Master Builders Association of the ACT - Annual Report 2012

2011/12 ANNUAL REPORT

RESIDENTIAL SUBCONTRACTORS & SUPPLIERS PROFESSIONAL COMMERCIAL CIVIL

MASTER BUILDERS ASSOCIATION OF THE ACT

Master Builders Association of the ACT Annual Report - Year Ending June 30 2012

MAIN PHOTO: ST GREGORY’S SCHOOL COMPLETE CONSTRUCTIONS

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Master Builders Association of the ACT Annual Report - Year Ending June 30 2011

CONTENTS 4 PRESIDENTS, EXECUTIVE DIRECTORS, HONORARY MEMBERS & LIFE MEMBERS 5 EXECUTIVE COUNCIL 6 INDUSTRY REPRESENTATION 7 PRESIDENT’S REPORT 8 EXECUTIVE DIRECTOR’S REPORT 10 TREASURER’S REPORT 12 MASTER BUILDERS AUSTRALIA REPORT 13 SECTOR COUNCIL REPORT 16 DIRECTOR INDUSTRIAL RELATION’S REPORT 17 MASTER BUILDERS FIDELITY FUND & SKILLS CENTRE BUILDING FUND REPORT 18 MASTER BUILDERS GROUP TRAINING REPORT 20 2012 MASTER BUILDERS & BORAL EXCELLENCE IN BUILDING AWARDS 22 EVENTS 24 2011/2012 FINANCIAL REPORT 31 MEMBERSHIP ANNIVERSARIES

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HISTORY Presidents

4

Life Members

1949 - 1954

F J Watters

1981

T H O’Connor

1954 - 1956

D C Smith

1984

L V O’Hara

1956 - 1958

J B Kennedy

1984

F J Quinn

1958 - 1959

C Burrows

1959 - 1960

F A Somes

1993

R Winnel

1960 - 1962

P R Armstrong

1995

P J Murphy

1962 - 1963

T H Blow

1998

J A Haskins

1963 - 1965

G A Anderson

2002

J H Hailey

1965 - 1967

C F Moore

2007

R D Barrett

1967 - 1969

L V O’Hara

1969 - 1971

A R Marr

1989

D Andrew

1971 - 1973

A C Williams

2007

D P Dawes

1973 - 1975

W I Plant

2009

F J Gillingham

1975 - 1977

F J Hegerty

1977 - 1977

W I Plant

1977 - 1978

G A Jones

1978 - 1980

F J Quinn

1980 - 1982

F J Marr

1982 - 1983

C Gustavson

1983 - 1984

J Pfeiffer

1984 - 1986

J K Hindmarsh

1986 - 1987

C T Spring

1987 - 1988

M E Milne

1988 - 1989

J J Hanrahan

1989 - 1991

R Winnel

1991 - 1993

K J Bromfield

1993 - 1998

J A Haskins

1998 - 1999

T J Rodgers

1999 - 1999

J A Haskins

1999 - 2001

S J Pinter

2001 - Present

R D Barrett

F J Marr

Honorary Members

Executive Directors 1964 - 1980

D Andrew

1980 - 1983

P M Berents

1983 - 1986

E M Lonie

1986 - 1987

F J Gillingham

1987 - 1989

R Winnel

1989 - 1990

G Williams

1990 - 1998

B D Bryant

1998 - 2007

D P Dawes

2007 - Present

J R Miller

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

EXECUTIVE & PEAK COUNCIL EXECUTIVE & PEAK COUNCIL •

Ross Barrett – President & Peak Council Chairman

•

Simon Butt – Treasurer & Peak Council Member

•

Valdis Luks – Chairperson Commercial Sector Council & Peak Council Member

•

Alan Seymour – Alternate Commercial Sector Council

•

Andrew Crompton – Chairperson Civil Sector Council & Peak Council Member

•

Nigel Forde – Alternate Civil Sector Council

•

Grace Ferreira – Chairperson Subcontractors & Suppliers Sector Council & Peak Council Member

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David Morgan – Alternate Subcontractors & Suppliers Sector Council

•

Hans Sommer – Chairperson Professional Sector Council & Peak Council Member

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Gareth Powell– Alternate Professional Sector Council

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Frank Porreca – Chairperson Residential Sector Council & Peak Council Member

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David Howarth – Alternate Residential Sector Council & Peak Councillor

OTHER PEAK COUNCILLORS •

David Colbertaldo – Peak Council Member, Commercial Sector

•

Sam DeLorenzo – Peak Council Member, Commercial Sector

•

Michael Ensor - Peak Council Member, Commercial Sector

•

Nick Zardo - Peak Council Member, Civil Sector

•

Jason Burgess - Peak Council Member, Civil Sector

•

Nigel Forde - Peak Council Member, Civil Sector

•

Matt Houghton - Peak Council Member, Civil Sector

•

Ross Burke - Peak Council Member, Subcontractors & Suppliers Sector

•

Richard Corver - Peak Council Member, Residential Sector

•

George Tanchevski - Peak Council Member, Residential Sector

•

Jason Tanchevski - Peak Council Member, Residential Sector

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

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MASTER BUILDERS

INDUSTRY REPRESENTATION Master Builders is represented on the following Industry bodies in the ACT and Nationally.

ACT ABCB Commercial & Residential Energy Advisory Group ACT Heritage Council

Training Fund Authority University of Canberra - Bachelor of Construction Management Advisory Committee

ACT Skills Commission

University of Canberra - Building & Construction Reference Group

ACT Tertiary Taskforce Review

World Skills ACT

ACT Work Safety Council

Canberra Business Council Consultative Committee

ACT WorkSafe Construction Industry Advisory Group ACTPLA Asbestos Advisory Board

Canberra Business Council Planning Infrastructure Taskforce

ACTPLA Building Regulations Advisory Group

East Lake Community Reference Group

ACTPLA Commercial Advisory Committee

New Employment Opportunities

ACTPLA Industry Monitoring Group (Planning)

Industry Reference Group

NATIONAL MBA

ACTPLA Planning & Development Codes ACTPLA Residential Advisory Committee

Master Builders Australia Board

ACTPLA Sustainability Initiatives Progress Group

Audit Committee

Building Quality Review

Constitutional Review

Canberra Builders Supply Merchants Association

Contract Committee

Construction & Property Services (Construction qualifications)

Executive Director’s Advisory

Construction Industry Advisory Group on the OH&S Handbook

Membership & Marketing Committee

Construction Industry Forum on Best Practice Water Use Construction Industry Long Service Leave Authority Construction Industry Training Council EDD Commercial Advisory Committe EDD Residential Advisory Committee

Industrial Relations

National Licensing Expert Group National Occupations Licensing - ACT Group National Residential Builders Council National Training Advisory Committee OH&S Council

CCF GROUP

Molonglo Valley Stage 2 Planning & Design Framework - Community and Industry Reference Group

CCF CEO Committee

Occupational Health & Safety Council (Ministerial)

CCF National Board

Procurement Advisory Council

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Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

PRESIDENT ROSS BARRETT OAM I am pleased to present this, my twelfth and final Annual President’s Report.

As I mull over my time as President, I can’t help but reflect back even further on the long history of the Master Builders which is Australia’s oldest industry association. It was established in several of the colonies during the 1870s and was federated on a national basis in 1890.

And more significantly for us, our MBA ACT has generated its own proud history since its establishment in 1925 when the growth of the capital began to accelerate. Since that time we have evolved into our own unique MBA structure with its five separate sector councils.

It is this strong foundation and a continuing commitment to supporting our members’ interests, our industry’s wellbeing and our local economy which will ensure the MBA ACT remains the Territory’s most respected and influential advocacy group.

This last year has seen increasingly uncertain times for our local industry and I will leave it to the other contributors to our Annual Report to give those details.

The MBA ACT continues to deliver some wonderful programs. Our ongoing commitment to quality training through our Training organisation, our continuing support of builders through our MBA Fidelity Fund and our continuing commitment to the Kids Assist program are the greatest source of satisfaction for me.

