Edition 2-2014 http://www.mba.org.au/ files/view/?id=594 Master Builders Executive Council President – Valdis Luks 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 – John Nikolic Senior Management Accountant – Louise MacCallum Senior Manager - Marketing & Membership Services – David Leitch Work Health and Safety Advisor – Philip Edwards Master Builders Group Training General Manager – Wendy Tengstrom
ACT building industry stimulus announced ACT Chief Minister Katy Gallagher has announced a package of initiatives designed to stimulate the ACT building and construction industry in the face of Federal Government cutbacks.
The package, which follows a “a “Call to Action” to the ACT Government by Master Builders ACT and other sections of the building and development industry consists of: •
changes to lease variation charges (LVC);
•
reduction in extension of time (EOT) commence and complete development fees;
•
new legislation to facilitate major projects across the ACT;
•
releasing at least four civil contracts for estate works in Moncrieff.
Chief Minister Katy Gallagher told the Legislative Assembly the Government was introducing the legislation to give identified priority projects the certainty to proceed. "This package responds in a timely way to local industry feedback about the need to support local jobs, provide certainty to business with a program of upcoming works and to provide short term stimulus for the continued development across the city," the Chief Minister said. It would modify some development fees and charges to better reflect the current economic conditions, she said.
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
"In finalising this package the government has worked closely with the peak industry groups who have advised us on the issues and pressures facing particular sectors across the ACT.
"I would like to acknowledge the Masters Builders Association, the Canberra Business Council, the Property Council of Australia, the Housing Industry Association and the ACT Chamber of Commerce and Industry for their work and their advocacy on behalf of their members" Master Builders ACT worked closely with the Government to ensure they understood the potential of the building industry to create growth and jobs and the challenges facing the industry highlighted by the recent drop in building approvals. Master Builders Executive Director, John Miller said, “Particularly welcome is the commitment to fast track the development of Moncrieff with direct investment of $150 million and flow on work for the ACT economy of $400-$500 million. “The Chief Minister and Minister for Economic Development have recognised the dangers facing builders who are fast running out of work and the escalating costs of land when supply continues to fall well short of demand.” Ms Gallagher said, "One of the great things about living in Canberra is when the city is under pressure - as it is from impending Commonwealth Government spending cuts - peak groups work closely with the government to meet the needs of the local community."
THE
HAMMER hits the nail on the head!
COOPERATE TO WIN Little did our forefathers perhaps envisage some of the cross-border shenanigans that would take place when New South Wales ceded a portion of its land under the Seat of Government Act 1908 to establish our national capital? Then again, maybe they did. After all, Canberra was essentially created post-federation to overcome the rivalries of the two former colonies of Victoria and New South Wales. We now sit a quarter of a century beyond self-government in the ACT. Since the inception of self-government there have been various agreements and studies that have been designed to overcome the political and legal impediments created by the physical borders that separate the ACT and New South Wales.
cross-border developments at Googong and South Tralee seek to be seamlessly integrated into this region. The new mantra coming from the ACT Legislative Assembly and Macquarie Street in Sydney should be, “What else can we do to help each other make this region an exemplar for others to follow”. If that means banging some heads together inside the relevant bureaucracies, then so be it. The potential rewards a too great to risk and the lost opportunities are too grave to consider.
Ask most clear thinking, sensible and progressive people and they will invariably rail against the physical boundaries and say “get on with it” in terms of providing infrastructure and options that will assist all communities in this region, be they inside the ACT or in New South Wales.
Fortunately, the current leaders of the ACT and New South Wales have recognized the absolute importance of regional cooperation through a Memorandum of Understanding signed in December 2011. That was a critical first step by Chief Minister Gallagher and Premier O’Farrell in demonstrating their leadership credentials. Getting a few small wins out of the way was also important but the real leadership comes around big picture planning and infrastructure support.
