National Construction Code Draft Changes for 2016
EDITION 3-2015 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 – Marc Roland Chair, Civil Contractors’ Sector Council – Andy Crompton Chair, Professional Consultants’ Sector Council – Bryan Leeming MASTER BUILDERS MANAGEMENT TEAM Executive Director – Kirk Coningham OAM Deputy Executive Director – Michael Hopkins Director Industrial Relations & In-house Legal Counsel – John Nikolić Director Commercial Operations – David Leitch Senior Management Accountant – Aaron Froud Work Health and Safety Advisor – Philip Edwards
The Australian Building Codes Board (ABCB) has released a package of draft changes to the 2016 edition of the National Construction Code (NCC) for industry and public comment. The draft changes give NCC users advance notice of proposals that take effect from 1 May 2016. The period for comment on the NCC 2016 draft proposals closes on Monday 3 August 2015.
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MBA GROUP TRAINING General Manager – Wendy Tengstrom
A webinar on the Increased Use and Quantification of Performance project was held on 23 June 2015. Proposed changes to the Performance Requirements for NCC 2016 were discussed during the webinar. If you would like further information on the webinar or to view the draft NCC changes please refer to the ABCB web site at www.abcb.gov.au/consultation. Master Builders ACT will make comment via the Master Builders Australia office and keep members informed of the proposed changes between now and the 1 May 2016 commencement date. 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
HAMMER hits the nail on the head
RED TAPE AND TRAFFIC LIGHTS How often have you sat at a red light in Canberra waiting patiently with not another car in sight? How often have you been stopped by the ubiquitous right turn arrow when you could have easily and safely gone on your way? The infuriating and entirely unnecessary red lights on our roads, many of which impose a 24/7 cost to meet a 2 hour 5-day a week need, are hauntingly similar to equally unnecessary and infuriating red tape in our industry. In our red light example, our bureaucrats have a single objective or KPI – stop traffic accidents. The cost of doing so is huge: from the opportunity cost of wasted time, to the cost in fuel and pollution, from the stress on frazzled motorists to wear and tear on cars. In a perverse outcome, avoiding higher speed collisions by stopping cars at intersections comes at the cost of many more ‘tail enders’ as drivers struggle with stop start traffic. It’s the same with red tape. Our bureaucrats take a single KPI and apply it without any concern whatsoever for either cost or perverse outcomes. Take Territory Plan Variation 306 as a case in point. A key part of this now famous Variation seeks to ensure that “new development does not unreasonably impact on a neighbour’s access to sunlight”. A reasonable and desirable objective that has been lost in the application. The solution was to require a 2.4m high solar fence between the minimum front setback and a point 10m rearward. This works fine on nice big, flat blocks; the likes of which are only generally available in established suburbs. But it comes at huge cost when casually applied to greenfields developments with small blocks on sloping ground. Perverse outcomes abound. The first is that the provisions make it nigh impossible to build a standard-sized modern home on a standard ACT Government designated block without applying the ‘Coober Pedy’ option - dig a hole and put your house in it. As well as adding tens of thousands of dollars in site costs, the end result is often towering, potentially dangerous, retaining walls and homes that are permanently damp.
Another perverse outcome is Government has changed the way they design subdivisions. As a result we see many more blocks with north to the front or rear of the property, this goes completely against passive solar design principles. The Lawson subdivision is a good example of this. Other outcomes have seen homes crammed tight against one boundary ensuring backyards are in permanent shade – equally tough on growing kids and tomatoes. Another planning outcome is to build a much smaller home with a nice skinny frontage. The cost of your square of sunshine is the neighbour’s bedroom and study. Of course your other neighbour demands the same sacrifice from you for her patch of sunshine. And so it goes – all the way down the street. Howls of protest from architects, builders and designers have been simply ignored. Worse still, even the bureaucrats know it’s a crock - imposing huge costs all around for very small reward. Now the entire industry, builders and bureaucrats alike, look to the ‘work around’. Of 12 houses that make up the Moncrieff Display Village, six will require specific development applications to account for V306. Extrapolated out across the 2200 Moncrieff blocks, this could see government inundated with 1100 DA’s all trying to work around ridiculous planning requirements that everyone knows are unworkable. Another huge cost to the community and our industry. Too bad for our kids as they look for affordable housing in our city. It’s already tens of thousands of dollars cheaper to build across the border. This latest planning fiasco will add another $20k to the base price. To be fair, the jaw-dropping stupidity of the entire process does open a second KPI for government. They’ll need a whole lot more public servants to manage the DA’s. Remember to wave to them when you’re stuck at your next red light.