I thank our members and our sponsors for their continued support of the association. I also marvel at the work of our dedicated and hard working staff. It was pleasing to see from the recent survey of members that we have achieved significant member satisfaction for their work.

The MBA is very fortunate to be guided by the leadership skills of John Miller together with the support of Jerry Howard.

Group Training could not be in better hands than those of Wendy Tengstrom with the assistance of Brendon Lampard.

Both John and Wendy have the backing of staff of the highest quality who are focused on both current and long term performance outcomes. At all times they have maintained strong relationships with our industry stakeholders and have remained focused on our industry issues and our advocacy work.

I also recognize the support of our board members and our sector council members who give so freely of their time to support our industry. It is this combination of individuals which provides us with our effective and vibrant MBA. Finally, I welcome incoming President Simon Butt to his new role.

ROSS BARRETT OAM President

Unfortunately, the year ahead will see a deteriorating economic environment and this will create an even more daunting period for many of our members.

I would like to take this last opportunity to express my thanks to everyone who has made my stint as President so satisfying and also so enjoyable.

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

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EXECUTIVE DIRECTOR JOHN MILLER Political and financial commentary about the “long row to hoe” before returning to something like the activity levels witnessed pre-global financial crisis has played out again over the past year. All of the data supports industry claims of further tightening. The frustrating factor for our industry is the recognition that we are still faced with an infrastructure deficit in the country and in the region. The challenge for everyone is to decipher the numbers and bring confidence back to the market to enable delivery of that infrastructure.

In the Australian context, outside of Western Australia, the ACT has demonstrably outperformed other sates and territories on a raft of indicators including building and construction activity on a per capita basis. This is cold comfort for many who have experienced declining business and is the reason that our major objective is to continue to push for an environment that is conducive to allowing projects to commence in a far more timely fashion.

During the financial year, we completed a comprehensive member survey and it is clear that compliance, duplication of paperwork, general red tape and frustration with delays across agencies continue to cause most concern for membership.

This message has been conveyed through to governments at various levels, and locally, resulted in the preparation of an Industry Call for Action paper in the lead up to the 2012 ACT Election.

Industrial relations activity is undoubtedly growing in terms of potential for disruption to the industry as witnessed in Australian Bureau of Statistics data in recent times. This comes on the heels of the demise of the Australian Building and Construction Commission and the focus of attention by the replacement Fair Work Building Construction workplace regulator away from more confronting industry behaviour. The increased attention around the industrial relations area has resulted in a strengthening of our own resources over the past year.

The changes that came as a result of the ACT Government’s Hawke Review conducted in the latter part of 2010 and implemented in early 2011 have been slow in terms of providing significant benefits. Our message to the ACT Government and into the bureaucracy is that there is still a need for a much stronger service culture within the public sector. This is critical at a time when the costs of delays are magnified given the difficulty in accessing business opportunities. I am pleased to say that the responses to discussions around improving and delivering quicker service are an of acknowledgement of the need to do better.

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Safety has been the biggest single item on the agenda in the past financial year. Firstly, the introduction of the harmonised Work Health and Safety Act 2011 commencing on 1 January 2012, as expected, threw up a number of problems for industry and the regulator, some of which are still looking for resolution on a local and national front. It is fair to say that the diligence of members of our local civil construction industry saw some major issues take centre stage at a national level.

The gradual withdrawal of some jurisdictions from a harmonised system has brought its own problems, both for industry and government, and is a reminder of just how difficult it is in such a small country (population wise) to get the states and territories to cooperate in areas where you might think it worthwhile.

Unfortunately, it was for the wrong reasons that safety took on a greater focus in the past financial year. Tragic accidents resulted in the devastating loss of life of four industry workers over eight months. This has prompted an ACT Government initiated industry inquiry which should be seen as a genuine opportunity to review current systems and see what is working well and identify where change might be needed. A lot has been spoken about the in terms of the reliance of paper-based systems to manage safety as opposed to a more hands-on approach of observation and growing a safety culture. It is expected that these processes will be addressed throughout the inquiry.

As always, there has been no shortage of contentious issues around planning and land supply. Without question, the introduction of Draft Variation 306 and the granting of interim effect around solar access provisions have engendered furious debate. With the exceptional support of a number of members, MBA has lobbied very hard on behalf of industry to bring about sensible changes to elements of DV306 that have made it nigh on impossible for designers and builders to work within the current framework delivered. We were pleased to have both the planning minister and the Assembly’s planning committee visit a number of sites to see just what outcomes are being delivered. This debate has moved into the next stage and will be dealt with after the 2012 ACT election.

Reduced land supply over the past year and ongoing proposals to reform current Land Rent arrangements have also occupied much of the agenda through the residential builders’ sector council and the Economic Development Directorate’s Residential Advisory Committee. The past financial year saw the ACT Government’s targeted land release program almost

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

halved and an escalation of land provided under the Land Rent Scheme. Increasing Englobo land releases, including some smaller packages, is a message that is going to the Land Development Agency along with a requisite review of Land Rent with its ability to temper market interest.

In addition to the issues discussed above, the membership was quite clear about the major impacts and imposts on their business during our annual survey. These are borne out in the graph below.

It is noticeable that government charges rates very highly as a

candour and directness in these discussions can be testing, I believe that the ongoing involvement and goodwill by all at the table is an indication of the desire to make things better, and it often does.

The year ahead will be no less challenging. MBA Group Training has felt that challenge in the last financial year and will do so again in the upcoming year. Our ongoing desire to support industry in meeting their training needs remains, but we also look to industry to support our efforts by engaging apprentices. We must continue to train and bring new people into our industry, and give them quality training although this is being tested currently by union demands for substantially increased wages.

Showcasing the great work of our industry to the public as well as communicating vital information to members has been delivered by our marketing and events team. The 2012 Excellence in Building Awards was a highly successful event. Our great major sponsor, Boral and our other sponsors continue to support our local industry.

Many terrific industry partners also continue to support our President’s Lunches, apprentice awards, golf day and annual dinner as well as Canberra Building News.

Other

Access to the skilled staff

External Competition

Land Supply

Government Charges

Planning Issues

Lack of timely payments

Consumer / Client Disputes

Union Activity

Compliance / Red Tape / Paperwork

member concern and in delving deeper the three standouts were building fees, lease variation charges and commencement and completion charges. The longer we remain in denial that these charges are a force against potential activity, the longer we will remain in a weakened period of activity. We would contend that there are a range of regulatory charges that make the ACT a higher cost jurisdiction than most in the country. This will remain a key area of our lobbying activity into the next year and I contend that it always will as government revenue capture is continually moved around.

Over the past year we have retained very important regular forums with a number of agencies including Shared Services Procurement, ActewAGL, TAMS and Economic Development Directorate. I reported last year that whilst we do not always achieve every change we need, there are some important gains made for industry through these channels. More importantly, industry participants are very much involved through these forums which ensure that upto-date information is tabled and acted on appropriately. Whilst the

A host of individual members give incredible and valuable time to assist in preparing submissions and policy positions. So often this input goes unacknowledged and the value of those contributions is never fully understood or appreciated. I offer my sincere gratitude to all of those who are on our various committees, councils, reference groups and associated bodies that support the work of MBA-ACT and MBA Group Training.

It would be remiss not to identify one individual this year, something I have not done before. Ross Barrett has taken a decision not to continue as President of MBA-ACT. Ross has been an incredible servant of the industry and the organisation, both locally and nationally over many, many years. I am personally indebted to Ross for his guidance, support and wisdom. Whilst Ross stands down as President, we will still see him heavily involved with our industry and organisation and that is a very good thing.

I close by thanking all the terrific staff of MBA-ACT and MBA Group Training for their efforts throughout the year. We all look forward working with members in the year ahead and delivering vital outcomes for the broader industry.

JOHN MILLER Executive Director

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

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TREASURER SIMON BUTT This is my fourth and final report as Treasurer. I am pleased to confirm that the organisation remains in a very strong financial position although it is clear that the past year has been one of the most difficult in recent times. It would also be fair to say, based on current data, that the next year or two will be tough ones for our industry. This means we will need to manage our affairs very closely, a point I made last year and an essential principle for running any operation whether it be in good times or bad.