Regrettably, and at great cost to governments and communities, petty politics and the irresistible temptation of power-laden decision makers to laud it over their perceived enemies mean that too often appalling decisions are taken just to exact retribution. It will be very interesting to see what unfolds as the new
The MOU captures the important intent of real collaboration where it states “Promoting targeted service delivery, sustainable regional growth and future economic prospects offered by infrastructure investments are important priorities for both jurisdictions.” This is a fine and optimistic set of words that must
be earnestly and collaboratively turned into a physical reality demonstrated by infrastructure. It also means getting rid of shadows in the form of spurious arguments set up to prevent sensible outcomes and protection of short-term gains. To the north, the Tweed area on the Queensland and New South Wales border and in the south, the Albury-Wodonga cities straddling the Victorian and New South Wales border are standout examples of co-existence. Their growth and development will not have come without some pain but it is clear that joint major infrastructure initiatives have unfolded to support communities across all of those areas. Denying one side or the other to wreak pain and suffering is in nobody’s interests. Stemming back into the late 1970s, it was evident to a then small cohort of business leaders that the future and prospects for both Canberra and the region wrested in cross-border cooperation and collaboration. With an overflowing Sydney basin, the prospects for Canberra and the region continue to rise. We can offer so much choice to those looking for their new promised land. It can’t be done with a mindset of pettiness and belligerence for to do so will only mean a fabulous opportunity will be hammered.
ACT Government to ‘fast track’ priority projects The ACT Government has introduced legislation in the Legislative Assembly to fast track priority development projects through the planning and approvals process.
be subject to ACAT merit review or review by the Supreme Court under the Administrative Decisions (Judicial Review) Act 1989. Court proceedings in relation to a priority project or development application cannot be started more than 60 days after the declaration is made or the DA approved. The Minister will be the decision-maker once the declaration has been made.
The ‘fast track’ measures are part of a package of ACT Government initiatives designed to stimulate the ACT building and construction industry – and through it the ACT economy – to counter the effects of Commonwealth Government cutbacks. The scope of the package is outlined in a separate article. The move follows a “Call to Action” to the ACT Government by Master
Metro light rail project. "The purpose of this bill is to provide certainty in decisionmaking and not see decisions around either a refusal or an approval for a development caught up in protracted and lengthy appeal processes that can often go on for many months, if not years." Public consultation will be through the Assembly rather than the usual community consultation process. "It directly engages the elected
"The changes in this legislation are all about giving priority to projects that will have substantial public benefits and which will implement the key priorities set out in the Government's planning strategy." Builders ACT and other sections of the building and development industry, to remove obstacles to the sector.
•
The Planning and Development (Project Facilitation) Amendment Bill was introduced in the Assembly on 20 March. The Bill: •
•
Allows the Government to vary the Territory Plan to establish a special precinct area, designated for priority development and changes the Territory Plan. Within the precinct area the Territory Plan can be varied by special amendment, and third party ACT Civil and Administrative Tribunal (ACAT) merit review of the development would be removed. Allows the Government to declare a project of ‘major significance’ using a ‘disallowable instrument’ (which can be overturned by the Assembly). Priority projects will not
•
Allows a development proponent to lodge a DA without waiting for a draft Territory Plan variation to be approved. Currently, the wait is usually 6-18 months for the Territory Plan variation to be realised and implemented. The approval will not take effect until the Territory Plan variation becomes operational. Allows for simultaneous DA notification and public consultation on the EIS to be allowed for DAs in the ‘impact track’, rather than requiring the EIS process (including public consultation) to be completed before the DA is lodged.
The Bill will give the government the power to identify special precincts and prioritise projects of high public benefit. Environment and Sustainable Development Minister Simon Corbell said the new laws will significantly cut delays on priority projects such as the Capital
representatives in the Assembly in decisions about whether or not projects should be granted a priority status," Mr Corbell said. "The changes in this legislation are all about giving priority to projects that will have substantial public benefits and which will implement the key priorities set out in the Government's planning strategy." Greens MLA and Minister for Territory and Municipal Services Shane Rattenbury backed the bill which he said provides a more transparent and democratic alternative to the use of call-in powers. "We know that major projects are much more likely to trigger the use of the ministerial call-in power, so we are pleased that this new legislation introduces a new level of final decision-making through the Legislative Assembly," he said.