Currently
T C A e th in e l b a l no land avai MICHAEL HOPKIN
ive Director
S - Deputy Execut
THERE IS “CURRENTLY NO LAND AVAILABLE” FOR SALE IN THE ACT. THAT IS THE MESSAGE SHOWING ON THE LAND DEVELOPMENT AGENCY’S WEB SITE. As a new resident of Canberra I was staggered to discover that I could not purchase land to build a family home. I cannot contribute taxes to the Territory, engage a local builder, or invest in the ACT housing market by purchasing a family home. This is an extreme land shortage, matched nowhere else in Australia. The Urban Development Institute of Australia (UDIA) recently released a report on urban land supply. It reveals that that Melbourne and South East Queensland led the way in new residential land supply being made available to purchasers in 2014, with new lots released increasing by 61% in Melbourne, and 55% across South East Queensland. The report also showed that Sydney experienced a strong 29% increase in new lots released. In the ACT Government’s 2015-16 budget, Master Builder’s calls to increase land supply have been listened to. The annual number of dwelling sites expected to be sold has increased from 3,300 to 3,513 in 2015-16, from 3,300 to 3,713 in 2016-17, from 3,300 to 4,566 in 2017-18, and has been set at 5,398 in 2018-19.
myself) to purchase, and start constructing a new home. Herein lies the underlying problem with the ACT situation. While Government has lifted its targets to meet forecast population growth there is so much existing demand that any new land supply is immediately absorbed. Builders and potential home owners then wait for months until the next land release. This is a sign of a dysfunctional land supply system. The problems of land shortage are well documented, most notably, land prices increase and housing affordability decreases. The impact on the construction industry is also significant. Builders cannot maintain a sustainable forward pipeline of work, land ballots are inefficient, unfair and open to abuse. Master Builders will continue to maintain pressure on government to ensure a sufficient and sustainable supply of land for housing is provided that meets market demand. While we acknowledge that efforts have been made to improve supply, the ACT is still a long way from having a healthy land supply system.
The key difference between the ACT land supply situation and every other urban property market in Australia is the level of land stock on the ground. In each of the areas studied by the UDIA there was sufficient stock (albeit reducing) of developed land ready for a new resident (like
NDIS update The National Disability Insurance Scheme (NDIS) is a new way of funding individualised support for people with disability that involves more choice and control and a lifetime approach to a person’s support needs. The scheme is a big change for the disability sector and will roll out gradually across the country. Here in the ACT, a trial of the NDIS commenced in July 2014. To be eligible for the NDIS you need to meet the disability of early intervention requirements. We are phasing people in gradually in an ages and phases approach, with people entering according to either their date of birth or if a school child their school year. The National Disability Insurance Scheme (NDIS) funds reasonable and necessary supports that help a participant to reach their goals, objectives and aspirations, and to undertake activities to enable the participant’s social and economic participation. The NDIS may fund home modifications where, due to the impact of the participant’s disability, the participant or their
carers are unable to reasonably access and use frequently used rooms and spaces using standard fixtures and fittings. The NDIS may fund home modifications where the home, in its current condition, has a significant and adverse impact on the sustainability of current living and care arrangements. We are keen to hear from builders who are experienced in home modifications and interested in registering as an NDIS provider. To be registered as a provider of home modifications you will need to hold relevant trade qualifications and demonstrate how your service responds to concepts and limitations of AS 1428 and other disability access standards and their application in accordance with a person’s needs and specifications of plans. The NDIS is also intending to run a one day training course to ensure that home modification providers understand the NDIS processes and expectations. The NDIS registration forms and information regarding the process can be accessed at http://www.ndis.gov.au/providers/registering-provider If you would like to further information please contact the ACT Trial site office on 6146 8200.