Australia has continued to outperform other advanced economies although a lot has been said of the “two speed economy”. In looking around the country, the ACT continued to perform well against other jurisdictions although the indicators are weakening in a number of areas impacting on the building and construction industry. ACT Government spending on capital works is diminishing against previous years and as their budget comes under greater pressure and this is also noted at a Commonwealth level. In turn, this has impacted on members and increasingly so on our Group Training organisation through the engagement of apprentices.

The industry has dealt with the volatility in the past and no doubt will do so into the future. The forecasts are somewhat gloomy at present although it would still seem that once we can navigate these difficult times, the projects waiting to commence will again put pressure on industry as demand rises. The ACT’s own publication, Canberra Construction Snapshot, and other construction forecasts would confirm that many projects are in the pipeline and will commence once conditions begin to improve.

I present the following overview of the activities and performance of each entity during the 2011-12 financial year as reflected in the consolidated financial report of the Master Builders Association of the ACT and MBA Group Training.

MASTER BUILDERS ACT: MBA-ACT, as the parent entity, has recorded a surplus of $610,729 for the financial year ending 30 June 2012. The result was above budget forecast and continues recent performances of the Association in difficult times. It should be noted that a revaluation of assets accounted for $151,182 of that surplus and

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the above expected performance. Additionally, the better than expected result was achieved with the critical addition of a senior industrial relations person to strengthen our Workplace Relations department at a time when this service is key to the needs of a large part of our membership.

The executive committee has maintained a position where borrowings by the Association are kept at a minimum in order to protect members’ equity during uncertain times. We have been offered additional land adjacent to our current site for current and future additional training needs and master planning of that site and the 400m² of space on the upper level of our building with further income potential is currently underway.

Revenue and expenditure continues to be closely monitored to ensure delivery of member services and take every opportunity to enhance those services. I am pleased to note that membership has remained steady during the financial year. The Master Builders and Boral Excellence in Building Awards continue to achieve its objective to showcase the Association and work of members both within the industry and externally to the broader community. We look to the awards along with our other events to provide excellent member networking opportunities.

Communication with the membership is critical and more resources have been provided this year to further improve our website and other communication mediums to help members in their businesses.

Despite difficult conditions, a small budget surplus has been forecast and confirmed for the 2012-13 financial year. I am confident that given the processes we have established to monitor and adjust our activities and budget, we will be able to report a sound result for MBA-ACT this time next year.

MBA GROUP TRAINING: The result of MBA Group Training in the past year is a reflection of not only continued Government support for training activities but the diligence and hard work of the staff. It is a well known fact that our training operation has had to deal with difficult trading periods in the past and has required financial support by Master Builders ACT. Pleasingly, we have achieved a surplus of $760,538 for the year ending 30 June 2011. We know with the

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

continued uncertainty surrounding the financial markets and the impacts on activity in building and construction, our results can be varied and often quite quickly.

We slightly increased our apprentice numbers during the last year and pleasingly in the face of the predicted uncertainty placement with industry continued to be strong. As reported in the previous financial year, Construction Industry Induction Card (White Card) training kept the skills centre quite busy in the first half of the financial year. Builder’s licensing training continues to be in strong demand and we have introduced other new courses for work health and safety, energy rating and green building. Funding by the Commonwealth to recognise skills of existing workers has also ensured a busy training operation.

During the year we have been looking at the options around future expansion of our training activities and continue to discuss measures to facilitate that growth. This has included investigations of nearby land. We are currently preparing to provide additional covered space and storage area to cater for our outdoor training which is constantly in use. This will ensure more year round opportunities for training and better protection for those in training.

CONCLUSION: I conclude this report, my final one as Treasurer, by thanking my fellow executive committee and board members and John Miller and Wendy Tengstrom for their diligence and support in ensuring we all keep our eye on the financial well being of the entities. The accounts team is capably led by Senior Management Accountant, Louise McCallum and they continue to produce timely and detailed information to inform our deliberations. We look forward to reporting positively again next year.

SIMON BUTT Treasurer

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

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MASTER BUILDERS AUSTRALIA WILHELM HARNISCH In this financial year, the building and construction industry continued its role as major contributor to the national economy.

It added more than $106 billion to the economy and employed over a million Australians.

In the ACT, building and construction contributed more than $2 billion in economic performance and generated 14,000 jobs.

Our industry should be celebrated. Instead, the Federal Government imposed a legislative framework that makes it even harder to operate. Throughout 2012, the Government introduced new legislation, amended laws and increased regulations that seem to punish the industry rather than facilitate its continuing contribution to economic growth and employment.

A new requirement was introduced this year forcing builders and contractors to report every payment made to subcontractors and suppliers. Master Builders Australia strongly opposed these onerous requirements, arguing it isn’t the way to deal with incidents of non-payment of taxes. Not only does it create a significant compliance burden on all honest operators to catch a small few who break the law, it creates an opportunity for unions to access highly sensitive information.

The introduction of the carbon tax presented significant challenges for the industry, which are yet to be fully felt. The unknowns surrounding this legislation will remain, especially in 2015, when the tax becomes an emissions trading scheme and the floor price linked to Europe’s scheme.

The replacement of the Australian Building and Construction Commission with the toothless Fair Work Building and Construction Inspectorate was another big blow for the industry. The CFMEU’s illegal attack on Grocon in August provides a clear example of how the Government is failing the industry and our need for a tough cop on the beat.

Subcontracting lies at the heart of our productivity. The CFMEU’s unwarranted crusade on the ‘issue’ of sham contracting has represented another major challenge for the industry. It’s unfortunate the Government allowed the union to pursue this cause based on a dramatic over representation of its prevalence. Master Builders advocated strengthening the existing legislation, rather than creating new regulatory options.

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National harmonisation of workplace health and safety and its implementation created even more difficulties for the industry.

We strongly argued the objective must be to improve safety outcomes. This cannot be achieved through a more complex, paper based compliance regime.

On another industrial front, Master Builders lodged a comprehensive submission to the Fair Work Review Panel and continues to lobby government for change. We made 46 recommendations to the review panel to amend the Act and we responded to the panel’s report to Government. It is clear the Act is neither fair, nor helpful for a productive workforce.

Industry continues to experience difficulties in the award modernisation process. Instead of modernising the awards, the process has entrenched past unproductive provisions that do not reflect the modern needs of the building and construction industry.

Master Builders will continue to fight the CFMEU’s claim to massively increase the minimum apprenticeship wage. It’s another example where our industrial relations system is failing young people and business.

The Board of Master Builders Australia is acutely aware of the poor trading conditions facing the building and construction industry. As high priority, we lobbied the Government to adopt economic policy to help stimulate consumer confidence and our industry. We put this strongly at the National Tax Forum and the Prime Minister’s Economic Forum during the year.

As 2012 draws to close, the National Board is gearing up for next year’s Federal election to press the major parties to adopt policies that strengthen the capacity of our industry to be one of the key productivity drivers in the economy and to deliver much needed social and economic infrastructure.

Wilhelm Harnisch Chief Executive Officer

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

SECTOR COUNCILS RESIDENTIAL The Residential Sector Council has canvassed a number of issues affecting the sector over the last 12 months. . Some of the issues that have drawn the most attention are land rent, the Change of Use Charge, and Draft Variation (DV) 306.

The Council has acknowledged the impact of land rent on demand. While there is in-principle support for concessional land rent, there is much concern about the effects of the nonconcessional element. The non-concessional element seems to be distorting demand through the provision of cheap finance to speculators rather than bona fide buyers. This is clearly not the intent of the scheme.

The last 12 months has seen an increase in developers buying land in greenfield sites. This is one of the impacts of the Change of Use Charge, which has made development in brownfields less viable. This results in a decrease in diversity of product available across the ACT, which impacts on consumer choice.

