2014 Master Builder New South Wales Magazine Jan-Mar

Official Magazine of the Master Builders Association of NSW | Issue One | Jan - Mar 2014

READ ABOUT THE NEW HISTORY OF THE MASTER BUILDERS ASSOCIATION OF NSW BOOK ON PAGE 14 2014 CONSTRUCTION INDUSTRY FORECASTS AWARDS FOR EXCELLENCE IN BRICK AND BLOCK LAYING WINNERS INSIDE WATERPROOF TRAINING FOR YOUR ORGANISATION FEDERAL GOVERNMENT ANNOUNCES ROYAL COMMISSION INTO UNION CORRUPTION

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Experts in water.

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Despite builders best efforts, leaking showers are consistently listed in the BSA’s top ten defects.

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contents

2

JANUARY/MARCH 2014

in tHis issue: Official Magazine of the Master Builders Association of NSW | Issue One | Jan - Mar 2014

RegulaRs

Official Magazine of the Master Builders Association of NSW | Issue One | Jan - Mar 2014

Contact list

4

President’s Viewpoint

6

Executive Directors Viewpoint

7

Newsbrief

Read about the new histoRy of the MasteR buildeRs association of nsw book on page 14 2014 ConstruCtion industry ForeCasts awards For exCellenCe in BriCk and BloCk laying winners inside waterprooF training For you organisation Federal government announCes royal Commission into union Corruption

8

Dates for your diary

16

Regional Roundup

18

The way we were

60

featuRes cover story A History of the Master Builder Association of NSW

14

Forecasts Building Activity to Rebound on Back of Improved Confidence

20

Mixed Outlook for Building and Construction

22

housing Non-Conforming Building Materials a Simmering Nightmare

23

New Home Warranty Insurance Underwriting Guidelines

24

“Unholy Political Alliance” Threatens Much Needed Planning Reform for NSW

25

Building and Construction Industry Security of Payment Amendment Act 2013

26

legal

eDitoR: Kirra Smith laYout: Carol Taylor gRaPHic Design team: Aniko Gaspar, Andrew Crabb and Byron Bailey national sales anD maRKeting manageR: Trish Riley sales manageR: Peter Shepherd email: peter.shepherd@crowtherblayne.com.au aDVeRtising sales: Elizabeth McDermott

Tread Carefully with Building Contract Variations

27

Protect your Business from the Insolvency of a Contractor or Subcontractor

28

industrial relations Federal Government Announces a Royal Commission into Union Governance and Corruption

30

Mca awards for excellence in brick and block laying

41

Mentoring Hiring a Female Apprentice

46

The Importance of Workplace Mentors

47

training

PRoDuction: Brooke Travers

Plug the Leaks in Waterproofing Training for Your Organisation

PRint: Newstyle DistRibution: Newstyle

membeRsHiP

contact Details PO Box 824 Surfers Paradise QLD 4217 tel: 1800 222 757 faX: 1800 063 151 email: publications@crowtherblayne.com.au Web: www.crowtherblayne.com.au

Disclaimer: The Publisher and the Master Builders Association of NSW, their employees and agents take no responsibility for any inaccuracies or omissions. The opinions are those of the contributors and not necessarily of the Publishers nor of the Association. No warranty is given and no liability is accepted.

Products and Services appearing in Master Builder are not necessarily endorsed by the Publisher or the Association.

While every care has been taken during production, the publisher(s) do not accept any liability for errors or omissions that may have occurred.

Fringe Benefits Tax – Vehicles Considered an Exempt Benefit

48

32

Members profile Neville Southon Volunteering Building Skills Overseas

34

project profile Newland Constructions

36

New members

38

geneRal featuRes Concrete Spalling

50

Directory/What’s New

58

cbus When it comes to super, you can rely on

At Cbus, we make meeting your super obligations easy:

We have a range of online contribution payment options, including the Cbus Clearing House which will allow you to pay your employees’ super into multiple funds using the one system.

Access to financial advice for Cbus members.

Regular communication with members and employers.

At Cbus we invest back into the building and construction industry as part of our investment strategy, thereby creating jobs.

1 Bligh St - a Cbus Property development, Sydney

Read the relevant Cbus Product Disclosure Statement to decide whether Cbus is right for you. For a copy: call Cbus on 1300 361 784 or visit www.cbussuper.com.au Cbus’ Trustee: United Super Pty Ltd ABN 46 006 261 623 AFSL 233792 Cbus ABN 75 493 363 262.

4

contact list JANUARY/MARCH 2014

master builder magazine Master Builders Association of New South Wales 52 Parramatta Road, Forest Lodge NSW 2037 Private Bag 9, Broadway NSW 2007 Tel: 02 8586 3555 | Fax: 02 9660 3700 Email: enquiries@mbansw.asn.au Website: www.mbansw.asn.au | ABN 96 550 042 906

HEAD OFFICE CONSTRUCTION APPRENTICESHIP MENTORING PROGRAM - (CAMS)

EXECUTIVE BOARD Paul Maginnity Ross Mitchell Gordon Leggett Scott Nash Martin Patience Simon Pilcher Chris Calderbank Park

State Manager Apprenticeship Mentoring Officer

President Deputy President Immediate Past President Vice President Vice President Vice President Vice President

Director, Operations

Brian Seidler Amanda de Vries

8586 3503 8586 3507

Peter Meredith Kraig Butler

8586 3513 8586 3549

Adam Fawcett Edwina Lyall Malcolm Foung Adam Myers Erroll Wong Daniel Vine Jayne Pan Bill Korakis Julie Hilder

8586 3519 8586 3570 8586 3556 8586 3501 8586 3568 8586 3566 8586 3528 8586 3541 8586 3565

MBA INSURANCE SERVICES State Manager - NSW Senior Account Manager Account Executive - General

Account Executive - Home Warranty

Development Manager - Specialist Products Development Manager - Corporate Broker

Ogarit Kelley

0414 919 194 1300 760 366

Director Construction Manager WHS Industrial Officers

Safety Officer IR Administration Officer Secretary

Peter Glover Tim Stootman Rod Grace Nicholas Arends Chris Schultz Judy Macgregor Beverly Glover

8586 3535 8586 3552 8586 3574 8586 3573 8586 3522 8586 3531 8586 3523

Michelle Bass Dean Edser Lian Li Carson Gao Stanley Wu Andrew Turner Emma Willing Simone Craswell Stacey Betar William Louie Timithy Rolls

8586 3579 8586 3548 8586 3582 8586 3559 8586 3544 8586 3578 8586 3577 8586 3576 8586 3521 8586 3563 8586 3560 1300 884 315 8586 3553

TRAINING Skills Development Manager Cert IV-VI Coordinator Cert IV Administrator Cert III Coordinator Cert III Administrator Head Trainer Short Course & Development Coordinators

Diploma Administrator Administration Assistant Compliance and Quality Officer MBA Skill Recognition Centre NWDF

LEGAL Head Solicitor Solicitor Legal Assistant

Robert Collings Hannah Shephard Beth Mitchell

8586 3517 8586 3517 8586 3517

Susan Manning Helen Harris Juliet Pratley Amanda Kelly

8586 3506 8586 3564 0421 050 395 8586 3504

Graham McGuiggan Paul Love

Mark Shearwood Paul Madden Carly Reynolds Joan Ah-Hen

8586 3554 8586 3540 0413 306 556 8586 3520 8586 3572 8586 3515 8586 3581

Karen Kellock Leonie Lowder Maria-Luisa Branezac Paulo Atienza Alex Maxwell Frank Luppino Philippa O’Rourke Donna Seidler Perry Wynn

8586 3538 8586 3542 8586 3536 8586 3550 8586 3551 8586 3505 8586 3558

EVENTS & BUSINESS DEVELOPMENT Awards Coordinator Assistant Awards Coordinators

Special Projects Officer

MEMBER SERVICES Manager Member Services Membership Coordinator

Membership Representative Membership Representative Member Services - Administration Member Services - Administration

Director Finance & Administration Accounts Payable Accounts Supervisor Credit Control Manager Credit Officer Training Accounts Officers

Reception #2 Fishbowl #2 Charles Martin Room

Arthur Johnson Sharon Eakin Strebre Delovski Leon Kopcikas Frank Chevell Rheannon Vea Vea Bridget Delmore

8586 3508 8586 3510 8586 3511 8586 3509 8586 3567 8586 3527 8586 3527 8586 3526 8586 3530 8586 3546

IT SUPPORT IT Support/Webmaster

Alexander Ashley-Carrington 8586 3525

MATES IN CONSTRUCTION

Hotline

8586 3575

Steven Swan

8586 3562

Joanne Papageorge Daniela Fraumeni

8586 3555 8586 3555

MARKETING AND COMMUNICATIONS Marketing and Communications Manager Receptionist

Regional Offices NEWCASTLE OFFICE Level 1, 165 Lambton Road, Broadmeadow NSW 2292 Tel:

NSW Regional Manager Len Blakeney Office Administrator Sarah Croft Receptionist Ilana-Kate Howard Industrial Relations Officer Ben Ziolkowski Safety Officer John McGhee Trade Events & Divisional Coordinator Haley Tibbetts Membership Officer Luke Reeves Events and Training Coordinator Kerri Richards

