminaires. This compares favourably with the 15,000 to 20,000 hour average lifetime of most conventional lamps. It is important however to be wary of unrealistic LED lifetime claims that are not backed by performance testing documentation and warranty. LED manufacturers with a long track record will for example cover all parts over the entire warranty period. Light output Light output is an informal term for how much light a fixture produces, and how the fixture emits and distributes that light and has a critical impact on lighting compliance to Australian regulations and standards. The formal term for data describing the quantity and distribution of the visible light produced by a light source or fixture is photometrics. It is common practice for lighting fixture manufacturers to report key photometrics in fixtures specification sheets or data sheets. These usually include basic charts and graphs that describe the power or intensity of a lamp or light fixture, the way it distributes light in space or over an area, and its energy efficiency. Lighting specifiers and designers use this data to make preliminary evaluations of a lighting fixture’s capabilities and its potential suitability for a particular task or application. For a number of reasons, lumen output is not the best measurement of an LED lighting fixture’s capabilities. In fact, evaluating an LED lighting fixture solely or primarily on the basis of its lumen output can underestimate

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or otherwise give a distorted picture of the fixture’s performance and suitability for a given task or application.

Return on investment calculators demonstrate any upfront investment in LED is negligible when compared with the total cost of owning, operating and maintaining LED Lighting, particularly when used in partnership with a lighting control system. A switch can mean energy savings of up to 80 per cent compared to conventional technologies. The break-even point on the initial investment varies between two to three years based on the cost of energy in each region.

Instead of lumen output, the best and most relevant measurement for evaluating LED lighting fixtures and for making accurate comparisons with other LED or conventional lighting fixtures is ‘delivered light’. The formal term for measurements of delivered light is illuminance. Roughly speaking, illuminance is the intensity of light falling on a surface area. For areas measured in square metres, the unit of illuminance is lux (lx).

Aim to satisfy a light need rather than a lighting need Although there is now an LED for almost every application it is important to remember that when considering lighting options for a project that first and foremost the lighting solution is ‘fit for purpose’.

Expected ‘delivered light’ for specific task areas such as an entrance hallway, a common office space with desktop computers or a kitchen countertop, are outlined in Australian Standard AS/NZS 1680.2.2- Interior and workplace lighting. Quality of light The two most common measurements that provide useful guidance on LED colour quality comparisons are correlated colour temperature (CCT) and colour rendering index (CRI). CCT measures relative colour appearance of white light from lower (warm/ yellow - 2700K - 3000K and cool white – 4000K) to higher (cool/blue - 5000K-6000K) values on the Kelvin (K) scale. CRI provides a comparison of how colours are rendered by LEDs relative to a reference light source (either incandescent or daylight). Good quality LEDs will provide a CRI of minimum of 80 or higher. Upgradability LED technology continues to transcend performance barriers of conventional lighting technologies and what is thought to be low energy consumption today may actually be considered high energy consumption tomorrow. Therefore ensuring a project can benefit future innovations is highly favourable. For commercial buildings in particular, consider modules that are easily upgraded or can be replaced at a future date with the latest technology. This allows building owners and lessors to keep up with the pace of innovation without the need to redesign or look at alternative premises. Compliance In Australia, minimum energy performance standards (MEPS) apply to lighting products such as fluorescent ballasts, linear fluorescent lamps, incandescent lamps (tungsten filament, tungsten halogen lamps), compact fluorescent lamps, ELV lighting converter/transformers and mains voltage reflector lamps including halogen (PAR, ER, R type lamps etc.).

For this reason, all lighting options should be on the table at the outset of a project, not only LED. The residential or commercial building design and uses may for example call for a lighting design that incorporates both LED and energy efficient conventional products to achieve a balance between aesthetics and energy efficiencies required to meet Australian regulations and standards.