Less Red Tape Means More Jobs In Building and Construction Master Builders welcomes the introduction of the Government’s red tape repeal legislation in the Parliament
“The Bill is another important signal that the Government is open for business in following through on its election commitment to slash the burden of over regulation and associated compliance costs,” Wilhelm Harnisch CEO of Master Builders Australia said today. “But it should only mark the start of the process. The building industry doesn’t want Red Tape Repeal Day to be the one shot in the locker for abolishing over regulation,” he said.
$300 million annually,” he said. “We will continue to champion regulation review and reform of the national building standards National Construction Code, and of the work of Standards Australia, both of which have large regulatory footprints on the building and construction industry,” Wilhelm Harnisch said. “Master Builders has also been pressing for red and green tape reforms to help tackle the current undersupply of housing and housing affordability and to
“While it is important to eliminate existing, inefficient and redundant regulations, Master Builders is also looking to the Abbott Government to reform the processes by which future regulations are made to prevent mountains of red tape from recurring,” he said. “New regulation should only ever be considered following a rigorous assessment about whether it is needed in the first place including a requirement to closely consult with business. Where a need is established
"Master Builders has also been pressing for red and green tape reforms to help tackle the current undersupply of housing and housing affordability and to accelerate investment in projects in the commercial building sector." “Red tape may sound mundane until you connect it with business people spending hours grappling with excessive paperwork instead of directing their energies to the productivity of their businesses and creating new jobs,” Wilhelm Harnisch said. “Building and construction is one of Australia’s most intensely regulated industries and the nation’s third largest employer. Cutting red tape will boost the productivity of the industry allowing it to generate more jobs and provide better value to consumers,” he said. “Master Builders is a strong advocate for removing over-regulation and called for the cutting of red and green tape as a key policy priority in the lead up to the 2013 Federal Election,” Wilhelm Harnisch said. “An example of the benefits of cutting red tape in the building and construction industry was the report for the Australian Building Codes Board which found that simplification of national regulations covering the building industry would benefit the economy by around
accelerate investment in projects in the commercial building sector,” he said.
there needs to be a greater discipline and rigour in the Regulatory Impact Statements,” Wilhelm Harnisch said.
“The reform foreshadowed by Josh Frydenberg, Parliamentary Secretary to the Prime Minister, to streamline environmental approvals processes for new developments is therefore very important,” Wilhelm Harnisch said.
“‘RIS’ should also be accompanied by rigorous, transparent and independent cost-benefit analyses that factor in the costs of compliance,” he said.
“Master Builders also supports the Government’s strategy to achieve better regulation by cutting inefficient regulation such as requirements to register with the Commonwealth construction equipment hired for more than 90 days,” he said.
“Ultimately the cost of over-regulation is borne by the community through higher building costs and higher government charges to pay them. Master Builders backs the Government’s reforms aimed at cutting red tape because it will boost the productivity of the industry,” Wilhelm Harnisch said.
“Another example is the requirement introduced by the previous Government for contractors in the building industry to report to the Australian Tax Office every transaction they have with another contractor. This has led to a massive red tape nightmare for the industry and is a classic case of regulatory overkill where legitimate contractors are being penalised in order to catch a small minority who break the law,” Wilhelm Harnisch said.
Revised Code of Conduct for Members Following several recent and high-profile cases of alleged substandard practices by building industry participants, Master Builders’ Executive Committee has introduced a revised Code of Conduct, which can be viewed at Master Builders’ website.
As members would know, under Master Builder’s membership Rules, members must abide by Master Builders Code of Conduct (rules 4(c), 6(k)(iv), 34(a)(ii)). Failure to comply with the Code of Conduct can lead to disciplinary measures, including suspension and even expulsion from membership. The Code of Conduct focuses on business ethics and building quality. It reflects many elements of the Australian Consumer Law, as well as the particular values of Master Builders. The Code of Conduct is designed to enhance the integrity of the Master Builders ‘brand’ and protect consumers who might rely on the fact that a building industry participant is a member of Master Builders. However, it will not provide any remedies to consumers in building disputes, being instead an internal document used to assess membership suitability. Where it comes to the attention of Master Builders that a member may be in breach of the Code of Conduct, it can be referred to the Code of Conduct Integrity and Disciplinary Committee, which will investigate the matter, before making a recommendation to the Executive Committee about any disciplinary action that should be taken. The member in question will be given an opportunity to defend themselves against the allegations and may appeal any decision to a Special Meeting of members. The Code of Conduct Integrity and Disciplinary Committee will be made up of four permanent members, being the President, the Executive Director, the Technical Services
Manager and the Industrial Relations Director / In-House Legal Counsel, as well as several temporary members, being the Chair of the relevant Sector Council and further members of that Sector Council. The temporary members will ensure that members brought before the Code of Conduct Integrity and Disciplinary Committee will be judged by their peers, with technical support from the permanent members. Members are encouraged to familiarise themselves with the updated Code of Conduct and to abide by it.
