2016 Master Builders SA Builder Magazine Apr-May by arkmedia4217

APRIL / MAY 2016

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New Middle School in the Heritage Listed Saint Peter's College Full story page 50

2016 South Australian Group Training Awards

Advocacy Update

A New Focus on Skills for Residential Inspections

O F

S O U T H

AU S T R A L I A

Invites you to

CTME is a ticket entry event. To obtain your ticket you will need to register online or send the registration slip back to CSS. Register online at ctme.com.au WHERE: adelaide event and exhibition centre Goodwood Rd, Wayville SA 5034

. Industry only event . ticket entry only

WHEN: thursday april 14th 2016 11.00AM - 5.30PM

70 suppliers participating 70 suppliers participating

. Industry only event . ticket entry only

ctme.com.au

The Construction Supply Specialists Group in CTME is a ticket entry event. conjunction with their two South Australia member branches, are holding a must see tradeshow called To obtain your ticket you will need Construction Trades and Mining Exhibition (CTME). to register online or send Withthe over 70 national leading brand suppliers to the industry, exhibiting and demonstrating a wide range of registration slip back to CSS. Construction, Industrial and Mining related products and services, CTME will be a must visit for anyone Register online at ctme.com.au working in or associated with the Construction, Civil,Building, Industrial and Mining market segments.

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Contents

SA BUILDER APRIL – MAY 2016

President: Richard Bryant Deputy President: Peter Salveson

Project Feature: Staint Peter’s Boys School. See page 50.

FOREWORDS 03

CEO’s Report

President’s Report

Vice Presidents: Mario Romaldi, Christopher Leopold Past President: John Kennett Treasurer: Mark Beatton Councillors: Enzo Zito, Jock Merrigan, Nick Abley, Morry Canala, Neil Mossop, Nathan O’Neill, Fred Pascale, Patrick Innes, Anthony Gow, Des Pawelski

REPORTS

Master Builders South Australia PO Box 10014 Gouger St. 47 South Terrace, Adelaide, South Australia

Phone: (08) 8211 7466

Master Builder News

UPDATES 08

Training

Finance

Legal

Industrial Relations

Advocacy

Industry

Investment

Innovation

Licensing Reform

Safety, Quality and Environment

Development and Technical

FEATURES

Fax: (08) 8231 5240 Email: buildsa@mbasa.com.au Executive Editor: Master Builders Association

Published by: Crowther Blayne Media Specialists Phone: 1800 222 757 Email: publications@crowtherblayne.com.au Web: www.crowtherblayne.com.au Business Development Manager: Trish Riley Sales: Paul Baird, Peter Shepherd and Rose Delosreyes Editorial: Jessica McCabe Graphic Design : Danny McGirr

Feature: Transport

Design Team: Byron Bailey, Andrew Crabb, Michelle Triana

Project Feature: SARAH/Colonnades Shopping Centre

Production: Yvonne Okseniuk

Project Feature: St. Peter’s Boys School

Printed by: Newstyle Printing

IAN MARKOS,

IAN MARKOS, CEO, Master Builders SA CEO, Master Builders SA

Every leader has a different vision for an organisation, but stewardship of an organisation with a 132-year history demands a longer-term view. You tend to look for the things that cannot change to ensure they are protected and provided for. In the case of Master Builders SA, that is our commitment to members. We are here to represent our members, to be a strong voice in their corner, and here to help them grow their businesses and profitability. A leader is also responsible for developing a sustainable organisation, a goal that necessarily involves change in response to the broader environment. In our case, the State Government’s cancellation of funding for VET education has set the stage for a review of where we invest your membership fees. Every dollar has to be carefully spent and, ultimately, invested in supporting our members. To that end, you will see a renewed focus on the core business of Master Builders SA: our members. Our products, our services and structure need to better connect with members and member businesses, and our delivery will focus on better connecting you with those products and services. Our training services have contributed to the growth of the organisation over the past five years, but State Government funding cuts have limited our ability to continue this expansion. We therefore will be ensuring that we offer training relevant to the industry, with a focus on flexible offerings that suit members. Succeeding in this difficult area requires a partnership: members telling us what they need, and Master Builders SA designing solutions. Coping with broader economic change presents its own challenges. A lack of private sector confidence and a slowing in Government investment is limiting the project pipeline available to industry, which affects principal and specialist contractors alike. Our housing sector is facing its slowest period in more than 10 years, recording the only fall in approval numbers while Eastern states boast approval figures more than 30 per cent above their 10-year averages. SA BUILDER APRIL– M AY 2016

CEO’sHere Report Section Name Goes

These challenges have been made very clear to me in my meetings with members, and so we are focusing on how we can better support the industry. We are seeking to better support your business by helping cut business costs. We have negotiated attractive deals with Telstra, Caltex and gold fleet vehicle pricing, and are looking to expand upon these services to offer direct savings for all members. We have also invested in the only insurance broker to offer specialised coverage for the industry and a commitment to investing back into the sector, MBAIS. Master Builders SA is also building consumer confidence in our members through a marketing campaign promoting our members as the first choice for anyone seeking to build or renovate. We represent the strength of our members, and we want consumers to appreciate that a Master Builder represents the best of the industry with a brand that creates value. We are also trying to build the capacity and ability of our members to grow and protect their business. You will have already seen an expansion of our free information seminars. Over the last couple of months we have held specialist sessions on the need for every business to have its own drug and alcohol policy and how to protect your business from unfair preference claims in the event a client goes into liquidation. We have also held the first of a new quarterly seminar series summarising the technical and legal changes you need to be aware of to avoid prosecution and sanction. These have been free for members, drawing on the expertise of our specialist staff to ensure members of Master Builders SA are among the best in the industry. We will continue to expand these offerings as long as we see appropriate interest. We will also soon be expanding our professional services offering to help members focus on what they do best. We believe we can provide almost all support services at an affordable price, helping you to grow your business and its profitability without investing in a full-time resource you don’t need. As with MBA SA Legal, these services will not be provided free – we cannot expect members to effectively subsidise the business operations of other members – but our member focus will ensure a more flexible and affordable offering that makes good business sense. We therefore have a clear vision of what we need to do: work with a lean organisation to support members and their businesses and help them grow. Very few of us will be around in 130 years’ time, but working closely with our members today and tomorrow will go a long way to ensuring that Master Builders SA will continue to represent our industry as it changes over the next century.

RICHARD BRYANT, President, Master Builders SA

President’s Report

Housing choice A family home on a large suburban block, a cottage home on a smaller block, a townhouse, apartment or even a hobby farm have been the choice for Australian home buyers. We no longer have an Australian dream – we now have a rich mixture of dreams, and our industry has grown by recognising this evolution and diversifying. The Bill allows for property owners to be taxed via rates for new infrastructure schemes. After a push from industry, this was changed so as to only allow a tax when an owner agreed to it. Some owners may welcome new infrastructure that increases their property values, but Master Builders SA wanted to ensure that they would not be forced to pay a new tax without their direct agreement. Simplification of 3rd last par: suggest deleting “raises significant benefits for our industry: it…” to shorten. The rest is balanced to highlight the problems and the benefits of the Bill and the process. The rise in those wanting a home with minimal maintenance hasn’t spelt the end of the traditional dream. In fact, the suburban home on a large block remains an aspiration for many, from mature property investors wanting their space to first home buyers wanting their own land, wherever that may be. But beneath the land lie the pipes and cables that connect each home to the city. The homes are connected by the roads and verges to every other part of the city, and dotted along the way are the schools and hospitals that connect the community as a whole. And the cost of this infrastructure cannot be ignored. The costs of establishing new homes are significant. In some cases, they can be prohibitive, forcing a developer to wait until the demand is right to proceed with such a significant investment. And in some cases, the right time may be decades away. In recognition of this problem, the State Government has proposed a new “basic infrastructure scheme” as part of its overhaul of planning laws. The scheme allows the creation of a separate fund to collect contributions from developers, State or Federal Governments, external investors and related regulatory bodies, all of which can be used to fund the pipes, roads, culverts and bridges we think of when the building and construction industry talks about “infrastructure”. The cost of these are currently borne by the developer and the State Government. But infrastructure is a broad term. It also includes social infrastructure such as schools, police stations and public transport that is currently paid for by all taxpayers. The Bill proposes that this “general

infrastructure” be funded, by a scheme where all parties can contribute – including a levy on property owners. The State Government has negotiated in good faith with Master Builders SA. Changes have been made to the scheme and it now stands much-improved with our involment. However, this ability to create a new taxation scheme raises questions. The Government has altered its legislation so that only those property owners who agree to pay a contribution will be taxed. After all, if a property owner sees a benefit in a new school nearby and agrees to pay an additional contribution because he or she forsees a rise in property values as a result, then they should have the freedom to contract. However, at present only owners – and not lessees or renters – will be able to vote, leaving open the question of equity where one party is able to pass on the cost but receive the benefit of higher property values. This underlying requirement for 100 per cent agreement was a clear requirement from the combined voices of the property and construction industry, and the State Government responded positively. Another section, however, requires a review of this infrastructure scheme within two years of the new planning system being passed into law. Thus, the requirement for 100 per cent agreement might be diluted on review to fund a major state-wide transport investment, opening the way for a new tax on homeowners. This remains a concern for Master Builders SA given the mechanism, if used in such an expansive fashion, represents a substantial shift in taxing power that should be debated directly with the public rather than passing into law as an element of a new planning regime. The Bill promises faster planning approvals, fewer variations on planning schemes, and the introduction of an electronic planning system. However, its birth has been marked by division, compromise and ongoing debate – perhaps the hallmark of democracy. This new regime will be implemented over the next five years. There are elements that Master Builders SA believes will limit jobs in the sector – but also elements that we believe will benefit all members. Making it work for the next generation remains the next challenge.

SA BUILDER APRIL – M AY 2016

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Master Builder News

Choosing a ‘default’ super fund for your business All businesses need to choose a default super fund in order to make super contributions to employees who haven’t chosen to go with their own preferred super fund. When a new employee begins working for your business, you are required to provide them with a ‘choice form’ within 28 days from their start date. If they don’t choose their own preferred super fund, you will need to pay their super contributions to your nominated ‘default’ fund. As an industry super fund with over 30 years of experience in the building and construction industries, we understand your business has unique super needs. We can help make it easy for you to manage your employee super contributions through our online payment system, as well as help you to understand and comply with legislative super changes, keeping you informed with regular updates. If you’re interested in making Cbus the Default Super Fund for your business, call 1300 361 784 or visit the Cbus Website for more information. Read the relevant Cbus Product Disclosure Statement to decide whether Cbus is right for you. Call 1300 361 784 or visit www.cbussuper.com.au for a copy. Cbus Clearing House service is provided by Westpac Banking Corporation for Cbus employers. Cbus’ Trustee: United Super Pty Ltd ABN 46 006 261 623 AFSL 233792 Cbus ABN 75 493 363 262

SA BUILDER APRIL– MAY 2016

Master Builder News

Member Profile

Skyworld brings the sky into your world Sparkling sunlight and the moon and the stars at night are brought into your world of work, study and leisure by Skyworld’s roof glazing systems. No doubt you have taken a leisurely stroll around Burnside Shopping Centre or under the majestic Seaford Dome or brought your fruit and vegetables at Adelaide Central Market or maybe enjoyed the natural light flooding into the new Tonsley TAFE building. Well if you have its thanks to Skyworld’s roof glazing systems that brings sunshine and stars into your interior world. Skyworld has approximately sixty different profiles of glazing bars for polycarbonate and glass roofing systems and they have the anodized or powder coated aluminium profiles that can mix both polycarbonate and glass in the same system for any roofing solution. The range of alternative profiles can be designed to construct flat, gabled, curved and complex curved roofing systems. Master Builder’s member Kevin O’Looney, Managing Director of Skyworld, has been building the business for the last decade servicing both commercial industrial and residential builders with the highest quality roof glazing system available in South Australia. “Our roof glazing systems are designed to meet the most stringent standards for functionality and they also have a great aesthetic appeal viewed from any angle. We own them and they are manufactured in Australia for Australian conditions” “Skyworld’s glazing bar profiles are designed to be structural whilst also providing the finished roof glazing solution and once installed there is no need for any additional work or maintenance except to clean the glass or polycarbonate when necessary”, Kevin said. Polycarbonate roof glazing systems are a revolutionary solution as the product is light weight, impact resistant and a versatile alternative to glass which often requires a more expensive reinforced substructure. Polycarbonate sheet is 250 times more impact resistant than glass and only weighs 7.2kg per square metre. Architects are turning to Skyworld to provide innovative polycarbonate roofing solutions to realise their more complex designs which are supported lightweight aluminium glass bars that do not require a highly engineered often weighty structural solution. “Polycarbonate sheeting has rapidly developed with consumer demands and is available in multi-walled, 12 metre long sheets that provide great insulation qualities. Heat reflective thicker solid polycarbonate sheets are becoming very popular as the light-weight, impact resistant roof glazing system”. SA BUILDER APRIL – M AY 2016