MEPS and energy rating label requirements are reviewed on an ongoing basis to ensure they keep up with advances in technology. Currently there are no minimum energy performance standards (MEPS) requirements for LED components and luminaires. MEPS for LEDs are currently being developed. Although there are currently no MEPS for LED, there are other safety requirements, which are applicable. The Australian government requires that all imported or locally produced electrical and electronic equipment comply with electromagnetic compatibility (EMC) emission requirements. Compliant products must bear the C-Tick logo. Non-compliant products do however still make their way onto the shelves and into the hands of builders and electrical contractors. In addition to the potentially serious safety issues, fines and legal action and use of non-compliant lighting products will stall building approvals processes, and can be a costly mistake to rectify. Cost Whilst initial fixture costs are higher with LED than for traditional light sources, a key consideration for builders, the investment in LED is now an expectation of prospective purchasers and lessors.

Plan for lighting Lighting has a critical impact on the aesthetics and functionality of a building, not only on a building’s energy consumption. Planning for lighting enables builders to take into consideration the purpose of a building, and for the most part, buildings exist as a space for human interaction and experience. What planning enables a builder to do is balance the human need with the need for ensuring energy efficiency in order to comply with the regulations and standards critical to securing building approvals. For these reasons lighting should be considered during the initial design phase of a new build or major retrofit, rather than at the point of installation. This is particularly the case when considering incorporating controls into a project for lighting or HVAC. Use of lighting control systems can significantly impact on wattage allowances under the Building Code of Australia and on whether or not a project for example qualifies for voluntary energy efficiency ratings and government grants. Sticking to a certified lighting plan Once a qualified professional certifies a lighting design, deviation from that design, whether by switching technologies or brands, is a serious compliance risk.

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

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solutions for existing buildings, some states also offer incentives in the form of energy savings certificates.

associated with interior lighting for both residential and commercial projects is AS/NZS 1680.2.2- Interior and workplace lighting.

BCA energy efficien cy requirements The Building Code of Australia (BCA), specifically Part J6 – Artificial Lighting and Power, outlines energy efficiency requirements for lighting in residential and commercial buildings.

What is key to the Australian Standard is an understanding of how the Standard should applied and that means ensuring light is, where light is needed. Those unfamiliar with the application of AS/NZS 1680.2.2 will tend to take a uniform approach to lighting, often over-lighting a space. Whereas, a qualified lighting designer will take the Standard, and apply the appropriate level of light to each function and task area within a space. For example, on an office floor the light levels (lux) appropriate for breakout areas, circulation areas, corridors, meeting rooms and workstations all differ. In addition to light level considerations, other LED lamp and luminaire factors should also be taken into consideration, such as the colour quality of the light (CCT and CRI).

In 2010 the BCA introduced considerable changes to what is permitted in relation energy consumption from lighting per square metre of floor space. Concessions relating to consumption are available if certain lighting controls are used and vary depending on both the lighting design and hardware incorporated into the project. The changes to the code ensure that more energy efficient types of lighting are used in order to reduce unnecessary energy use. An LED may be 4 to 5 times more efficient than the typical incandescent or halogen equivalent. Although there are basic watts per square metre limitations for fixed wired lighting, concessions, which are calculated as ‘adjustment factors’, are available when using lighting controls such as corridor lighting timers; time switches; motion detectors; and daylight sensors and dynamic lighting control devices. Switching out a specified LED for another LED, or an LED for a conventional product and vice versa, can have serious implications for the light in a space in addition to overall energy consumption, both impacting on whether or not a project still meets the various lighting regulations and standards. One of the defining features of LEDs is that they emit light in a specific direction. Since directional lighting reduces the need for reflectors and diffusers that can trap light, well-designed LED fixtures can deliver light efficiently to the intended location. In contrast, fluorescent and bulb shaped incandescent lamps emit light in all directions; much of the light produced by the lamp is lost within the fixture, reabsorbed by the lamp, or escapes from the fixture in a direction that is not useful for the intended application. Lighting regulations, standards, schemes and incentives There are a number of regulations, standards and schemes that lighting for new residential and commercial builds must comply with, as well as voluntary building rating schemes that are fast becoming an expectation of purchasers and lessors. To encourage a switch to more energy efficient lighting