(02) 4953 9400 4979 0101 4979 0103 4953 9400 4979 0107 4979 0112 4979 0106 4979 0109 4979 0105

MBA Insurance Services Business Development Manager NSW

Leeanne Farmer

4979 0115

Juliet Pratley Susie Bell Graham Marchant

(02) 6681 4266 0421 050 395

Peter Meredith Helen Tinson Lesley Potter

(02) 4323 4588 0412 694 001 4323 4588 4323 4588

Lynn Smith Debbie McDonald

(02) 4454 1955 0418 633 297 4454 1955

Steve Donaghey Lesley Donaghey Pauline Meade

(02) 6058 2000 0402 044 075 6058 2000 6058 2000

NORTHERN Regions Shop 1, 97 Tamar Street, Ballina NSW 2478 Tel: Northern Regions Manager Administration Officer Membership Officer

0428 412 784

GOSFORD Unit 7/4 Stockyard Place, West Gosford NSW 2250 Tel: Director - Housing Office Manager (Mon/Wed) Office Manager (Tues/Thurs)

Southern Regions Unit 1, 171 Princes Highway, Ulladulla NSW 2539 Tel: Manager - Southern Regions Administration Assistant

Albury/Wodonga 35 Hovell Street, Wodonga VIC 3690 Tel: Regional Manager Office Manager Administration Assistant

PORT MACQUARIE

Apprenticeship SERVICES Apprenticeship Services Manager Apprenticeship Payroll Apprenticeship Payroll Supervisor Apprenticeship Recruitment Officer Apprenticeship Recruitment Officer Apprenticeship Safety Officer Apprenticeship Safety Officer Apprenticeship Mentor Apprenticeship Services Coordinator

8586 3537

RECEPTION

MASTER BUILDERS FINANCIAL SERVICES

INDUSTRIAL RELATIONS AND SAFETY

Craig Donovan

FINANCE & ADMINISTRATION

HOUSING Director - Housing Government & Media Advisor

8586 3539 8586 3524

OPERATIONS

EXECUTIVE Executive Director Executive Assistant

Omesh Jethwani Jack Long

8586 3533

Unit 3, 12 Jindalee Road, Port Macquarie NSW 2444 Tel:

Administration Officer Kerrie Clark

(02) 6581 4033 6581 4033

wollongong Unit 3, 29-35 Princes Highway, Unanderra NSW 2526 Tel:

Illawarra Manager Michael Hart Administration Assistant Janelle Talbot

(02) 4272 9409 0419 140 126 4272 9409

GOLD FLEET DISCOUNTS for all Master Builders Members.

HILUX 4x4. NOW WITH A 5 STAR ANCAP SAFETY RATING. As a member of the Master Builders Association, don’t forget that you are eligible for full Gold Fleet Discounts on all Toyota Models*, not just HiLux. To find out more contact 1800 444 847 for your local Toyota Fleet Specialist Dealer. ®

2014

toyota.com.au

* Excluding Special Edition models.

6

president’s viewpoint JANUARY/MARCH 2014

president’s viewpoint 2014 is already shaping up to be a very busy year for the Association. The economic forecasters are also suggesting that things are improving for our industry and a recent Master Builders’ survey indicates more opportunities are appearing and confidence is returning.

You all would have probably seen or heard by now about the issues raised in recent media coverage regarding activities of trade unions and their alleged connection to underworld figures.

President Paul Maginnity

New revelations from within the building unions appear to corroborate these connections, which is most worrying. Just before going to print for this edition of Master Builder Magazine the Federal Government announced a Royal Commission into union governance and corruption.

The Royal Commission will address increasing concerns arising from allegations involving union officials establishing and benefitting from so called “slush funds”.

Further, alleged corrupt behaviour and unlawful kickbacks in parts of our industry has made it clear there is a need for serious scrutiny.

It is interesting to note that the terms of reference for the Royal Commission actually identify a number of unions involved in our industry – including the Construction Forestry Mining & Energy Union (CFMEU), Electrical Trades Union and the Australian Workers Union (AWU), all of which will face close scrutiny.

The Federal Government has advised that it intends to appoint a recently retired High Court Judge, the Honourable John Dyson Heydon AC QC as the Royal Commissioner.

The Association, at both a state and national level, has indicated its support for the Royal Commission but we should not forget to emphasise the point that the industry needs and totally supports the re-introduction of the Australian Building & Construction Commission (ABCC) to stop the systematic reintroduction of restructure by building unions.

executive director’s viewpoint 7 JANUARY/MARCH 2014

executive director’s viewpoint This edition of Master Builder Magazine will feature a very special section introducing a very special publication; a book called “A History of the Master Builders Association of NSW – The First 130 Years”. It’s author, Mr John Elder, a past Executive Director and long-time MBA employee worked for many years researching material which we have now condensed to reflect the history of one of the oldest employer associations in Australia.

This rich and fascinating history of the Association is told against the backdrop of the history of NSW up until 2005.

Executive Director Brian Seidler

The history identifies the builders of some of the most well known, enduring buildings that have contributed to create the social, educational and commercial infrastructure of the built environment of NSW. The book traces the MBA’s economical and social development through colonial times, the federation of the colonies, the depression, two world wars and the period of the social protests groups, including the student movement, the women’s movement, aboriginal

rights and the creation of resident action groups that are merged during the period of the green bands.

The book also chronicles the 1970s and 1980s as periods of massive social unrest and union agitation. It was a period when industrial relations in the building industry was played out against differing political philosophies.

The early 1990s were dominated by a poor economy and saw the establishment of a Royal Commission into the NSW building industry from which the MBA was to attract great criticism.

By the end of the 1980s economic strategies of a conservative government were starting to take hold and the industry, along with the MBA, commenced a recovery.

A most interesting read for anyone who’s interested in the history of NSW. The Association thanks and congratulates Mr John Elder for his attention to detail and most insightful research.

8

newsbrief JANUARY/MARCH 2014

Workplace Relations

MBA Backs Royal Commission into Union Corruption Master Builders welcomes the Royal Commission. On 10 February 2014 the Prime Minister, the Hon Tony Abbott, in a joint media release announced the establishment of a Royal Commission to be headed by former High Court judge Dyson Heydon. The Royal Commission will inquire into alleged financial irregularities associated with the affairs of trade unions. It will inquire into the activities relating to ‘slush funds’ and other similar funds and entities established by, or related to, the affairs of these organisations. It will address increasing concern arising from a wide range of revelations and allegations involving officials of unions establishing and benefiting from funds which have been set up for purposes which are often unknown and frequently unrelated to the needs of their members.

Fair Work Ombudsman Advice to Small Businesses Master Builders welcomes the announcement by the Minister for Employment Senator the Hon Eric Abetz that small business operators who follow and act upon advice received from the Fair Work Ombudsman (FWO) will not be subject to prosecution should the information be incorrect.

Newsbrief

This measure was set out in the Government’s pre-election Policy to Improve the Fair Work Laws. Specifically, the Coalition committed to “providing potential immunity from Fair Work Ombudsman pecuniary penalty prosecutions for a small business employer if it pays or applies the wrong employment conditions, provided the error was not deliberate and the employer had previously sought [FWO] advice and help on the same issue.”

Master Builders Steps up Fight for Return of the ABCC Master Builders has been fighting for the restoration of the ABCC. We have appeared before a further Senate hearing where Labor Senators were on the attack. The evidence that the ABCC boosted productivity was particularly the subject of detailed questioning.

The Senate hearings have been occurring

against a background of revelations about corruption of unions and the admissions by Paul Howes, the Secretary of the Australian Workers Union that the culture in the building and construction industry is toxic. For example, The Australian on 29 January 2014 covered the allegations of corruption in the building and construction industry, quoting the CEO where he said: ‘We need a system whereby employers have the confidence and the wherewithal to be able to say no to these demands’. Calling for the expedited re-establishment of the ABCC, the CEO noted that ‘the ABCC did make a severe dent in this kind of behaviour by making people aware that it is not acceptable.’ Master Builders will be monitoring the Parliamentary debate at the end of March when the Senate debate on the Bills will resume.

Master Builders Says Yes to New Appeals Body Just prior to Christmas 2013, Master Builders provided a confidential submission to the Minister for Employment, the Hon Senator Eric Abetz, supporting the establishment of a separate appeals court for the Fair Work Commission. The court would operate along the lines of the UK system. In mid-January 2014,the Australian Financial Review published an article reporting employer support for a new appeals jurisdiction within the Fair Work Commission. The article refers Master Builders’ submission. Confidential discussions with the Government continue.

Anti-Bullying Bench Book Changes After Master Builders’ Submission Lodged Amendments made to the Fair Work Commission Rules 2013 dealing with applications regarding anti-bullying commenced on 1 January 2014. These amendments were made in addition to those introduced on 1 July 2013 by the Fair Work Amendment Act 2013. The Commission also published approved forms for the new anti-bullying, consent arbitration (for general protections and unlawful termination disputes) and right of entry jurisdictions.

