EDITION 3-2013 http://www.mba.org.au/ files/view/?id=594 MASTER BUILDERS EXECUTIVE COUNCIL President – Simon Butt Treasurer – Frank Porreca Chair, Commercial Builders’ Sector Council – Valdis Luks Chair, Suppliers and Subcontractors’ Sector Council – Grace Ferreira Chair, Residential Builders’ Sector Council – Frank Porreca Chair, Civil Contractors’ Sector Council – Andy Crompton Chair, Professional Consultants’ Sector Council – Hans Sommer MASTER BUILDERS MANAGEMENT TEAM Executive Director – John Miller Deputy Executive Director – Jerry Howard Director Industrial Relations – Mike Baldwin Senior Management Accountant – Louise MacCallum Senior Manager - Marketing & Membership Services – David Leitch MASTER BUILDERS GROUP TRAINING General Manager – Wendy Tengstrom
Master Builders Association of the ACT 1 Iron Knob St, Fyshwick ACT 2609 PO Box 1211, Fyshwick ACT 2609 Tel: (02) 6247 2099 Fax: (02) 6249 8374 Email: canberra@mba.org.au Web: www.mba.org.au
Warning on building and construction industry Taxable Payments reports The Australian Tax Office (ATO) has issued a warning to registered BAS Agents that they are not permitted to provide advice or to assist in the lodgment of Taxable Payments reports which are now required for the building and construction industry. BAS Agents are also widely referred to as bookkeepers. BAS Agent associations are concerned about the exclusion and are lobbying the Government for a change in the ATO ruling. Building and construction industry businesses or their Tax Agents are now receiving letters from the ATO regarding lodgment of their first Taxable Payments Annual Report for payments made to contractors for building and construction services during the year ending 30 June 2013.
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address
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gross amount paid for the financial year (this is the total amount paid inclusive of GST)
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total GST included in the gross amount paid
Businesses need to report payments made to contractors for building and construction services including any of the following activities: •
Alteration
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Assembly
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Construction
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Demolition
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Design
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Destruction
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Dismantling
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Erection
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Excavation
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Finishing
Payments are required to be reported on the ATO’s Taxable payments annual report.
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Improvement
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Installation
The ATO said the information reported about payments made to contractors will be used by the ATO for data matching to detect contractors who have not:
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Maintenance
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Management of building and construction services
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Modification
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lodged tax returns
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included all their income on tax returns that have been lodged.
Organisation of building and construction services
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Removal
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Repair
For each contractor, businesses have to report for each financial year:
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Site preparation
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ABN, if known
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name
Payments for materials only and unpaid invoices as at 30 June each year are not required to be reported.
The government announced the introduction of taxable payments reporting for businesses in the building and construction industry as part of the 2011-12 Federal Budget. From 1 July 2012, businesses in the building and construction industry have been required to report to the ATO the total payments they make to each contractor for building and construction services each year.
THE
HAMMER hits the nail on the head
BREAKING THE CAMEL'S BACK Is Australia a country in denial? Because things have been so good for so long do we believe we are bullet-proof? Don’t worry about cost, business can absorb it! Has anyone stopped to ask the record number of businesses either going down the drain or closing their doors because they can’t cope with the extra cost? We only have to have a look at Ford’s demise in terms of its Australian manufacturing activities to know that sometimes no end of government assistance will save some businesses. The mounting pressure of costs being applied to business is unsustainable.
We’re now seeing real signs of the shine diminishing from the golden goose of the resources sector. Sure, there are still big projects underway but the growth has stopped. This alone should be telling state and territory governments across the land that there has to be a lot more emphasis on creating their own activity and they need to quickly get over the reliance on Commonwealth distributions. The dollars are simply not going to be there to the extent of the past and that has been manifested in the latest Commonwealth, State and Territory budgets.
If you just look back over recent years in the Territory, it’s not hard to work out why some in the building and construction industry are failing. There’s been ridiculous wage demands well above inflation rates, creeping 36 hour weeks, a steadily rising long service leave levy, increases in the default insurance fund levy, punishing growth of fees for lodgement of development applications, and even harsher penalties for delayed commencement and completion of projects subject to the incredible uncertainty of a very volatile economic climate. On top of this, some businesses have been simply targeted with project disruption adding enormous costs as industrial demands are sought.