“For designers polycarbonate sheet supported by Skyworld’s glazing bars is a very exciting solution that allows them to incorporate more innovative, light-weight, complex shapes with excellent insulation qualities that are transformed buildings. Surprisingly our product has a cost advantage over our immediate competitors”. “Skyworld has unique glazing bar profiles that can be finished to the designer’s specification and sealed with our proprietary gasket profiles ensuring the systems are weathertight”. “Our glazing bars can be curved and with Skyworld’s gasket profiles especially designed to fit each bar profile our clients can be assured a great looking finish and a very functional system that requires minimal maintenance”, Kevin said. The feature of modern architectural design is to make more use of natural light and to incorporate light, open spaces that allow uninterrupted views during the day and at night. Skyworld roof glazing systems provide a great solution and are turning their attention to not only provide roofing systems but also walling systems. “We enjoy working with innovators, customising those ‘bespoke structures’ that add that wow factor. We are always looking at new international products of both roofing and walling systems that allow minimal interruption to the outside world. Whilst we have been primarily a South Australian company the scope for expansion interstate is enormous”. “We send our glazing bars interstate but have not mounted a full scale marketing campaign interstate as yet. The South Australian commercial and residential builders are keeping us busy as Skyworld has trebled in the last three years”. “One of our next developments is to market a polycarbonate office partitioning system which we have shown to a limited number of architects and they love the colours, insulation qualities and the simple furring system to secure the sheets”. “The future is very exciting, our glazing systems are second to none and it’s all Australian, yes totally manufactured in Australia”, Kevin said.

Training

IAN MARKOS, CEO, Master Builders SA

2016 South Australian Group Training Awards The Board of Group Training Australia (SA) will host the 2016 South Australian Group Training Awards in March of this year and Master Builders SA is pleased to announce our two nominations on behalf of Master Builders Apprentices.

Damien Browne

Nominee for the GTA(SA) Apprentice of the Year

Sarah Collier

Nominee for the GTA(SA) School-based Apprentice of the Year

The nomination process required Damien and Sarah to address selection criteria around four key areas: • Career and study achievements; • Communication, team and leadership skills; • Other pursuits; and • Ability to represent the National Training System at a broader level. Both Damien and Sarah are completing a carpentry apprenticeship with Master Builders Apprentices and have interesting yet diverse backgrounds that prompted them to consider carpentry as their professional career. In Sarah’s last year at high school she had the opportunity to participate in a school-based program called Southern Off Campus Learning Experience (SOLE). “I participated in 3 subjects through SOLE woodwork, community studies and a research project. I didn’t really need to do woodwork but it worked well with the requirements of my community studies subject and I liked working with timber and thought it would be interesting and fun.”

Upon participating in SOLE Sarah was fortunate to secure work experience with a commercial construction company for five weeks and from there was provided the opportunity to enrol into a school-based apprenticeship completing a Certificate III in Carpentry. “I’m passionate about carpentry because if I’m going to build something I’m going to do it how I would trust and believe it should be built. I’ve always wanted to be active and busy and the opportunity to work outside and to be part of building something rather than having it built for me is great! I also think if you’re going to do something you love you may as well get paid for it!” Damien comes from a family with finance and engineering backgrounds however he says he always knew he wanted to become a carpenter. He participated in a Doorways 2 Construction program in Year 11 and 12 and despite experiencing all of the trades in this school program he says carpentry was his favourite. “When I was younger I would sit and watch renovations and couldn’t wait to get out there and do that type of work myself. I was always building little things at home and now love finishing something like decking or framing up a house and looking back at the fi nished product thinking ‘Yeah, that looks pretty sick’. Damien commenced his apprenticeship two weeks after completing year 12. He has since completed his Certificate III in Carpentry and has now commenced a Certificate IV in Building & Construction (Building) which he completes his fourth year of his apprenticeship. In August 2015 Damien was awarded the Master Builders Apprentice of the Year award. “I take great pride in my job and if I wouldn’t do something on my own house then I won’t do it onsite.” Master Builders Apprentices SA wish Damien and Sarah all the best with their nominations.

SA BUILDER APRIL– MAY 2016

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Training

DAVID THOMPSON, Director of Education & Training, Master Builders SA

The ever changing political landscape of Vocational Education and Training (VET) Had I written this article a week ago I would have introduced you to Minister Luke Hartsuyker as the new Federal Minister responsible for VET. However, in true VET style, where nothing stays the same for long, allow me to introduce an even newer Minister responsible; Senator Scott Ryan. In fact the procession of Ministers has been considerable and unhelpful in setting clear VET policy for the country. Over the last three years there have been seven ministers responsible for this important portfolio. Alarmingly, this averages out to a mere 157 days for each Minister in this portfolio. If we were to draw the analogy of Ministers being senior executives within a corporation, then you would have to conclude that something was drastically wrong with the corporation if they were turning over executives every 157 days. The State Government has also performed poorly in the ministerial space with three Ministers holding this portfolio over the previous three years. Less than an ideal situation. The VET sector is in dire need of stabilisation from both the Federal and State governments. They will need to control the plethora of ideas, of the Minsters, who for the most part, care about their VET portfolios but don’t stay long enough to see reform through to the conclusion. There has been much discussion from both the State and Federal governments about fixing the VET industry, although it is difficult to see how this can be achieved by a revolving door of Ministers who barely have enough time to come to grips with the issues at hand, let alone make meaningful contribution and change where it is needed most.

It is apparent from the multitude of media articles that the VET sector is broken and requires remediation. At least this is the view that would be reasonably drawn by the casual reader. The truth of the matter is that Australia has a VET sector which is the envy of many countries, although its image has been tarnished over the last several years by a number of questionable practices and business failures by a handful of VET providers. In my view, this does not constitute a broken VET sector, it constitutes a massive opportunity for unscrupulous providers to get rich quick, usually at the expense of the tax payer and the student. Unfortunately the problem of shonky providers can manifest wherever and whenever there is a large amount of easy government cash on the table. This has been the case for the VET sector over the last several years. There has been a number of initiatives taken at both Federal and State level to weed out the shonks. A recent example being the clampdown on providers offering free laptop computers and other incentives to low income earners to sign up to expensive courses under the Federal Government’s VET FEE HELP loan scheme knowing that there will never be any prospect of the loan being repaid. Much more has to be done to fix the image of the sector as opposed to the need to fix VET itself. Direct action against the providers by government regulators must be the way forward instead of more red tape and regulation for the sector as a whole.

SA BUILDER APRIL – M AY 2016

WILHELM HARNISCH, CEO, MBA Australia

Focus on housing affordability reform welcome

SA BUILDER APRIL – M AY 2016

Finance

Master Builders welcomes the call by the Minister for Social Services the Hon. Christian Porter and the Assistant Minister to the Treasurer the Hon. Alex Hawke MP for public submissions on innovative financing models to boost affordable housing for households on low incomes. The lack of adequate and available affordable rental housing has been a major gap in the housing policy debate. “Finding innovative ways to finance the sector is one of the solutions that need to be addressed. There is a proper role for the private sector to work with the social housing sector in finding sustainable solutions,” Wilhelm Harnisch said. “The challenges facing the private and public rental housing sectors are the same challenges facing the private home ownership households which are increasing supply by removing the structural impediments that increase the cost of housing.” “Master Builders, in making its submission to this inquiry, will equally emphasise this aspect in finding solutions to the supply of affordable rental housing.”

Finance

TOM KOUTSANTONIS, Treasurer

Business tax cuts brought forward In early December the Treasurer announced that South Australia is officially the lowest taxing state in Australia for commercial property transfers. When handing down the 2015-16 Mid-Year Budget Review (MYBR), Treasurer Tom Koutsantonis announced the first cut to non-residential stamp duty, originally scheduled for 1 July 2016, has been brought forward to take immediate effect. “The 2015-16 MYBR includes $24.8 million to bring forward the first ⅓ reduction in non-residential stamp duty, making South Australia the best place for businesses to invest, consolidate and expand,” Mr Koutsantonis said. “The bringing forward of this tax cut means any business that now purchases a commercial property in South Australia pays the lowest stamp duty costs of any other state in the country. “A business purchasing a $10 million commercial property will save more than $181,000 in stamp duty. “That is more than $181,000 that can, for example, be reinvested by the business into fit outs or incentives to attract tenants, which ultimately leads to more jobs.” Mr Koutsantonis said a further ⅓ reduction in non-residential stamp duty will occur as scheduled on 1 July 2017, while on 1 July 2018 the tax will be completely abolished, making all commercial business property transfers in South Australia stamp duty free. The cuts to non-residential stamp duty form part of the State Government’s nation-leading $670 million tax reform package, announced in the 2015-16 State Budget in June. The reforms, which make South Australia the best place to do business, have been welcomed by business and industry groups across the country.

Capital Value ($)

Previously ($)

Other key elements of the tax reform package included: • Abolishing share duty. • Abolishing stamp duty on non-real property transfers (e.g. non-fixed plant and equipment, aquaculture leases and statutory licences). • Abolishing stamp duty on genuine corporate reconstructions. • Abolishing the Save the River Murray Levy. • Extending the payroll tax rebate to 2015–16. “The State Government has embarked on the most significant tax reform in its history in order to create jobs, maintain jobs and build enterprises that create careers,” Mr Koutsantonis said. “Like never before, the State Government is determined to make South Australia this country’s most attractive place to set up a new business or to consolidate and grow an existing business. “Over the next decade, our tax reforms will return almost $2.5 billion to businesses and working South Australians. “These reforms will attract businesses to South Australia and reduce costs so they can invest, grow and employ more South Australians. “It will provide a lasting improvement to the South Australian economy and encourage the creation of new businesses and new careers”. Stamp duty on non-residential property is generally considered to have a larger negative impact on investment decisions than any other State tax. By abolishing stamp duty on non-real and non-residential property transfers, it removes a large barrier to business investment and expansion, encouraging economic growth and job creation. More than 6800 property transfers will benefit each year from the changes.

From 7 December 2015 ($)

From 1 July 2017 ($)

From 1 July 2018 ($)

500 000

21 330

14 220

7 110

NO TAX

750 000

35 080

23 387

11 693

NO TAX

1 000 000

48 830

32 553

16 277

NO TAX

5 000 000

268 830

179 220

89 610

NO TAX

10 000 000

543 830

362 553

181 277

NO TAX

SA BUILDER APRIL – MAY 2016

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Insolvency

The long road to insolvency reform Company collapses in the construction sector are estimated to have cost industry at least $1.6 billion in 2013–14 and the $5.5 billion in outstanding tax liabilities across the sector is “alarming”, according to a Senate Committee. The Senate Standing Committee on Economics recommends increased oversight, better data and improved licensing to improve the sector and mitigate further pain, listing 44 key recommendations in its report into Insolvency in the Australian Construction Industry. The Federal Government has provided no indication as to its willingness to adopt the Committee’s report, but there are several aspects that should be welcomed. Improved oversight is likely to improve the reputation of our sector, and better data will provide everyone with better tools to assess and manage business risk. The Committee has recommended a national Security of Payment regime, but the States may not yet be willing. South Australia’s Small Business Commissioner, John Chapman, has told Master Builders SA that he believes the SA legislation is still too young for significant changes – although he has made a number of recommendations that are being considered, including the introduction of a new offence to prevent industry participants from being intimidated from relying upon the Act. The recommendations are broad and reflect concerns raised by the broader industry.