The Bench Book that guides Commission members in how to deal with anti-bullying complaints was substantially amended along lines suggested by Master Builders.

newsbrief 9

JANUARY/MARCH 2014

Legal and Contracts

Work Health and Safety

New Privacy Laws Affect Businesses from 12 March 2014

Government announces review of FSC Accreditation Scheme

The Privacy Act 1988 (Cth) (Privacy Act) applies to businesses with an annual turnover of more than $3 million or specified health services, credit providers and those who purchase personal information. It broadly regulates disclosure by companies of ‘personal information’, i.e. information that could identify a person.

On 19 December 2013 the federal Government announced that the Department of Employment will be conducting a review of the Australian Government Building and Construction OHS Accreditation Scheme administered by the Office of the Federal Safety Commissioner. The announcement says that the review will consider options to reduce red tape and modernise the Scheme whilst not reducing safety standards. A national review panel has been established on which Master Builders CEO is a member. It is expected that the details of the review will be released very soon. Master Builders has been lobbying Government for many years to review the Scheme and will be heavily involved in representing the views of industry during this review. We would appreciate any feedback our members are able to provide about their experiences with the Scheme.

A short questionnaire can be found by following this link.

From 12 March 2014, important changes to the Privacy Act will commence, under the Privacy Amendment (Enhancing Privacy Protection) Act 2012 (Cth). The amendments will introduce a set of harmonised privacy principles – the 13 Australian Privacy Principles (APPs). Most significantly, the APPs will require that employers have an express and up-to-date privacy policy.

Master Builders Australia has developed a policy for its own use and has prepared a pro forma policy for insertion into the Human Resource Manuals that it markets with most State and Territory Associations.

Bullying Statistics Released The Fair Work Commission recently released key anti-workplace bullying statistics as at 31 January 2014: • 44 applications received • Six applications withdrawn • 28,049 number of unique hits to Commission website seeking information 100 per cent of matters commenced within the 14-day period required for the Commission to deal with matters.

Fake Yellow Pages Ads Members should be aware that there are a large number of fake emails and faxes in circulation pretending to be from Yellow Pages. The fake messages ask for business contact details and include an agreement, requesting sign up to an online business directory service. This service is not associated with the Yellow Pages or Sensis. If a member receives a ‘Yellow Pages’ fax or email, its authenticity should be confirmed by calling Sensis on 13 23 78.

New Heavy Vehicle National Law Begins The newly developed Heavy Vehicle National Law (NVNL) took effect from 10 February 2014. These new laws regulate heavy vehicles over 4.5 tonnes in Queensland, New South Wales, Victoria, South Australia, and Tasmania.

The Australian Capital Territory and the Northern Territory are set to take up the new laws at a later stage. The creation of the NVNL brings separate laws regulating heavy vehicles in these states together into one set of laws. The NVNL is overseen by the National Heavy Vehicle Regulator (NHVR) with enforcement still being carried out by state and territory police and authorised officers.

Builders who are involved in road transport or are a consumer of road transport services are taken to be part of the road transport chain of responsibility (CoR), with obligations under the new laws. Builders who are in the CoR must take steps to ensure truck drivers do not exceed speed limits and do not drive while fatigued.

CoR duty holders will need to identify and assess any activities they undertake that could lead to an offence and put in place measures to eliminate or minimise the risk.

However, it is not the intention of the CoR rules to hold employers strictly liable for offences committed by drivers.

10

newsbrief JANUARY/MARCH 2014

Economics and Taxation

Hockey Must Restore Business Confidence

Builder Survey: Spike in Sentiment to Fuel Industry Revival

The focus of Master Builders’ Pre-Budget submission is the role that the building and construction industry can play in strengthening and rebalancing the economy, driving investment and jobs in the non-resources sectors. Master Builders is deeply concerned at the very difficult fiscal challenges revealed by the Treasurer when releasing the Mid-year Economic and Fiscal Outlook (MYEFO) and against this background restoring confidence is crucial to the building and construction industry. The May 2014 Federal Budget must restore business confidence by setting out a credible strategy for a return to sound economic management and to a Budget surplus. Confidence is fundamental to the wellbeing of the building and construction industry and its capacity to contribute to economic and jobs growth.

Master Builders Australia’s latest National Survey reports a big rise in builder confidence during the December quarter. Building activity looks set to rebound in 2014 on the back of a revival in sentiment that comes after an extended downturn. This should allow the building and construction industry to play a key role in rebalancing the economy in the wake of the resources boom. The turnaround in the industry outlook, particularly for residential building, is encouraging for a wider economy grappling with below trend growth, a soft labour market and concern over the gap left behind as resources investment unwinds. As a forward indicator, Master Builders’ survey adds strength to recent ABS data indicating that housing is now on a recovery path set to assist the economy through 2014 and beyond.

Master Builders has called for adequate funds to be allocated to properly resource the restored Australian Building and Construction Commission (ABCC) so it can effectively confront the resurgence of unlawful behaviour by building unions, particularly in the first year of its renewed operations. The lack of housing supply and its impact on housing affordability continues to be important but is largely missing from the public policy narrative. Master Builders is calling for a reinvigorated and effective COAG and a national ‘competition style’ payment to State and Local Governments to remove regulations in order to improve the supply-side efficiency of the housing market.

The latest survey results add weight to Master Builders Australia’s forecast for residential building to improve strongly over the next three years, with the number of dwelling starts predicted to draw near to 200,000 in 2016. The December Quarter 2013 Master Builders Australia Survey results: • Business confidence - the index rose above the neutral 50 mark indicating that builders believe own business activity will improve over the next six months; • Business conditions - the index rose to the ‘satisfactory’ 50 mark as conditions begin to improve after an extended downturn; • Residential building - prospects jumped in the December quarter as low interest rates, a shortage of stock and rising house prices work to turn sentiment around; • Non-residential building - builders were less pessimistic about conditions and prospects as input costs drift lower and financial constraints begin to ease; • Display centre traffic/commercial enquiries - rose to an encouraging level; • Sales contracts - despite improvement and indication they have troughed, sales remain in the ‘lower’ category.

• Work on the books - the index measuring the backlog of work rose, but builders need the pick-up in enquiries to translate into stronger sales that, in turn, leads to a healthier pipeline of work; • Financial constraints - the index fell as the credit squeeze begins to ease;

The building and construction industry is one of the most regulated industries and Master Builders is calling for the Government’s to pare back the red and green tape burden stifling the productivity of the industry and, in particular, the requirement for independent contractors to report all payments they make to other independent contractors should be abolished.

As the building industry begins to enter a period of forecast recovery, the industry’s lack of skilled tradespeople is a major concern and therefore Master Builders calls on the Government to maintain its investment in post-secondary skills training and deliver effective assistance to employers to allow the industry to provide sufficient young people with a rewarding career path in a trade apprenticeship. Master Builders’ Pre-Budget Submission also addresses building and construction industry’s concerns in the areas of infrastructure, immigration and tax reform.

• Input costs - the index fell as weak operating conditions influence the capacity for labour/material price rises.

• Employment intentions - rose to be close to the neutral 50 mark, indicating that builders are now less likely to cut back on employees and subcontractors.

Builders See Upside Despite Headline Fall In Approvals Latest building approvals data show the industry’s confidence about the strengthening recovery is building a head of steam despite monthly volatility. The 2.9 per cent fall in dwellings approved, seasonally adjusted needs to be seen in the context of a big rise in the September figures, with the trend remaining positive. The figures confirm the big uptick in builder confidence recorded in the latest Master Builders Survey and despite only a marginal pick up in actual conditions the industry will be buoyed by the approvals figures. Builders now need improved sales to flow from enquiries to help restore order books.

Latest Housing Finance Paints Positive Outlook A steady recovery in new housing commitments should translate to a strengthening recovery in new house building in 2014. The 1.1 per cent increase in November commitments seasonally adjusted, is the twelfth consecutive monthly rise and shows that low interest rates and increased affordability continue to drive increased demand for new dwellings.

Loans for construction were up strongly by 2.3 per cent in November as confidence returns to the market, offsetting a 4.3 per cent decrease in loans for purchase of new dwellings as stock begins to runs down.

newsbrief 11

JANUARY/MARCH 2014

Demand continues to be driven by investors and upgraders while first homebuyer commitments lag, accounting for only 12.3 per cent of all dwellings financed.

Cost of Construction under Pressure from Weak $A According to Macromonitor, construction costs in Australia will rise 3 per cent this year, more than twice as fast as last year and the highest since before the global financial crisis. The weaker dollar is expected to push up the cost of imported inputs such as equipment, fuels and metals. While they are forecasting cost increases to remain contained and well below escalation rates of the pre-GFC mining boom years, the real test will come when a wave of major urban infrastructure projects gets under way over the next five years.

Construction wage growth has slowed from 4 per cent in 2011 and 3.5 per cent in 2012 and Macromonitor says labour costs are not really a reason for the forecast of an acceleration of construction costs, although they are not providing any offset either. Wages growth in construction should start rising again from 2015. Costs in house construction will likely slow to 3.2 per cent this year from last year’s estimated 4.3 per cent, but inflation in non-residential construction will jump.

After a contraction in prices of 0.7 per cent in 2012 and a 0.9 per cent gain last year, costs in non-residential building will rise an estimated 2.7 per cent this year, the report says.

