Edition 1-2015
ACT Building Act revamp to start in 2015 The ACT is likely to go through a toughening of building industry licensing requirements as a result of a review of the ACT Building Act, due to start in early 2015. Changes to builders licencing requirements are expected to put greater emphasis on licence holders’ business and financial skills.
Master Builders Executive Council President – Valdis Luks Treasurer – Frank Porreca Chair, Commercial Builders’ Sector Council – Peter Naylor 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 & In-house Legal Counsel – John Nikolić Director Commercial Operations – David Leitch Senior Management Accountant – Louise MacCallum Work Health and Safety Advisor – Philip Edwards MBA Group Training General Manager – Wendy Tengstrom
Environment and Planning Directorate Director of Construction Se`rvices Craig Simmons told The Canberra Times, "COLA (the Construction Occupations Licensing Act) represents possibly the end game of that (1990s) debate about what are you there for." Mr Simmons said, "The trade qualifications for builders across various jurisdictions used to have money management (and) how to run a business (and) those sorts of things in them". These were dropped when regulators decided licensing requirements should be restricted to skill as a builder. "There is a pushback," Mr Simmons said. "Some of the quality issues or the technical issues actually play out because of a failure to appropriately finance and manage the money in the business and where it is." The first discussion paper in a series that will pave the way for a complete rewrite of the Building Act in 2015 is to be released in mid-February. Master Builders ACT told The Canberra Times the rewrite is long overdue given building is now second only to the public service in economic importance to the ACT with an annual spend of more than $3 billion.
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
The sector has grown by 277 per cent, almost double the national average, since the current Building Act came into effect in 2004.
Subcontractors and consumers are among those who have paid a high price for explosive growth in a deregulated environment MBA deputy executive director, Jerry Howard, said. "The good builders, and they are out there, have had enough," he said. "The industry is falling into disrepute and since the advent of deregulation we have seen the culture of doing things right, a culture that takes decades to build, seriously weakened. "The system is broken, too much time has been wasted already and repairs are necessary." More than 114 building and construction related companies went to the wall between January 2013 and July this year. An Environment and Planning Directorate spokesman said the review of the Building Act was "part of a rolling program of administrative, policy and legislative reforms" and that three Bills had been enacted to date. These dealt with licensing and compliance, offences and penalties and information for consumers. The first Building Act Review discussion paper, which had been due to be released by the end of 2014, was delayed by the Mr Fluffy crisis. Mr Howard said change couldn't come soon enough. "Because the regulator has chosen not to look closely at the financial competence and character of people setting up building companies individuals have been allowed into the industry that the industry could well do without," he said.
THE
HAMMER hits the nail on the head
Productivity Commission Review Everyone wants to be optimistic about the future but Australia enters 2015 in a political, business and economic environment of great uncertainty and volatility. The recent Greek elections have seen voters shun the austerity measures needed to try and arrest further economic decline and flow on effects through to the European Community. This is a country and now a majority of its people in denial and displaying a total failure to deal with the realities of living beyond its means. Meanwhile, 15,000km from Athens, the Productivity Commission in Australia is tasked with essentially reviewing the impact of wages, salaries and conditions on the economy and our ability to sustain current arrangements in a changing economy. Everyone’s banging on the door for more but with shrinking revenues we are heading for big trouble in little China. One commentary recently questioned the business community and others for even concerning themselves with the almost manic pursuit of growing wages and condition. This is the type of thinking that is driving our economic bus straight at a brick wall, someone with a moral compass (usually for show purposes only) totally disoriented by an ideological fantasyland. If the business community is crying wolf over wages and conditions, you only have to ask yourself why so many businesses in all sectors, including building and construction, are failing at a greater rate than ever. We can blame pricing, we can blame competition, we can blame poor business practices but the jump in wages and explosion in debilitating conditions placed on employers are the primary nails in the demise of many.
If it’s a more homogenous society we are seeking then rest assured we are headed there. Our choices are being limited as only the big can survive in this current environment. Whilst it is difficult to see any real winding back of wages and conditions, it is going to take something special through the Productivity Commission inquiry to ensure that businesses of all sizes can survive and compete into the future. In the building and construction industry, productivity growth is more than eroded by ridiculous arrangements around redundancy, long service leave entitlements, travel allowances and a raft of other allowance fiddles perpetrated over many years. Enterprise bargaining in pure form and free from interference of third parties could possibly deliver real and balanced outcomes but that is not possible where an anachronism in a modern society arrives in the form of unions who have no interest in employers and employees enjoying a harmonious working environment. Yes, we’ve survived the recent string of global economic crisis better than many but we had other weapons (non-military, of course) not enjoyed by others – most notably our natural resources and willing trading partners, most noticeably China. That advantage is no longer prevalent and so we find ourselves falling back into the pack. When the playing field is levelled out, we find ourselves limited in our ability to compete because our employers are faced with employment conditions not experienced by our trading partners and worse still, our competitors. The Productivity Commission review is touted as the single biggest catalyst for potential reform of the Australian economy in years. Many in businesses holding on to the ledge by their fingernails right now hope that the review delivers something meaningful before they get hammered.