More changes ahead for security of payment? In December 2014 former Judge Alan Moss was commissioned to review and recommend changes to the South Australian security of payment legislation (the SA SOP Act). The review was completed in March 2015. The Moss Review is of interest to us here in the ACT because the SA SOP Act was introduced at roughly the same time as ours and, like ours, it was based on what the NSW legislation said at the time. The NSW legislation has been amended twice since, but both the ACT and SA still have their original Acts. SA is the fourth state to undertake a review of the operation of their security of payment legislation. Here in the ACT we are still waiting. Moss Review recommends abolishing ANAs It will not be a surprise to read that the Moss Review suggested the SA SOP Act’s process, in particular the operation of Authorised Nominating Authorities (ANAs), was perceived to be biased in favour of the claimant, and that this perception led contractors to frequently challenge the adjudication process in courts. Currently under the SA SOP Act the Minister can appoint an organisation to be an ANA, and the ANA then nominates the individual adjudicator. Both the ANA and adjudicator may charge a fee. This is the same process as under the ACT legislation. ANAs are generally commercial organisations operating for a profit. Currently there are five ANAs in the ACT (SA has seven). The claimant chooses which of the authorised ANAs it will use for the adjudication. There is therefore a commercial incentive for an ANA to be perceived as ‘claimant friendly’. Whether any ANA is in fact nominating adjudicators who produce ‘claimant friendly’ decisions is debatable. However the Collins review in NSW, the Wallace review in Qld and now the Moss Review in SA have all identified the perception of bias to be a major flaw in the east-coast adjudication system.
The main recommendation from the Moss Review was that existing ANA authority be revoked, and that the Small Business Commissioner should be appointed as the sole ANA. This move would mirror the step taken by Qld earlier this year to change the legislation so that all adjudicators under the Qld security of payment legislation are now appointed by the Queensland Building and Construction Commissioner. This amendment was specifically introduced in an attempt to restore faith to users of the adjudication system that adjudicators are impartial and independent.
Moss Review also recommends differentiating between simple and complex claims Another issue identified by the Moss Review was the lack of a distinction between simple and complex claims. The review recognised that while the ‘quick and dirty’ adjudication process was reasonable for small and simple claims it was absurd to apply it to large and complex claims. It suggested that a clear distinction between simple and complex matters should be made and this would allow adjudicators to extend time limits for determination of complex matters. A move in this direction would be similar to the changes implemented in Qld, where the legislation now recognises that complex claims need to be treated differently to simple claims.
Government introducing electronic tendering system
Will any change occur? It is unclear if and when SA will actually amend the legislation. Indeed the review expressly states that SA needed changes, but now was not the correct time to introduce these changes. Certainly no changes have yet been foreshadowed here in the ACT. Should the ACT make similar changes? If the SA legislation is amended, Tasmania and the ACT will be the only jurisdictions retaining the original ‘east-coast model’. In our view, the ACT Government needs to urgently conduct a comprehensive review to consider whether we should follow the reforms made by Qld or NSW, or adopt some combination of the two. Of course, unless and until security of payment is dealt with at a national level, it is going to remain technically complex and a breeding ground for disputes. If you would like to know more… The Construction Dispute Resolution team at Meyer Vandenberg specialises in security of payment disputes. If you have any questions about the recent reforms in NSW or Qld, or the Moss Review, or you would just like to know more about how our ACT legislation operates, feel free to contact us.