Increased regulatory oversight Our existing regulatory bodies need to be more active in reporting signs of company distress, the Committee believes. The Australian Securities and Investments Commission receives hundreds of liquidators’ reports every year summarising details of company demises, but there is scope for that information to give valuable feedback, the Committee said. Liquidators might simply have to tick a box if they consider phoenix activity a possibility, and the Phoenix Taskforce should be allowed to share information with the Australian Taxation Office, the Committee recommended. ASIC should review reporting requirements to improve early warnings of repeat and concerning insolvent practices, and work with the ATO and superannuation funds regarding early detection of non-payment and to secure Commonwealth debts, the Committee recommended. Work between Federal agencies could be used to coordinate data and trigger alerts for bankruptcy, fraud conviction, director disqualification and company liquidation, the Committee said, all of which could raise questions over whether an industry participant remains a fit and proper person.

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Insolvency

Directors in spotlight Company directors should be held properly to account for business failures, the Committee said, with a few key changes needed. Regulators should be empowered to undertake random financial health spot-checks prior to a “show cause” notice being issued, but greater scrutiny is simply the start. The issue of phoenixing is so significant that criminal proceedings should not require a subjective intent, but instead focus on an objective approach that gives rise to a reasonable interpretation of the facts, the committee said. A new civil penalty would be introduced and extended beyond liquidation to administration. The Committee would also like to see the introduction of Director Identification Numbers to create a single identity for each director, thus preventing multiple identities that fail to consolidate behaviour across entities – a failure that has been used by some to confuse regulators and those undertaking company checks for their due diligence.

Security of Payment The state-based jurisdiction of the Security of Payment Acts demands a nationally-uniform approach, the Committee recommended, with an emphasis on greater education to boost access to the protection the Act offers. However, there are additional changes that the States should consider, the Committee said. Every State should introduce a new offence under the Act to “intimidate, coerce or threaten a participant in the building industry in relation to the participant’s access to remedies available under security of payment legislation”. This has also been recommended by the South Australian Small Business Commissioner, John Chapman, and is expected to gain strength given the Committee’s recommendation.

Licensing and bank accounts Businesses should be required to show financial backing for the scale of each project with increasing proof required for larger projects, the Committee recommended. Industry participants should also be required to prove financial and business training – a recommendation that reflects a call Master Builders SA made to the State Government. The Committee has also recommended a two-year trial of project bank accounts on 20 projects with Commonwealth funding of more than $10 million. The accounts are intended to hold all project receipts, from which all subcontractors would be paid. While this falls short of a central levy considered by some Committee members, the Committee has also requested the Australian Law Reform Commission investigate the potential for statutory trust accounts as a means of protecting project funds. There has been no indication as to whether the Federal Government will commit to any of the measures recommended, but the coming Federal election – due before November but possibly as early as July – may see a commitment to some elements by either or both parties. True industry reform will demand involvement and agreement of the industry. We are now waiting to see whether the Government – and all parties – are similarly committed.

SA BUILDER APRIL–MAY 2016

Finance

IAN MARKOS, CEO, Master Builders, SA

Industry confidence defies subdued activity South Australia’s building and construction industry is boasting a more confident outlook, heading into positive territory in a promising sign for jobs – but housing affordability remains the biggest constraint on future growth even as industry faces falling approval numbers. “The confidence reported by survey respondents fl ies in the face of patchy approval data which suggests a slowing industry, particularly when benchmarked against comparisons with eastern state activity”. The outlook for business activity has continued to improve over the last 12 months, reporting an index of 61.3 points in December, pipping the national result of 61.0 points. SA Chief Executive Officer Ian Markos said a settling of national concerns, coupled with an increase in local enquiries, were the likely drivers of confidence. “The resolution of national leadership issues has likely provided some comfort to our members, particularly in a sector so tied to confidence. In recent times, that confidence has reflected the impact of housing approvals below their long-term average and commercial activity

SA BUILDER APRIL – MAY 2016

slowing as the New Royal Adelaide Hospital winds up,” he said. “But the industry is seeing a marked rise in enquiries: it has recovered from an earlier fall, and that has to send a positive signal. “We now have to make good on that promise. We need real investments, so let’s make sure we cut back the fat now so we can build the best environment for future growth. Taxes can’t just be collected without making sure they are working hard and not being wasted. For example, can we combine licensing and prequalification to deliver better outcomes for business and taxpayers? Let’s have those discussions so we can look upon 2016 as the best start for a growing economy.” The quarterly survey also showed continuing concerns over the impact of housing affordability, which now rates as the biggest constraint on economic activity in the sector. Concern over input costs also continued to rise, while concerns over infrastructure charges have settled over time. Meanwhile, senior site professionals remain in high demand while scaffolders are readily available. Bricklayers are increasingly difficult to find in South Australia, according to the survey results

Finance

IAN MARKOS, CEO, Master Builders SA

Patchy approvals send strong signal for reform South Australia has recorded another country-worst performance as the only state where building approvals are less than their 10-year average, according to the Australian Bureau of Statistics. The patchy approvals data shows a need for urgent constructive reform in the building and construction sector, Master Builders SA says. The $2.7 billion of residential approvals last calendar year is down 4 per cent on the previous 12 months, according to the Australian Bureau of Statistics, but is up 8 per cent on the 10-year average of $2.5 billion. Non-residential, or commercial work, is reflecting a stronger result of $1.7 billion up 13 per cent on 2014’s $1.5 billion. But the number of housing approvals for the year shows the nature of Australia’s economy, with South Australia the only state to record a fall in activity compared to 10-year averages, Master Builders SA Chief Executive Officer Ian Markos said. “The Eastern Seaboard is booming: New South Wales is up 65 per cent, Victoria is up 32 per cent and Queensland is up 26 per cent. Tasmania is reporting a lowly 5 per cent increase over their 10- year averages. And where is South Australia? Approvals are 3 per cent behind our long-term average,” he said.

“When we hear of companies connected to the building and construction industry failing, like Martelco, it’s no surprise: if there is a lack of activity, that impacts not just numbers being reported, but on the families and communities of which those businesses are a part. “We know the State Government is looking to build interest in the northern suburbs and is working on packages for our small builders in coming months and we commend them for that. And the planning reforms being championed by Deputy Premier John Rau can deliver real productivity and cost improvements for the sector. “But it’s time to talk seriously about the reforms proposed by our Industry Futures Group. It’s time to act on fundamental change to build a more resilient sector. It’s not about hand-outs – it’s about sensible investments for the industry and the communities it builds. “Defence is facing its valley of death. We don’t want to find ourselves in a similar position because we failed to act.”

Improved outlook for SA building VALUE OF SOUTH AUSTRALIAN BUILDING APPROVALS TREND ($m) Dec-2015

Residential - New

$2,306.4

Previous 12 months

Ten year annual average

$2,434.2

(5%)

$2,132.8

Residential - Alterations, Additions $380.5

$362.9

$356.7

Residential - Total Work

$2,686.9

$2,797.0

(4%)

$2,489.5

Non Residential - Total Work

$1,713.7

$1,514.3

13%

$1,697.8

Total Building Approvals

$4,400.6

$4,311.4

$4,187.2

NUMBER OF BUILDING APPROVALS (12 MONTHS) TREND (number)

Past 12 months

Previous 12 months

Ten year annual average

NSW

65,327

51,860

26%

39,559

65%

VIC

67,453

60,165

12%

51,194

32%

QLD

45,576

38,831

17%

36,297

26%

10,872

11,396

(5%)

11,211

(3%)

28,447

32,424

(12%)

$4,187.2

TAS

2,846

2,420

18%

24,841

15%

1,644

1,966

(16%)

1,419

16%

ACT

4,050

3,817

3,621

12%

SA BUILDER APRIL– MAY 2016

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Legal

Is your two-way radio an outlaw? Two-way radios can be found on most construction sites around Australia. The vital communications they provide help keep you and your workers safe.

As an employer, you should ensure that your radios are legally operated. By doing this you could stop a serious workplace accident or even save someone’s life. Under the Radiocommunications Act 1992 (the Act), every radiocommunications device must be authorised for operation by a spectrum licence, an apparatus licence, or a class licence.

A two-way radio must be authorised to be operated under: • a class licence for the citizen band (more commonly known as CB radio) • a land mobile licence belonging to your company • someone’s land mobile licence where that person has provided you with written authorisation. So, no matter how you intend to buy your two-way radios, you must have the necessary licensing requirements sorted when you are purchasing or renting two-way radios. It’s the law! Communication companies who supply two-way radios for use on worksites will often have pre-programmed frequencies into these radios. These frequencies are generally licensed to that supplier and cannot be operated under any class licence issued by us. If you bought or rented a two-way radio with the frequencies pre-programmed and you intend to rely on the supplier’s licence to operate that radio, then you must have the supplier’s written authorisation. This can even be in the form of an invoice or rental agreement.

As part of your agreement, the supplier should disclose the following information (including but not limited to): • • • •

the frequencies that you’re allowed to use the duration of the authorisation the location that you’re allowed to operate in any other licence conditions that must be met.

It’s your responsibility to understand and meet the restrictions of the licence you’re operating the two-radio under. Otherwise you run the risk of operating a two-way radio in a manner that is not authorised by the licence. The consequences of operating an unlicensed two-way radio may be serious. There’s a risk that another radiocommunications service could interfere with that two-way radio, meaning your two-way radio might not always work the way you want. Th is can also affect safety on worksites. You could also interfere with someone else’s radio or another radiocommunications service. This could significantly impact their operations. The consequences for operating an unlicensed two-way radio may be serious. Th is is because there is a range of civil and criminal penalties under the Act that could apply in relation to the operation of an unlicensed radiocommunications device, or possessing an unlicensed radiocommunications device. You may also be subject to civil liability or litigation from a third-party where your possession or operation of the unlicensed two-way radio causes loss or interferes with that party’s radio or a radiocommunications service. If you don’t know the details, don’t risk it. Check with the company or person who issued your two-way radio. If you’re still unsure, contact the Australian Communications and Media Authority (the ACMA) on 1300 850 115 or info@acma.gov.au. The ACMA is the regulator for radiocommunications, telecommunications, broadcasting and the internet. Disclaimer: this is not legal advice and should not be relied upon as such. Independent legal advice pertaining to your individual circumstances should be sought where required or appropriate.

SA BUILDER APRIL– MAY 2016

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Legal

SEAN RICHTER, Director, MBA SA Legal

WHS Prosecutions - A Glimmer of Light The increased penalties in the Work Health & Safety Act 2012 have given employers a considerable scare throughout South Australia. These new penalties are significantly increased from those which were contained in the previous Occupational Health And Safety Act 1986. In particular, for individuals running a small business, the penalties are substantial.

The new penalties for businesses include: • A maximum penalty of $6 million or five years imprisonment where a breach of health and safety duty results in death or serious injury and a person is reckless as to the risk to an individual of death or serious injury. • A maximum penalty of $300,000 where an individual as a person conducting a business or undertaking fails to comply with their health and safety duty and exposes and individual to a risk or serous injury or illness • A maximum penalty of $100,000 where an individual as a person conducting a business or undertaking fails to comply with their health and safety duty (eg a near miss). In a recent case before the Industrial Court, MBA SA Legal was acting for a subcontractor who had been engaged in carpentry work on a two storey domestic building. During the course of that construction, one of the workers on site fell through the void between the first floor on the ground floor of the building and sustained significant injuries to his back and his neck. In all of the circumstances it was very fortunate that the worker did not sustain a greater injury. The subcontractor was prosecuted for breach of the Work Health & Safety Act 2012 as a category 2 breach which carried a maximum penalty of $300,000. For any builder or subcontractor running a small business, $300,000 is a significant amount of money.