Licensing of Asbestos Assessors and Asbestos Removalists From 1 January 2015 the regulation of asbestos assessor licenses moved from the Constructions Occupations (Licensing) Act 2004 (COLA) to the Work Health and Safety Act 2011 (WHS Act).
This will mean that responsibility for asbestos assessor and asbestos removalist licensing has moved from the Environment and Planning Directorate to WorkSafe ACT / the Office of Regulatory Services from that date.
The previous asbestos removalist licence classes provided for under COLA has not changed.
For asbestos assessors, there is only one class of asbestos assessor licence under the WHS laws. The single class of licence is equivalent to the current class A assessor licence issued under COLA. The class B asbestos assessor licence is not provided for. In line with the existing COLA licences and the types of assessment required under ACT law, the scope of licensable work also includes forms of asbestos assessment that are not licensable work in other jurisdictions.
There are still be two classes of asbestos removal licence, class A and B, from 1 January 2015. The COLA licence scope applies to work associated with any type of building and worked with the allowance that other qualified tradespeople were able to remove up to 10m2 of non-friable asbestos.
Pending any conditions placed on the licence, the holder of an asbestos assessor licence is able to carry out the following in a workplace: 1. to carry out air monitoring during asbestos removal work 2. to carry out clearance inspections of asbestos removal work 3. to issue clearance certificates in relation to asbestos removal work 4. to identify the location, type and condition of asbestos or ACM, including by taking samples 5. to assess the risk resulting from the identified asbestos or ACM 6. to advise on how the asbestos or ACM should be managed, and 7. to report about the work mentioned in paragraphs 1 to 5.
The new scopes apply to all asbestos removal work in a workplace, which does not need to be a building, for example this could include removal of soil containing ACM and ACD from an outdoor workplace. The 10m2 rule is also removed. This means that other than for minor work and minor maintenance work (a separate Guidance Note on minor work and minor maintenance has been issued by WorkSafe ACT) a licensed asbestos removalist must undertake the work. Minor maintenance work includes routine work that is small scale, often short in duration and may be unscheduled. This work may require the partial dismantling of a structure or plant and may include the removal of asbestos or ACM such as gaskets or brake components (e.g. a piece of plant to remove an asbestos-containing gasket, a passenger lift or press machine to remove an asbestos-containing brake component, or a piece of plant for the purpose of cleaning or repair). Minor work includes small tasks that are of short duration, such as cutting a small hole or hand-drilling up to a few holes in an asbestos cement sheet. It is not routine or regular such as planned maintenance. It is incidental work that can be done quickly and safely within minimal control measures required to ensure safety (e.g. cutting a small hole into an asbestoscontaining eave to install a cable, removal of an asbestoscontaining vinyl tile to install a plumbing fixture, or hand-drilling a few holes into an asbestos cement sheet to attach a fitting).
For further information on these changes, please visit the Worksafe ACT website at www.worksafe.act.gov.au
Fair Work takes on CFMEU in ACT
The construction union is expanding its militant approach beyond Victoria and Western Australia to South Australia, Queensland and the ACT, according to the industry watchdog. Fair Work Building and Construction has launched prosecutions of the CFMEU and its officials in the ACT including secretary Dean Hall, alleging breach of ‘right of entry’ provisions. The Fair Work prosecution alleges the CFMEU stopped a concrete pour on a site in Franklin. Fair Work Building and Construction (FWBC) alleges Mr Hall disrupted a concrete pour and threatened to stop another one.
Nigel Hadgkiss of the Fair Work Building Commission says the CFMEU are expanding it's more militant tactics.
FWBC also claims Mr Hall produced a square of paper the size of a matchbox when site management asked him to show his right of entry permit on a construction site. Right of entry permits are A4-sized documents. The small piece of paper Mr Hall produced was illegible apart from his name, the Australian Government logo and the words “Fair Work”, FWBC says. The case filed in the Federal Circuit Court claims the CFMEU and CFMEU (ACT Branch) organisers Halafihi Kivalu, Johnny Lomax, Jason O’Mara, Zachary Smith and Kenneth Miller broke right of entry laws on several occasions between August 2013 and March 2014. Mr Hall and the other organisers allegedly broke the law on three different construction sites in Canberra – all large scale apartment and townhouse developments.