Reserve Bank – Period of Stability in Rates Likely The first board meeting for 2014 contained a number of important developments in the Bank’s thinking on the economy and policy. Most importantly there was a discrete shift in the Bank’s thinking about its policy bias. Monetary policy was assessed to be appropriately configured to foster sustainable growth in demand and inflation. With the exchange rate lower and more positive signs in the domestic economy, the RBA’s level of confidence in its central case of a “period of stability in interest rates” has increased.

Labour Market Conditions Deteriorate Employment slumped badly in December led by a steep decline in full-time employment. Over the past twelve months fulltime jobs have contracted by around 70,000 with all net jobs growth a result of part-time roles. The pace of job creation witnessed over the past year is insufficient to prevent the unemployment rate from trending higher. Year-end growth in employment at 0.5 per cent in December is the slowest pace since late 2009 when the economy was still suffering in the aftermath of the global financial crisis. The loss of employment across the economy in December saw the unemployment rate edge higher, rising 0.1 of a percentage point to 5.8 per cent. However, the rise in the unemployment rate would have been much more pronounced if the participation rate hadn’t fallen in the month to reach an almost eight year low under 65 per cent.

Business Upbeat Over Sales According to the latest National Australia Bank (NAB) business survey, business conditions have jumped to a two and a half year high, boosting expectations that the RBA will leave rates unchanged for some time. Sales and profits in some industries rose sharply, helped by higher share and house prices and a weaker dollar. The new figures, as well as improving retail sales and house price growth, could be a sign the non-mining sectors of the economy strengthened in the fourth quarter of 2013. Business conditions rose four points from -3 in November, while confidence was unchanged at 6 points.

Small Business Benchmark Update The Tax Office has advised that it has just finished updating all of its Small Business Benchmarks with data from the 2010-11 financial year (the latest data available).

The small business benchmarks were introduced by the Tax Office in 2009.

The benchmarks are industry averages which allow small businesses and the Tax Office to compare your performance against other businesses of a similar type.

The benchmarks have been formulated

based on prior year returns and activity statements as well as consultation with industry. Benchmarks have now been published for use by business across more than 100 industries. The benchmarks were originally designed as a tool to assist your business to compare its performance against industry averages and, where your business falls outside the averages, check that it has reported all its income and GST to the Tax Office as well as ensure that your reporting systems are adequate. However, in recent years the Tax Office has gone much further and used the benchmarks as a tool for not only identifying audit targets (namely, those businesses that fall outside the benchmarks) but as the basis for issuing amended BAS and income tax returns.

The ATO encourages all business owners to check out the updated benchmarks to see if it falls outside the averages. If the business falls outside the benchmarks you should check that you have declared all your income correctly. If you have, there could be many reasons why your particular business falls outside the benchmarks, such as higher costs or lower selling prices than others in the industry. Whatever the reason, be sure to communicate it to the Tax Office if they make an enquiry. Doing so could mean the difference between the matter being closed, and the Tax Office proceeding to a full audit.

12

newsbrief JANUARY/MARCH 2014

Training

Government holds roundtables on the future of VET Master Builders attended a roundtable last week with invited industry representatives and the Vocational Education and Training (VET) Review Taskforce established by the Abbott Government. Other roundtables were held the same week with training providers and industry skills councils.

The review is looking broadly at the governance of the VET system, including registration, funding and quality assurance requirements. Industry stakeholders expressed concern that real measures of quality (as opposed to red tape) were currently missing from the system, and that existing bodies such as the National Skills Standards Council were not coming up with workable solutions.

There was strong support for a greater level of industry involvement, including through a streamlined National Workforce Development Fund.

National Licensing in Deep Freeze A COAG meeting in December determined that national licensing would not go ahead and that the National Occupational Licensing Authority would be wound up in early 2014. This decision recognises the flawed nature of the national licensing process that constituted a missed opportunity to realign licensing with industry practice on a consistent and rational basis.

Master Builders will continue to press for a strengthened and nationally unified builder licensing system aligned with qualifications under the Australian Qualifications Framework (AQF) and complexity of work under the Building Code of Australia, as agreed by the National Board in 2013.

Nominations Open for 2014 Australian Training Awards The Australian Training Awards are the peak, national awards for the vocational education and training (VET) sector, recognising individuals, businesses and registered training organisations for their contribution to skills development. Award

winners are celebrated at a major event in November and gain Australia-wide recognition for the work they do.

Direct nominations are currently open in the following categories: • National Leadership Award (Individual) • Lifetime Achievement Award (Individual) • Excellence in Language, Literacy and Numeracy Practice Award (Individual) • Disability Training Initiative Award (Employer) • Australian Apprenticeships (Employer) • School Pathways to VET Award (RTO) • International Training Provider of the Year Award (RTO) Applications close on Friday 30 May 2013. For more information, visit www. australiantraininagwards.gov.au or phone 13 38 73.

The CAMS Advisers Program has now been wrapped up and brought information about the construction industry to nearly 1000 schools, TAFEs, private training providers, Group Training Organisations and Careers Expos. There have been almost 20,000 downloads of CAMS Factsheets from our website, 25,000 visits to CAMS stalls at a range of events, and over 5000 ‘likes’ of the CAMS Facebook page.

Currently CAMS is undergoing a comprehensive internal evaluation, conducted by Courage Partners, to assess the impact of mentoring on participating apprentices, mentors, Master Builders and the industry at large. Their final report will be available in April.

housing Giving More Weight to Skilled Trades The Assistant Minister for Education, Sussan Ley, who has responsibility for vocational education and training (VET) in Schools, has signalled her intention to raise the status of skilled trades in the secondary education system.

In an interview in the Australian Financial Review, Ms Ley said that trades should no longer be regarded as the “B team” in comparison with university.

Ms Ley said she would like to see preapprenticeships offered as early as Year 10 as part of a wider review of the role of VET in schools.

Mentoring Proving a Major Asset for the Industry The Construction Apprenticeship Mentoring Scheme (CAMS) now has just over 880 apprentices who are participating in mentoring or who have completed their twelve months with CAMS. Much positive feedback has been received from around the nation. Many apprentices who were out of work have been found a stable work environment and other apprentices who were close to ‘calling it quits’ are staying in work due to the encouragement and practical assistance from their industry savvy volunteer mentors.

Housing – Demand for Units Increased Australians’ love affair with units and apartments appears to be continuing, according to new figures from the Australian Bureau of Statistics (ABS), accounting for nearly 45 per cent of all new dwelling approvals. This figure contrasts sharply with the 25 per cent share experienced in the early 1990s, and the 30 per cent share in the early 2000’s. The strongest demand for units and apartments appears to be in Darwin, where they account for over 70 per cent of new residential building, followed closely by Sydney (69 per cent) and Canberra (67 per cent). By contrast, just 22 per cent of new residential construction in Perth, and 25 per cent in Hobart were units or apartments.

newsbrief 13

JANUARY/MARCH 2014

infrastructure

Housing Supply – Building Times Increase

Infrastructure Supply and Costs Submission

New research from the Australian Housing and Urban Research Institute (AHURI), a federal government-funded housing thinktank, has found longer building times may be exacerbating Australia’s housing shortfall.

AHURI estimates it took 6 months to build the average detached house in 1993, by 2010, the figure had increased to 10 months. The blowout in build times, they say, can be attributable to a number of factors, the most notable of which is the increasing size of new houses, which have risen from 138 sqm in 1990 to 192 sqm in 2007 (a jump of 39 per cent), and to a greater diversity in house designs and options available to home buyers.

National Office has lodged a substantive submission with the Productivity Commission for its high-profile inquiry into infrastructure supply and costs. Key themes addressed in the submission include: the linkages between the supply and the efficiency of infrastructure, and residential housing; the critical importance of reinforcing the effective rule of law in elements of the building and construction industry, through a revitalised Australian Building and Construction Commission (ABCC); and, restoration of necessary public sector infrastructure funding, back to around 6 per cent of national output.

Housing Affordability Housing affordability is expected to continue to be “strained” in Australia over 2014, according to a new analysis by Fitch Ratings, one of the world’s top credit rating agencies, largely on the back of rising house prices which are in turned fuelled by low lending interest rates. However, Fitch cautions, over the longer term, house price growth cannot remain “excessively disconnected” from income growth, suggesting some degree of house price correction is inevitable.

Major Project Development Assessment Processes A new study by the Productivity Commission has found the costs of developing major infrastructure and natural resources projects in Australia is already high and rising, which if left unactioned will likely compromise our international competitiveness and national productivity performance. The Productivity Commission identified a number of sources for these higher costs, including wage and other labour costs, restrictive work practices, shortages of skilled labour, and the increasing value placed by the community on protecting amenity, environmental and heritage assets.

Environment Phones and Internet Emissions Reduction Fund Submission National Office has lodged a substantive submission with the Federal Government in response to its Green Paper on the proposed Emissions Reduction Fund (ERF).

Key issues include: greater clarity on the mechanics of the reverse auction model, whether it will be based on ‘lowest bid price’ or ‘best value for money’; the need to allow acceptable international carbon credit units in the proposed reverse auction model; support for the application of the ‘additionality’ principle to proposed emission reductions; and, greater transparency on the determination of baselines, most notably whether they are intensity or volume of emissions based.