By coming to us early, this subcontractor was able to get advice on his prospects of success in defending the charge, and to come to a considered decision to enter a guilty plea at an early opportunity. By pleading guilty very early in the process, the subcontractor became entitled to a discount of up to 40% by the court because of the effect of the Criminal Law (Sentencing) Act. In addition to that discount, MBA SA Legal was able to persuade the Magistrate to exercise the discretion to impose a penalty that he is unable to pay, or that would unduly prejudice him or his dependents. In hearing the guilty plea in the matter, the Magistrate considered all of the circumstances of the subcontractor, including his own personal debts, his wife’s financial circumstances and the recent birth of his first child. While the offence was quite serious in its consequences, the early guilty plea to be made by the defendant and the subcontractor’s personal circumstances saw the penalty reduced significantly. While the Magistrate found that the appropriate start point in setting penalty was $80,000, that was reduced by 40% as a result of the early guilty plea and then further reduced because of the personal circumstances of the subcontractor. At the end of the day the fine was $17,000. While $17,000 is a lot of money, the court will always allow time to pay a fine. We can expect more of these offences to be prosecuted now that the Act has been in force for more than two years, and Safework SA has had ample time to investigate incidents and accidents which have happened since the Act came into force. In our case, there are a number of good outcomes. The subcontractor is now going to be able to continue to run his business, the penalty isn’t going to destroy his livelihood or that of his family and further it shows that the Court still have the prerogative to exercise mercy when they’re imposing penalties in WHS prosecutions. While the new penalties seem quite terrifying on their face, the Courts still have the discretion to apply common sense and mercy. SA BUILDER APRIL– M AY 2016

WILHELM HARNISCH, CEO, Master Builders Australia

Master Builders Backs PM’s Call On ABCC

Return Of ABCC Remains Top Priority For Master Builders

SA BUILDER APRIL – M AY 2016

Industrial Relations

Master Builders welcomes and supports the Prime Minister’s call for the cross bench senators to back the restoration of the Australian Building and Construction Commission (ABCC). “As the Prime Minster said earlier today it is abundantly clear from the evidence of the Heydon Royal Commission that the ABCC is needed to clean up unlawfulness in the building industry,” Wilhelm Harnisch CEO of Master Builders Australia said. “This is reinforced by the latest ABS industrial disputes data which lends further substantial weight to the well-established case for the re-establishment of tough cop on the beat in the construction sector,” he said. “The latest ABS data shows that of the 20,000 total days lost to disputes nationwide, over two-thirds were in the construction industry – about 13,000,” Wilhelm Harnisch said. “The data also shows a loss of 16.7 days for every 1000 workers in the construction industry. This is higher the coal mining industry which since 2000 has been, on average, five times higher than the construction industry,” he said. “This data clearly rebuts the claim by the CFMEU that the number of industrial disputes are falling,” Wilhelm Harnisch said. “There is abundant data and proof justifying the need to bring back the tough cop on the beat. Failure by the cross bench senators to restore the ABCC fails the community,” Wilhelm Harnisch said. “Prime Minister Malcolm Turnbull has challenged the crossbench Senators to pass the ABCC Bill or face a double-dissolution election under new electoral laws.”

Reports that there may be a further delay in a vote to restore the Australian Building and Construction Industry (ABCC) are causing uncertainty and deep concern in the industry. “The return of a tough cop on the beat to tackle the ingrained culture of unlawfulness in the building unions remains the top priority of Master Builders Australia, as it must be for the Government and the community,” Wilhelm Harnisch CEO of Master Builders Australia said. “The decision by the Fair Work Commission revoking the right of entry permits of three CFMEU officials goes to highlight that the culture of unlawfulness remains rife in the building and construction industry. It also shows building unions are undaunted by the Heydon Royal Commission’s exposure of their institutional culture of unlawfulness by continuing to bully and intimidate contractors to enter agreements containing restrictive and inflexible work conditions,” he said. “These conditions, combined with the unlawful disruption experienced almost every day on building sites, increase the cost of construction by up to 30 per cent,” Wilhelm Harnisch said. “Master Builders calls on the Government to make passage of the Bills re-establishing the ABCC a key priority for the sake of the community and the economy,” Wilhelm Harnisch said.

WILHELM HARNISCH, CEO, Master Builders Australia

Industrial Relations

Call for IR reforms “Master Builders welcomes Employment Minister Michaelia Cash’s commitment to consult widely in framing industrial relations reform in Australia following the release of the Final Report of the Productivity Commission’s inquiry into the workplace relations framework,” Wilhelm Harnisch, CEO of Master Builders Australia said. Master Builders, during the consultation, will emphasise the major reforms that need to occur in the building and construction industry. Master Builders will make the following key points. Industrial relations is not an end in itself and neither is industrial relations reform. It is an integral part of future proofing Australia and maintaining our living standards. It is about making sure that we can create rewarding jobs for our young people. It is about making sure we maintain our attractiveness as an investment destination. It is about making sure that companies in Australia stay in Australia and not move offshore. Master Builders will also emphasise that if we are to be a high wage country then we need to be highly productive.

What is important to the building and construction industry is removing industrial barriers that act as roadblocks to improving productivity. The evidence shows that pattern bargaining does not work in the building and construction industry. Pattern bargaining has led to unproductive work practices being entrenched and has entrenched the power of the CFMEU. Restrictive work practices such as inflexible RDO rosters also cause unnecessary and costly disruption that drives up the costs of schools, hospitals, childcare centres, and other community facilities. It is about unions behaving lawfully. It is about unions not bullying at the workplace. It is about unions behaving like normal and law abiding people just like others in the community. These simple changes can make a huge difference. “In the short term, however, the building industry looks to the Senate in passing the Government’s Bills to restore the Australian Building and Construction Commission (ABCC).” “These are common sense approaches that can future proof Australia and the building and construction industry.”

SA BUILDER APRIL– MAY 2016

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Advocacy

IAN MARKOS, CEO, Master Builders SA

Advocacy update This is one of the busiest and most productive periods for Master Builders SA’s advocacy work and with two elections in the next 24 months, now is the right time to use the strength of the industry to create change. Industrial manslaughter The Australian Greens have proposed a new offence of industrial manslaughter, carrying fines of up to $1 million or jail terms of 20 years for corporations and their officers found guilty of an employee death through an intentional or reckless act or omission. It’s an issue that has sadly come into focus again with a tragic death that has shocked South Australia’s close-knit construction sector. A Parliamentary inquiry is investigating how South Australian laws sit in a national and international context but this proposal remains a key matter of interest for Master Builders SA. We explore the issue further on page 36.

Planning reform The once-in-a-generation reform of the planning system holds great promise for industry, but also raises questions about its likely impact. At the time of writing, Parliament is contemplating State Government amendments to the finished Bill but there remain four key issues: the introduction of an urban growth boundary, the impact of a proposed infrastructure levy, the level of penalties and the reintroduction of elected councillors into the assessment process. Master Builders SA has repeatedly met with Planning Minister John Rau and his office and achieved very real change in the proposal. The infrastructure levy requires full agreement before anyone is consigned to pay; penalties have been reduced; and the urban growth boundary, which is synonymous with job creation, has been temporarily defeated. However, there remain concerns about the capacity for the infrastructure levies to be reviewed within 24 months to remove the 100 per cent barrier – and thus serve as a taxing mechanism for large-scale public projects – and the urban growth boundary has been reintroduced. Master Builders SA has been in weekly contact with the Opposition and the minor parties – including Family First and Independent John Darley – to build a stronger position to support the changes that will help industry and defeat those likely to make life harder. In some cases, positions are changing almost daily as new propositions are raised and negotiated, argued and updated. Master Builders SA expects to work with the Government on the Bill if and when it is passed, but there remains a great deal of negotiation and time before it is close to being complete. We remain supportive of the need for reform and many of the changes within the Bill. Anything that can spark more investment and less red tape is welcome; getting it right is imperative before it passes.

Industry reform Master Builders SA has begun the process of talking with key decision-makers about reforming South Australia’s building and construction industry.

Small Business Commissioner John Chapman is generally supportive of improved education for the sector, and is keeping an open mind regarding a proposition to underwrite a guarantee scheme to allow entrants to the building sector to work on larger projects without access to cash but on a cost-recovery basis. Master Builders SA has also met with representatives of the Department of Planning, Transport and Infrastructure to outline potential changes to licensing and prequalification designed to improve transparency for the industry, cut administrative demands and streamline Government business opportunities. The changes are also expected to provide more support for South Australian businesses looking for work interstate. DPTI is undertaking its own review but is looking for further detail for potential changes. We will be raising these issues with the responsible Ministers in coming weeks – Small Business, Infrastructure and Consumer and Business Services – with a view to making fundamental changes we believe can better protect the industry.

Security of Payments and subcontractors Small Business Minister Martin Hamilton-Smith is considering changes to the Security of Payment Act as recommended by Small Business Commissioner John Chapman. These recommendations, which are understood to significantly surpass those of the formal review undertaken by Retired Judge Alan Moss, have not been disclosed as yet as they are under consideration. However, at a presentation given to Master Builders SA’s Subcontractor Committee in February, Mr Chapman confirmed a preference for the creation of a new offence for the Act. It is understood Mr Chapman has proposed to make it an offence to intimidate someone against utilising provisions of the Act, although the wording and penalties have yet to be disclosed. We believe we are likely to have more information after our next meeting with Mr Hamilton-Smith.

South Australia’s federal presence – the 2016 election South Australian Senator Nick Xenophon’s threat to run candidates against sitting Liberals at the next Federal election if the proposed submarines are not built in the State is understood to have triggered a change of Prime Minister. Senator Xenophon’s profile and polling is sufficiently strong to raise concern for both major parties. South Australia will be hotly contested in this Federal election, and so Master Builders SA is stepping up its connections with all Federal members in SA. We have met with Family First Senator Bob Day and will soon be meeting with key Liberal Christopher Pyne and Senator Xenophon to highlight the need for greater economic activity for the State. This is already a busy year – and Master Builders SA is busy ensuring your voice is not only heard, but is listened to and acted upon.

SA BUILDER APRIL– M AY 2016

ADVERTORIAL

The Building & Construction Industry’s Own Insurance Broker MBA Insurance Services (‘MBAIS’) is the Master Builders own general insurance broking business. We have offices in all States of Australia, employing specialist staff skilled in the key aspects of building and construction insurance – including Construction (or Contract) Works, Building Indemnity and Third Party Liability. Unlike other general insurance brokers, all profits made by our business are returned directly back to the association, who in turn re-invest these funds into support services such as training, OH&S, legal advice and apprenticeship schemes, al initiatives that support your own building and construction industry. By being a leading broker in this sphere, MBAIS uses its industry muscle to leverage great ‘value for money’ insurance arrangements with preferred underwriters, ultimately ensuring that premiums are kept low, yet policy coverage is kept broad. Our customer’s claims are always well managed because our insurers cherish the importance of their relationship with MBAIS. We currently provide insurance related services to over 8,000 members nationally, and this number continues to grow strongly each year. We look after a broad spectrum of members – large and small, residential or commercial, builder or supplier etc. The bulk of our business is generated through referrals from our customers who appreciate the quality and price of the products we recommend to them. Unlike several of our competitors, who have retreated from specialising in the building and construction industry in recent years, we are continuing to strengthen our specialist expertise in this often complex insurance market. We have also streamlined a number of our internal and external processes in order to make our operation faster and more efficient, providing our customers with a professional ‘can do’ service. Working closely with our MBASA colleagues allows us to offer a complete ‘business services’ offering, which is more than just insurance broking. This is a unique combination of services, which you’ll only receive if you appoint MBAIS (SA) as your broker.

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Approach / Philosophy Our approach focuses on providing high levels of service and ‘value for money’ products. We have a pro-active team of experienced and motivated staff, who are trained to understand the issues relevant to your business, and who can design an insurance program that is appropriate for your needs. Importantly, when you have a claim, our experts will help you lodge the claim, and then work with you to ensure that you gain peace of mind throughout the entire settlement process. We only place your business with insurers who offer the best overall package of long-term financial stability, broad coverage, competitive and consistent premiums, and a proven claims payment record. You can be assured when appointing MBAIS (SA) as your broker, we only use reputable Insurers who can be relied upon.