DV 306 remains a contentious issue with members of the Council. The MBA has had a proactive role in the consultation process and hopes that its submissions will be taken into account by the legislative assembly as it deliberates over whether to enact the variation.

As flagged in last year’s annual report, the ACT residential sector has witnessed a change in pace from recent years, with a decrease in demand for residential housing across all dwelling types over the last 12 months. These changing market conditions are stabilising land and house prices, which is improving members’ confidence in the market and resulting in a positive outcome for home buyers.

In response to changing market conditions, members do not want to see a return to the land shortages experienced over the last decade. The desirable outcome is for ‘shovel ready’ land to be available to the market to respond to changes in demand.

In closing, I would like to acknowledge and thank my fellow council members for their support this year. I would also like to encourage others to become involved in the Council as we welcome a broad spectrum of views from across the sector.

SUBCONTRACTORS & SUPPLIERS Over the last 12 months we had many high calibre guest speakers address our meetings. The fact that these people took time off from their busy schedules to come hear our concerns and answer our questions reinforces the importance of our sector within the construction Industry.

Our first meeting for 2011 was in February and Jim Gallogley from CBus spoke about Superannuation. Meg Brighton, Manager of the Workers Compensation Unit from the Chief Minister’s Department and Mark McCabe, WorkSafe ACT Commissioner made themselves available to explain proposed changes to the workers Compensation legislation in the ACT. It also gave our group the opportunity to reinforce the need for reform in line with the changes made in NSW under the Carr Government.

Without a doubt one of the most pressing topics affecting the Construction Industry at the moment is Sham Contracting so we were extremely pleased when ABCC Commissioner Leigh Johns accepted our invitation to address our meeting and give us a first hand update on the current inquiry. His comments were well received and he took our concerns seriously, there is no doubt that it is and will remain of serious concern to all.

We are the sector most likely to be affected by the outcome of the inquiry and after the conviction of a local company which attracted severe financial penalties, it reinforces the fact that the ABCC aren’t just giving lip service to the matter but are seriously pursuing the issue.

Robyn Hardy from Shared Services Procurement attended our meetings in April and August to introduce the ACT Government’s new Audit Tool, which they believe will catch out rogue employers and Sham Contractors. Robyn has since retired and while we are sad to see her leave we will forward an invitation to Peter Murray to be a guest at one of our meetings next year.

With all the challenges facing us we are sure to have interesting times ahead.

Graciete Ferriera Chair

Frank Porreca Chair

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

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SECTOR COUNCILS PROFESSIONAL Since the publication of the last Annual Report, the Professional Sector Council has continued to play a key role in the building and construction industry. Particular emphasis of our sector has been on planning, architectural, engineering, environmental and legal issues.

The Council maintained its advisory role in relation to relevant matters dealt with by the Association. Advice to the Executive Committee was provided by the Council’s Representatives and other highly qualified volunteers concerning the operational aspects of the Association, and ongoing industry specific issues.

Some of the specific areas Council commented on included: •

Building Standards and Quality of Building Work, with particular focus on a building’s lifecycle: building design, including environmental sustainability – construction – demolition;

•

Regulation requiring solar passive environmental design, and the practical restrictions the regulations impose on new and future construction;

•

Security of Payments issues, and the legalities involved;

•

Process of sourcing offshore materials, and the impact on building standards because of unregulated importation of non-standard / non-compliant products;

•

Draft Variation to the Territory Plan (DV306) input and tracking of proposed changes, including contributing to feedback to government of risk and likely impact in the market place;

•

In raising concerns in relation to DV306, the Council also contributed to ongoing objections being put to government of the Change of Use Charge Policy and the Lease Variation Charge, which came into force 1 July 2011.

Unfortunately, the government still adheres to its Policy.

Other areas Council gave input to during the year involved:

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•

Providing input to the Constitutional Review Committee, in relation to proposed amendments to the Association’s Constitution;

•

Regular meetings with ActewAGL, to consider and advise on policy and operational matters;

•

Level of land releases, particularly residential as an ongoing issue;

•

Electronic submission / digital process requirements for

Building Applications implemented by ACTPLA, and the resultant impact on the ACT building and construction industry.

As mentioned, the Council was instrumental in these areas, and also from time to time was invited to provide comment on other matters affecting the industry.

Although it is generally acknowledged that the ACT building and construction industry is being severely challenged at present as a result of global financial and national economic conditions, the Professional Sector Council will actively continue to advocate and contribute its views, for the betterment of the whole industry, and professional sector members in particular.

I take this opportunity to express my personal thanks to our Chair, Mr Hans Sommer for his tireless efforts throughout the year, and to the members of the Council for their generous and continued support.

Gareth Powell Deputy Chair

CIVIL CONTRACTORS In preparing my first annual report as chair of the civil sector I reflect on a year in which the civil construction industry has been impacted by tragic incidents in addition to the usual challenges and changes faced by our members.

Regretfully the 2011/ 12 year has seen incidents in the local civil industry which have resulted in the deaths of two workers.

On behalf of all our members, our condolences go to the families, friends and colleagues of those effected by these tragic incidents. The ACT civil construction industry has undertaken to engage with all industry stakeholders and the regulator to provide recommendations to prevent future workplace incidents. Our involvement in this will continue to be priority focus for the upcoming year.

In the 2011/12 year workloads and work opportunities have been significantly down from last year, this has also coupled with significant periods of wet weather putting significant pressure on members productivity. The year has also seen the introduction of new WHS legislation, the introduction of the carbon tax, the introduction of the Personal Property Securities Act and also the introduction of new tax reporting requirements. The impact of all these items is now only just beginning to be realised by members who are having to adjust their business systems to manage the changes.

Throughout this period the civil sector and the MBA’s staff have been active representing the civil construction industry on members behalf including: •

Establishment and participating in a safety round-table specifically to address the particular safety challenges of the civil construction industry.

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

•

Input into the development of a new ACT specification for major infrastructure.

•

Participating in the review of the existing ACT standard specification.

•

Representation of industry wide and individual procurement issues to Shared Services Procurement on behalf of members.

•

Establishing an ongoing dialogue with WorkSafe ACT in relation to the introduction of the new WHS legislation and lobbying for exemptions to sections of the new regulations particularly in relation to ROPS/FOPS and Dogging requirements for standard lifts.

•

Developing a SWMS template in conjunction with WorkSafe to provide a guidance document to members.

•

Inputting civil industry concerns into the construction industry call for action paper provided to all major parties in the upcoming ACT elections.

•

Continual lobbying to ensure that government projects are packaged where possible to suit the local industry.

•

Lobbying on behalf of members in respect of industrial relations issues.

In all these challenges what has been particularly satisfying over the last 12 months is to see the high level of attendance at our quarterly meetings demonstrates that we are a proactive and engaged industry.

I have no doubt that the next 12 months will be equally if not more challenging than the last. Our industry will be subjected to increased scrutiny and regulation against the backdrop of reduced workloads. As an industry body we need active participation from our membership so that we can proactively address industry wide issues. I encourage all members to raise issues, attend meeting and to get involved with representing our industry.

the big stick approach to dealing with issues.

There has to come a point in time where we are oversaturated with this approach. We are creating systems where people endeavour to comply with them just for the sake of complying rather than because they want to create a culture of safety.

A number of commercial builders together with senior management of the MBA met with Dr. Rob Long in August to look at how we could influence the culture of safety firstly within our own companies, followed by the industry as a whole.

A number of managers, mostly site based, recently undertook Dr. Long’s “Safety Conversations and Observations Program”. The feedback from participants was very positive and highlights the need for us to pursue this in relation to better managing the risks we deal with on building sites. It is also very encouraging to see the MBA organising the “Safety Culture and Leadership Forum” on the 22nd of October.

In regard to other news, it was pleasing to be able to agree to trading terms with Actew for electrical projects. This agreement allows for milestone payments to be made to Actew rather than all costs paid for up front.

The Commercial Builders’ Council is also represented at quarterly meetings with senior managers from both Actew and Shared Services Procurement. These forums have been a good avenue to raise issues of concern as well as receive feedback from both organisations.