It is now less than three months until the federal general election. The recent launch of the Australian Chamber of Commerce and Industry’s “Small Business – Too Big to Ignore” campaign has sent a strong message about the weight of cost and compliance being felt in the engine room of the Australian economy. The campaign is about business fighting back. It is about awakening all political parties and the community as to effects of poor policy impacting on business growth and hence employment growth, and the strangulation of business by excessive compliance and costs.
The capacity of business to absorb the increasing costs, never alone dealing with the compliance obligations, is highly constrained. This must be obvious in the current economic environment but ad nauseum the increases are arriving almost on a daily basis. We always hear about ‘the straw that broke the camel’s back’. Some of those businesses who had the straw arrive by the bale are no longer in existence. There is only one answer – the burden of compliance and cost has to be eased because the big guns in the mining sector are not going to be able to carry the nation for much longer. The broader business world will need to (have to) play a part if we are going to deal with revenue declines from the resources boom that previously filled up the coffers. This can only be done if the right conditions are present that ensures the energy, innovation and desire of business is rekindled. If that doesn’t happen, then the Treasury vaults and community are simply going to get hammered.
On the spot fines came into effect as of 1 July 2013
New on-the-spot fines for safety breaches came into effect 1 July 2013.
New on-the-spot fines for workplace safety breaches came into force from 1 July 2013, greatly broadening the number of offences which will earn fines of $3,600 and putting the onus of safety more firmly on the employer rather than workers. New on-the-spot fines for workplace safety breaches will come into force from next Monday, greatly broadening the number of offences which will earn fines of $3,600 and putting the onus of safety more firmly on the employer rather than workers. Workplace Safety and Industrial Relations, Simon Corbell, said the ACT Government was committed to implementing all of the recommendations of the Getting Home Safely report, which concluded that increased ability for inspectors to issues fines would likely lead to an improvement in employers’ and workers’ attitudes to workplace safety. ACT Work Safety Commissioner Mark McCabe said the new fine schedule would also take some of the pressure off the court system when WorkSafe had no option but to seek a prosecution over relatively minor offences. From 1 July, inspectors will be able to issue on-the-spot fines for workplace safety breaches including: not notifying WorkSafe ACT of notifiable incidents; not providing first-aid equipment; not providing personal protective equipment; not providing training and instruction on the use of personal
protective equipment; not preparing a safe work method statement for high risk construction work; not ensuring work is carried out in accordance with a safe work method statement; not stopping work if the work is not being carried out in accordance with the safe work method statement; not minimising the risk of collapse of trenches; not preparing a work health and safety management plan; and not ensuring a worker has undergone construction induction training. Mr McCabe said the fines, which are $720 for an individual and $3600 for a company, targeted employers rather than employees and “will greatly add to our ability, where appropriate, to get an immediate health and safety effect, rather than a significantly delayed one through courts”. “It also frees us up to spend time preparing the more serious matters for court and for those more serious cases we may need a more public demonstration of the need for accountability than a fine,” Mr McCabe said. “We will be using the new fines judiciously because there is no substitute for a prosecution when it is warranted”.
Mr McCabe said the new fine schedule also better reflected the most common safety breaches he and his team were encountering, but were currently limited to imposing improvement or prohibition notices which did not carry a financial penalty. “We currently have a situation where we can fine a company for not keeping a record of an incident, but we can’t fine them for not informing WorkSafe when the incident occurred. We can fine workers for not using personal protective equipment but we can’t fine an employer for not providing it to them. We can fine an employee for not having a White Card (training induction) but we can’t fine employers for allowing them to work on site.” "This will all change now." Mr Corbell noted that “any person who disputes an infringement notice could still choose to go to court instead of paying the fine.” “The Government will do everything it can to improve safety on construction sites - this is just one step.”
1 31/05/2013 11:43:16 AM
Burning off on building sites
Building Australia
As the cold weather settles in for the next few months we have received a timely reminder from Environment Protection relating to fires on building sites.