For more information contact the Construction Dispute Resolution Team Alisa Taylor, Partner Meyer Vandenberg Lawyers Ph: (02) 6279 4388 alisa.taylor@meyervandenberg.com.au
The ACT Government will implement an electronic-only tendering system called Tenders ACT on 1 July 2015. The new Tenders ACT system will replace manual and paperbased tendering processes with electronic processes. From 1 July 2015, Territory procurements will only be advertised through Tenders ACT. From that date the ACT Government will cease print advertising of procurement opportunities. Master Builders ACT members will need to be registered to download the tender documents. Only registered users will be able to lodge responses electronically through the secure Electronic Tender Box. Businesses will only need to register once to use Tenders ACT. Once registered the primary contact can add additional users as required. Tenders ACT will Go Live on 1 July 2015. User registrations will commence 25 June 2015. Subscribers to the Territory’s current notification system will receive an email to advise them when registrations open. The email will include a link to the registration page. Responses to tenders released after 1 July 2015 must be submitted electronically. The Government said “Electronic tendering is consistent with the Government’s commitment to streamline processes, eliminate duplication, and provide more opportunities for local businesses in the tendering process. It also accords with one of the recommendations of the Master Builders ACT Procurement Policy paper, which sought to reduce red tape by eliminating requirements for paperwork to be provided at tender stage.” Under Tenders ACT, individuals and businesses will be able to register their interest for tenders and to lodge tenders electronically in a secure environment. The Government said suppliers can expect Tenders ACT to significantly reduce the administration and cost associated with tender submission, particularly with regard to existing requirements for publishing and submitting duplicated paperwork. “By improving and streamlining the tender receipt and registration process, Tenders ACT will enable the focus to shift to tender evaluation, in turn increasing the potential for quick notification of successful tenderers and prompt procurement outcomes for the Territory. “ Detailed information about how Tenders ACT will operate, including details of system requirements is available at http://www.procurement.act.gov.au/About/ACTGovernment-introduces-electronic-tenderinG
Liberals warn consortia over light rail Canberra Liberals’ formal warning to the two short-listed consortia currently bidding on the multi-million dollar Capital Metro light rail project that they will not proceed with it if the Liberals are elected to Government at the October 2016 ACT election has propelled the project and the Canberra Liberals to the centre of a national political controversy. The Canberra Liberals warning to the consortia has attracted the anger of their Federal counterparts, with assistant infrastructure minister Jamie Briggs warning that it raised “sovereign risk” issues.
He said, “It’s only fair to give Canberrans a choice. If Canberrans vote for the Canberra Liberals, light rail will be stopped. This project is only proceeding because ACT Labor did a deal with the Greens to stay in power.”
"As we have seen with the East West Link disaster in Victoria, tearing up legally binding infrastructure contracts raises sovereign risk, damages investor confidence and stifles economic growth," Mr Briggs said.
Citing the planned $783 million cost, ongoing interest and operating payments, Mr Hanson said the opposition did not believe it was viable to proceed with the construction of the 12-kilometre line from the city to Gungahlin.
The warning the Liberals would not proceed with the project even if contracts have been signed is a mirror image of the Victorian controversy over the East-West Link, but with the roles of the political parties reversed.
"We inform you that we have called on the ACT government not to sign contracts until the matter has been properly put to the people at the next election, and that a future Liberal ACT government elected to stop the project will honour the will of the people," Mr Hanson said.