The MBA recently met with representatives from the University of Canberra in regard to the long term future of the Bachelor of Building and Construction Management. The student intake has been increasing each year for the past five years and the course is now at a position where it is sustainable and appears to have a secure future.

Finally I would like to congratulate Simon Butt on being elected the next President of the MBA (ACT) and wish our outgoing President, Ross Barrett, all the best in his future endeavours.

Valdis Luks Chair

Andy Crompton Chair

COMMERCIAL This year has been a very busy time for the Commercial Builders with a number of issues being dealt with.

Foremost on the agenda for the past 12 months has been safety within our industry. With four deaths over recent times the focus and scrutiny of safety on building sites has never been greater.

The difficult and frustrating thing to deal with in regard to this is that government and bureaucracy seem to think the best way to deal with this is to be reactive rather than proactive and to put more systems and paperwork in place, which in turn is more of Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

15

INDUSTRIAL RELATIONS MICHAEL BALDWIN NATIONAL ISSUES

THE LOCAL SCENE

Last year I wrote about the lack of reform in the national space particularly as it related to productivity in the workplace. In the year that has followed these concerns remain front and centre in the public discourse, as business continues to call for changes to the Fair Work Act to right the problem. Minister Shorten delivered on his undertaking to conduct a review of the Act; unfortunately an examination of productivity levels was not a focus of the Review Committee. The Committee recommended some 53 amendments of substance to the Act. Whilst we are yet to get the Government’s response, indications are that substantive change is unlikely, as the pressure from the ACTU and individual militant unions, predicates against a lot of movement from the Government. Remember, that it views the Act as a panacea to all ills, as an instrument well suited to the workings of a modern economy. Our view of the process is that whilst well intentioned, it has produced precious little by way of genuine reform, which is essential if we are to lift ourselves beyond the mediocre.

The enduring issue on the local scene has been safety and more particularly, the four accidents that occurred this year, which resulted in the deaths of three construction workers and a painter on a domestic site. Following the second tragedy MBA-ACT called a roundtable conference involving all parties, including Shared Services Procurement and other Government agencies. Apart from the opportunity to ventilate concerns and perceptions about safety in the industry, one clearly useful outcome was the formation of civil construction safety subcommittee under the auspices of the ACT Work Safety Council.

The recommendations of this committee form an important part of the Government inquiry into safety in the industry that was called by the Attorney-General following the final death in May. The Inquiry is due to submit its report on 16 November.

Submissions have now been called and MBA-ACT will drive industry’s response.

There were numerous other matters of national interest this year, some of which are worthy of comment. Firstly we have finally seen the demise of the ABCC, replaced by the Fair Work Building Commission (FWBC). This is a body that is a mere shadow of its predecessor, the result being that whilst the Government has fulfilled its election promise, the industry is left without a body designed to regulate our construction workplace. Secondly in several interesting decisions, the courts have been both a friend and foe to industry. In JJ Richards a Full bench of the Federal Court confirmed that protected industrial action is available to compel an employer to bargain even when bargaining has not commenced. In Board of Bendigo Regional TAFE v Barclay, the High Court made it clear that it is incorrect to suggest that any conduct in a union capacity is immune from disciplinary action by the employer. This is a common sense decision which means that union delegates and representatives can be disciplined for misconduct like any other employee. Finally, litigation remains on foot with respect to several of our awards and we have seen the implementation of the national OH&S regime.

On to other matters; the issue of compliance whether industrial or safety related remains our core business. In terms of the unions, we are now advising members in the broader finishing trades (plumbing, plastering, cranes & scaffolding for example) in their negotiations. We also note that the CFMEU continues to pressure our civil members to strike deals. Unfortunately the same old issues remain on the agenda including: 36 week; income protection; 20% wage increase over four years with no acceptance of productivity offsets to name but a few. The MBA continues to advise employers that they ought to negotiate on the basis of what is good for their business rather than the industry. Whilst a number of members have held the line and refused to embrace the union Agreement, the industry as a whole has preferred to do otherwise.

Finally a word about what others think of industrial relations as a public policy issue. For reasons best known to themselves, it has little resonance in the current local election campaign, nor does there seem a willingness for pivotal change at the federal level. This is in spite of the primacy of the productivity debate, as the local and national economies attempt to overcome many impediments to growth.

Michael Baldwin Director Industrial Relations

16

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

MASTER BUILDERS FIDELITY FUND & SKILLS CENTRE BUILDING FUND FIDELITY FUND

SKILLS CENTRE BUILDING FUND

The Master Builders Fidelity Fund continues to support the industry by providing certainty to builders and protection for consumers and, since being established 10 years ago, has issued more than twenty thousand certificates.

One of the major topics of discussion across government and industry revolves around education and training. Without a functioning and adequately resourced education and training system, business and industry would be unable to fulfill its potential. In delivering on that education and training there is a responsibility on all stakeholders to play a role. It is not an effort that can be or should be left to government notwithstanding they need to take a lead and shoulder a significant load.

Each year we are reminded of the reason for the Fund’s being and it is very pleasing that builders who remember the difficulties in the wake of the HIH insurance collapse in 2001 continue to support its existence. We never want to return to the days where builders were placed under extremely severe pressure in maintaining the financial viability of their businesses, and the impact on suppliers and contractors as they struck trouble in obtaining housing indemnity insurance.

It is pertinent that my message also acknowledges the ongoing support of the ACT Government and recognises the foresight and high level of cooperation they provided to ensure that our industry was able to get through one of its greatest challenges. We still receive excellent support and assistance from key ACT Government agencies in conducting the affairs of the Fidelity Fund.

Through the Fidelity Fund, a fund owned by builders to service builders’ needs, we look to innovate and find ways to raise industry standards. Apart from ensuring capital adequacy objectives and providing industry with appropriate and realistically priced insurance, we assist in supporting builders with relevant technical advice through undertaking audits during construction to minimize risks to all parties. The industry is under scrutiny on a daily basis and we see this it as an equally important role to play our role delivering on improved quality.

The Trustees do not resile from their commitment to improve standards and at the same time protect the integrity of the Fund by minimising claims risk. In fact we actively encourage and rewards good performers and lift the bar on standards by refusing entry to non-performing industry participants with below par records on performance around work quality and financial management.

Another factor giving industry strength in dealing with the Fidelity Fund is the expertise and local knowledge of the Board of Trustees controlling and administering the operation and their intimate understanding of the unique aspects of the local industry. Builder assessment is undertaken locally and any issues arising can easily be dealt with locally in a very timely way. That timeliness is critical in an environment like that currently confronting industry.

Ongoing uncertainty and difficulty continues to plague the provision of Home Warranty Insurance elsewhere and particularly in surrounding New South Wales. If copying is a form of flattery, it is worth noting that the Northern Territory is seeking to take the Fidelity Fund template north in dealing with their Home Warranty situation.

It is very pleasing to again report that the Master Builders Fidelity Fund continues to safeguard local industry against problems being encountered elsewhere.

The Master Builders Skills Centre Building Fund is one way that our industry can join government and make a contribution where the need is greatest. In the case of the Fund, that revolves around the provision of infrastructure. Our objectives are to provide funding assistance to non-profit organisations for the acquisition, construction or maintenance of a building, or buildings, to be used to deliver training.

It is again pleasing to report that we have identified and supported organisations during the past financial year in expanding their infrastructure to support training. One of those organisations plays a critical role across our industry and the broader community in dealing with a growing crisis of mental health and depression, no doubt some of that exacerbated by the difficult economic times we currently find many parts of the community struggling with, often alone. Providing enhanced facilities to improve training to their counsellors was of paramount importance to that organization.

Our objectives are met through a variety of funding sources including some surplus funds through the Master Builders Fidelity Fund and other industry events such as charity golf days, raffles and auctions.

We continue to actively promote giving to the Fund through advertising in seeking contributions from interested individuals and companies wishing to donate.

On behalf of my fellow Trustees, I would encourage all of industry to consider this Fund as a great initiative in supporting skills development, particularly young people we will need to help tomorrow’s Australia and our region. The Fund provides a great opportunity to proactively invest in training.