It is important to note that these provisions within the BCA may require additional information to be provided when seeking building approval. Plans will for example require statements of lamp rating, associated room areas and possibly control gear ratings. A qualified lighting designer will look at the relative cost/benefit ratio of each lighting option across a residential or commercial project. The cost/ benefit may not be a simple balance of the cost of the detector versus the potential energy saving. The criterion may be to provide surplus illumination power density allowances to offset another area. Qualified, certifying lighting designers (MIES – Member Illuminating Engineering Society or RLP – Registered Lighting Practitioner) will be aware of these lighting requirements. Not meeting them will mean failure to comply and failure during final inspection. Australian Standards In addition to compliance with the energy efficiency requirements of the Australian Building Code there are also minimum light levels required for each space set by Standards Australia. The Australian Standard

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Commercial Building Disclosure scheme There are also the mandatory obligations under the government’s Commercial Building Disclosure scheme, a national program designed to improve the energy efficiency of Australia’s large office buildings (managed by the Australian Government Department of Climate Change and Energy Efficiency). Under the Building Energy Efficiency Disclosure Act 2010 most sellers or lessors of office space of 2,000 square metres or more are required to obtain and disclose a current Building Energy Efficiency Certificate (BEEC). A BEEC is comprised of: a NABERS Energy star rating for the building (National Australian Built Environment Rating System); an assessment of tenancy lighting in the area of the building that is being sold or leased; and general energy efficiency guidance. It is important to note that Building Energy Efficiency Certificates and NABERS Energy base building ratings complement, but do not replace the voluntary Green Star rating provided by the Green Building Council of Australia, and nor can a Green Star rating be provided in place of a BEEC or NABERS rating. Green Star rating Increasing numbers of residential and commercial projects are now ‘Green Certified’ under voluntary schemes, and this is anticipated to become the norm rather than the exception. The most widely recognised rating system in Australia is the national voluntary ‘Green Star’ Green Building Council of Australia (GBCA) rating system that evaluates the environmental design and construction of

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multi-residential and commercial buildings, including lighting. The GBCA estimates fitout lighting for example, accounts for more than 60 per cent of the average tenant’s energy costs and represents the largest single opportunity for energy savings. Over the last 10 years more than 500 buildings across the country have been Green Star-rated and is widely recognised as a way to futureproof fitouts for changes in the market and regulatory environment. Government incentives For retrofit projects, as opposed to new builds, builders can take advantage of government incentives created to encourage the move to more efficient lighting technologies. Through IPART (Independent Pricing & Regulatory Tribunal of NSW), and VEET (Victorian Energy Efficiency Target) for example, projects can apply for energy saving certificates for energy efficient projects (lighting retrofits). However to qualify for energy savings certificates key eligibility criteria for the scheme must be met and therefore taken into consideration at the lighting design stage. For example, maintenance of light

levels is a key requirement for inclusion in the ESS, as energy savings cannot be claimed where they come from a reduction in output. In order to claim the grant builders will also need to engage an Accredited Certificate Provider (ACP); a professional accredited to manage the energy certificates for your site. How to avoid issues Lighting as with any other aspect of building design is heavily regulated. A qualified lighting designer should therefore be considered alongside the supply and installation cost of lighting for any project. By working collaboratively with a lighting designer or lighting engineer builders have access to crucial product knowledge and product application knowledge that will ensure compliance. A practicing lighting designer with MIES or RLP industry recognition, can work with a builder or project manager from the initial lighting design concept through to the end lighting solution including certification of the lighting design, required for building approvals.