Insurance Broking Services MBAIS takes service to another level in the manner in which we care for our customers. Our intimate understanding of the building and construction industry has previously led to the development of many innovative and exclusive insurance solutions tailored specifically for the industry. The value MBAIS brings to your business and the types of services we offer is multifaceted as summarised below:

RUSSELL EMMERSON, Director of Policy & Communications, Master Builders SA

Industry

SA’s slow recovery Premier Jay Weatherill told 300 business leaders last month that it was time “to do something new with something old”. It was a direct challenge to industry, launched while overlooking Adelaide Oval from one of the distinctive structures that now shapes the city’s skyline. He was launching the State’s Investment and Trade Statement, a glossy brochure that highlights the business successes of a growing economy: the Health and Biomedical Precinct growing from SAHMRI on North Tce, the innovation district housed at the new Tonsley, and the Riverbank Precinct, surrounded by Adelaide Oval, the Convention Centre and Festival Plaza. Each of these success stories is based around the expertise of members of Master Builders SA. Each shows the mastery and professionalism of South Australia’s building and construction sector. And recent data shows that sector is waiting for the “something new” to be built from “something old”. We recorded 10,872 building approvals in the 12 months to December 2015 – a reasonable effort that is seeing the sector tick along but about 3 per cent lower than our 10-year average of 11,211 approvals. That result is more stark when we look to the Eastern States: New South Wales is 65 per cent ahead of its 10-year average, Victoria a mere 32 per cent above its long-term average, and Queensland struggling at 26 per cent above its average. South Australia is the only state to record a fall from its long-term average, with Tasmania the next lowest but 5 per cent more than its 10-year approval level. While there’s less activity, we’re holding value. There was $2.3 billion of residential work undertaken in the last 12 months, 8 per cent higher than the sector’s efforts over the past 10 years, and work on alterations and additions shows a similar rise. Despite the investment in the New Royal Adelaide Hospital, we’re about even in the commercial sector: $1.714 billion of work over the last 12 months has just pipped the $1.698 billion average over the past 10 years. Those approvals aren’t always translating to construction work – sadly they never do – but activity is holding up reasonably well.

Member feedback tells a different story. It is tough out there. Time are difficult. And that’s not surprising: we are still coming down from one of the biggest stimulus packages, and the broader economy is facing what some would describe as possessing “downside risk”. That risk has a very human face in anticipation of the closure of the State’s automanufacturing industry, recent news of steelmaker Arrium’s outlook and South Australia’s continued record of holding the highest unemployment rate in the country. This isn’t meant to be depressing tale. Instead, it is a time to get our houses in order. South Australian responses to the most recent National Survey of Building and Construction show we are starting to think more positively, even looking toward growing our businesses. (Although, to be accurate, it’s a neutral reading of 50, but let’s take the improvement as a positive.) And our outlook for the next 12 months is significantly positive, outstripping the national result.

So something is happening. Master Builders SA is working with multiple Government Ministers to introduce reforms that will produce a more resilient industry. We have also raised the need for a return to value negotiation rather than price. We can’t allow the biggest contracts to be negotiated on nil margins in the hope that some living profit can be clawed back from our partners in the industry. At the same time, many national businesses are developing domestic innovations from international ideas – they are investing in their next wave of growth. Every sector now faces faster turnarounds, a desire for more productivity and a higher level of international competition, and building and construction is not immune. At the same time, many legislative changes are slow, needing persistent pressure to cut through the noise. We need to do something new with something old. We have done it with some of our most significant structures. It’s now time to revitalise the industry and our offering.

SA BUILDER APRIL– M AY 2016

MINISTER STEPHEN MULLIGHAN,

Minister for Transport and Infrastructure, Minister for Housing and Urban Development

Investment

Government keeps building South Australia in 2016 Construction will begin on almost $2.5 billion of major infrastructure projects in South Australia in 2016, creating thousands of jobs. Transport and Infrastructure Minister Stephen Mullighan said together with continuing projects, such as the Royal Adelaide Hospital and the Torrens Road to River Torrens upgrade, more than $6 billion of major infrastructure projects are underway or about to start. “Our biggest major infrastructure project to commence this year will be the $985 million Northern Connector due to start in May,” Mr Mullighan said. “The $620 million Darlington Upgrade and $160 million O-Bahn tunnel are also due to start early in 2016 and together these three projects alone should support more than 850 jobs this year.” Mr Mullighan said the Government’s $208 million commitment to build 1000 homes in 1000 days would create about 400 jobs this year and another 500 a year in 2017 and 2018. “Add to that the $900m Festival Plaza redevelopment, of which the State Government is investing $180 million, and which will generate hundreds of jobs during construction and 400 ongoing positions,” Mr Mullighan said. “As the Government continues implementing Transforming Health, work is set to start on a $15m PTSD Centre of Excellence, creating about 30 jobs during construction.”

Other projects due to begin this year include: • $85 million city school–up to 400 jobs during construction, 120 ongoing school jobs • $67.9 million for 200 extra beds at Port Augusta and Mobilong prisons – about 70 jobs during construction • $50 million School and Preschool Stimulus Package–creating 275 direct and indirect jobs • $18 million Kangaroo Island Airport upgrade creating 25 jobs • $16 million two new ambulance stations and expansion of another – about 60 jobs • $12 million SA Ambulance Service, Rescue, Retrieval and Aviation base–50 jobs

• $165 million Budget Roads Stimulus Package–more than 100 jobs a year • $94 million Kangaroo Creek Dam upgrade–220 jobs over three years–complete 2018 • $32.2 million Drill Core Reference Library–up to 100 jobs– complete early 2016 • $27 million Bald Hills Interchange–55 jobs during construction – complete 2016 • $12 million school maintenance package–up to 66 jobs – continued 2016 • $10 million Noarlunga Hospital upgrade – 30 construction jobs • $10 million Anzac Centenary Memorial Garden Walk – about 40 jobs – complete 2016 “City planning reforms have also unlocked 44 private sector-funded projects, now underway or approved, valued at $1.4 billion and supporting hundreds of jobs in the construction industry,” Mr Mullighan said. One local business already benefiting from the public infrastructure boom is CME Civil, an Adelaide-based company working on the Torrens to Torrens project. CME Civil Director Malcolm McNeil said the company had engaged new staff for the project. “Projects such as Torrens to Torrens are really important for local South Australian businesses such as CME Civil,” he said. “This project will allow our business to grow and employ more local South Australians including supporting apprentices and trainees.” One trainee on the project is labourer and cleaner Kate Griffen, who spent a year unemployed before gaining work on the T2T project. “If it wasn’t for this project, I would probably still be unemployed. The training and work experience has given me an opportunity to start a career in the construction industry and I am really enjoying working on the project and learning new skills,” Ms Griffin said. Mr Mullighan said companies which employ local workers and use local products have a greater chance of winning Government infrastructure work under changes made late last year to the State Government’s Industry Participation Policy.

Mr Mullighan said these projects were in addition to almost $4 billion of major infrastructure projects already underway and which had already generated thousands of construction jobs.

These include: • $2.1 billion New Royal Adelaide Hospital–up to 2000 workers at peak • $896 million Torrens to Torrens Upgrade–about 480 jobs a year– complete 2018 • $397 million Convention Centre–400 workers on site at peak • $170m Flinders Medical Centre rehabilitation and palliative care centre–about 350 jobs–completed mid-2017

SA BUILDER APRIL – M AY 2016

DEPUTY PREMIER JOHN RAU & TREASURER TOM KOUTSANTONIS

Investment

1000 new homes in 1000 days to boost construction industry One thousand new Housing Trust homes will be built in 1000 days to provide a valuable boost to South Australia’s housing and construction industry. Treasurer Tom Koutsantonis said the 2015-16 Mid-Year Budget Review included $208 million over three years to help stimulate the housing and construction industry. It builds on the $65 million public housing package announced in 2015-16 State Budget to renovate and rebuild ageing Housing Trust homes to stimulate the sector.

The 1000 homes in 1000 days program will include: • The acceleration of the self-funding Better Neighbourhoods Program to replace ageing Housing Trust homes with new social housing. • More than 500 new Housing Trust homes across greater Adelaide including Mount Barker and in regional locations including Naracoorte, Goolwa and the Barossa Valley. The program will be funded through the sale of land and old Housing Trust stock. “This is an industry that employs thousands of South Australians. This program will provide some certainty to this important sector,” Mr Koutsantonis said.

“It is estimated this initiative will create about 400 jobs in 2016 before ramping up to about 500 jobs in its second and third years. “By providing these opportunities for industry to build 1000 homes in 1000 days, it will deliver a boost to metropolitan and regional economies.” Deputy Premier John Rau said the program would not just create jobs but provide better homes for Housing Trust tenants. “We are looking at building these new homes on existing public land in suburbs across greater Adelaide and in regional areas. “This includes areas with large numbers of old Housing Trust homes. “A lot of the stock currently owned by the Housing Trust isn’t serving the needs of tenants, with more demand for smaller dwellings expected to increase as the demographic changes. “This allows us to increase density in sought after suburbs and locate people close to the services they need like transport and schools. “Through this program we are providing a much needed boost for the construction industry, supporting local jobs and better serving the needs of Housing Trust tenants.” The program will complement the Renewing Our Streets and Suburbs strategy that will see the regeneration of all Housing Trust dwellings that pre-date 1968, within the next 15 years.

SA BUILDER APRIL – M AY 2016

MINISTER MARTIN HAMILTON-SMITH,

Minister for Investment and Trade Minister for Small Business

Investment

Value of capital investment projects rising in SA Value of capital investment projects rising in SA South Australia continues to buck a nationwide investment slump with a new report showing the total value of capital investment projects in the State has risen to $42.6 billion. This is an increase of 0.7 per cent on the quarter and 14 per cent over the last 12 months. Nationally, the value of projects in the investment pipeline dropped 4.6 per cent on the quarter and 6.8 per cent over the last 12 months. Investment and Trade Minister Martin Hamilton-Smith said the Deloitte Access Economics Investment Monitor December Quarter report, released in February, showed South Australia recorded the second highest year-on-year growth of the states and territories. “Importantly, the value of South Australian projects ‘committed’ or ‘under construction’ rose by $426 million over the quarter, which means more construction jobs for South Australians,” Mr Hamilton-Smith said. “This was largely driven by new projects including the $300 million Adelaide GPO precinct development (‘committed’) and the $350 million redevelopment of the Westfield Marion shopping centre (‘under construction’). “The report also highlights construction on the $896 million South Road upgrade project is underway.” The 2015-16 State Budget included a $10.8 billion capital investment program over the next four years to support 4700 jobs per annum. Mr Hamilton-Smith said the State Government’s $670 million in tax cuts for business would also drive private capital investment in South Australia. SA BUILDER APRIL – MAY 2016

“The recent Mid-Year Budget Review brought forward tax cuts to non-residential stamp duty making South Australia the best place to invest and do business,” he said. “Our tax cuts will encourage developers to buy commercial property in South Australia knowing they are paying the lowest stamp duty of any other state in the country. “And by 1 July 2018, developers will be able to purchase commercial property in South Australia stamp-duty free.” The report follows the Development Assessment Commission’s (DAC) approval of the $300 million Adelaide Casino expansion, paving the way for construction to begin by the middle of the year. The major CBD project is expected to create 500 jobs during construction and 1000 ongoing jobs once complete. It will form part of a major redevelopment of the Riverbank Precinct, including the $610 million Festival Plaza redevelopment. DAC also approved a $200 million high-rise residential and retail complex on North Tce, which will include the demolition of the HQ nightclub. The Deloitte Access Economics Investment Monitor records major capital investment projects, exceeding $20 million, from the time fi rst intentions are publicly announced through to the completion of construction.

Innovation

IAN MARKOS, CEO, Master Builders SA

Looking for the corner for South Australian building and construction South Australia’s third-largest industry shows its own two-speed economy with slight growth in home building over the past year failing to outpace the fall in commercial construction. Data released today by the Australian Bureau of Statistics shows $2.4 billion of private residential construction for the year to December 2015, up 5.6 per cent from the previous year. But total commercial construction has recorded a 7.6 per cent fall to $2.1 billion for the same period, leading to an overall 1.6 per cent fall in South Australia’s building activity to a touch over $5 billion in 2015, Master Builders SA Chief Executive Officer Ian Markos said. “Our members are telling us that it is tough out there, and these figures prove it,” he said. “The pullback in Government investment in infrastructure is obviously hitting and hurting, and the main thing holding back private investment – confidence – is likely to be challenged with coming closures in automanufacturing and uncertainty in defence.