Questions If members have any questions about the revised Code of Conduct, please call: John Nikolic Director Industrial Relations and In-House Legal Counsel on (02) 6175 5921 Alternatively, if a member would like to make a complaint about a potential breach of the Code of Conduct, please contact: Jason Grieves Technical Services Manager, on (02) 6175 5954
Is your unconditional bank guarantee really unconditional? For many years the courts viewed unconditional bank guarantees as virtually as good as cash, able to be called on by a principal notwithstanding a dispute between the contractor and principal as to whether the contractor was in breach. However a number of decisions in recent years have chipped away at this view.
The decision of the ACT Supreme Court in Walton Construction Pty Ltd v Pines Living Pty Ltd 1 in December 2013 represented yet another departure from the generally accepted view that an unconditional bank guarantee can be accessed by the principal in the event of a dispute. This decision is particularly pertinent to those using the PC1 contract, but has broader implications for all contracts (not only construction contracts but also other commercial contracts such as sale agreements and leases) under which unconditional bank guarantees are given as security for performance of a party’s obligations. The PC1 Contract PC1 contracts were developed by the Property Council of Australia and are currently used by commercial principals in Australia, as well as for a number of Department of Defence projects. PC1 contacts require the contractor to provide the principal with an unconditional bank guarantee to secure the contractor’s performance of the contract. The contracts do not specify the circumstances in which the bank guarantee may be called on. This type of security is adopted in a number of other contract suites, including Australian Standard and GC21 contracts. Shifting the risk There is a long line of cases that that say that an unconditional bank guarantee is presumed to serve two purposes: (1) to provide security to the principal for its valid claims; and
1
[2013] ACTSC 237
(2) to allocate the risk of a dispute such that the principal is not out of pocket pending resolution of the dispute. The traditional view was that (subject to anything to the contrary in the contract) the principal will only have to meet the administrative requirements of the issuing bank, such as presenting the original guarantee at the specified branch. A principal would only be prevented from calling on a bank guarantee in exceptional circumstances, such as fraud or unconscionable conduct. However there are now an increasing number of cases in which courts have held that the principal is not entitled to call on the bank guarantee because the principal has not established an ‘entitlement’ to payment or damages under the contract. These cases have all turned on the particular wording of the contract, but the message being sent to principals is that they need a clear contractual right before calling on the security. Walton Construction v Pines Living is another such case. Walton Construction Pty Ltd v Pines Living Pty Ltd In June 2011 Walton provided two NAB issued unconditional bank guarantees totalling $380,000 to Pines, to secure performance of a construction contract. A dispute arose between the parties in early 2013. A statutory payment claim was issued by Walton for unpaid invoices, an adjudication followed, and Walton was largely successful. Pines appealed the adjudicator’s decision, raising issues about defects and liquidated damages (amongst other things), but the appeal was dismissed by the ACT Supreme Court. The appeal decision was
discussed in our October eBrief (link) Pines then looked to cash in the bank guarantees to recover the cost of defect rectification. It made enquiries with the NAB in September 2013 about doing so. The NAB, as most banks do, tipped off its customer Walton. Walton wrote to Pines requesting that Pines give three days’ notice of any intention to call on either guarantee. Pines agreed, and gave that notice to Walton on 20 September 2013. Walton applied to the ACT Supreme Court for an injunction. The PC1 contract was silent on when the bank guarantee could be called on. The guarantee itself said ‘the bank will pay the Amount to Pines whether or not notice is given, and irrespective of performance or non-performance by Walton’. This is not an uncommon position. A number of widely used construction contracts, including the GC21 and the Australian Standards do not give an unconditional right to access the security within the contract, preferring to restrict the terms of the guarantee to the guarantee document only. Walton argued that where there was no express contractual term dealing with the circumstances in which the security could be accessed, the parties could not have intended that access would be unqualified and unconditional. Pines argued the opposite, namely that where there was no contract term preventing it from calling on the security, it was implied that Pines was entitled to access the security. The decision Master Mossop found that the contract did not allow Pines to call on the
New WorkSafe ACT Guidance Note on Traffic Management WorkSafe ACT has today issued a new Guidance Note (No. 120) on Temporary Traffic management when working on or near public roads.