By Vessi Ivanova,MIES,RLP BE(Hons)Elec,Grad Cert Design Sc(Illum) Manager-Philips Lighting Solutions Resources: Lighting Council of Australia, Australian Government Department of Industry, Illuminating Engineering Society, Standards Australia, Australian Building Code Board The Illuminating Engineering Society of Australia About the author: Vessi Ivanova is a qualified lighting design professional with more than 20 years of experience in design of lighting installations across various industries and sectors: residential, commercial, retail, clubs, landmark attractions and public areas. Vessi Ivanova is the elected NSW Board Director for IESANZ and Qualified Lighting Designer/ Registered Lighting Practitioner, MIES. She is the Manager, Philips Lighting Solutions www.philips.com.au/lighting

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Standing Tall: Pryda Celebrates 50 Years in Building Pryda, the company who revolutionised the building industry by inventing the steel angle brace, Claw® Nail nailplates, and world-leading truss design software, is turning 50 and celebrating with a retrospective look at its journey as a world-leading producer of timber truss and frame solutions – from technology to innovation.

“Pryda is an integral part of the building industry in Australia. We’ve succeeded for 50 years by continuing to innovate, develop and move with the times. It’s fascinating to look back on how our industry has changed over this time, and how our business has too,” says Pryda General Manager, Mr. Paul Gaiardo. Builder Ray Turner launched Pryda in New Zealand in 1964 (then known as AR Turner & Company), pioneering the design and manufacture of timber joining connectors to simplify timber construction. He sent his son Daryl to establish the business in Australia in 1970. Pryda is now a trusted brand on building sites, in trade stores and in the offices of architects, engineers and designers. Mr. Gaiardo says that when Pryda was founded, Australia’s population was around 11 million1 and 105,22022 new homes were being built each year. Today, the country’s population has boomed to more than 23 million and in 2013 more than 147,000 new dwellings were built to keep up with the rising demand for housing. “It’s hard to imagine now, but back when Pryda began in the 1960s, our engineers didn’t even have calculators to work with, let alone computers. Neither appeared until the 1970s so our business and our famous truss accessories were built on the skill of manual techniques and calculations,” says Mr. Gaiardo. He explains that in the late 1960s and early 1970s, truss requests would be sent to the Pryda design office and an engineer would carry out the calculations manually using a slide-rule and drawing board. It could take several hours for one truss to be designed, which was then drawn up and posted to the fabricator. Today, the company’s Pryda Build software means a truss can be designed, costed and assembly instructions produced in a matter of seconds (once architectural plan information has been inputted). “Part of our success as a business has been a commitment to adopting new technology early and with passion, to find ways it can improve our offerings and the work of our customers. This extends from our engineers developing small programs for calculators in the 1970s to reduce repetitive calculation and error, to our modern Pryda Build software that bundles roof trusses, wall framing, floor

trusses and various framing components into an integrated suite,” Mr. Gaiardo says. “Another example includes the release of our Pryda Computa-Roof software in 1989. For the very first time in the history of our industry, it allowed fabricators to obtain designs for non-standard trusses, based on first principles and not look-ups. This software went on to receive an Australian Design Award. “It also supported the industry by adopting changes in Australian design and loading standards, which occurred every five years or so, saving engineers an enormous amount of time.” Today Pryda continues to use world-best technology to provide a total systems package to its licensed truss and frame plants, including fully integrated software and production systems, access to world leading manufacturing equipment, and the highest levels of technical support. “Building is part of the great Australian dream and Pryda is about supporting that vision by helping achieve efficiencies in the building process – saving time and money,” says Mr. Gaiardo. “Our longevity suggests we’re meeting this need. For example, when Pryda launched in Australia, there were 40 nailplate manufacturers worldwide; today there are only around 12. So we can be proud of our

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

achievement in a competitive industry that relies on investing in expensive and ongoing software development.” After a series of mergers and takeovers that began in 1986, Pryda is today part of the international corporation Illinois Tool Works (ITW), taking advantage of pooled knowledge and resources in what has become a very sophisticated industry based on computer technology. It means the company can pursue further innovation and transform the dreams of founder, Ray Turner, into a lasting legacy.