“Industry has provided the Government with a list of Budget-neutral reforms that can build a more resilient sector before it’s too late. We don’t want to find ourselves on the brink because people didn’t listen to us and to the obvious warning signs.” South Australia is the only Australian state or territory to record approval figures lower than the average over the past 10 years, while Eastern Coast states are recording rises above 30 per cent. Rises in construction costs have helped push construction activity past 10-year averages but the 5.2 per cent increase reflects an overall consolidation of one of the State’s biggest employers.

For further information Russell Emmerson: 0422 463 333

Available for interviews Ian Markos, Chief Executive Officer

Background

SA BUILDER APRIL– M AY 2016

RUSSELL EMMERSON, Director of Communications, Master Builders SA

Licensing Reform

A new focus on skills and experience for residential inspections Domestic or residential building inspectors are generally engaged prior to purchase to deliver an opinion on the physical state of the target property and whether it meets Australian Standards or, if not, the extent to which it falls short. There is no standard form of report although Australian Standard 4349.1 –2007 establishes recommendations for the visual inspection of residential buildings, including pre-purchase inspections. It includes recommendations for the preparation of property inspection reports but is silent as to the requirements of the professionals providing those services. Building inspectors are employed by both investors and owner-occupiers. Whereas investors might be considered more experienced by reason of their designation, the infrequency of property purchases and the significance of the investment required underscores the need for experienced, informed and reliable advice. Those same factors are exacerbated for owner-occupiers, who are more likely to suffer negative consequences resulting from a poorly-informed purchase.

The lack of national requirements provides no assurance of capabilities, expertise or professionalism. In some cases, this professional service is sold as a business opportunity or franchise, with little reference to underlying technical abilities other than “an understanding of residential construction”. Given the potential exposure of purchasers – and the potential for legal action for negligence for failing to provide appropriate levels of technical expertise – there is a strong argument for the introduction of minimum standards for building inspectors in South Australia.

Potential requirements At present, only Queensland possesses mandatory requirements for building inspectors engaging in domestic pre-purchase inspections. New South Wales has established requirements for its training course, but these are not as yet reflected in legislative requirements.

Experience and scope of licence Market requirements and concerns Master Builders SA has not found any literature or research outlining the effectiveness of pre-purchase inspections and thus cannot attest to whether an informed professional opinion properly influences purchase decisions. However, it is considered preferable to establish a standard that protects vulnerable purchasers. This protection, offered through the establishment of minimum standards, is also likely to produce reputational benefits for established and experienced builders and the Associations that represent them. SA BUILDER APRIL – M AY 2016

Building inspectors must rely on their knowledge and experience of building techniques and standards to offer a reliable opinion. Current building licences attest to the underlying knowledge possessed by a building inspector, including classifications signalling to regulators and the broader public of the classes of building the holder is accredited for. It therefore is clear that existing building licences should serve as the base requirement for building inspectors, with licence classifications describing limits of inspections that can be undertaken.

A new focus on skills and experience for residential inspections However, building knowledge cannot be gained through a course alone but must be amassed through practical experience. This is especially true when assessing an ageing property rather than a newly-built construction given the impact of ageing faults. A requirement of experience is therefore recommended for building inspectors to reflect the standards required of the profession. Without further evidence as to how years of experience translates to an innate understanding of structures, it is suggested that three years’ experience would serve as a bare minimum requirement for building inspectors. Five years’ experience – as required in Queensland - is considered a more reliable measure, while seven or more years’ experience would appear to rule out those wanting to engage in the profession in a different role. It is suggested that any shortcomings of experience between five and seven or more years are likely to be reflected in oversights or omissions but are expected to be negligible. If losses do occur as a result of those shortcomings or oversights, they are likely to be covered by appropriate insurance coverage. Master Builders SA has proposed that inspectors have a minimum of five years’ experience, although referees should be selected from differing periods or cross-referencing with mandatory insurance coverage to ensure that experience is reliable across the entirety of a person’s career.

Financial stability The liability of building inspectors for errors – either by reason of negligence of breach of contract – is accepted in South Australia, although there exist differences of opinion as to where the knowledge being applied is general or expert knowledge. Damages are generally calculated so as to recognise losses incurred as a result of the error, which may reflect loss on resale or potential loss of profit. Given that the awarding of damages for potential loss of property value might be considerable, there is great potential for significant financial impact on the business of a building inspector. Should the business or inspector have insufficient assets to cover such an event, it would be inequitable for the purchaser to bear the loss. There is a strong argument, therefore, for a test as to the building inspector’s financial stability. One approach might be to allow inspectors to bear the risk. Given that a proposed inspector’s licence is attached to the natural person, the

creation of a corporate entity might not provide sufficient opportunity to safeguard personal assets from the reach of an adverse judgment. This is likely to result in personal losses for both building inspector and purchaser. Alternatively, requiring building inspectors is likely to offer adequate protection but increase business costs and the cost of the service for purchasers. Although losses resulting from negligent inspections are considered rare on an anecdotal basis, the adoption of a “best practice” approach for building inspections in South Australia requires an action rather than inaction. Queensland inspectors must provide evidence of meeting minimum financial requirements and proof of professional indemnity insurance, while New South Wales does not distinguish between inspectors and other building professionals. Existing requirements, including professional indemnity insurance and the lodging of financial statements, effectively cover the same ground. Given our recommendation that building inspectors also hold the appropriate building licence, fi nancial stability requirements are already likely to be in the possession of Consumer and Business Services and therefore should not be required for an additional licence. Master Builders SA notes they remain historic records and offer no real protection against the risk of negligent inspection behaviour. Investing in professional indemnity insurance is likely to provide the coverage required for negligent behaviour. Some members have informed us they do not believe it is necessary as they manage their own risks and the investment is likely to increase business costs. Master Builders SA believes that the increased costs might be necessary to provide confidence in the industry and adequate protection for consumers. While it is likely to add to the administrative burden, this is only likely to be an annual task, and therefore likely to have only a minimal impact. Master Builders SA believes insurance should be mandatory for building inspectors in South Australia with limits tied to that required of building licences to provide adequate protection for consumers and confidence in the industry. The administrative burden is likely to be limited as, once purchased, Consumer and Business Services should accept proof of currency as sufficient evidence of adequate insurance coverage. SA BUILDER APRIL – MAY 2016

Licensing Reform

Education and training Building construction is a dynamic process that responds and incorporates innovation, growing knowledge and technical developments. As such, in principle there is a need not only for initial training as to the required standards but also for ongoing training or professional development. Many organisations are already providing initial training for residential pre-purchase inspectors but there is no commonality of structure. The development of an industry-based standard would likely resolve this issue and ensure that entrants are not only capable of understanding the building technology, but also the standards and reporting requirements relating to building inspections.

Character There is some distinction as to the character requirements for inspectors. Queensland requires inspectors to be a fit and proper person whereas building professionals in Victoria are required to pass a National Police Certificate Check. Master Builders SA questions whether such checks are necessary, particularly if they may be unfairly prohibitive for those seeking new careers. However, Master Builders SA believes building inspectors should be beyond reproach as representing the best of the industry to those most vulnerable. To this end, we recommend the adoption of Queensland’s fit and proper person test. Master Builders SA will review the current fit and proper person test as part of its review of licensing.

and conf irmation of the necessar y insurance requires minimal documentation. However, confirmation of references and the completion of a fit and proper person test are likely to take time. Master Builders SA believes Consumer and Business Services should commit to completing applications within four weeks as a service level commitment. Master Builders SA recommends the creation of an online application process to minimise paperwork and cut demands on both applicants and regulators.

Conclusion “Th is is an edited version of a submission made to the State Government. There are currently no restrictions on who can offer domestic inspections, but Master Builders SA believes the professionalism of our members deserves recognition”. There is a strong case to be made for the introduction of a new class of building licence for domestic building inspectors. Master Builders SA believes such a license should reflect the experience, character and training needed to match the confidence invested in the task by the public.

Process Given the professional qualifications and experience of builders and inspectors overlap, there is a broad recognition that the process of applying to become an inspector can be curtailed by relying upon those documents already sighted or held by appropriate authorities. As the sole jurisdiction currently offering a separate licence for inspectors, the Queensland Building and Construction Commission specifies a turnaround of six to eight weeks. Some of the requirements proposed in this submission are already issued or held by Consumer and Business Affairs. There should therefore be no difficulty with confirming the currency of an existing building licence (required for an inspector to gain an inspection licence), SA BUILDER APRIL – MAY 2016

SA BUILDER APRIL – MAY 2016

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SAFETY QUALITY & ENVIRONMENT

IAN MARKOS,

IAN MARKOS, CEO, Master Builders SA CEO, Master Builders SA

Industrial Section NameManslaughter Goes Here

There is no price for a lost life There have been five workplace fatalities in South Australia this year. There were 14 last year, and 186 across the country. In a different turn of events, an apprentice suffering heatstroke at the end of last year could have died, recorded as a statistic but felt by families and the community. The construction industry feels these matters more than most. We know we are working in a high-risk environment, on busy sites, over multiple levels and at height. The risk is significant enough for SafeWork SA to have established a specialised inspectorate. The Australian Greens have relied upon these deaths and risks to propose a new South Australian law: a new offence of industrial manslaughter. The Bill proposes a penalty of $1 million for a company and 20 years’ imprisonment for an officer of a company that “knew, or ought reasonably have known, or was recklessly indifferent” to an act or omission that leads to the death of an employee. It is a significant shift in the South Australian industrial landscape. The proponent of the Bill, the Hon. Tammy Franks MLC, has told Parliament that the introduction of corporate criminal responsibility will hold employers responsible for their action. It is a stick to accompany the carrots within the industrial system, and is a continuation of a campaign by the Construction, Forestry, Mining and Energy Union, she told Parliament. There is a close link between the Greens and the CFMEU. The party received $70,000 in donations from the union in 2013-14, and Ms Franks launched her Bill while standing alongside party officials at an event to commemorate International Workers Memorial Day, a day established to honour the memories of workers in the absence of politics. But the question remains whether it should be supported.

SA BUILDER APRIL – MAY 2016

That question will in part fall to a Parliamentary Committee. The Committee on Occupational Safety, Rehabilitation and Compensation will examine the potential criminal penalties, explore how industrial deaths are treated in other jurisdictions and identify South Australian penalties. The Committee will look at Ms Franks’ Bill, which ref lects amendments she proposed in 2010 and 2012, and recommend a response. Both the State Government and the Liberal Opposition have recorded their reservations but there is a need to review this proposal squarely. Last year Adelaide trucking company boss Peter Francis Colbert was jailed for 12 years for failing to repair faulty brakes that failed and killed an employee driver. In that case, existing law was found to be sufficient. The Committee must now ask whether that case – the most recent manslaughter case relating to the employee-employer relationship – is enough to send the right message. I personally believe that our resources are best spent on prevention rather than penalties. Saving lives is more important than looking to blame, and greater effort is required to prevent injury and death occurring in the first place. But we will take part in this Committee to answer the question fully, and ask for any feedback you might have on how you believe the laws would affect you and your business and, in particular, whether you believe it would create a change in behaviour. Master Builders SA is committed to more than representing the industry – we are committed to leading and representing the best the industry has to offer. This is one area where we can, should and will set the standard. And that is for the good of all in the industry.

REBECCA PICKERING,

Safety, Quality and Environment

SQE Manager, Master Builders SA

Planning for the best in the worst Development of the plan is therefore essential. It cannot simply be downloaded from the internet and repurposed. It needs to cover your operations, your way of working and your location. In particular, it must reflect: • • • •

the nature of the work being carried out at the workplace; the nature of the hazards at the workplace; the size and location of the workplace; and the number and composition of the workers and other persons at the workplace.