security where the grounds relied upon as the basis for calling on the security (i.e. the defects and liquidated damages) were themselves the subject of a genuine dispute. He reasoned that the contract did not make it clear that the security was intended to protect Pines from any risk involved in a genuine dispute about contractual breach, and he refused to imply a term to that effect. The effect of the decision is: • Under the PC1 contract, the principal cannot call on the guarantee if the contractor disputes that it owes the principal anything; and • Under any contract without an express provision to call on the guarantee when the parties are in dispute, the principal is probably not entitled to call on the guarantee where parties do not agree as to whether either has breached the contract, the usual ‘unconditional’ right to call the guarantee may not exist. How can you secure performance of your contract? Every contract is different, as is every job, so it is important to make sure your contractual provisions regarding security reflect your intentions from the outset. Where your security is an unconditional bank guarantee, you may need to amend your construction contracts to: • Clearly state who can call on the guarantee and when; and • If the intention is for the contractor to bear the risk of dispute, set out a positive entitlement for the principal to call on the security in the event of any alleged breach, not just one that is proved or admitted. The expert construction team at Meyer Vandenberg would be happy to assist you to ensure that your contracts will allow you to access your security in the event of a dispute.
This Guidance Note, which has been prepared in consultation with Roads ACT and Shared Services Procurement covers issues associated with the management of hazards associated with the interaction between traffic and work being conducted on or near roads, pathways and the like. The Guidance Note can be accessed on WorkSafe ACT's website at http://www. worksafe.act.gov.au/publication/view/2185
Construction Work Code of Practice This Code of Practice for construction work is an approved code of practice under section 274 of the Work Health and Safety Act (the WHS Act). An approved code of practice is a practical guide to achieving the standards of health, safety and welfare required under the WHS Act and the Work Health and Safety Regulations (the WHS Regulations). This Code provides guidance to principal contractors and other persons conducting a business or undertaking who carry out construction work on how to meet the health and safety requirements under the WHS Act and Regulations relating to construction work. HOUSING CONSTRUCTION WORK While the information and guidance contained in this code is relevant to all types of construction work, additional guidance marked with this symbol is provided for businesses working within the housing construction sector. We have been advised by the minister for Workplace Safety and Industrial Regulations, Mr Simon Corbell MLA, that this Code of Practice will be adopted and will come into force in the ACT on 1 May 2014. To view the Code of Practice, please visit the following website: http://www.safeworkaustralia.gov.au/sites/SWA/about/ Publications/Documents/696/Construction-Work-V2.pdf
Lease variation and extension of time fee changes The ACT Government’s package of measures to stimulate the ACT building industry in the face of Federal Government cut-backs includes changes to lease variation requirements and ‘extension of time’ fees.
Lease variation charge • All codified LVC fee and remissions schedules will be frozen at the current rate and remission level until 6 March 2016. • For non-codified variations, the remission rate will be increased from 25 per cent to 50 per cent for the next 2 years. • A further 25 per cent remission is available for developers whom the Government accepts have incorporated high standards of sustainable design and adaptable housing into their projects. • The Environment and Sustainable Development Directorate (formerly ACTPLA) said the Minister for planning, Minister Corbell, would table an Instrument in the Legislative Assembly committing the government to the reforms for a two year period. The Environment and Sustainable Development Directorate (ESDD) said that developers wishing to take advantage of the LVC reduction should submit a development application for their lease variation and the building as one application.