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Fifty Years of Influence — The Pryda story 1960s When Pryda launched in New Zealand in 1964 (then known as AR Turner & Company), across the Tasman Australians were: • Expanding from basic post WWII homes to houses with second bathrooms, extra bedrooms or a rumpus room; • Building carports as a rising number of second-hand cars put motor vehicles in the reach of more families; • Making use of new building materials such as laminex, plastic paints and linoleum floor coverings; • ‘Bringing the outdoors in’ with a focus on natural light, patios and outdoor living areas. Pryda milestones • Introducing Australia and New Zealand’s first knuckle nailplate with moveable, hand-operated hydraulic presses – pushing the nailplate teeth into the timber more quickly and with greater efficiency than standard nailplates. • Producing a book of standard, everyday truss designs for a variety of local conditions including low and cyclonic wind conditions and roofs with tiles and steel. The iconic manual was widely used throughout the New Zealand and Australian building industries until around 1980. 1970s Pryda launched on Australian soil in 1970 and hit the ground running with Daryl Turner conducting seminars and visiting hundreds of hardware stores around the country to increase awareness of his product. During this time, Australians were: • Using natural materials like mud brick, straw bales and raw timber; • Prompted by the global oil crisis in 1974 to thinking about energy consumption and homes that considered their impact on the environment. Pryda milestones • Rapidly adopting new technology such as calculators and computers, to help fabricators quote, cost and produce manufacturing data; • Pryda’s first ‘electronic’ truss design takes 40 minutes to run and by 1980, this reduces to 15 minutes; • Founder Ray Turner inventing the angle brace, now a major commercial success; • Developing steel angle braces for wall framing, replacing timber. Carpenters could now quickly and simply brace walls with a small cut into the studs, fit the angle brace into the cuts and nail it off. This eliminated the time consuming process of cutting a large notch out of the studs

to accommodate an expensive hardwood timber brace; • Launching in Australia, South Africa and Fiji. 1980s Pryda was a reliable supplier for builders, homeowners and European migrants across Australia, who throughout the decade were: • Revitalising worn out homes in undesirable areas, giving them new life and attracting new residents; • Establishing cafes, delicatessens and other businesses, lending new vibrancy to inner city suburbs. Pryda milestones • Significantly speeding up truss manufacture with the launch of the company’s signature Claw® Nail nailplate, which uses hydraulic pressing equipment instead of hand driving knuckle nailplates. It has proven to be a robust and reliable product, having been used to assemble several million trusses worldwide and is in service constructing roofs all over Australia, New Zealand and the AsiaPacific region; • Revolutionising the industry in 1989 with Pryda’s Computa-Roof software, enabling truss design from first principles. It opens the door for Pryda fabricators to tackle all sorts of roofs themselves that previously required special engineering designs; • Moving forward with Ray Turner selling his business to a publically listed New Zealand/ Australian company. 1990s Australians continued to pursue the great Aussie dream of building a house, with a historic peak of more than 170,000 new homes built in 19943 Australians were: • Building larger homes (with fewer people living in them) and decreasing the size of front and back yards; • Continuing the push to create environmentally friendly homes, including those with alternative energy source, low impact building materials and appropriate insulation; • Contributing to urban sprawl as new homes are built at the edge of major cities; Pryda milestones • Winning an Australian Design Award in 1992 for Pryda Computa-Roof V3; • Launching Wall Builder in 1994, a world leader in wall detailing software; • Revolutionising timber cutting efficiencies within Australian truss plants, with the launch of Auto Omni; • Launching Pryda Roof in 1997, the world’s first automated roof plane solving software.