I conclude my report by thanking my fellow Trustees and those who have provided important support and contributions to the Fund. We will continue to actively seek out those who are able to contribute and help secure the future skills need of our industry and associated organisations.

Trevor Corver Chair

In closing, I express my sincere gratitude to my fellow Board of Trustees for their ongoing commitment, input and guidance along with Jerry, Alison and Jason who make the system work.

Col Alexander Vice President Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

17

GROUP TRAINING MBA Group Training (MBAGT) continues to serve our members and industry through employing and training apprentices and trainees as well as providing broader training opportunities for all members of the Master Builders Association of the ACT. We provide a broad range of services to our members by providing flexible and affordable placements for apprentices and trainees employed through MBAGT. We also train apprentices employed directly by our members (user choice) through our Registered Training Organisation (RTO) as well as delivering a diverse range of general training to meet industry requirements.

This year has been a particularly challenging time for our organisation due to the general downturn in building activity being felt across the industry. This has required us to readjust some of our strategies to meet these challenges. However, we remain focused on continuing to develop and grow our organisation through prudent management of day-to-day operations and the ongoing implementation of the strategic plan.

This financial year, the Group Training Organisation (GTO) employed 156 full time and part time apprentices and the Registered Training Organisation (RTO) trained 235 full time and part time apprentices.

2011

2010

2011

2010

RTO

RTO

GTO

GTO

Full Time Apprentices

166

149

106

109

Part Time School Based Apprentices

58

70

50

70

Cadets

11

83

0

7

235

302

156

186

Programs

Total Learner Numbers

Balancing our charter to provide both quality training as well as meeting the demand for our services to the wider industry requires considerable planning by the management team. Forecasting future demand for our services and balancing this with our annual intake of new apprentices is always difficult due to the competing demands of satisfying our Members’ needs, while ensuring that we do not have our apprentices out of full

18

time placement. Although we planned for the current easing of demand for our apprentices in last year’s intake, this year has been particularly challenging in meeting this goal due to the decline in the long term placement of our apprentices coupled with another particularly wet year. This year total unrecoverable hours was up from 1,871 hours in 2010/2011to 4,529 hours this financial year.

The safety of our Staff, Apprentices and Trainees is paramount. This is supported by our WHS policy and operational plan which continues to mature in line with recent changes to the Work Health and Safety ACT. These changes have delayed our initial goal to have our WHS systems certified to AS4801 in the last financial year.

However, this remains a goal for the organisation in the coming year.

The general wellbeing of our Apprentices and Trainees is also equally important to us. Our partnership with Ozhelp provides advice and counselling for our people on a range of issues which are particularly pertinent to young people. This service is now supported by a mentoring program which has been funded by the Federal Government. This funding has allowed us to engage a full time mentor to provide additional support to the great work our field officers already provide.

Again our Apprentices and Trainees have excelled in achieving recognition for excellence in their chosen fields. In the Worldskills competition we achieved Silver (2nd place) in the Carpentry, 5th Place in the Bricklaying, 5th Place in ASBA program.

Our school based programs such as the School Based Apprentice Scheme continues to provide a learning path for students and an opportunity for them to use this training to secure an apprenticeship at the end of their schooling. This has an added benefit. These students will have already obtained a number of skills and competencies prior to officially starting as an apprentice.

This makes them more valuable to our host clients from the first day they start on site. Other programs such as the Kids Assist program continues to generate enormous interest. It is generally recognised in the training arena that this program is effective in assisting students make more considered decisions regarding their options for future education and training.

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

We continue to develop training initiatives to suit the demand from our members and through changes in legislation and industry standards. In addition to our existing courses we continue to develop new initiatives such as the new Dogging course. This year MBAGT has issued 2026 statements of attainment through our short course program.

Our partnership with the University of Canberra continues to strengthen by providing training pathways for industry participants. This initiative has opened opportunities for our trainees to further enhance their careers through a “seamless” transition from entry level Certificate II through to Degree and Post Graduate qualifications. Currently we are exploring with UC the option to train certain core subjects at our Fyshwick Training Centre.

As in the past, the ongoing viability of our organisation is contingent upon continuing funding from both Federal and State Governments. Unfortunately, we have seen a decline in real terms of funding over many years as it has not kept parity with the expense of running an enterprise such as MBAGT. Again this year we have engaged with Government, both locally and nationally, to highlight the issues affecting our industry. We are also discussing opportunities for Government to assist us in better targeting future funding for our sector.

Despite the current downturn, planning for our future is important to ensure the organisation is ready for when the industry recovers. That is why, in consultation with the MBA-ACT executive committee, we continue to explore options to acquire additional land adjacent to the Training Centre as well as developing a master plan to accommodate future expansion of the current Training Centre.

MBAGT’s ongoing success can be attributed to a number of individual people and groups who all contribute to our operation. I would like to acknowledge the hard work and dedication of the Executive and Staff of MBAGT, our host employers who provide the demand for our services and my fellow Board members who all give back to our industry by providing stewardship to the organisation.

We also welcome a new board member in Adam Davidson. Adam is a former MBA Apprentice and will be able to provide a valuable perspective to the Board in navigating the challenging period ahead for MBAGT. Rod Mitton Chairman

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

19

MASTER BUILDERS & BORAL EXCELLENCE IN BUILDING AWARDS THE AWARDS DINNER The 2012 Master Builders & Boral Excellence in Building Awards lived up to all expectations with the Master Builders Association of the ACT, together with its event partner Boral Limited, again delivering an exceptional night filled with glitz and glamour.

The celebration of this year’s achievements highlighted the unshakeable resilience, determination and strength of the local building and construction industry with high quality, innovation and style featuring in winners and finalists projects.

Almost 1,450 guests enjoyed a wonderful Italian themed feast whilst experiencing the unique humour of Australia’s first Lady of Comedy, Julia Morris, who took to the stage to run the official proceedings.

Our sincere thanks go to Boral and the many other incredibly generous industry partners who contributed to the success of the awards.

PROJECT OF THE YEAR - HINDMARSH Hindmarsh has worked continuously with ANU for the past seven years on a range of projects including laboratories and research facilities, with the Colleges of Sciences – Bioscience Building an exceptional example of collaboration between the project team, client and a core group of subcontractors.

The Biosciences Building incorporates extremely complex architectural facade elements, with a mix of digitally moulded precast panels, high performance glazing, lightweight aluminium panelling installed with intricate geometric patterns and recycled timber sunshades.

The ANU Colleges of Science - Biosciences Building winning Project of the Year, the most prestigious of commercial categories within the Master Builders & Boral Excellence in Building awards, was the sixth award for this project.

HOUSE OF THE YEAR CREATIVE BUILDING SERVICES The collaboration between Creative Building Services and the design team has resulted in a magnificent multi award winning project. This house was awarded the top prize in four categories, including House of the Year, Bathroom Design & Construction more than $25,000, Kitchen Design & Construction more than $25,000, the Custom Built Home more than $1,000,000.

Congratulations to Creative Building Services, Marcus Graham Architect, Cia Landscapes And Colour and Archertec Interiors on winning this year’s most prestigious residential award – House of the Year.

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Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

THE FRANKLIN CHARITY HOUSE

Built for hopes and drea ms After approximately 18 months of planning the Franklin Charity House project began in late 2011.

The Master Builders Association of the ACT joined forces with the Land Development Agency on this project to raise money for five local charities that provide services to Canberra’s homeless and disadvantaged.

The construction of the Franklin Charity House was entrusted to Classic Constructions, a Master Builders member that is recognised as one of Canberra’s leading construction companies and renowned for its quality and service.

The Franklin Charity House is a true example of the ACT building and construction industry coming together to support the local community, with over 70 businesses offering either products, labour or professional services.