Extension of time - commence and complete The Government said it will simplify and reduce EOT charges. • From 1 April 2014, EOT fees will be applied on completion breaches only. EOT fees will not be charged on the first four years of breach. From the fifth year EOT fees will be billed annually, calculated on 1x the general rates bill. • EOT debts that accrued between 1 July 2012 to 31 March 2014 will be waived. For debts accruing from 1 April 2014, the EOT will be determined based on one year’s general rates bill. • People and businesses who paid EOT fees for the waiver period (July 2012 to March 2014) can apply for a refund equal to the fee after 1 July 2012. Application forms are on the ESDD website. • ESDD said the Government will monitor the policy changes to ensure that they have the intended outcomes and will review the fees in 2016-17. It said, “If this change in policy is not found to be effective, the government may consider grounds for resetting the policy.”
• For new lessees, leases will no longer include commence dates. ESDD said will mean that a standard residential block will have a period of up to six years to develop before any fees will accrue. For a commercial development this would typically means eight years. The new system will come into effect for people entering into a Crown Lease from 1 April 2014. Hardship provisions will also be revised to provide for changes in circumstance that result in an inability to complete within the required timeframes. They will also address cases where a lessee has been living in the house, but due to external circumstances, a Certificate of Completion was not issued and hence not marked as “completed” on the Lease.
ACT Government brings forward construction projects The ACT Government has announced that work on previously announced civil works at Moncrieff will be brought forward as part of measures to stimulate the ACT building and construction industry.
The bringing forward of at least four civil works contracts at Moncrieff will see construction activity that was originally scheduled over a 3-4 year period undertaken concurrently, the Government said. “This will have the effect of driving economic activity as well boosting housing supply.” Master Builders’ Executive Director John Miller said the commitment to fast track the development of Moncrieff as part of the Government’s Stimulus
Treasurer, Andrew Barr said that $1.8 million has been brought forward to fund the Integrated Project Team and external advisers to oversee the procurement and delivery of the ACT Courts Redevelopment Project. It will also fund an Infrastructure Finance and Advisory Unit within CMTD to advise on PPP's across Government and manage unsolicited proposals for public infrastructure. "As this is the first PPP project in the ACT, it is being delivered through an
through an interactive bid process. It is expected that construction will be complete and the facilities operational towards the end of the 2017-18 financial year, the ministers said. "Subject to innovations driven by the PPP procurement process, it is expected the new facilities will contain eight courtrooms (five of which will be jury trial enabled), an expanded single custodial facility, best practice child and protected witness
The release of the contracts at Moncrieff will also contribute towards meeting the Government's target of 20 per cent affordable dwellings in greenfield development sites in line with the Government’s Affordable Housing Action Plan Plan was particularly welcome, with direct investment of $150 million and flow on work for the ACT economy of $400-$500 million. The release of the contracts at Moncrieff will also contribute towards meeting the Government's target of 20 per cent affordable dwellings in greenfield development sites in line with the Government’s Affordable Housing Action Plan, it said. The Government has also brought forward funding for the ACT ‘Courts Redevelopment Project’, the Government’s first Public Private partnership. Attorney-General Simon Corbell and
Integrated Project Team which includes officers from the Justice and Community Safety, Commerce and Works and Chief Minister and Treasury directorates as well as external advisers," Mr Barr said. "The Integrated Project Team is currently at initiation stage and it is expected the team will be fully staffed in early May 2014. Procurement of a project director and core advisers including commercial and legal specialists is underway. "The procurement processes for the project will commence with an industry briefing in April followed by an expression of interest process in the second half of this year, alongside the development of a request for proposal tender process, and evaluation of those proposals
facilities, a single public entry point and counter and a separate jury reception and orientation area," Mr Corbell said. Mr Barr said, "The PPP Framework is aimed at engaging the private sector to help deliver major infrastructure projects and help ensure major projects are completed on time and on budget." The Government said its proposed changes to ‘fast track’ priority building projects could be used to bring forward work on the proposed new secure mental health unit at Canberra Hospital and Canberra's light rail network, ‘Capital Metro’.