On a site in Franklin, ACT, Mr Hall told a concrete pump operator ‘stop pumping or I’ll make you lose your ticket!’, FWBC says. “As a direct result of this, the operator packed up the concrete pump and left the site. Mr Hall reportedly said to fellow organiser Johnny Lomax: ‘watch what happens when I stop their pour. There’s going to be a punch on here.’ When a subcontractor said to Mr Lomax ‘You are just trying to stop my job’, Lomax allegedly replied: ‘It’s not about you mate. Ever since we started coming here these Village guys have had bad attitude and it needs to be fixed and they’ll get plenty of trouble when they start that Harrison site across the road as well’. FWBC is also alleging that Mr Hall, Mr Kivalu, Mr O’Mara and Mr Smith failed to obey safety laws during site visits. Mr Hall told a senior manager who asked him to follow safety rules “…I have a permit to enter the site and it overrides your site rules”. When told to follow site safety rules, Mr Smith allegedly positioned his face centimetres from the site manager’s face, yelled ‘I’m here as a WH&S Officer! You can’t f***ing tell me what to do’ and pointed his finger at the site manager. FWBC Director Nigel Hadgkiss said the alleged offences were indicative of an increasing trend of disregard for right of entry laws. “Right of entry laws exist to minimize disruption to construction sites while affording union officials the right to do their jobs. Reports that union officials continue to break right of entry laws and show no respect for occupational health and safety laws once on site are alarming,” Mr Hadgkiss said. “Safety is paramount on construction sites and it is frightening that some union officials appear to have no regard for safety rules designed to protect them and others.” The maximum penalties available to the court in this case are $10,200 per breach for an individual and $51,000 per breach for a union. FWBC is alleging 18 breaches by CFMEU organisers and 18 breaches by the CFMEU (ACT Branch). Mr Hall has rejected the allegations and said the union would mount a vigorous defence in the Federal Circuit Court.
MBA calls for action on non-conforming products Master Builders Australia has written to the Federal Government setting out a series of actions it believes the Government should take to stop dangerous non-conforming building products entering the building chain. Master Builders has outlined a program of actions it believes the Government should take following a roundtable discussion on non-conforming products convened by the Parliamentary Secretary to the Minister for Industry, Bob Baldwin in late December. The roundtable was attended by the MBA. In December ACT and Region Building News highlighted concerns about the recent use of plasterboard containing asbestos in ACT building projects, which highlighted the continued failure of federal, state and territory governments to agree on a workable program to prevent the import and use in construction of non-conforming building products – including plasterboard containing asbestos. ACT and Region Building News noted that Master BuildersACT Deputy Executive director Jerry Howard had raised concerns about the continued import and use of banned building products including asbestos plasterboard and Federal, State and Territory authorities failure to accept responsibility for banning and policing the bans of such products and seeking to shift responsibility to the other level of government. Mr Howard said that asbestos plasterboard was banned from import but inadequate controls mean this and other products are continuing to be used. Master Builders Australia told Mr Baldwin the following action should be taken to prevent non-conforming products from entering the building chain: ••
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wider dissemination and take up of the twelve principles set down in the Australian Procurement and Construction Council (APCC) "Procurement of Construction Products" guidebook broader and more intensive sampling by the ACCC of products which have higher risks/ greater consequences of failure, to ensure their conformity with applicable regulations or standards. In the building supply chain, such products would likely include adhesive, electrical, glass and plumbing products; wider and more effective use of the Codemark Scheme, which can be used as prima facie evidence of conformity when the product is properly used for an appropriate purpose; and ensuring regulations (per the National Construction Code) and standards (per Australian Standards) are up to date and contemporary with current practices and requirements.
Master Builders said the Federal Government and its key agencies needed to be pro-active, rather than reactive, to the increasing problem of NCPs entering the building supply chain. “While it may well be impossible in a practical sense to completely prevent such products entering the Australian market place, at very least we need systems which in the first instance emphasise prevention, and but failing that are effective in detecting, and then removing , them from the supply chain at the earliest possible opportunity.” Master Builders said that its surveys had shown that 92 per cent of firms have experienced NCPs in their supply chains, with 45 per cent of firms reporting lost revenue and/or reduced profits as a result of NCPs. “The problems associated with NCPs are very real for the building and construction industry. Amongst the most prominent and serious is the Infinity Cables issue, which involves some four million metres (4,000 kilometres) of electrical cable spread around the nation, installed in somewhere between 40,000 and potentially as many as 250,000 residential and commercial properties.” It said there is the growing realisation amongst both regulators and industry that the cable which remains in situ, despite the limited voluntary recall, will deteriorate and become increasingly dangerous as soon as 2016 (just 3 or so years from time of installation). “Sadly, it appears to be just a matter of 'house fires just waiting to happen'.