The two storey, double garage, 386 square metre house features a 7 star thermal rating which was achieved by the house’s orientation on the block and its modern slab

construction together with the use of double glazed windows and extensive insulation. With its sleek design and modern features, the house will be the ideal setting for entertaining family and friends in its undercover alfresco area with builtin barbecue surrounded by a generously sized backyard with easy care landscaping. The house also boasts hydronic heating, solar hot water and the lower level will provide adaptable design features, making it accessible for older people and people who may have physical disabilities.

The proceeds from the auction, in March 2013, are set to benefit five charities within the ACT including YWCA of Canberra, YouthCARE Canberra, the Canberra Men’s Centre, Toora Women and Inanna Inc. Each of these charities work to provide services to specific members of the Canberra community who are either homeless or in danger of becoming homeless and includes young people, older men and women and women and children escaping domestic violence.

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

21

2012 EVENTS 2011 ANNUAL DINNER Leading business commentator Robert Gottliebsen, who has spent more than 30 years writing and commentating about business and investment in Australia delivered the key note address. Master Builders Executive Director, John Miller looked at the challenges 2011 had brought to our industry and some we would need to be aware of in 2012.

The evening was well attended with some 250 members and guests enjoying the excellent food and the unique setting for the dinner, underneath ‘G’ for George at the iconic Australian War Memorial.

Nine MLAs attended, including Simon Corbell representing the Government, Senator Gary Humphries and Member for Canberra Gai Brodtmann also attended, as did Member for Monaro, John Barilaro.

Mick Burgess from Urban Contractors received the ‘Build the Community Award’ for his outstanding contribution to the building and construction industry, including his support and development of apprentices and for his continuing charitable generosity to the community. There was also a number of long standing members receiving anniversary certificates, among who were Tony Toscan for 35 years of membership, and W & M Bowman Constructions for their 40 years of continued membership.

2012 ANNUAL CHARITY GOLF DAY The Annual Charity Golf Day was held on the 20th February 2012 at the Yowani Country Club and Restaurant. The weather was kind, and the rain held off till all players had finished. Over 200 players vied for bragging rights over their colleagues for another twelve months. The “Speed Cop” on the 10th tee provided a lot of fun, with each player winding up and letting loose to impress with their ball speed. Some were more successful than others.

This year the charity we were supporting was ACTAADS – The ACT Association for Advancing Disabled Sport and Recreation. Thanks to the very generous support of the charity auction, as well as all players and guests digging deep for the raffle over $12,000 was raised.

PRESIDENT’S LUNCHEONS President’s Luncheons are one of the Master Builders ACT key activities on the event calendar. The luncheons are hosted by the President of the Master Builders, Ross Barrett, and include a presentation from a prominent Guest of Honour. The Guests of Honour include leading politicians and executive officers of Federal and ACT government departments.

The Luncheons provide an intimate forum for twenty guests to discuss topical industry issues. They are a superb way for Members to network with key industry stakeholders and to keep up to date with current activities within the ACT’s building and construction industry.

22

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

u by Boral.

tone age.

boral golf day i annual dinner i Carbon Tax i abCC aboliTion i molonglo valley i franklin ChariTy house

e has been loved out of reach.

Edition 3-2011 Canberra building news 3-2011 - The 100 Th issue

ge

CANBERRA BUILDING NEWS - 100 ISSUES

S P E C I A L

1 0 0 T H

I S S U E

C O L L E C T O R S

E D I T I O N

100

th

issue

S P E C I A L

S P E C I A L

1 0 0 T H

1 0 0 T H

I S S U E

I S S U E

C O L L E C T O R S

C O L L E C T O R S

E D I T I O N

E D I T I O N

ncc compliance

unjustifiable harDship anD accessibility

DV 306

neeDs fair anD reasonable guiDelines

will you be ready...........

new oh&s laws

carbon price

charity house

canberra hit harDest, housing alreaDy unafforDable

master builDers anD lDa builD a charity house to aiD homelessness

The first edition of the Canberra Building and Region Building News was published in March 1987 by Master Builder’s life member Bob Winnel, who at that time was the Association’s Executive Director, and in November 2011, some 25 years later, we published the 100th edition.

The Canberra Building News is the Master Builders official industry publication. Three editions are published each year with release dates in March, July and November. The 100th edition was an 84 page ‘burst bound’ glossy magazine, with print run of 5000.

For this special edition we asked Mr Winnel to write the introduction for the feature celebrating the milestone and this is part of what was written.

“In 1987 the Master Builders Association of the ACT was in the middle of industrial mayhem relating to the deregistration of the BLF. Even the then Hawke Labor Government and the Union movement itself had run out of patience with the thuggery and industrial blackmail perpetrated by the BLF. This mayhem caused the existence of Master Builders ACT to be under threat. We had an office of nine staff, six were temporaries.

The residential membership was down to a mere handful and most members were not financial.

In the middle of this crisis I volunteered to move in for three months, recruit staff, reorganise the office, employ a new Executive Director and stabilise the Association. It took 21 months of intense effort, including establishing the Canberra Building News.

We also faced the issue that Government was winding down from an extraordinary construction peak and the city needed to look at ways of encouraging private investment to plug the gap, as well the industry was being strangled by extraordinary workers compensation costs of around 40% with the penalties for late payment of taxes and charges like Stamp Duty were as high as 200% a day.

In this environment we needed to rapidly and dramatically improve communication with our members, hence the birth of the Canberra Building News. Thankfully today the industrial scene is vastly more civilised, though we need to be vigilant to ensure that destructive lawlessness never returns.

After the industrial mayhem subsided we turned our mind to more constructive issues through the Canberra Building News, such as supporting the building of a casino in Canberra. Over 1500 business people demonstrated in Civic Square for the Federal Parliament to give the OK to a casino in Canberra.

It was also a time of expansion of the Master Builders with the creation of Sector Councils to specifically represent subcontractors & suppliers, professional consultants, civil contractors and residential builders, expansion of our Master Builders Group Training and a move to establish our Building Information Centre.

In the early years issues in the Canberra Building News included how to achieve competition with ACTEW, how to ensure an acceleration of redevelopment housing in inner Canberra and as it is today the ongoing challenge of affordable housing. It should be noted that in an edition from 1989 standard residential lots at Calwell were advertised for $22,000 per lot. Prices have risen tenfold in just 22 years.

Many of the goals talked about in the early editions like private sector diversification, growth of apprenticeship training, competition for ACTEW, redevelopment within the inner areas and affordable housing, require as much ongoing debate within the Master Builders and the Canberra Building News in 2011 as occurred in those early years of 1987 to 1989. “

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

23

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2012

STATEMENT BY MEMBERS OF THE COUNCIL OF MANAGEMENT

We R Barrett and S Butt, being two members of the Council of Management of the Master Builders Association of the ACT, do state on behalf of the Council that in the opinion of the Council: 1. The financial statements and notes comply with the Australian Accounting Standards, mandatory professional reporting requirements and other authoritative pronouncements of the Australian Accounting Standards Board;

(iii) The financial records of the Master Builders Association of the ACT have been kept and maintained in accordance with the RAO Schedule and the RAO Regulations;

(iv) The information sought in any request of a member of the Master Builders Association of the ACT or a Registrar duly made under section 272 of the RAO Schedule has been furnished to the member or Registrar; and

2. The financial statements and notes comply with the reporting guidelines of the Industrial Registrar for purposes of section 270 of the RAO Schedule;

(v) There has been compliance with any order for inspection of financial records made by the Commission under section 273 of the RAO Schedule.

3. The financial statements and notes give a true and fair view of the financial performance, financial position and cash flows of the reporting unit for the financial year to which they relate;

Signed in accordance with a resolution of the Members of the Council of Management passed on the 6th September 2012.

4. At the date of this report there are reasonable grounds to believe that the Master Builders Association of the ACT will be able to pay its debts as and when they fall due; and 5. During the financial year to which the financial report relates and since the end of that year:

President

(i) Meetings of the Council were held in accordance with the rules of the organisation including the rules of the branch concerned; (ii) The financial affairs of the Master Builders Association of the ACT have been managed in accordance with the rules of the organisation including the rules of the branch concerned;

Treasurer Dated this 6th day of September 2012

Master Builders Association of the ACT Annual Report - Year Ending June 30 2012

25

INDEPENDENT AUDIT REPORT TO THE MEMBERS Report on the Financial Report We have audited the accompanying financial report of of the ACT and controlled entity (the association) which comprises the statement of financial position as at 30 June 2012, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the statement by members of the Council of Management (the council)

Council’s Responsibility for the Financial Report The council of the association is responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Associations Incorporation Act 1991 (ACT) and for such internal control as the council determines is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the council, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have provide a basis for our audit opinion.