How Much is Your Driver’s License Worth?

Research conducted by the Australian Government shows that making a voice call on a mobile phone while driving increases the risk of being involved in a motor vehicle accident by as much as four times. Shockingly, sending a text message while behind the wheel can increase this risk to 23 times.

So, there is little wonder that all Australian states and territories have outlawed the use of a mobile phone while driving. But did you know that ‘using a device’ includes holding a mobile phone or resting one in your lap, resting it in the cup holder of your car, even if you’re at traffic lights or not even engaged in a phone call?

Smart drivers are preparing themselves by installing a car kit for their mobile phone. As a member of Master Builders, you have access to a great range of car kit and install options for most handsets. Don’t risk a fine, or worse an accident. Keep your license and stay safe by installing a car kit for your mobile phone.

Call the Master Builders Telecommunications helpdesk on 1300 88 13 72 for details.

MBA Insurance Services

Providing Competitive CTP Green Slip Insurance A greenslip or compulsory third party insurance (CTP) is a legal requirement for vehicles registered in NSW and so therefore, to register your vehicle you must have a green slip. Your greenslip covers injury to people when your vehicle is involved in an accident.

A greenslip does not cover damage to property, other vehicles or to your vehicle, nor does the greenslip cover theft. Insurance for those types of risks can be obtained via different insurance policies, which you should also consider taking out.

Your greenslip does cover: • Provide for compensation for people killed or injured in a motor vehicle accident. This includes pedestrians, passengers, cyclists, motorcyclists, drivers of other vehicles and, to a lesser extent, the driver at fault; • Include trailers under the greenslip of the towing vehicle.

Your greenslip does not cover: • The driver at fault to the full extent of the scheme, unless the driver is catastrophically injured (as defined by the Lifetime Care & Support Scheme and in which case that scheme applies); • Damage to your vehicle or property; • Damage to other peoples’ vehicles or property; • You for theft of your vehicle.

Your greenslip operates all over Australia, no matter where the accident involving your vehicle occurred.

For a competitive CTP Greenslip quotation via QBE Insurance (Australia) Limited, log on to www.mbais.com.au and follow the links to CTP Insurances (NSW) or contact us now for further information.

14

cover story JANUARY/MARCH 2014

a History of tHe master Builder association of nsw an insightful new book, written by John elder, tells the story of the master builders association against the backdrop of the history of nsW over 130 years.

this rich and fascinating history of the Master builders association of Nsw is told against the backdrop of the history of New south wales up to 2005. it is brought to life by the strong concentration on personalities, especially on those who led the Mba from time to time and influenced its direction and development over nearly 135 years. the history identifies the builders of some of the wellknown enduring buildings that have helped to create the social, educational and commercial environment of the cities and towns of Nsw. buildings such as the great hall at sydney university (opened 1859), the Mortuary railway station (opened 1869), redfern railway station - the original main sydney terminus (1874), the great synagogue (1878), st Mary’s cathedral - first stage (1882), the lands department building (1890), Queen Victoria Markets (1898), the Mitchell library (1910), government savings bank in Martin place, now called commonwealth bank (1928), the state theatre (1929), australia square (1967) and many more. it traces the Mba economic and social development through colonial times; the federation of the colonies; the stark period of the depression; two world wars; and up to the tragic years of the Vietnam war and the emergence of the social protest groups – the student Movement, the women’s Movement and the creation of resident action groups that emerged during the period of the green bans. the 1970s and 1980s was a period of massive social unrest and union agitation – it was a period when industrial relations in the building industry was played out against the three differing philosophies of the australia communist party, the Maoist communist party and the socialist party of australia. that has influenced a strong focus on industrial relations in the description of that period. the early 1990s were dominated by a poor economy, due to the excesses of the previous decade, and a royal commission into the Nsw building industry from which the Mba was to attract great criticism. this brought about one of the lowest periods in the fortunes of the Mba both in terms of its finances and to its reputation. the road back required the help and support of other Mbas and from mid-1996 the identity of the association was submerged by those who sought to assist it. by 1998, the impact of the howard government’s economic strategies was being felt and the Mba commenced a quick recovery. with its attention to detail, this history should be a useful research tool as well as an interesting read. to order the book, visit www.mbansw.asn.au/historybook or complete the enclosed order form.

CMA-CM40006

BAL 29

• • • •

16

diary JANUARY/MARCH 2014

12 POINT CPD SEMINAR Kogarah 26-Feb-14 Newcastle 5-Mar-14 Castle Hill 9-Apr-14

Trade Shows Merimbula Trade Show Ulladulla Trade Show Mittagong Trade Show Tamworth Trade Show Forster Tuncurry Trade Show

26-Mar-14 27-Mar-14 2-Apr-14 29-Apr-14 30-Apr-14

DIVISION INFORMATION NIGHTS Central Coast 5-Mar-14, 2-Apr-14 Cronulla 14-Apr-14 Eastern Suburbs 25-Feb-14, 25-Mar-14, 22-Apr-14 Hume 3-Apr-14 Hunter 26-Feb-14 Illawarra 6-Mar-14, 3-Apr-14 Inner West 18-Mar-14 Manly Warringah 13-Mar-14, 10-Apr-14 Manning/Great Lakes 9-Apr-14 Northern Suburbs 20-Mar-14, 17-Apr-14 Oxley 26-Feb-14 Parramatta Cumberland 19-Mar-14, 16-Apr-14 Snowy Mountains 5-Mar-14 South Coast/Shoal 6-Mar-14, 16-Apr-14 Southern Highlands 1-Mar-14, 8-Apr-14 St George 1 15-Apr-14

For all events visit our website www.mbansw.asn.au

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*For members of Master Builder Association registered according to the conditions of the vga corporate program. #Capped Price Servicing is available on Volkswagen Commercial Vehicles first registered in Australia on or after 1 January 2013 and applies to the first 6 standard scheduled services of your vehicle. Exclusions and conditions apply. For details on pricing, items not included in the capped price and for full terms and conditions please see www.volkswagen-commercial.com.au. Volkswagen Group Australia reserves the right to at any time modify or discontinue the Capped Price Servicing program.

18

regional roundup JANUARY/MARCH 2014

Hunter Region Events for early 2014 26 Feb – Hunter Division Information Dinner – East’s Golf Club Presenters – Eoin O’Keefe, Salinity Consultant, Dept. of Primary Industries, Landscape Management Group – Presentation on ‘Building in a Saline Environment’. Salinity processes and impacts and an outline of simple, affordable strategies designed to minimise the adverse effects of salt on the built environment.

Ben Burdett will provide a presentation on Efflock, a new product set to change the Australian Building Industry. The presentation will include key topics on persistent industry problems such as efflorescence, leaking bathrooms and rising damp.

28 Feb – Pink Tie Charity Ball for Hunter Breast Cancer Research – Newcastle Civic Hall 3 Mar – Remove Non Friable Asbestos Course (MBA Building, Broadmeadow) 4, 11 Mar – Non Friable Asbestos Supervisors Course (MBA Building, Broadmeadow)

Lord Mayor of Newcastle, Cr Jeff McCloy

9 Mar – Business Workshop for Builders and Contractors – Learn how to become more profitable through better planning and management of your finances, taxes and risks related to contracts & insurance (MBA Building Broadmeadow) 9 May – Industry Insights Lunch – NOAHS on the Beach – the State Member for Newcastle, Tim Owen AM MP, will discuss the redevelopment of Newcastle CBD and plans for a new light rail system within the city. He will be joined by Newcastle Lord Mayor Jeff McCloy, who will discuss Newcastle Council’s Planning Approval process and his views on amalgamation with Lake Macquarie Council.

MBA NSW expects up to 100 leading commercial and residential building members to attend and provide informed and interesting feedback to guest speakers.

The event will comprise a two course lunch with drinks provided and will be an ideal opportunity for leaders within the development and building industry to convey their vision for the city’s regeneration.

Leeanne Farmer, MBAIS & Brad Garrard, HL Mullane

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20

forecasts JANUARY/MARCH 2014

Building Activity to Rebound on Back Of Improved Confidence Master Builders Australia’s latest National Survey reports a big rise in builder confidence during the December quarter.

Peter Jones, Chief Economist of Master Builders Australia said, “Building activity looks set to rebound in 2014 on the back of a revival in sentiment that comes after an extended downturn.”

“This should allow the building and construction industry to play a key role in rebalancing the economy in the wake of the resources boom,” he said.

“The turnaround in the industry outlook, particularly for residential building, is encouraging for a wider economy grappling with below trend growth, a soft labour market and concern over the gap left behind as resources investment unwinds,” Peter Jones said.

“As a forward indicator, Master Builders’ survey adds strength to recent ABS data indicating that housing is now on a recovery path set to assist the economy through 2014 and beyond,” he said.

“The latest survey results add weight to Master Builders Australia’s forecast for residential building to improve strongly over the next three years, with the number of dwelling starts predicted to draw near to 200,000 in 2016,” Peter Jones said.

Each quarter Master Builders in states and territories are asked to complete an online survey canvassing their views on the national economy and conditions within their own enterprises.