“Infinity Cables is not an isolated case of a single NCP entering the building supply chain." “Master Builders has heard reports of non-conforming curtain windows (used, for example, in offices and shopping centres), external windows in commercial buildings, and insulation used around cooling/heating ducting. There are also reports of new deficient electrical cable (marketed under the appellation of "Ecable") the protective coating for which apparently melts at relatively low temperatures. “The presence of NCPs in the building supply chain can potentially create enormous liabilities and risks for builders, suppliers and property owners. For smaller builders in particular, the costs of remediation can be ruinous, pushing them into financial distress, even out of business."
ATO update: Common mistakes to avoid
As part of the ATO’s working with industry campaign, they have identified some common mistakes made by businesses in our industry when completing their activity statements and income tax returns. These mistakes include:
claiming deductions and input tax credits for personal items that are not related to business activities
incomplete and missing tax invoices
depositing income in personal accounts and failing to report it
regular reconciliations not being completed
treating employees as subcontractors
failing to pay superannuation for contractors paid under a labour contract; even if the contractor quotes an ABN.
They have also found that a number of businesses in our industry lodge their activity statements and income tax returns late. What you can do:
Check the ATO’s building and construction tax guide for information on how to get it right
Find out what deductions you can and can’t claim as part of running your business
Organise a ‘no strings attached’ assistance visit to ensure your business is on track
Keep up-to-date with the latest information and advice for small business via the small business newsroom
Complete a voluntary disclosure or speak to your tax adviser to correct any mistakes you may have made
The ATO recognises mistakes can happen and will work with businesses that have genuinely tried to get it right. However, for those businesses that seek to gain an unfair advantage by avoiding their obligations the ATO will utilise the full force of the law to ensure a level playing field for honest businesses in our industry.
MBA highlights growing apprenticeship shortage
Skills crisis: A dramatic increase in apprentice numbers is needed
Master Builders Australia has highlighted the growing gap in the number of building industry apprentices completing their training. New data from the National Centre for Vocational Educational Research (NCVER) shows that the total number of apprentices in training within the building and construction industry fell from 56,000 as at June 2013 to 43,100 as at June 2014 and had declined by 23 percent since 2010. Commencements in construction and plumbing apprenticeships in the ACT in the June quarter 2014 were up by 100 according to the NCVER figures. Master Builders Australia chief executive officer Wilhelm Harnisch said the research highlighted that current apprenticeship completion rates of between 11,100 and 14,500 per year were barely more than a third of what was needed just to replace retiring workers. “This is a dramatic drop for an industry that will be one of the growth sectors in the economy and with an annual exit rate of 30,000 construction workers each year due to retirement,” Mr Harnisch said, referring to the fall in apprentice numbers in the system and adding that the sector will become increasingly reliant upon foreign labour if insufficient numbers of new trainees come though. “Unless there is a dramatic increase in the number of people in skills training, then the building and construction industry is heading for a skills crisis putting billions of dollars of investment at risk.”
ACT building slump nearing bottom says forecaster Forecasts by the Commonwealth Bank’s CommSec investment unit argue that the ACT building and construction slump is nearing its bottom and that renewed investor interest could boost the sector in the next 12 to 18 months.
According to Commsec’s quarterly ‘State of the States’ published in January, “the ACT economy is now the sixth best performing economy, supported by housing finance but constrained by a soft job market.” After falling to seventh (out of eight) in the previous survey, the ACT rose to the sixth best performing economy in the latest survey. CommSec chief economist, Craig James, told The Canberra Times, "Housing construction moves in cycles. While housing starts in Canberra are low [at the moment] outsider investor interest could drive the start of a new [building] cycle in Canberra in the next 12 to 18 months." According to the report the ACT was the only jurisdiction where property prices fell between December 2013 and December 2014.