Canberra, 14-16 November
Master Builders Australia National Conference
Master Builders National Conference...Canbe
Burning of waste materials on site, such as plastics, chemicals or wood that is painted, treated or contaminated with chemicals is illegal. A fire may be permitted for heating purposes provided it is in a brazier or constructed fireplace. Only seasoned untreated timber can be burnt for heating purposes. For more information on preventing pollution from building sites and other guidelines relating to Environment issues please visit: http://www.environment.act.gov.au/environment/ environment_protection_authority/business_and_ industry/environment_protection_guidelines
or call 13 22 81
Images: Australian Capital Tourism Master Builders National Conference delivers a comprehensive program of keynote speakers on topics relevant to today’s building and construction industry. High profile inspirational speakers such as Chris Richardson and Peter Jones two of Australia’s leading economists will be presenting on the Economic Outlook. Australia's most respected strategist, futurist and forecaster Phil Ruthven Chairman of IBISWorld will be presenting on Australia’s changing demographics and implications to our industry. Be inspired by Lisa McInnes Smith leadership session Lead Follow or get out of the Way! This is just a sample of the exciting line up of speakers. Further details and the conference brochure can be found on our website.
Building Austral
Rydges Lakeside, Canberra, Nove
d - We are delighted to invite you to the 2013 National Conference, Exhibition and Awar d Australia to come together to learn more about the industry and where it is headin Partners the option of taking the alia theme focuses on leadership and assistingAccompanying members inhave continuing toingrow their b sessions or indulging themselves in the Essence of Canberra tour. Partners can embark on an Essence of Canberra day to remember which will include attractions that are unique to Canberra, as well as lunch and high tea.
nspirational speakers such as Chris Richardson and Peter Jones two of Australia’s l ed strategist, futurist and forecaster Phil Ruthven Chairman of IBISWorld will be pr Corporal Ben Roberts-Smith VC, spired by Lisa McInnes Smith leadership session Lead Follow or get out of the Way! T MG, joins Master Builders National Conference Programme e brochure can be found on our website www.masterbuilders.com.au. The most highly decorated serving member
ng Partners have the option of taking in the sessions or indulging in the E of the Australianthemselves Defence Force, Corporal Ben Roberts-Smith VC, MG, has joined the ber which will include unique to Canberra attractions, lunch and high tea. speaker's list for Building Australia, the Master Builders biennial National Conference.
ded? The delegate’s package is outstanding value and a comprehensive one that mix Roberts-Smith’s motivational and inspirational presentation will take place at the National Conference Dinner hosted by Cbus on Friday 15th November at the Australian War Memorial. It will draw on the Corporal’s life in the military and actions while serving in Afghanistan where he earned a Victoria Cross and. Medal for Gallantry on separate occasions.
ning cocktail function; All conference speaker sessions on Friday and Saturday; Cbu o Exhibition; Happy hour; Lunch and morning tea on Friday and Saturday; Conferenc example of what is NOT permitted GreatAnHall, Parliament House on Saturday evening
More details at: nberra is expecting sunny days with a central swell of inspirational speakers and stron www.masterbuilders.com.au/events/national-conference
Improved Housing Incentives in ACT Budget As reported in the Master Builders 2013-14 ACT Budget Briefing, the ACT Budget on 4 June contained a number of improved incentives for home buyers and the home building and construction industry.
Here are further details of the changes:
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From 5 June 2013, the Scheme will now be accessible to households with annual incomes of up to $160,000 (up from $150,000) and the property threshold for accessing the full concession will increase from $385,000 to $425,000. These changes will mean even more homebuyers will only pay a minimal duty of $20 when purchasing a new home up to a value of $425,000.
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The threshold for the partial concession will increase from $450,000 to $525,000.
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Like the First Home Owner Grant, the Home Buyer Concession Scheme will only apply to new or substantially renovated dwellings.
FIRST HOME OWNER GRANT •
The First Home Owner Grant will be retargeted to new and substantially renovated properties from 1 September 2013.
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For first home buyers purchasing a new home from 1 September 2013, the First Home Owner Grant will be increased to $12,500 - up from $7,000.
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The Grant can be applied to any new property with a total value of $750,000 or less. Eligible purchasers also have access to the Home Buyer Concession Scheme, which assists persons purchasing residential land or a home by charging stamp duty at a concessional rate.
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These changes align the ACT with other states, including NSW, QLD, VIC and SA, which have implemented similar reforms to their First Home Owner Grant arrangements.
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The Land Rent Scheme will be retargeted.
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From 1 October 2013, access to the Scheme will only be available to applicants who do not own other property, have an income under $89,100 (increasing by $3,330 for each dependent child, up to a maximum of five children), and in situations where the lessee or at least one of the lessees lives on the parcel of land under the lease.
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The Scheme will no longer be available for new entrants at the standard rate. Lessees currently in the scheme at the standard (4 per cent) rate will be able to continue in the Scheme.