The Victorian Liberal Government signed contracts for the East-West road link shortly before the 2014 election, in the face of warning from the state Labor Party that it would cancel the project if elected and use the funds for other infrastructure priorities – public transport. Labor won in Victoria, cancelled the contract, and was forced to pay $340 million in compensation. The Abbott Government suspended promised Federal funding for the road link and refused to allow it to be applied to the Andrews Government’s alternative priorities. Canberra Liberals leader Jeremy Hanson and transport spokesman Alistair Coe wrote to the two international consortiums shortlisted by the ACT government for the public-private light rail project in early June, warning that if elected a Canberra Liberal government would stop the project. “The Canberra Liberals will stop light rail if elected at the October 2016 ACT Election. We are being as upfront with the shortlisted consortiums as we can. That’s why we have written to them, saying we will stop the project,” Mr Coe said
The letter was sent to consortiums Activate and Canberra Metro, shortlisted by the government for the project in March. Mr Briggs warned the ACT opposition not to cancel contracts for Canberra's light rail line after the 2016 election, describing the move as "economic lunacy". He said the Abbott government's firm position was that contracts lawfully entered into by governments to build infrastructure projects must be honoured. Following Mr Briggs' warning, Mr Hanson said: "If the Canberra Liberals are elected next year, we will have a responsibility to stop light rail because that's what Canberrans would have elected us to do."
"The best course of action would be for the Labor Government to not sign contracts before the election so that Canberrans can have their say on this massive project.''
Capital Metro Minister Simon Corbell said the ACT Liberals' letter was "reckless" and that it signalled the possible loss of hundreds of jobs under a Hanson government. Master Builders ACT Executive Director Kirk Conningham recognised that Labor’s mandate on light rail was ambiguous at best but said Master Builders could not support cancelling contracts. “Sovereign risk aside, if governments get in the habit of cancelling infrastructure projects at every election, nothing will get done. In the Territory and around the country the construction industry needs clarity and certainty of the pipeline of work. Connecting the infrastructure cycle directly to the political cycle is a bad outcome for communities everywhere,” he said. Hindmarsh Group chairman and former Master Builders ACT President, John Hindmarsh said he thought Mr Briggs may not have been fully aware of the background, but conceded the issue could have an impact on the ACT investment climate. “It could have some impact on projects that require significant investment in the future. Some people may think carefully about making those decisions without there being a political mandate.” However “I don’t think it would have longterm implications for the Territory.” He said the issue had arisen largely because the ACT Government had made a “massive financial commitment” to light rail without canvassing the project before the last ACT election. “It was only part of the Greens platform and the community had not had a real opportunity to voice its opinion through the ballot box.” He said the light rail had implications for the ACT Budget “and the community should have been able to decide if it was better to use the funds for a tram or for the rejuvenation of Civic – which is an absolute disgrace – or the Convention Centre or some other more important infrastructure.”
Union entities in union EBAs: enforceability and potential law reforms Pattern union enterprise bargaining agreements (EBAs) often require employers to make payments to a range of entities for established superannuation, training or even charitable ends. As the ongoing Royal Commission into Trade Union Corruption and Governance has detailed in its recent Discussion Paper on Options for Law Reform, such ‘funds or schemes commonly have financial and other links with the union negotiating the enterprise agreement’, providing a potentially dangerous incentive for union militancy and conflicts of interest: The income flowing to unions creates a powerful incentive for unions to include provisions in enterprise agreements requiring employers to contribute to particular funds, or purchase particular products, from which unions derive a benefit. This has several potential consequences. First, it can induce unions to engage in coercive conduct to compel employers to contribute to funds, or purchase products, from which unions will derive a benefit … Secondly, it presents a conflict of interest … there is a great incentive for the union to act contrary to the interest of the employees and be unwilling to negotiate with the employer concerning the relevant terms of the enterprise agreement. This has led the Royal Commission to suggest that ‘the Fair Work Act could be amended to prevent enterprise agreements containing terms requiring employers to make payments to employee benefit funds at all’ and to provide for greater freedom of choice in relation to superannuation funds. While it remains unclear whether such recommendations will be implemented by government, even under existing laws, requirements that employers pay into particular funds or use particular service providers under an EBA are unenforceable, if they stray beyond the employment-relationship nexus. Under the Fair Work Act, EBAs must relate to the employment relationship between the signatory employer and its employees. Terms which stray beyond that employmentrelationship nexus may be included in agreements certified by the Fair Work Commission, but are unenforceable.