Auditor’s Opinion In our opinion, the financial report of the Master Builders’ Association of the ACT and controlled entity (the association) is in accordance with the Associations Incorporations Act 1991 (ACT) and the Workplace Relations Act 1996, including: (i) giving a true and fair view of the association’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and (ii) complying with Australian Standards.

Auditor’s Responsibility Our responsibility is to express an opinion. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preperationof the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

26

A.B Papps, PricewatehouseCoopers, 44 Sydney Ave, Forrest ACT 2603 Dated this 7th day of September 2012

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012 Consolidated Group

Revenue Employee benefits expense

Parent Entity

2012 $

2011 $

2012 $

2011 $

8,989,520

9,632,382

3,809,114

3,354,772

(5,662,970)

(5,901,605)

(1,536,127)

1,472,663)

(367,034)

(363,248)

(313,290)

(311,687)

Rent expense

(34,240)

(34,417)

(34,240)

(34,417)

Meetings and seminars

(14,439)

(15,965)

(14,439)

(15,905)

Printing, postage and stationery expense

(167,368)

(192,826)

(112,475)

(135,263)

Subscriptions

(141,312)

(147,657)

(133,320)

(139,392)

Consultant expense

(634,259)

(499,374)

(224,227)

(97,364)

(73,062)

(64,874)

(40,105)

(48,913)

(9,500)

(36,478)

(9,500)

(10,932)

Building awards expense

(387,680)

(421,744)

(387,680)

(421,744)

Worker’s compensation expense

(304,307)

(238,005)

(11,161)

(9,491)

Insurance expense

(66,597)

(63,314)

(36,850)

(37,041)

Skills Centre expenses

(10,132)

(13,493)

(10,132)

(13,493)

Bad debts income/(expense)

3,360

20,938

(660)

3,176

Loss on revaluation of assets

(33,814)

-

(29,490)

-

(772,179)

(649,637)

(455,871)

(359,498)

313,987

1,010,683

459,547

250,145

Other comprehensive income

-

-

-

-

Gain on revaluation of property, plant and equipment

182,483

-

151,182

-

Total comprehensive income for the year

496,470

1,010,683

610,729

250,145

Depreciation and amortisation expense

Motor vehicle expense Donations and sponsorship

Other expenses Profit for the year

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

27

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012 Consolidated Group Note

Parent Entity

2012 $

2011 $

2012 $

2011 $

4,049,767

4,496,214

2,671,859

1,953,561

983,762

887,206

254,889

315,139

1,454

2,243

1,455

2,243

1,041,973

-

-

-

ASSETS CURRENT ASSETS Cash and cash equivalents Accounts receivable and other debtors Inventories on hand Other financial assets

179,843

30,576

108,535

23,829

6,256,799

5,416,239

3,036,738

2,294,772

8,575,212

8,419,676

8,409,242

8,230,618

46,592

59,451

46,592

59,451

-

4,545

-

4,545

8,621,804

8,483,672

8,455,834

8,294,614

14,878,603

13,899,911

11,492,572

10,589,386

1,131,234

869,099

545,404

319,265

Short-term provisions

156,291

112,413

121,985

96,846

Other current liabilities

284,411

108,576

144,411

108,575

1,571,936

1,090,088

811,800

524,686

82,768

48,555

47,055

25,492

500,000

500,000

500,000

500,000

Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Intangible Assets Other non-current assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Accounts payable and payables

TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Long-term provisions Other non-current liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS

582,768

548,555

547,055

541,712

2,154,704

1,638,643

1,358,855

1,066,398

12,723,899

12,261,268

10,133,717

9,522,988

12,019,808

11,739,660

9,460,927

9,001,380

704,091

521,608

672,790

521,608

12,723,899

12,261,268

10,133,717

9,522,988

EQUITY Retained earnings Reserves TOTAL EQUITY

28

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012 Retained Earnings

CONSOLIDATED GROUP

Balance at 1 July 2010

$

Asset Revaluation Reserve $

Total $

10,728,977

521,608

11,250,585

1,010,683

-

1,010,683

-

-

-

COMPREHENSIVE INCOME Profit for the year Other comprehensive income for the year TOTAL COMPREHENSIVE INCOME Balance at 30 June 2011

1,010,683 11,739,660

1,010,683 521,608

12,261,268

COMPREHENSIVE INCOME Profit for the year

313,987

313,987

Adjustment

(33,839)

(33,839)

-

182,483

280,148

182,483

462,631

12,019,808

704,091

12,723,899

Other comprehensive income for the year TOTAL COMPREHENSIVE INCOME Balance at 30 June 2012

Retained Earnings

PARENT ENTITY

Balance at 1 July 2010

182,483

$

Asset Revaluation Reserve $

Total $

8,751,235

521,608

9,272,843

250,145

-

250,145

-

-

-

COMPREHENSIVE INCOME Profit for the year Other comprehensive income for the year TOTAL COMPREHENSIVE INCOME Balance at 30 June 2011

250,145 9,001,380

250,145 521,608

9,522,988

COMPREHENSIVE INCOME 459,547

Profit for the year Other comprehensive income for the year TOTAL COMPREHENSIVE INCOME Balance at 30 June 2012

459,547

-

151,182

151,182

459,547

151,182

610,729

9,460,927

672,790

10,133,717

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

29

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012 Consolidated Group

Parent Entity

2012

2011

2012

2011

$

$

$

$

9,753,612

11,586,480

4,174,019

4,405,544

202,932

152,119

83,652

57,005

(9,015,950)

(9,711,611)

(3,197,985)

(3,564,793)

940,594

2,026,988

1,059,686

897,756

28,183

62,500

28,183

36,364

Purchase of property, plant and equipment

(373,251)

(351,650)

(369,571)

(250,683)

Net cash (used in) investing activities

(1,387,041)

(289,150)

(341,388)

(214,319)

Net increase/ (decrease) in cash held

(446,447)

1,737,838

718,298

683,437

Cash and cash equivalents at beginning of financial year

4,496,214

2,758,376

1,953,561

1,270,124

4,049,767

4,496,214

2,671,859

1,953,561

Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from ordinary activities Interest received Payments to employees and suppliers 15

Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment

Cash and cash equivalents at end of financial year

30

5

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

MEMBERSHIP ANNIVERSARIES 45 Year Members HOLCIM (AUSTRALIA) PTY LTD - CONCRETE

20 Year Members ACT INSULATION SERVICES PTY LTD BEASEC ENTERPRISES PTY LTD

30 Year Members

PURDON ASSOCIATES PTY LTD

T.OK CARPENTRY & PARTITIONING PTY LTD

JON MCRAE

BELCONNEN CONCRETE PTY LTD

KENOSS CONTRACTORS PTY LTD

BORAL PLASTERBOARD

SERENDIB HOMES LORRAINE BROOK

25 Year Members

THE LAMINEX GROUP PTY LTD

ERINCOLE BUILDING SERVICES PTY LIMITED

GOLDRUBY HOMES PTY LTD

OZTAL ARCHITECTS PTY LTD

FGW ROOFING PTY LTD

BMT CORPORATIONS PTY LTD

PAVILION HOMES

MAY & RUSSELL ARCHITECTS PTY LTD

PIONEER KITCHENS & JOINERY

WATERLAND PTY LIMITED

ANITA CONSTRUCTIONS PTY LTD CHINCIVIL PTY LTD BENCHMARK PROJECTS PTY LTD

Master Builders Association of the ACT Annual Report - Year Ending 30 June 2012

31

ANNUAL REPORT

11

2012 ANNUAL REPORT