The current First Home Owner Grant will continue until 31 August 2013, to allow households already in the market to purchase an existing dwelling to have access to the grant.
THE HOME BUYER CONCESSION SCHEME •
LAND RENT
The Home Buyer Concession Scheme will expanded by increasing the income threshold and property value thresholds.
You cannot use the Security of Payment regime to enforce multiple invoices under a standing order contract in the same payment claim or same adjudication.
Do you have a standing trade credit agreement to supply construction services or materials?
A new NSW Supreme Court decision has confirmed that you cannot use the security of payment regime to enforce multiple invoices under a standing order contract in the same payment claim or same adjudication. The decision is also relevant to claims made under the ACT security of payment legislation. The case On 11 April 2013, the NSW Supreme Court handed down its decision in Class Electrical Services v Go Electrical.1 Go Electrical (“Go”) and Class Electrical (“Class”) had a standing contract under which Class would issue purchase orders to Go, and Go would then supply construction goods to Class. Go issued a single $1.8m payment claim to Class under the Building and Construction Industry Security of Payment Act 1999 (NSW) (“Act”) seeking payment of several outstanding invoices for separate purchase orders. The claim went to adjudication and Go was awarded the full amount of its claim. Class appealed to the NSW Supreme Court. Class’s key argument was that because the payment claim referred to multiple separate contracts in the one claim it was invalid. Class argued that as a result the Adjudicator’s determination was void and Go was not entitled to recover payment. The law Under the Act (and equivalent ACT legislation) an Adjudicator cannot make
a decision unless all of the technical requirements of the Act have been met. One such requirement is that the right to claim payment under the Act must come from a single construction contract. This has been confirmed in a number of cases, including: •
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Rail Corporation of NSW v Nebax Constructions2, in which Nebax (the contractor) served 5 payment claims simultaneously for construction of platform resurfacing works at different train stations, all dated the same date. Nebax then made a separate adjudication application for each payment claim. The Court decided that “there can only be one adjudication application for any particular payment claim for any particular contract”. Matrix Projects (QLD) Pty Ltd v Luscombe & Ors3, in which Luscombe (the builder) had a “period subcontract” with Matrix Homes for undetermined building work, the scope and locations of which would be agreed at a later date. Luscombe ultimately completed building work on instruction from
Matrix Homes at a range of locations over a 9 month period. Some work was completed under the terms of the period subcontract, with individual purchase orders made as required by Matrix, and some on a “do and charge” basis after verbal requests. Luscombe issued one payment claim for all of the work, and specifically referred in the payment claim to the fact that there were multiple contracts. Citing Rail Corporation, the QLD Supreme Court decided that the fact that the payment claim covered multiple contracts was “fatal to its validity”. In Class Electrical Services, Go argued that there was a single credit agreement that covered all of the purchase orders, and this meant that there was just one construction contract. Class, on the other hand, argued that the credit agreement was not a construction contract for the provision of construction work or related goods and services (as required by the Act), but simply an overarching agreement to provide credit. The court agreed with Class, finding that, although the individual purchase orders were each a separate
construction contract under the Act, and the credit agreement setting out the broad terms was not a construction contract. The court therefore held that the adjudicator’s decision was void and unenforceable. What does Class Electrical Services mean when I’m trying to get paid? If you have a standing contract where: •
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your clients sign up to broad terms for the supply of construction-related goods or services not referring to a particular project, quantity or price; and once signed, your client submits purchase orders from time to time as required, with the terms of the credit arrangement applying to all purchases,
then it is likely that each purchase order will be a separate “construction contract” for the purposes of the Act. If you issue a payment claim for multiple purchase orders, it will be invalid. Each purchase order must be dealt with as if it is a separate contract, which means a separate payment claim and a separate adjudication application.
However the terms of each contract need to be looked at separately. It is possible that if your overarching terms of credit actually specify details such as timing, quantity, quality and cost for the items to be supplied, it might be a construction contract under the Act. If this is the case, then you can only issue one payment claim per reference date and any others will be invalid. If you are in doubt, it is important to check with a lawyer – particularly if you are on the receiving end of a payment claim. Want to know more? Our Building and Construction Dispute Resolution team can provide straightforward advice on strategies for structuring your order and payment arrangements, securing payment, making or responding to payment claims, or preparing adjudication applications or responses.