Despite Mr James optimism about a pickup in the ACT market driven by interstate investors and the ACT’s strong performance in housing finance, the ACT was the only state or territory in which dwelling commencements in the last quarter were below those 12 months earlier. They were also below the decade average. While unemployment in the ACT remains low by national standards the ACT’s employment position is deteriorating rapidly While trend unemployment is the second lowest in the nation at 4.9 per cent, this is over 41 per cent higher than the 3.5 per cent ‘normal’ or decade-average rate level – the worst performance in the nation. ACT output growth in the last quarter compared to decade averages was third after Northern Territory and West Australia on 16.3 per cent and third on quarterly growth after NSW and West Australia on 2.5 per cent.
While, at 0.6 per cent, the fall was negligible, NSW prices, which are dominated by movements in the Sydney market, soared 12.4 per cent. Victorian prices rose 7.6 per cent and Queensland prices rose by 4.8 per cent.
On other measures the ACT: ••
Was second last on quarterly retail spending growth compared to the previous decade on 6.2 per cent
Mr James said investors were already concerned about returns on new developments in Sydney and Melbourne. If Canberra's property prices remained stable and the value gap widened, investment in the ACT would look quite attractive.
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But third-fastest on new equipment investment growth on 8.1 per cent.
"Given the [relatively low] prices it wouldn't surprise me to see outsider investment activity," he said. "[Sydney] investors are already looking for returns in other states and territories." The CommSec report looks at the performance and outlook for each state and territory by analysing eight key economic indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance and dwelling commencements. Overall the CommSec report said the ACT is top-ranked on housing finance but is bottom ranked on unemployment. “As a result the ACT economy lacks momentum.”
In all states and territories, construction work was higher than decade averages. But the ACT was third-lowest (ahead of Tasmania and South Australia) on 6.5 per cent. In four of the states and territories – ACT, Victoria, Western Australia and NSW – trend housing finance commitments were above decade averages. And in five of the eight economies, trend commitments in November were above year-ago levels in all states and territories. The ACT took top spot for housing finance, with the number of commitments 9.8 per cent above the long-term average.
Coming events for 2015 2015 MBA Group Training Apprentice Awards
Date: Friday 13 March 2015 I
2015 Civil Contractor's Federation (CCF) Earth Awards
Date: Friday 8 May 2015 I
2015 Master Builders and Cbus Excellence in Building Awards
Date: Friday 26 June 2015 I
Where: Ainslie Football Club
This evening is an opportunity for industry professionals and industry bodies to come together to support and recognise outstanding work by current MBA Group Training apprentices. Where: The Rex Hotel, Canberra
The 2015 CCF Earth Awards will this year be held at The Rex Hotel in Canberra. These awards recognise outstanding achievement in Civil Construction over the past 12 months. Where: National Convention Centre, Canberra
The Master Builders and Cbus Excellence in Building Awards are the largest blacktie event in Canberra and feature some of the best builders not only in the ACT, but in Australia. Entries for the awards close on Friday 13 March 2015.
Training Dates for 2015 Restricted Height Scaffolding - 1 Day
There are a number of available dates. (Contact Cecilee Miller at cmiller@mba.org.au to book your place, or visit www.mba.org.au/training This course is particularly useful for construction industry personnel with minimal experience in erecting and dismantling scaffolding, who wish to further improve their skills and understanding. This unit of competency specifies the outcomes required to erect and dismantle restricted height scaffolding to provide work platform for various occupational applications. It includes placement of safety barriers and involves modular and mobile scaffolding restricted to a height of four metres.
SECTOR COUNCIL MEETINGS 2015 COMMERCIAL
10 Feb
21 Apr
2 Jun
11 Aug
CIVIL
3 Feb
5 May
4 Aug
6 Oct (AGM)
RESIDENTIAL
11 Feb
15 Apr
10 Jun
SUB-CONTRACTORS & SUPPLIERS
24 Feb
28 Apr
PROFESSIONAL
18 Feb
15 Apr
Annual General Meeting
13 October
6 Oct
1 Dec
12 Aug
14 Oct
9 Dec
30 Jun
15 Sep
17 Nov
17 Jun
19 Aug
21 Oct
16 Dec
ACT Private Sector Building Activity $80 $70
MILLION
$60 $50 $40 $30 $20 $10 $0
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
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 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14
Additions and Alterations (Residential) Commercial Building Work Garages, Pools, Decks and Similar Structures Multi Unit New Housing
4.7 26 12 56 62
6.8 48.2 3.4 4.6 51
4.6 61 12 22.5 52
5 55 10 18 50
4.7 26 12 56 62
6.8 48.2 3.4 4.6 51
Jul-14 4.6 61 12 22.5 52
Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 5 4.2 5.2 5 4.5 55 26.5 74 11 22 10 16 16.5 8.8 7.5 18 0.6 30 58.7 34 50 20 47 29.3 54