High rise residential problems causing industry concern Master Builders ACT has called for tougher builders’ licencing requirements, better industry training and more mandatory site inspections in the face of renewed complaints about defects in high rise residential construction in the ACT. MBA acknowledged there were areas where improvement was needed following a series of ABC TV news programs highlighting high rise residential building defects in the ACT. The ABC news series argued that little had changed since a previous period of public controversy three years ago about problems with construction standards of some high rise residential buildings in the ACT. Master Builders’ deputy director Jerry Howard said that more stringent licensing requirements and better training were needed to improve high rise construction standards. He said that where once a trade qualification was a prerequisite to becoming a builder, now it can take just six months to obtain a licence, and not much more effort to set up a building company. Without adequate supervision and experience mistakes can happen, resulting in defects, he said. Former MBA Residential Builders Council chair David Howarth told the ABC, “A lot of people are becoming licensed way too easily." Adding to that is a lack of skills in supervision. A construction company needs only one person to hold a builders licence. If that company has multiple projects that one set of skills can be spread very thinly. He said ongoing training was needed in the industry. But also, "A lot of the problem we have is a lack of detail supplied to builders by engineers and architects". Mr Howarth said there were shortcomings in building certification. Buyers often believe that if a building has been certified it was free of defects, but the certifier's role is limited. "To give you an example, there is no requirement to have waterproofing checked in a basement set up in a unit," said Mr Howarth.
"The certifiers aren't mandated to do enough inspections in order to certify that the building is correct." But ACT Planning Minister Simon Corbell denied that certification requirements were inadequate. "Certifiers have every capability to be on site whenever they choose to ensure that work is being done according to standard," he said. The Environment and Sustainable Development Directorate told the ABC that while it is at the discretion of the certifier to work out how they satisfied themselves that works are compliant with the Building Act, it would be difficult to do so by only doing the minimum mandatory inspections. But others argued that in a private market a certifier will only inspect what they are legally required to, or what they are paid to do. The MBA said that declining apprentice numbers would impact on industry standards. Mr Howard says it has become more expensive for employers to take on apprentices. "Apprentice wages have now been increased by 30 per cent, so there's a disincentive for employers to take on apprentices as well, and this is effective from January this year," he said. Unit owners who have obtained rectification orders complained to the ABC that builders and developers were using the appeals process to delay carrying out rectifications ordered by ACTPLA.
MASTER BUILDERS ADDRESSING CRITICAL ON-SITE SKILL DEFICIENCIES Jerry Howard, Deputy Executive Director Master Builders ACT has formally petitioned Construction and Property Services Industry Skills Council (CPSISC) for Skills Connect/NWD funding for their onsite supervision and management skills program known by its acronym, MBA OSCM (On-Site Construction Manager). The present moratorium imposed on federal funding by the new federal Government has slowed down the development and implementation phases of all new workforce development programs somewhat but this has served only to strengthen the resolve of the ACT industry working group which was convened to get this program off the ground now in excess of 40 construction companies, some with national linkages.
The advantage of the program is in the simplicity of its intrinsic design. It has been developed by Master Builders, in partnership with a course advisory group of industry specialists, to address a glaring skill need for middle managers in the industry. The participants in this training will principally be from the commercial sector, but also evident in larger residential and civil construction identified company skill needs. The program will be based on a practice model which is informed by theory so that participants will be able to contribute their experiences on-site, good and bad, as a basis for acquiring more uniform best practice standards at a higher level of operation. Middle managers in construction are typically qualified, skilled and knowledgeable in their occupation of origin, be it in trade disciplines or in para-professional roles, but the transition to managing human capital and project outcomes is not something that can be delivered exclusively in a classroom without being backed up by site-based experience. The potential participants for this Master Builders program have backgrounds as experienced construction operators who have performed well at lower levels of engagement (and often been promoted because of their diligence and skills) who wish to refine and enhance what they have learned on-site in current management roles. Experience can be a definitive learning model, especially when combined with theory in critical learning situations, coupled with mentoring and the opportunity to review alternative options for
dealing with situations where costly mistakes might have been made in the past as a learning brief. As the Deputy Executive Director of the ACT Master Builders I’m well aware of the identified skill shortages and skill deficiencies and I’m also well aware that these issues cannot be adequately addressed by directing new entrants into training positions alone. The actual skill shortages and deficiencies which are most manifest and at the same time the most hidden are those at experienced practitioner levels. For this reason it is absolutely pivotal that training is targeted to address the needs of those who are already in post - both as a means of enhancing fledgling skill and knowledge sets for the applied role requirements but, more importantly, to develop the ability of construction managers to audit future skill needs, match these with project requirements and direct those within their existing resource into targeted training as a means of addressing the particular identified skill shortage issues. The current Vocational Education Training (VET) and university training and education system does an adequate job of preparing participants with ‘front-end’ knowledge requirements for managers at the point of entry into construction roles. Where the skill gaps emerges, however, is when new managers are promoted into roles which carry higher levels of responsibility, where their knowledge and experience inform the new practice requirements – but cannot effectively substitute for it because it is at a lower level of responsibility.