For example, the current ACT CFMEU EBA requires employers to: ••
use Creative Safety Initiatives (CSI) for employees’ vocational training;
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make donations to Construction Charitable Works (CCW);
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provide for income protection insurance via Built-Plus,
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pay into CBUS as the default or even mandatory superannuation fund;
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make redundancy contributions to Australian Construction Industry Redundancy Trust (ACIRT).
The purported requirement that employers pay into BuiltPlus is unenforceable, as it relates to injuries / illnesses occasioned outside of work. Similarly, the requirement that employers use CSI or pay into CCW would also be likely to be unenforceable, as EBAs are not intended to offer commercial advantages to service providers or charities which are insufficiently related to the employment relationship at hand. However, the requirement to use CBUS and ACIRT would be enforceable under existing laws. If members have any queries about the enforceability of terms of their EBA, they are encouraged to call Master Builders IR Department on 02 6247 2099.
While it remains unclear whether such recommendations will be implemented by government, even under existing laws, requirements that employers pay into particular funds or use particular service providers under an EBA are unenforceable
COMING EVENTS FOR 2015 Professional Development Week at the Master Builders
Date: 19 to 23 October 2015 I
Where: Master Builders Skill Centre, Fyshwick
2015 Master Builders Annual Dinner
Date: Thursday 15 October 2015 I
2015 Master Builders Charity Golf Day
Date: Monday 16 November 2015 I
MBA-ACT is proud to take a lead role in this event and to create a program for the building and construction industry and broader business community that will demonstrate current information on quality, technical skills, and a range of niche interest areas. MBA-ACT views this event as an opportunity to provide a broad range of workshops which are aligned with training opportunities and defined areas that require quality improvement. Where: TBA
The Annual Dinner is the Master Builder’s premier networking event, where industry comes together for a social and networking evening. This function provides an annual forum for the industry to take stock of its performance and to consider the outlook for the coming year. Where: Federal Golf Club, Canberra
The Master Builders annual charity golf day will again be held at the Federal Golf Club in Red Hill. This is a fantastic opportunity to socialise with friends and colleagues in an amazing setting, whilst raising funds for a worthy local charity.
TRAINING DATES FOR 2015 HIGH RISK LICENCE TRAINING
MBA Group Training provides continual learning opportunities through industry training and education services. Safe work practices within the industry are a priority with the Master Builders and expert advice is available in a range of areas including occupational health and safety requirements, industry codes of practice, education and training. High Risk Licence training is provided at the Master Builders through our trianing partner, Southern Training Organisation. For information regarding High Risk Licence Training please contact MBA Group Training. Ph: (02) 6280 9119 or via email: training@mba.org.au
SECTOR COUNCIL MEETINGS 2015 COMMERCIAL
11 Aug
6 Oct
CIVIL
4 Aug
6 Oct (AGM)
RESIDENTIAL
12 Aug
14 Oct
9 Dec
SUB-CONTRACTORS & SUPPLIERS
30 Jun
15 Sep
17 Nov
PROFESSIONAL
19 Aug
21 Oct
16 Dec
ANNUAL GENERAL MEETING
13 October
1 Dec
ACT PRIVATE SECTOR BUILDING ACTIVITY $80 $70
MILLION
$60 $50 $40 $30 $20 $10 $0
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
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
Jun-14 5 65 14.8 54 26
Jul-14 6.5 40.1 16.7 10.3 34
Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 4.6 5 4.2 5.2 5 4.5 2.5 2 61 55 26.5 74 11 22 17.2 12.1 12 10 16 16.5 8.8 7.5 5.2 10.4 22.5 18 0.6 30 58.7 34 65 21 52 50 20 47 29.3 54 30 33
Apr-15 May-15 7 4 43.3 42 12.5 5.2 3.4 65 42.1 30