Indices are calculated by taking the difference between the percentage of respondents nominating good or very good (or a rise) and those nominating poor or very poor (or a fall). An index reading of 50 is the neutral or no change mark. Business conditions index is a simple average of builders’ own business conditions and profits reported by respondents. Business confidence is a simple average of where builders believe their own business activity and profits are heading in the next six months.

Rise in business confidence Builder confidence rose again in the December quarter and the index has risen above the neutral 50 mark indicating that builders believe own business activity will improve over the next six months. Lower interest rates are finally working to turn sentiment around.

As conditions improve Business conditions rose in the December quarter, and the index has reached the ‘satisfactory’ 50 mark after falling below global financial crisis levels. After an extended downturn, business conditions are beginning to improve.

Pick up in enquiries Display centre traffic/enquiries rose in the December quarter, an encouraging result indicating that low interest rates may be finally gaining traction.

Yet to translate into sales Sales remain in the ‘lower’ category despite improving in the December quarter and showing signs that they may have troughed. The industry needs improved display centre traffic and commercial enquiries to translate into stronger sales thereby replenishing builders’ order books and strengthening the pipeline of work.

Builders optimistic about residential outlook Builders with significant operations in both residential and non-residential sectors expect to see a big improvement in residential building over the next six months. They are also less pessimistic about non-residential building conditions and prospects as financial constraints continue to ease.

Builders’ expectations for industry In the December quarter the index measuring expectations for building industry activity rose sharply again, recording 53.7, above 50 for the first time in over three years. Builders now expect higher activity in the next six months. The trend in the index has shown steady improvement from a trough in mid-2012 as interest rates finally work to impact positively on the outlook.

Pick up in own business conditions The index measuring builders’ current level of own business activity rose to 54.1 in the December quarter, above the neutral 50 mark and the best result in two years. Following a general decline in the index over the past two years to levels below that recorded during the global financial crisis, the index is now above the satisfactory 50 level.

Rise in own business prospects The index measuring builders’ views on their own future business conditions rose in the December quarter, the second consecutive quarterly rise,

bucking the saw tooth pattern exhibited in recent times. The improved trend is encouraging with the sharp pick up in the December quarter reflecting the large cuts in interest rates that have taken place over the past 18 months. At 58.6, the index is now well above the neutral 50 mark indicating that builders believe own business activity will improve over the next six months.

Profitability beginning to improve In the December quarter the index measuring own business profitability rose to 46.3.

Although the index remains below the neutral 50, profitability is beginning to improve as the chart shows. In terms of builders’ expectations regarding future profits, the index rose sharply to 53.9 in the December quarter, with a rising trend. The index is above the 50 mark indicating that builders expect some improvement in the next six months.

Sales still disappointing Sales remain in the ‘lower’ category, despite an improvement in the December quarter that took the index to 37.7 alongside an improving trend. Builders need sales to pick up to ensure a recovery in business conditions and profitability becomes entrenched.

Jobs outlook improves Builders are asked about their intentions regarding the likely level of employees and subcontractors for the next six months relative to now. In the December quarter, the index rose to 48.8, close to the 50 mark

forecasts 21

JANUARY/MARCH 2014

but improvement expected In the non-residential sector, the index measuring current conditions rose to 41.3, still in the ‘poor’ category. The index measuring expectations about future activity improved sharply to 55.6 in the December quarter (from 46.5) as non-residential prospects improve. and indicating that builders are less likely now to cut back on employment in the period ahead. apprentices The apprentice index rose in the December quarter.

Close to three quarters of respondents say they will make ‘no change’ in respect to apprentices, with 17.8 per cent saying they will put more on and 8.2 per cent indicating that they will release some apprentices.

Display centre traffic/commercial enquiries In the December quarter the index for display centre traffic/commercial enquiries rose to an above average reading, close to the neutral 50 mark. This encouraging result indicates that large reductions in interest rates are beginning to work. A pick-up in display centre traffic/ commercial enquiries leads to improved sales, adds to the pipeline of work and over time ensures stronger profitability. backlog of work The index measuring builders’ work-on-the books rose in the December quarter. The proportion of respondents reporting greater than six months of work rose to 30 per cent from 22 per cent in the previous quarter.

Thirty per cent of respondents are reporting one to three months of work on the books with 8 per cent less than one month. As noted, the industry needs improved traffic and enquiries to translate into stronger sales which, in turn, will flow through to a healthier pipeline of work. input costs Respondents are asked whether they expect input cost increases (labour/materials) to be higher or lower over the next six months, compared to the past six months. The index fell to 60.2 in the December quarter. The drift lower is to be expected given the weak operating environment. The index peaked at 75 in June quarter 2008, before the G.F.C. and economic downturn saw the index fall away sharply. non-residential building – well below par Builders with significant operations in both residential and non-residential sectors are asked a series of questions relating to the respective sectors—‘how would you describe current conditions’ and ‘where do you believe activity is headed’.

Residential – outlook improves markedly For the residential sector, the index for current conditions rose to 47.2, close to the neutral 50 mark. In terms of where the residential sector is headed, the index jumped to 67.5 in the December quarter (from 53), well above the 50 mark and indicating that builders now expect residential building conditions to improve rapidly over the next six months. credit conditions ease Financial constraints for builders fell in the December quarter and the index has fallen markedly in the past year as the chart shows.

Only 9.8 per cent of respondents were concerned that as a constraint, availability of finance was having a major/large effect on their business, down from 22.1 per cent in the previous quarter, and approaching levels recorded prior to the G.F.C. Builders see interest rates as neutral in terms of impacting on forward orders/enquiry rates/new contracts. availability of labour Respondents are asked about the degree of difficulty in finding a range of subcontractors/ employees. A high index reading indicates large to critical difficulty in finding employees or sub-contractors. A low index reading indicates builders are experiencing slight or no difficulty in finding subcontractors/ employees. At the national level in the December quarter, the degree of difficulty in finding employees/subcontractors increased but remained at a low level. All categories rose and as the chart shows are at or above levels recorded a year ago. However, overall there is little difficulty finding employees or subcontractors in the building industry.

The decline in industry conditions was accompanied by a dissipation of previous skills shortages as the extended slowdown in industry conditions masked the underlying structural problem. Builders are likely to once again experience some difficulty finding certain categories of subcontractors/ employees as the business cycle turns and conditions improve. industrial relations constraint Respondents are asked to indicate the degree to which they perceive industrial relations is acting as a constraint on their business. A dramatic fall in the index occurred in 2005 and 2006 associated with the introduction of the BCII Act and establishment of the ABCC. The index rose in the first three quarters of 2008 as industrial relations increased as an

issue for builders then eased back in the wake of the G.F.C. Despite quarterly volatility, there has been a steady rise in the index over the past two years. The index fell to 37.3 in the December quarter, similar to elevated levels that have been recorded in the past six quarters. The sharp rise experienced in the second half of 2012 was primarily due to major industrial relations disputes including the Grocon blockade in Melbourne and the Children’s Hospital project in Brisbane. national economic conditions With regard to the national economy, the index measuring perceptions about current national business conditions remains below the ‘satisfactory’ mark, despite a pick up in the December quarter. The index measuring expectations for national conditions increased sharply in the December quarter, moving into the ‘improving’ category. This is the first quarter since the middle of 2011 that the index has been above 50. about the survey The survey of building and construction is a national survey of Master Builders’ members published on a quarterly basis. In the December quarter 2013, 373 responses were received from builders involved in all sectors of the building and construction industry: residential, renovations, commercial building, engineering construction, subcontracting and materials supply. Since March 2010, Queensland results have been unavailable. The survey allows members of Master Builders to present their views on the national economy and the condition of their own enterprises. The survey also provides information regarding on-going constraints on activity and availability of resources as well as selected supplementary questions. Various state/territory offices of Master Builders also release individual survey results.

In calculating the index the responses are weighted according to firm size. An index reading of 50 indicates a neutral or satisfactory outcome, readings above 50 usually suggest a more positive result and those below 50 a more negative outcome.

The index is calculated by taking a weighted sum of the proportion of responses to every answer from an index between 100 and 0.

The strongest response is given the greatest weighting of one with the weakest given the lowest weighting of zero, and proportional weighting in between. As a result, if all respondents answered the strongest response, the index would be 100. If they all answered the weakest response, the index would be zero. If n is the number of response categories, prop is the proportion of responses in a given category and i is the response category, then the formula for the index is: Index =

Australia (2010-11 prices, %ch)

140,000

Forecast

40%

Engineering

forecasts

30%

100,000

JANUARY/MARCH 2014 20% 10%

Residential

NSW, QLD, WA, NT

80,000

mixed outlook for Building and construction NonResidential

0%

60,000

2015-16

2014-15

2013-14

2012-13

2010-11

2011-12

2009-10

2007-08

2008-09

2006-07

2004-05

2005-06

20,000

2003-04

-20%

VIC, SA, Tas, ACT

40,000

-10%

2002-03

master builders forecasts a mixed outlook for building and construction across the major sectors of the 0 2011 2012 2013 2014 2015 2016 industry over the three year forecast period to 2015-16.