Mindful of the work health safety risk potential of placing ‘potentially’ skilled managers into more responsible roles, Master Builders has crafted a set of complementary integrated skills which take account of all aspects of modern management knowledge and practice. The design of the program is to have the training foundations predicated on the formative experiences of the participant, their existing knowledge, and then built on by a mix of classroom interactive learning, new theory bases, and applied simulation with the object of lifting the actual performance standards and providing greater selfconfidence for participants to deal with the most difficult of circumstances under real-life project-based pressure. The Getting Home Safely report and the 2010 Building Quality report have clearly identified serious shortcomings in the supervision and management skills deployed on construction sites. This program has the capacity to address these shortcomings and the program has excellent potential for a roll-out nationally and Master Builders is intent on piloting an initial program to review the strengths and vulnerabilities before offering the revised format to other Master Builders jurisdictions. An information session will be held regarding this course at the Master Builders Skills Centre on Wednesday 23 April commencing 5.00pm. Please RSVP Norma Inglis to book your place. ninglis@mba.org.au or call 02 6280 9119
Coming events for 2014 CCF Earth Awards incorporating the Master Builders ACT Industry Dinner
Date: Friday 9 May 2014 I
2014 Master Builders & Cbus Excellence in Building Awards
Date: Friday 27 June 2014 I
Where: Hyatt Hotel, Canberra
This year the Civil Contractors Federation Earth Awards incorporating the Master Builders ACT industry dinner will be held at the Hyatt Hotel, Canberra. For more information please visit www.mba.org.au/events/earthawards
Where: National Convention Centre, Canberra
The Master Builders and Cbus Excellence in Building Awards are the premiere networking event of the year for our industry. This year's awards will again be held at the National Convention Centre, Canberra. Places are limited - ensure your place by booking early.
Training Dates for 2014 Safety leadership - advanced observations & conversations skills training
Date: There are a number of available dates. (Contact Cecilee Miller at cmiller@mba.org.au to book your place)
Working at Heights
Date: There are a number of available dates. (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 fail protection where required.
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.
SECTOR COUNCIL MEETINGS 2014 COMMERCIAL
10 JUN
12 AUG
14 OCT
CIVIL
3 JUN
2 SEP
7 OCT
RESIDENTIAL
11 JUN
8 OCT
10 DEC
SUB-CONTRACTORS & SUPPLIERS
29 APR
24 JUN
26 AUG
PROFESSIONAL
11 JUN
13 AUG
8 OCT
ACT Private Sector Building Activity $100
MILLION
$80 $60 $40 $20 $0
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-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 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14
Additions and Alterations (Residential) Commercial Building Work Garages, Pools, Decks and Similar Structures Multi Unit New Housing
6.4 68.6 11.4 10.2 43.2
5.02 24.3 13 18 51.2
7.4 35 12.5 28 69
6.3 27.5 13 43 55
4 22.3 13 32.6 60.2
13 45 22.2 17.3 60
3.4 24 5 13 14.2
11 41 9 84 32
7 24 12 35 32
4.7 26 12 56 62
6.8 48.2 3.4 4.6 51
4.6 61 12 22.5 52