A well-developed plan will reference common scenarios and outline the actions to be taken. The complexity of contemporary building adds to the mix. The following workplace circumstances / relationships are common and offer options to how best address emergency plan requirements:

1. Principal contractor with emergency plan in place for the workplace or project

The construction industry is one of high risk. We measure injuries. Sadly, we measure fatalities. When incidents do occur emergency management plans are essential, no wonder it is a legislative requirement for all workplaces. It’s something we need to get right, especially where we have multiple businesses and contractors working together in the one workplace. In the most extreme cases, a well-designed plan can mean the difference between life and death – an outcome that cannot be sold short. Despite the cramped conditions on any worksite, the responsibility for a safe workplace does not fall on one business: everyone has a responsibility to ensure there is an emergency plan in place. Regardless of whether you are a sole trader or a principal contractor with many contractors working for you, every business MUST ensure emergency plans are prepared, maintained and implemented. Emergency plans may take many forms. They might be a standalone document, or might be contained within a safe work method statement or similar document.

Regardless, each document must be maintained to remain effective and must address the following: • emergency procedures, including an effective response to an emergency, evacuation procedures, and how emergency serves will be notified at the earliest opportunity; • the management of medical treatment and assistance; • effective communication between the person authorised by the person conducting the business or undertaking to coordinate the emergency response and all persons at the workplace; • testing of the emergency procedures, including the frequency of testing; and • information, training and instruction to relevant workers in relation to implementing the emergency procedures. This is a plan to provide the essentials in the case of an emergency. Even if people are stressed and overwhelmed, it should be able to communicate what they need to do, when they need to do it, and who they need to speak to–all in one document with necessary contact details.

First, Work Health and Safety laws demand the principal contractor put in place arrangements for ensuring compliance relating to emergency plans at the workplace or project. There are no excuses. Similarly, any operating facility or premises– for example, a warehouse, office or shopping centre – must have its own emergency plan.

In these cases, you may: • Obtain a copy of the emergency plan and review it. • If you elect to use the document refer any omissions, errors and or if you have suggestions for improvement forward these to the document owner. • Where your works are not directly captured discuss emergency arrangements with others who are relevant. • Where the above is not suitable to address your operational emergency needs prepare your own workplace emergency plan in consultation with the workplace owner and or others.

2. You are the only business operating at a site You must create an emergency plan for the workplace, either as a standalone document or within a safe work method statement or similar document. In this case, you are the responsible entity and have no excuse but to create this plan under workplace laws.

3. You are one of several contractors working at a workplace with no nominated principle contractor All entities bear responsibility for ensuring a workplace emergency plan exists under workplace health and safety laws, and so you will need to coordinate your activities with the other businesses on site and their emergency plan requirements. This may require you to create your own emergency plan for your workers as a standalone document or safe work method statement or similar or you may coordinate with others at the workplace to develop an emergency plan together. Take care that your specific circumstances are addressed appropriately particularly where you may require specialist rescue arrangements, eg working at heights, excavation, confined space. Businesses face a huge administrative burden when it comes to work health and safety. Legal requirements demand you produce these documents–but in the case of a well-developed emergency plan, it can save lives as well as your business. SA BUILDER APRIL– M AY 2016

IAN MARKOS, CEO, Master Builders SA

Safety, Quality and Environment

Danger of severe heat an industry-wide issue Heat stroke is an avoidable injury that every business needs to be aware of Ian Markos says. “Although the majority of hot weather may be over, we have had a severe heat wave this summer and, on some building sites, people were working hard in exposed conditions. Every business has to take appropriate action as a matter of law. More importantly, they need to take appropriate action as a matter of decency and common sense. “Everyone, regardless of industry, needs to think critically about protecting employees, especially in the wake of this incident.” Mr Markos said businesses should critically think about whether work programs can be shifted or altered to avoid working outside during highrisk periods. For example, working inside could provide the necessary protection if ample ventilation and other support is also available, he said. The news of an avoidable injury also sent a clear warning that businesses need to review their work methods and documentation to ensure heat and other severe weather events were accounted for. “Every business should be talking to their employees, understanding how these events are going to impact them. Rain, hail or shine, there is a duty to take care of employees – and the best way is to work together in the interests of safety.”

SA BUILDER APRIL – MAY 2016

People should wear suitable clothing and head protection, drink regular and adequate quantities of water and seek shade to avoid the risk of heat stress. They should think about whether they are affected by medication that might impair their ability to cope with heat stress and seek regular rest periods in protected environments, especially if suffering from fatigue or discomfort. Those suffering from heat stress should be helped to rest in the coolest available space and encouraged to sip cool fluids. Medical assistance should be sought. If a person appears to be suffering from heat stroke – decreased sweating, high temperature, hot dry skin and confusion of unconsciousness – cool their body as quickly as possible by soaking their clothes in cold water, and seek urgent medical attention.

IAN MARKOS, BRENDON CORBY, Development & Technical Manager

CEO, Master Builders SA

Development and Technical

Development and Technical Update Support our Steel Launch The State Government recently launched Support Our Steel campaign to try and save Whyalla’s mill from being put into maintenance mode. Cheap Chinese imported material of varying quality has had significant impact on the Australian steel manufacturing process. Members wishing to know more about this initiative can visit www.supportoursteel.com However in a nutshell State Government projects contract conditions will be developed shortly that specify steel is to be sourced from mills with Australasian Certification Authority for Reinforcing (ACRS) and Structural Steel (SCA) by third party certification which will be subject to an Independent Audit regime. Whilst a mandated process would have been more stringent the proposed process will require compliance with Australian Standards like AS 4100, AS/NZ 5100 and a new standard AS/ NZ5131 which categorizes categories of build like normal construction as SC1, unusual loads as SC2, and fabrication requirements for simple fabrication as FC1 and High Grade Materials requiring Special Fabrication as FC2 . A good summary of the new requirements can be found by reading ASI Tech TN-011 (readily avaliable on the internet) Australia as a developed country is playing catch up regarding quality control on steel manufacturing controls, Australia has significant issues also with other non-conforming products and has been subject to dumping as a result hence a need for this South Australian initiative be become a National requirement for this and other Product Controls.

Non- Conforming Products Update Whilst the above mentioned State Government Steel campaign is another example where non-conforming products have found their way into the Australian market, asbestos in imported building products highlight that we need to increase our vigilance to make sure that these non-conforming products, particularly those containing asbestos, are prevented from coming into the country and the building supply chain. Further information from Queensland, New South Wales and Victoria has occurred regarding non-conforming building cladding.

Queensland The Iglu student accommodation building on Mary Street in Brisbane has been refused occupancy permits by the Queensland Department of Housing and Public Works due to concerns over the installation of potentially combustible non-compliant cladding on its exterior. Additionally, the Brisbane City Council is investigating building product issues in its construction. Iglu is majority owned by Macquarie Capital and Singaporean sovereign wealth fund GFC, which acquired the development in 2014 to capitalise on the strong demand for accommodation amongst overseas students. However, following the Queensland Government’s decision to deny occupancy permits to residents, Iglu has been compelled to find alternative accommodations for tenants who have already entered into agreements.

In a statement published on its website, Iglu claims that concerns over fire safety issues were “alarmist and absolutely misleading”, and that the company was “satisfied and absolutely confident that Iglu Mary Street is of high quality and safety standard”. Concerns over the use of sub-par building products within the Australian construction industry rose following the fire that broke out at Melbourne’s Lacrosse Apartments towards the end of 2014. An official investigation into the fire concluded that the use of non-compliant exterior cladding abetted the spread of the blaze across multiple floors of the building. The Victorian Building Authority is currently auditing 170 high-rise building permits issued in the past 10 years for central Melbourne and its immediate surrounding suburbs, and has so far found 16 buildings with non-compliant cladding as a result.

New South Wales Up to 2500 high-rise buildings in Sydney could contain the same type of non-compliant and deadly cladding that has caused dozens of deaths overseas, a secret briefing note from the NSW Department of Planning and Environment has revealed. The report revealed in the Australian last month comes after the Victorian Building Authority released the shock results of an audit of Melbourne buildings which showed more than half of the city’s highrise towers contained the highly flammable and non-complaint cladding, much of it imported cheaply from China.

Summary The picture about dumping of non-conforming products into Australia is increasingly becoming visible as light is being cast over exemplars in eastern states. It would be naïve for the South Australian Industry to think that it is immune from other state experiences. The extent and severity is simply not known. Master Builders SA is working with the State Government and its internal committee structures on this important matter. The intent is to develop pathways for existing buildings and proposed new work compliance audit plus verification processes. Furthermore Master Builders SA intends to run information workshops for members in coming months to help them avoid non-compliance problems, mitigate existing issues and how to protect their businesses. Members wishing to discuss further individual product conformity issues or know more about avoidance strategies are invited to contact the Development and Technical Department at devtech@mbasa.com.au

SA BUILDER APRIL– M AY 2016

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SA BUILDER APRIL – MAY 2016

FEATURE, Transport

TRUCK CURFEWS a drag on productive building sites

Of the dozens of industries that employ thousands of professionals or trade-related occupations, the building and construction sector is among the most sensitive to the repercussions of missed or delayed delivery windows for the supply of building materials. After all, the smallest of residential and the largest of commercial and industrial construction sites cannot operate to their maximum efficiency if materials like timber, concrete, bricks, roofing sheets, fittings and fixtures, and other essential supplies arrive late, or outside preferred times that have been methodically coordinated by site managers. A late arrival at the start of the day has the potential to impact the smooth and efficient operation of the site, leaving carpenters, electricians, plumbers and other trades with nothing to do, representing a significant cost in terms of lost productivity, timeline blowouts and potential penalty payments. Indeed, building site managers and transport operators supplying their materials have been known to precisely coordinate deliveries to avoid these costly repercussions. It’s concerning how rapidly, there is an influx of escalating calls from political and community leaders, and other stakeholders, to ban and/ or curfew trucks on key arterial roads and thoroughfares throughout the country. These bans and curfews will inevitably hit the construction industry and disrupt building sites. Bans and curfews are of course nothing new to transport operators. Various Industry groups have worked cooperatively and respectfully with local governments and resident groups for many years to minimise some of the congestion to which heavy vehicles inevitably contribute. It is important for building site managers, and others tasked with coordinating deliveries, to be aware of curfews to minimise and mitigate possible delays. The enforcement penalties will be high and actively pursued. A main argument and reason for lacking support for these bans and curfews, is because they do little to address the underlying problem, which is the absence of connectivity of freeway networks.

SA BUILDER APRIL – MAY 2016

They also foment an unhelpful, and unsafe, “us versus them” mentality among drivers, and run contrary to the sharing the road culture that the Police and road authorities have spent thousands of dollars and hundreds of hours promoting. Bans and curfews do not achieve their objective of removing trucks from the road. Rather, they have the effect of redistributing them to a usually smaller road that is not suited to their size and shape. Anecdotal feedback from transport operators about the night and early morning curfews is that in the absence of an alternative connection between roads and freeways, drivers will be forced to either: • time their morning deliveries and runs with the curfew lift ing, resulting in even greater congestion during the morning peak hour and across the day more generally; or • continue operating at night and in the early morning on smaller and less appropriate north-south roads to the west or east, resulting in more trucks on those roads at night. Noise restrictions mean building sites cannot actively start work until 7am (including receiving most deliveries), there is concern that the additional peak hour congestion and the curfews will create unwanted delays to scheduled deliveries in the early morning and throughout the day. The building industry should be equally concerned by this because rigid vehicles (as distinct from articulated vehicles) – commonly used to deliver materials to sites stand to be most affected by the curfews. The other adverse impact of truck curfews and bans are the associated potential implications for community safety of forcing trucks onto inappropriate roads. Transport operators and drivers for the most part want to do the right thing by the community; where possible, they prefer to use bigger roads that better accommodate their size and shape. A broader concern is the potential for them to be the thin edge of the wedge, and that future ratification will lead to calls for curfews on other roads, playing havoc with transport, building and construction, and other vital job-creating industries.