2000s The notion of what a home looks and feels like is changing, with Australians: • Experimenting with apartment, villa, warehouse and townhouse-style living, alongside traditional stand-alone homes; • Watching a raft of construction and decoration type television shows, such as The Block, Renovation Rescue, Better Homes and Gardens, House Rules and Changing Rooms. Pryda milestones • Fully designing a house lot of trusses in less than a minute, thanks to a more sophisticated and innovative design process than the one achievable 50 years ago; • Launching Pryda Build truss design software in 2007. For the first time the software was able to bundle roof trusses, wall framing, floor trusses and various framing components into an integrated software suite; • Joining the ITW stable in 2004, making it the second largest nailplate supplier in the world. Did you know? • In the late 1960s and early 1970s, one Pryda truss took more than two hours to be designed, drawn up and posted to the fabricator. Today, this same process takes a matter of seconds; • Around a third of all truss and frame fabricators in Australia today use the Pryda system; • The majority of Pryda’s timber connectors and truss nailplate range are manufactured in Melbourne; • In Norwegian, the word ‘pryda’ means ‘to adorn’; • Pryda’s first ever customers in Australia were John Danks, Adelaide Steamship Company, Myer and McEwans; • Basic materials used to construct a house haven’t really changed since the 1950s: timber, nails, bricks and mortar. 1. Australian Bureau of Statistics, www.abs.gov.au/ausstats/ 2. Housing Industry Association (HIA) - new home completion per year in Australia 3. Housing Industry Association (HIA) - new home completion per year in Australia

For further information contact Green Light PR — Amanda Mills: amanda@ greenlightpr.com.au or Mikhaila Hunter: mikhaila@ greenlightpr.com.au or phone 03 9620 2324.

M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

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Preparing Australian construction companies for compliance with the new SuperStream contributions standards Ideally your software system will enable you to meet the new data and payment standards for superannuation.

New SuperStream contribution standards are coming into effect from 1 July 2014. In this article, LEVESYS will bring Australian construction companies up to speed with the changes to ensure you understand what these changes are, and outline the timetable for compliance. What is SuperStream? SuperStream is a comprehensive package of reforms arising out of the Federal Government’s 2010 review of the superannuation system. It is simply new standards for the electronic generation of contributions and payment data. The objective of the new standards is to simplify, streamline and increase the efficiency of the administration of the entire superannuation system. SuperStream will ultimately make it easier for employers to comply with their superannuation obligations, and will provide better information about the amount and timing of payments for employees. For a construction company using a software system with plans to create functionality to meet the SuperStream standards, compliance will largely involve implementing new, in-built functionality and processes. Ideally your software system will enable you to meet the standards by simply generating all necessary data for contributions and payments in one step. Why was SuperStream brought in? SuperStream standards changes have come about out of the Cooper Review into superannuation, conducted by the Federal Government in 2010. A key recommendation from this was to simplify and streamline the processes of superannuation administration in order to make it easier for employers to comply with their superannuation obligations and for employers to better track and manage their superannuation. When will compliance with the SuperStream standards become a requirement? SuperStream standards come into effect from 1 July 2014 for “large” businesses (employers with 20 or more employees). For “small” businesses (employers with less than 20 employees), SuperStream standards come into effect from 1 July 2015. In both cases,

businesses have two years in which to comply with the new standards. Whilst full compliance from 1 July 2014 (for large employers) is possible, the ATO is carefully managing the induction of employers, funds and service providers to ensure the adoption of the new standards is done in a controlled manner, without undue pressure on all stakeholders. The simplest way to comply is to ensure the company behind the software currently in use at your construction company is developing a standards-based solution. How can a construction company ensure they comply with the SuperStream standards? The simplest way to comply is to ensure the company behind the software currently in use at your construction business is developing a standards-based solution. Ideally it will be available as an upgrade/update to your current installation, providing you with the means to comply with these standards. If your current software provider does not plan on adding the necessary functionality, you may need to review your options to ensure you can meet your compliance obligations. Small employers may be able to utilise the free services offered by the Medicare Small Business Superannuation Clearing House

M ASTER B U IL D ERS ASSOCIATION O F NS W A P R I L / M A Y 2 0 1 4

to streamline their processing – an effort by the Australian Government to assist small employers with the changes. Want more information? For more information on the standards and your obligations, please visit: www.ato.gov. au/Super/Data-standards/In-detail/What-youneed-to-know/Medium-and-large-employers/ Information-about-data-standards-for-mediumand-large-employers. The ATO will be increasing their communications with employers over the coming months, both directly and via industry associations. Article provided by LEVESYS. LEVESYS is a leading provider of ERP software solutions to the Australian construction industry. For more information about the standards, their impact on the construction industry or how software can assist you in achieving your business objectives, call LEVESYS today.