Year ended June

Souce: Master Builders Australia

Souce: Master Builders Australia

AUSTRALIA WORK DONE 2012-13 Recreation and Other Miscellaneous

Alterations & Additions

Roads

Accommodation

Retail

Entertainment & recreation Bridges, rail & harbour

OďŹƒce

Heavy Industry

Health & aged care

Housing

Other Residential

Electricity & pipelines

Other Commercial

Water

Education

Industrial

Telecommunications

ENGINEERING CONSTRUCTION

0%

NSW, QLD, WA, NT NSW, QLD, WA, NT

80,000 80,000

40,000 40,000

-10%

VIC, SA, Tas, ACT VIC, SA, Tas, ACT

2015-16 2014-15

2015-16

2013-14 2012-13

20,000 20,000 2014-15 2013-14

-20%

Forecast Forecast

60,000 60,000

2011-12 2010-11

-20%

NonNonResidential Residential

10%

2012-13 2011-12

-10%

120,000 120,000

Residential Residential

2009-10 2008-09

0%

The forecasts are set against a background of a two speed economy with weak activity outside of mining, fiscal consolidation, poor sentiment, a high Australian dollar and soft labour market. The forecasts reflect highly variable prospects for the building and construction industry by sector and state, with Queensland, New South Wales and parts of the Western Australian building industry set to enjoy better times after a number of challenging years.

100,000 100,000

20%

2010-11 2009-10

10%

30%

The engineering construction sector rose to remarkable heights during the resources investment boom. However, the investment phase has now peaked and engineering construction is forecast to fall by nearly 20 per cent in real terms over the next three years, from $122 billion in 2012-13 to $102 billion in 2015-16. After very strong growth, engineering construction activity in the Northern Territory, Western Australia and Queensland is forecast to fall back, albeit remaining at high levels.

New South Wales and Victoria look set to benefit from stronger infrastructure spending.

Dwelling Starts Dwelling Starts 140,000 140,000

Engineering Engineering

2007-08 2006-07

20%

40%

2008-09 2007-08

30%

Building and Construction Value of Work Done, Building and Construction Value of Work Done, Australia (2010-11 prices, %ch) Australia (2010-11 prices, %ch)

2006-07 2005-06

40%

2004-05 2003-04

The value of residential building work done is set to improve strongly over the next three years, but from a low base, after marginal growth in 2012-13. The value of residential building work done, in real terms, is forecast to grow by more than 25 per cent, from $48 billion in 2012-13 to $62 billion in 2015-16. The number of dwelling starts is predicted to draw near to 200,000 by 2015-16. The underlying assumption is that low interest rates will work to release significant pent up demand after a long period of underbuilding during a phase of strong population growth.

The stronger performing states are forecast to be New South Wales, Queensland and Western Australia. The key risks to the forecasts are consumer caution, economic uncertainty and ongoing softness in the labour market. The forecast improvement in residential building

Non-residential building work done declined further in real terms in 2012-13 but is forecast to stabilise over the following three years.

Growth is expected to be driven by commercial and industrial building sectors, contrasting with weakness in social and institutional sectors and education related building. The value of nonresidential building work done is expected to remain at around $33 billion in real terms over the period to 2015-16, well below the recent, stimulus-driven peak in 2010-11. New South Wales is predicted to be the best performing state in terms of non-residential building, with industrial, retail and office building leading the way. Reflecting current economic conditions, the key headwinds and risks are low investor confidence and capacity utilisation leading to poor cash flows and low margins. Lending criteria remain tough.

2005-06 2004-05

The return to more positive conditions for residential and commercial apartment builders implicit in the forecasts, signals light at end of what has been a very long tunnel. However, subdued prospects for many parts of nonresidential building and a fallback in engineering construction means overall industry conditions will fail to lift over the forecast period. Indeed, the current economic climate presents challenging headwinds that may impede the timing and strength of the forecasts.

NON-RESIDENTIAL BUILDING

comes from a very low base and the challenge remains for policy makers to address supply side inefficiencies and impediments that have contributed to the nation’s housing shortfall.

2002-03

The forecasts are derived from a sophisticated model purposely built for the building and construction industry developed

by Master Builders in collaboration with Independent Economics.

RESIDENTIAL BUILDING

2003-04 2002-03

22

120,000

Souce: Master Builders Australia Souce: Master Builders Australia

0 0 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 Year ended June Year ended June Souce: Master Builders Australia Souce: Master Builders Australia

AUSTRALIA WORK DONE 2012-13 AUSTRALIA WORK DONE 2012-13

Recreation and OtherRecreation and Other

Roads

Roads

Alterations & Alterations & Additions Additions

Miscellaneous Miscellaneous Accommodation Accommodation Retail Entertainment & Entertainment & recreation

Retail

housing 23

JANUARY/MARCH 2014

Non-conforming Building Materials a Simmering Nightmare With the proliferation of imported building products entering Australia a significant and growing problem is the prevalence of products that either don’t meet Australian standards, are being offered under fraudulent documentation or verification, or simply not fit for purpose.

The issue is not new with Master Builders being aware of defective copper pipe, plywood, screws and fixings surfacing over a period of 25 years, however the issue is growing at a significant rate with such products as defective electrical cable potentially having a health and safety impact which may be latent for several years to come.

Recent research undertaken by the Australian Industry Group found that 90% of respondents companies to their survey reported noncomplying products in their supply chains.

Furthermore, the Australian Window Association has released an alert and drawing attention to fabricated documents purporting to give compliance to fire retardant treatment of western red cedar as meeting the bushfire requirements of Australian Standard, AS 3959 – Construction in Bushfire Designated Areas.

While construction practises are heavily regulated and revised and indeed increased through the National Construction Code, there is not the same level of scrutiny or compliance to ensure that regulated building practises and performance requirements are supported by complying or suitable building materials and products. The national CodeMark Scheme is a voluntary certification scheme, mainly aimed at new and innovative products and the current listings of products under the scheme is insignificant in relation to the number and types of products and materials available to the industry.

Builders Heavily Exposed National Consumer Law and Statutory Warranties ensure that builders as the supplier of products and materials under a contract are heavily exposed to damages and costs due to unknowingly supplying or installing defective materials or products.

The recent recall of ‘ Infinity’ brand insulated electrical cable is a most recent example where one effected builder was exposed to $120,000 in costs in removing and replacing defective cable that had been covered with sheeting. Due to the liquidation of the Infinity Cable Co Pty Ltd leaves the builder with little avenue to recover costs. While the onus is on the supplier to meet product and service expectations, this responsibility disappears with the supply company being wound up and the manufacture offshore.

Counterfeit Certificates The issue is just not confined to defective materials but it is has also been found that certificates or documentation giving evidence to the performance or capability of a product or material has been falsified or counterfeit.

A statutory warranty of the NSW Home Building Act places the responsibility that materials will be suitable for purpose clearly at the foot of the licensed contractor. Section 18B (b) of the Home Building Act states: 18B Warranties as to Residential Work: The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential work: (b) A warranty that al materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new.

The Australian Consumer Law provides a new consumer guarantee requiring that goods must be of an “acceptable quality”.

Under the guarantee, goods will be of an acceptable quality where they are fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, are free from defects, safe and durable.

In the example of the builder above who was the victim of Infinity Cable, it is unreasonable to expect the client, nor the builder and possibly the electrician should be expected to suffer loss due to defective insulated electrical cable being purchased and installed based upon a reasonable assumption that it is indeed compliant. So who is responsible, the retailer? The retailer may be bound to refund the cost of the purchase, but what of the additional costs in removing or replacing product or latent life threatening risk where defective product remains undiscovered… or is it back to the builder?

As mentioned above, the independent testing and research authority, BRANZ issued advice that documents purporting to be issued by them in the name of Fire Retardant Technologies Pty Ltd for a product Firetard 120 are fabricated documents issued illegally. This example raises the question about the performance of other products such as insulation or glass where the performance of such material is reliant upon branding or product labelling and the inherent consequences where such labelling is fabricated or indeed counterfeit?

What is the Solution?

A register of complying building products (more relevant may be to name and shame non-complying products) has been suggested as part of an initial response but unless it is mandatory and backed by an effective audit process it will simply mirror the voluntary CodeMark scheme where few products a registered, and it can be said that industry is generally ignorant of the scheme.

The issue certainly requires a national approach as it’s a national issue and needs to be resourced and prioritised.

Statutory warranties need to be reviewed so that builder and contactors are simply not the scapegoats for product failures whereby they have reasonably relied upon on face value, the integrity of the product.

In NSW, this is another case for a consolidated building authority to entirely focus on industry in order to directly address such issues without the conflicting roles that currently exist within NSW Fair Trading of consumer protection and the regulation of the residential building industry.

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housing JANUARY/MARCH 2014

new Home warranty insurance underwriting guidelines on the 1st December 2013, the nsW Home Warranty insurance fund has released new version 5, of the nsW Home Warranty insurance fund underwriting guidelines.

A number of changes have been made to address fraudulent practices and attempts to circumvent home warranty insurance (HWI) obligations by altering insurance certificates and undervaluing or splitting building contracts. master builders insurance broker, master builders insurance services (mbais) requests clients to take particular note of the following changes made to the underwriting guidelines: applications for single Dwellings below $200K Where a project application is made for a single dwelling below $200K, the building contract, and scope of works, is to be provided in addition to the Project Application.