Stylish new home of fresh food in Adelaide’s South The redevelopment has expanded the Noarlunga centre by more than 16,000 square metres to make room for an Aldi supermarket, new speciality shops, alfresco restaurants and an expanded Woolworths. It also includes a new fresh food precinct, the largest fresh food market in the southern suburbs. South Australian building company Sarah won the bid to complete the centre’s expansion. Colonnades co-owner, Vicinity Centres, is committed to providing the best retail and shopping experiences for customers and the new vibrant market-style food hall is designed to cater for the booming local population that is expected to grow by more than 25 per cent by 2034. Vicinity Centres Development Manager, Kate Stevenson, said Sarah was chosen to work on the project because of its design management ability, professionalism and second-to-none quality. “We selected to work with Sarah due to their value proposition consisting of design management ability, personnel, retail experience and offer,” Ms Stevenson said.

“The project was tough due to an aggressive timeframe and new concept. We worked with the Sarah team to deliver an outstanding result in line with our vision, ahead of time, within budget and limited disruption to the existing tenants.” “In a dynamic retail environment it’s extremely important that we keep our retailers happy throughout the redevelopment,” Ms Stevenson said. She said the ability to be able to commit to a deadline – and keep it - was critical. “Sarah was fantastic. We were able to work together to develop a timeline that met our needs and Sarah guaranteed the work would be finished by this time.” Sarah’s site team worked closely with centre management and tenants to notify of any upcoming work and collaborated to develop strategies to minimise disruption to customers and trade. With its vast experience and high level skill in the retail sector, Sarah’s proactive team was able to get the job done on time and on budget. With an accelerated timeframe the group was required to work on design and construction simultaneously in order to meet the tight deadline. SA BUILDER APRIL – MAY 2016

FEATURE, SARAH / Colonnades Shopping Centre

Project Manager Terry Tsapaliaris said the team at Sarah was able to forecast potential issues that could delay progress, and fi nd workable solutions to avoid lengthy disruptions that can also lead to cost escalation. Mr Tsapaliaris said Sarah’s success was largely due to extensive experience in the building and construction industry. “Understanding lead times enables the team to meet our deadlines,” Mr Tsapaliaris said. The team thought strategically to make sure projects were completed on time, such as implementing clever design initiatives to rework existing building elements. The existing fresh food ceiling was retained, painted and design solution achieved through lighting and creating a new feature steel structure in the space at ground level. As a leader in the South Australian building industry, Sarah takes pride in creating high quality designs, built well, so customers walk away satisfied. A full design review process was established with Vicinity to agree on design intent and determine a process to approve the design as it SA BUILDER APRIL – MAY 2016

developed. Once design intent had been agree upon, Sarah was able to commence initial trade packages that maintained architectural finish, to expedite construction. Sarah was able to manage challenges, such as undergoing major civil works and services diversions, while retaining access to the shopping centre’s existing major retailers loading docks and services. Loading docks of major tenants, Woolworths and Big W were impacted by the redevelopment, with Bonacci Group, Civil Engineering Specialists, coordinating the removal of 120,000 tonne of earth from the site. Mr Tsapaliaris and the Sarah team worked closely with Mark Billinger and the Bonacci team, to reduce impact to tenants. To achieve this, work was broken down to several smaller stages that enabled continuous access to the loading zones. Sarah General Manager Adrian Esplin said decisions weren’t based on the bottom dollar, but rather, what was right for the customer. “We’re a customer centric business meaning the customer is our focus,” Mr Esplin said. “It’s not about us, it’s about them. We will go the extra mile to get the job done right.” As with all Sarah’s work, the team went above and beyond to accommodate the client’s wishes. With families being a key customer segment, Vicinity requested an entry feature that doubled as a children’s play area. The team at Sarah developed a design concept - a rustic jetty to align with the coastal feel of Noarlunga - and designed and sourced recycled jetty timber from the old Moonta Bay Jetty. A carpentry crew was engaged to bring the concept to life. Staff at Sarah sourced added items such as an old ship wheel and telescope to take the design concept to the next level. Sarah’s success on the redevelopment required outstanding collaboration with sub-contractors to ensure work was completed within the strict timeline. Sarah engages the best contractors and sub-contractors to ensure of the finest quality work is produced. More than 100 contractors and sub-contractors worked with Sarah on the centre redevelopment. “Delivering excellent outcomes is all about close collaboration and building relationships with all project stakeholders,” Mr Esplin said. “From my viewpoint it was fantastic to witness the close collaboration between our team, Vicinity Centres and Project Managers APP.” “To fast track construction whilst continuing on an 11 month design journey to ensure the design concept was delivered to high quality ahead of time, is a fantastic result.”

Among the contractors who contributed to the redevelopment include both Packers and Ceiling and Wall Contractors. Packers supplied, installed and glazed the new external shopfronts, bi-fold doors, new automatic sliding door entries and internal high level clear story glazing that consisted of aluminum framing with obscure glass to match existing and the ali-coil panels glazed into the window framing internally around the mall. Packers’ General Manager Matthew Morrisey said the project presented the group with several challenges. The design of the internal mall windows meant the group had to design a window frame that had unusually wide vertical mullions and horizontal sections, heads and sills. The windows were fitted with alicoil, a pre-fi nished composite panel, rather than glass. A lead time of 16 weeks was required to receive the product, so a pre-planning was required to ensure the windows could be installed by the deadline. “With the unique design of the internal framing system in the mall we had to submit a couple of variations of how we were going to achieve the design intent,” Mr Morrisey said. “With the input from the team at Sarah and the architect we came up with a workable solution that made it easy to fabricate the frames in the factory and also install them on site to give the client their design intent.” Mr Morrisey said successful collaboration was equally important to him as it was to Sarah. “The project has been scheduled well, which has made it easier to meet the program.” “Working with Sarah on the project and how easy it has run has made it easier for us to deliver a product of high standard that the client will be really happy with.”

Forestville company Ceiling and Wall Contractors supplied and installed plasterboard and timber ceilings to the new mall extension including the revised western entry. The group also installed the CFC external cladding and soffit linings, inter-tenancy partitions and lightweight steel framework for the new timber clad bulkheads in the existing part of the mall. Ceiling and Wall Contractors’ Luke Hoyle said he developed a strong working relationship with Sarah throughout the project. The shopping centre expansion is the latest in a series of successes for Sarah. The group won the tender to build the highly sought-after $13 million Royal Flying Doctor Service aeroplane hangar, administration facilities and treatment centre at the Adelaide Airport last December. Other achievements include the $8 million d’Arenberg Winery at McLaren Vale and the $23 million Campbelltown Leisure Centre. Sarah has also just commenced demolition for the $50m Southern Cross Carmelite project for Southern Cross. Th is is further illustration of Sarah capability to tackle larger projects following the success of Colonnades.

SARAH, a family owned business now run by third generation family members James and Tim Sarah, has been a fundamental part of South Australia’s building and construction industry for more than 50 years.

Commercial Painting Contractors

Proudly associated with Sarah Constructions and the Colonnades Shopping Centre

Specialists in:

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Proud to be associated with Sarah Constructions on the successful completion of the Colonnades Shopping Centre

32 Maple Avenue, Forestville SA 5035 Ph (08) 8292 6600 | Fax (08) 8297 0895 www.ceilingandwall.com Special thanks to key project suppliers:

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SA BUILDER APRIL – MAY 2016

FEATURE, SARAH / Colonnades Shopping Centre

SA BUILDER APRIL – M AY 2016

Saint Peter’s College

Description of Project: The under-utilised existing heritage listed Pentreath building was chosen to accommodate a new middle school within the senior school campus at St Peters College in Hackney. The project required the creation of a substantial two storey addition, to more than double the usable area of the facility. The middle school includes a diverse range of learning spaces as well as support facilities and staff areas. The completed facility contains approximately 4,300m² of floor space.

The Story: The Saint Peter’s College Pentreath Middle School was designed by a completely integrated architecturally lead team that possessed outstanding experience in the creation of educational facilities and deep knowledge of pedagogical philosophies as they apply to the design of learning environments. By placing educational planning, architecture and engineering at the forefront of the design thinking for the project the design team were able to create solutions that ensured an alignment of philosophy with outcome. The existing building carried significant historical and heritage values not only for the school but for Adelaide. The design of the refurbishment was executed by Matthews Architects who used the heritage listing as an asset during design instead of a hindrance.

“It’s not about pulling against the reins of heritage listing, it’s more about celebrating why the building is historically important – you have to see it as an asset, not a limitation” said Gerald Matthews, Managing Director of Matthews Architects. For Saint Peter’s College, this integrated approach to design was enhanced by the appointment of Kennett Builders as the head contractor. Kennett’s outstanding and award winning results on similar projects at Walford, Pembroke School and Seymour College and their 40 year history of working with the Architect made their inclusion on the team one that was welcomed by the Project Committee. St Peters College Middle School will call the building home from the beginning of 2016 and with Kennett Builders completing the build 6 weeks ahead of an already tight schedule the transfer into the new building was relatively seamless. The outstanding finished result hides some complex and intriguing construction issues that presented themselves right from the outset. Significant materials and structural items were found during demolition including some interesting concrete to brick details. “Let’s just say that the code must have been a lot more tolerant back when the building was constructed in 1935” said Craig Williamson, Site Manager for Kennett Builders. “The first floor concrete slab effectively rested on half a brick width in some parts of the rear of the building SA BUILDER APRIL – MAY 2016

FEATURE, Saint Peter’s College

where we had to connect in. When revealed by the demolition process we had some quick decisions to make and the engineers took it in their stride with a timely inexpensive solution.” In addition to the existing condition issues, the new build posed some logistical issues of its own. Whilst the concrete panels were by no means large or relatively heavy by modern standards, because of tricky site access the reach out to the far end of the building required a 450 tonne mobile crane just to place them and the surrounding streets were not designed for a vehicle of this size. Curved buildings also present challenges. “Grid lines certainly need to be understood very clearly when building against an existing arc in one direction and a dissimilar arc on the opposing façade” stated Project Manager Phil Barona. “It’s certainly not a vanilla building, but it’s the type of building you hope gets allocated to you. It’s why we do what we do. This building had everything, heritage listing, arcs in 2 directions, sloping site, occupied site, complex and striking facades and a very tight time frame.”

SA BUILDER APRIL – MAY 2016

Kennett Builders details: Kennett Builders is currently in its 102nd year of continuous trading under the stewardship of the 3rd and 4th generations. It has around 55 full time employees and completes between 11 and 16 projects a year ranging from $1m up to $50m in size. Kennett specialise in Education Facilities, Aged Care Delivery, Retail, Automotive and general Commercial construction along with fitout.

Address: 40 East St Brompton SA 5007 Phone: 82451822 | Email: kennett@kennettbuilders.com.au kennettbuilders.com.au Look us up on Facebook and LinkedIn to keep up with our current projects

WHAT’S NEW

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FEATURE, Saint Peter’s College

Commercial & Domestic Louvres & Screens

MBA builder saves time and cuts cost with SiteBook

3 Acorn Road, Dry Creek, SA, 5095 P 83591982 M 0439802517 E adam@wandw.com.au W www.wandw.com.au

Master Builders SA member AREA Construction has cut subcontractor pre-qualification costs and compliance complexity through a joint initiative with local soft ware developer SiteBook. In association with the Master Builders SA, AREA Construction Operations Manager Scott Taylor recently undertook a review of Work Health Safety to ensure the company’s documentation and processes were as streamlined as possible, and complied with Work Health & Safety Legislation. This review identified that the process of collecting and checking trade subcontractor pre-qualification and safety requirements took considerable time an could be improved. Scott requested local software developer SiteBook to design a website that enabled trades and suppliers to easily provide AREA with the details of their licences and insurances, by uploading their documents on to SiteBook. SiteBook developed a web site that guides the subcontractor through the pre-qualification process with a smart check list that contains items based on AREA’s requirements. Once the subcontractor provides pre-qualification items, AREA staff can easily review and approve each item. SiteBook automatically checks for expired items on a daily basis and emails the subcontractor requesting renewal details. Scott says “As a result of implementing these improvements, our staff at AREA are making considerable savings in time per contractor per annum. And, with the added benefit of no extra cost passed on to the contractor”. The SiteBook Pre-qua lif ication module is now available as part of the SiteBook Construction Management app for Builders. For more information contact: Phone: 1300 736 316 Website: www.sitebook.com.au

SA BUILDER APRIL – MAY 2016

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SA BUILDER APRIL / MAY 2016