Crowther Blayne is an Australian leader in business-to-business online and print publications for a variety of industries worldwide. Crowther Blayne publications provide businesses with the broadest possible audience and target the most relevant decision-makers. By providing a platform of the highest quality, products and services are presented in the best possible light to the marketplace. If you have a specific enquiry about our services, or simply want to get in touch, please contact: Trish Riley | National Sales and Marketing Manager | P: 1800 222 757 | trish@crowtherblayne.com.au | crowtherblayne.com.au

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A Screw Pile is primarily a steel pipe with a ‘Helix’ or large dia thread at the bottom end with a point protruding. With a down ward force it is rotated to “screw” into the ground by using a hydraulic drive on an Excavator. Screw Piles & Excavations have been providing Screw Pile solutions to foundation problems for many years.

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Other energy efficient features include: • Fujitsu General’s Human Sensor Control, which automatically switches to energy saving mode if no activity is detected in the room for 20 minutes. When activity resumes, the unit returns to the previously selected operating mode. • Fujitsu’s unique Power Diffuser automatically adjusts to the ideal angle, allowing air direction to match the operation mode for better circulation and greater indoor comfort. • Built-in Smart Demand Control, which may allow consumers to participate in key initiatives from their energy supplier.

Other uses for SCREW PILES; swimming pool support, founding in wet or reclaimed swamp areas, , anchoring for retaining walls, light, power and large sign pole foundations, creek culvert anchoring. Screw Piles & Excavations have shown that Screw Piles are the simple, quick and cost effective way to solve the problem. As there is practically no spoil to remove and no vibrations during installation, Screw Piles are an excellent choice to save time money and excavating. Servicing Northern NSW and VIC. Screw Piles & Excavations P/L Branches in Northern NSW & VIC Tel: 04 0993 9967 Email: dennis@screwpiles.com.au Website: www.screwpiles.com.au

Fujitsu General’s latest wall-mounted air conditioners come with superior energy efficiency and design elements.

Other easy-to-use features include a weekly timer setting, allowing a pre-selected on/ off time and temperature. Optional controls include a communication kit and wired remote controller. Available in a wide range of capacities, from 2.1kW to 7.1kW, there is a Fujitsu General solution for the individual needs of every home. www.fujitsugeneral.com.au

the baiLey p170 CoNverts a stepLadder to a Job statioN Stand Strong with the Bailey P170, the next generation of Platform Step-ladder from Bailey Ladders. The Bailey P170 is a mobile job station with a huge 170kg load rating and a massive 610mm x 460mm platform standing area, providing a comfortable and safe work area. A new trapezoidal tread to stile joint is fixed at three points for maximum strength and durability on each tread, while the fully reinforced platform has metal rod inserts and an anti-slip diamond plate deck design, offering peace of mind while working at height. The Bailey P170 is easy to manoeuvre with a convenient carry handle, complete with heavy-duty strap and fastener, plus the ladder boasts 360o castors. Extra-large, anti-slip boots and a fully integrated brace and castor system also make the ladder exceptionally stable. Further, a cleverly designed multi-function handrail can store tools easily, removing the need to climb up and down the ladder regularly. Available in both aluminium and fibreglass designs from leading trade and hardware stores. Product available June 2014. For further information please visit www.baileyladders.com.au.

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M a s t e r B U i l D e r s a s s o c i at i o n o F n s W A P R I L / M AY 2 0 1 4

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