For more information or assistance, please contact: Alisa Taylor Building and Construction Dispute Resolution Senior Associate (02) 6279 4388 alisa.taylor@meyervandenberg.com.au Kimberly Moore Building and Construction Dispute Resolution Senior Lawyer (02) 6279 4339 kimberly.moore@meyervandenberg.com.au Jonathan Devenish Building and Construction Dispute Resolution Lawyer (02) 6279 4432 jonathan.devenish meyervandenberg.com.au Tessa Dignam Building and Construction Dispute Resolution Lawyer (02) 6279 4478 | tessa.dignam@meyervandenberg.com.au
[2013] NSWSC 363. [2012] NSWSC 6. 3 [2013] QSC 4. 1 2
Iconic Builders Site Tour hosted by the ACT Government Land Development Agency. National Conference Delegates will have the opportunity to visit one of Canberra’s exciting major renewal programs on the southern shore of Lake Burley Griffin, the Kingston Foreshore Redevelopment.
This long term project, now in its final stages, has established itself as a leader in environmentally sustainable development incorporating best practice in construction and design. The development includes 3,000 dwellings and apartments, 13,000 square metres for retail, 22,000 square metres for office blocks and 12,000 square metres for arts and culture use. Reclaimed land from the lakebed has formed a new harbour, with the boardwalk planned to be home to restaurants, cafes and specialty shops.
This year, the Master Builders National conference will be held in Canberra, from 14-16 November , as part of the celebrations of the centenary of the nation’s capital. The conference will feature high profile industry speakers and is complemented by an exciting social and partners program. To find out more and to take advantage of the Early Bird discount registration special visit: http://www.masterbuilders.com.au/events/national-conference
COMING EVENTS FOR 2013 Master Builders ACT Annual Dinner
Date: Thursday 17 October I
Where: National Arboretum, Canberra
Master Builders Australia National Conference
Date: Friday 14 - 16 November I
This year the Master Builders ACT Annual Dinner will be held at the newly opened National Arboretum.
Where: Canberra
This year, the conference will be in Canberra at the recently refurbished Rydges Lakeside, 14-16 November. Delegates will have the opportunity to join in the celebrations of the centenary of our nation’s capital.
TRAINING DATES FOR 2013 SAFETY LEADERSHIP - ADVANCED OBSERVATIONS & CONVERSATIONS SKILLS TRAINING
WORKING AT HEIGHTS
Date: There are a number of available dates. (Contact Cecilee Miller at cmiller@mba.org.au to book your place) The program consists of three 4 hour modules and two on site coaching seesions. The Safety Leadership Program looks at the way human factors affect the development and maintenance of safety culture. Participants develop awareness and learn skills, to better influence safety culture on site. Date: 16, 20 July / 10 September (Contact Cecilee Miller at cmiller@mba.org.au to book your place) The aim of this course is to provide participants with information, tuition and activities that will enable them to identify, assess and safely work above 1.5 metres from floor level with fall protection where required.
SECTOR COUNCIL MEETINGS 2013 COMMERCIAL
20 AUG
15 OCT
CIVIL
30 JUL
19 NOV
RESIDENTIAL
24 JUL
16 OOCT
SUB-CONTRACTORS & SUPPLIERS
2 JUL
3 SEP
PROFESSIONAL
14 AUG
11 DEC
12 NOV
ACT PRIVATE SECTOR BUILDING ACTIVITY $100
MILLION
$80 $60 $40 $20 $0
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
The above graph and table below summarise private sector building activity for the various building sectors in the ACT over the past 12 months. The values for each month are depicted in millions of dollars. // To Insert New Data Goto Object/Graph/Data
• Copy and Paste Pivot Table Data into Data Additions and Alterations (Residential) Commercial Building Work Garages, Pools, Decks and Similar Structures Multi Unit New Housing
Apr-12 May-12 Jun-12 5.5 5.8 5.2 14.3 39 80.2 1.7 9.0 10.2 0.13 34.5 33.1 40 53 49
Jul-12 6.3 83 9.5 5.5 67
Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 5.3 8.2 5.8 7.02 5.00 6.2 6.4 5.02 17.1 27.5 51.27 34.0 38.2 19.2 68.6 24.3 15.0 13.8 15.8 18.3 13.8 11.6 11.4 13 0.5 1.8 14.6 0 11.2 16.4 10.2 18 17.2 40 56 72.3 55.5 55.5 43.2 51.2