The concern is that these are unusually low value single dwellings, and as such, care is to be taken to ensure that the contract value insured reflects the work to be performed and is consistent with the building contract. speculative ‘spec’ construction there are additional risks associated with speculative building work and as such, the insurer will require the following information: • Proof of ownership – verify ownership (rate notices etc.) and ensure it is in the same name as that of the licensed builder.

• Scope of works – the Insurance Agent may need to have its technical services unit assess the particular application.

• Proof of funding for project – what financing arrangements are in place. (e.g. a recent funding offer letter on the institution’s letterhead) • Source and nature of funding – the funding source (i.e. whether it is from the primary mortgage market or an alternative source) and the nature of the funding and collateral provided. contract Variations All contract variations are to be in writing between the builder & homeowner. The Certificate of Insurance lists the original contract price. An additional premium is payable in the event of a variation of greater than 10%.

Variation requests above 20% must be supported with a copy of the variation to the contract documentation to verify the scope of the variation. contracts originally under $20,000 Where variations increase the final contract sum to an amount over $20,000 during construction or where a builder is not aware of the value of the project at the time of entering into the contract, the builder is to make application for a Certificate of Insurance as soon as the builder became aware of the value of the project is likely to exceed $20,000. The builder is not to request or receive any (further) payment under the contract until an amended Certificate of Insurance is issued.

The application is to be accompanied by a letter of satisfaction from the building owner/ owners corporation or strata manager confirming that all work done to date is satisfactory and there are no disputes. amendments to certificates of insurance Amendments to Certificates of Insurance already issued can only be made where the details are of a trivial nature only, such as typographical issues, or where the contract price has changed.

As indicated in the section on ‘Contract Variations’, additional premium may be required where the contract price has increased by more than 10%. Evidence of the agreement of the builder and homeowner to the variation and the original Certificate of Insurance are required to be obtained. subsequent applications involving the same Parties and/or site Where a builder applies for a second and additional certificate/s of insurance for work to be undertaken at the same site and for the same homeowner (or related person/entity or an owners corporation) a copy of the building contract, plans & specifications and scope of works must be provided.

It is recommended that builders retain a copy of the new Underwriting Guidelines for further advice and future and ongoing reference. A copy of the new guidelines can be downloaded at: www.homewarranty.nsw.gov.au.

housing 25

JANUARY/MARCH 2014

“Unholy Political Alliance” threatens much needed planning reform for nsw 2013 Planning Bill stopped in it’s tracks due to amendments in the Upper House.

After two and a half years of work by the NSW Government to deliver much needed and indeed essential planning reform in NSW, the Planning Bill 2013 has been stopped in its tracks due to a barrage of amendments served up in the Upper House by what the Planning Minister, Brad Hazzard has described as ‘unholy alliance’ of Labor and the Greens, supported by the Shooters and Fishers Party and the Christian Democrats.

Over 70 amendments had originally been proposed of which 51 were forced through by the ‘unholy alliance’ and delivering what the Planning Minister described as ‘bastardised and vandalised’ legislation. The NSW Government has delayed further passage of the Bill and will consider its options and the future of the Bill over the Christmas Parliamentary recess.

No Opportunity to Consider Amendments While the public was given unprecedented opportunity to be engaged and make comment right up to the Bill going to Parliament, no such opportunity was provided by those in the Upper House choosing to make significant changes to the Bill. The amendments proposed by Upper House members were never published outside of Parliament in order to continue the process of consultation and comment as provided by the O’Farrell/Stoner Government.

The White Paper and draft legislation had received over 5000 written submissions but for unknown reasons, the Labor Opposition chose not to make a submission to neither the Green Paper nor the White Paper, rather in the confines of the Legislative Council proposed a raft of amendments.

This action by Labor mirrors one of the problems and frustration of the current planning system, whereby projects generally tick all the approval boxes but are still subjected to last minute objections and delays from those who simply don’t want any development — the NIMBY culture. The Planning Bill sought to avoid this very issue by making up-front community engagement as its centrepiece for a new planning system.

Bill Already Overly Compromised In our view, the Planning Bill 2013 as presented to Parliament was already overly compromised as the Government endeavoured to appease

public agitation, including Local Government NSW threat of delaying the processing of Development Approvals. However, it was recognised even with concessions to original proposal that gain was to be made.

As a concession the Government removed all reference to targets for complying development and wound back the new concept of ‘code–assessable development’, of which we saw as critical and beneficial reform, which is currently utilised in Queensland and Victoria. Furthermore, any aspect of a project proposal that did not fully comply with code development standards would send the whole proposal back for merit assessment.

Ironically, while NSW already lags behind the other larger States with our antiquated planning system, Queensland has moved forward recently to reduce further red tape by consolidating fourteen urban planning policies into one.

Legislative Council Amendments Amongst the 51 amendments successfully passed by the Upper House, the most significant amendments relate to the complete removal of code assessable development and changes to the State Environment Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 and the reinstatement of the affordable housing Levy.

The partial appeal of the Mining SEPP is the result of an amendment moved by the Shooters and Fishers Party, which makes the size of a mining resource the principal consideration of the consent authority. The amendment also imposes more onerous conditions in relation to noise, vibration and air quality.

As mentioned, a number of other amendments were narrowly defeated, including amendments by the Greens making Ecologically Sustainable Development as a primary objective of the Act, removing Strategic Compatibility Certificates and reining in State Significant Development.

Where to From Here It is obvious that the Governments compromises held little weight when it came to consideration by the Upper House. If nothing else, the Government should have learnt that you “can’t play with the hounds and run with the foxes”.

The Bill as amended and watered down cannot deliver on the reforms as promised by the White Paper and simply will not deliver a planning system that can address ever increasing housing demand and opportunities for investment in NSW. NSW will fall further behind other States that have not only modernised their planning system, but have a more consolidated approach to planning, development and regulation of the construction industry.

The Bill as amended will further stifle development to that delivered under current legislation and therefore the proposition is that if the government agrees to pass the Bill in its current form it will be a backward step in making NSW No 1.

The legacy that all members of Parliament have contributed to and are responsible for is that NSW cannot house its growing population and are bereft of a unified approach to addressing the issue.

The alternative for the Government is to continue to “cut and paste” those bits of the White Paper that they are able to negotiate with the Upper House into the current legislation.

Stunningly, the Legislative Council has since resolved to establish an Inquiry into social, public and affordable housing. One would have thought that a key to providing more social and affordable housing is through providing a planning system that encourages the investment and the delivery of social and affordable housing.

26

housing JANUARY/MARCH 2014

Building and construction industry security of payment amendment act 2013 following on from the recommendations of the collins inquiry into insolvency in the nsW construction industry, the nsW government passed the building and construction industry security of Payment amendment act 2013 (“amendment act”).

The Act provides a number of crucial amendments to the Building and Construction Industry Security of Payment Act 1999 (“SOP Act”) which are due to commence in or shortly after April 2014.

The endorsement is still required for trade contractors making a claim that is connected with an exempt residential construction contract if they wish it to be a payment claim under the SOP Act.

The Amendment Act will not apply to construction contracts entered into prior to its commencement. Key amendments are summarised below:

mandatory Payment Deadlines for commercial Work Except for exempt residential construction contracts and subcontracts under them, payment under a construction contract will be due and payable on: 1. The date 15 business days after a payment claim is submitted by a head contractor to a principal; 2. The date 30 business days after a payment claim is submitted by a subcontractor to a head contractor; or 3. An earlier date as provided in accordance with the terms of the contract.

Removal of the Requirement for endorsement of Payment claims Currently for a progress claim to be a payment claim under the SOP Act there must be an endorsement stating that it is made under the SOP Act. This is usually in the form of words on an invoice to the effect of, “This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999.”

The Amendment Act removes the requirement for the endorsement unless the construction contract is connected with an exempt residential construction contract. An exempt residential construction contract is a contract where the owner lives in, or proposes to live in, the premises. Therefore after the Amendment Act commences, any claim for payment in the commercial sector, and the residential sector if there is no exempt residential construction contract, will be a payment claim under the SOP Act and subject to a potential adjudication application.

Any claim for payment received after April 2014 should be treated as a payment claim under the SOP Act and a payment schedule supplied within 10 business days, or less if stated in the contract, if you do not intend to pay the entire amount of the claim.

Payments for subcontracts under an exempt residential contract or residential contracts between a builder and an investor continue to be in accordance with the terms of the contract or if there is no such term then the payment is due within 10 business days. supporting statement to accompany Payment claims A head contractor must not serve a payment claim on the principal unless the claim is accompanied by a supporting statement that includes a declaration to the effect that all subcontractors, if any, have been paid all amounts that have become due and payable.

The exact form of the supporting statement will be prescribed by the regulations.

It will be an offence punishable by fines and/ or imprisonment for a head contractor to serve a payment claim without the required supporting statement, or with a supporting statement knowingly making false or misleading statements. trust accounts for Retention money Held

by Head contractors The Legislative Council, the NSW Upper House, imposed an additional amendment providing for the making of regulations to introduce a requirement for statutory retention trust accounts held by head contractors for sub contractors.

The Department of Finance & Services has released a consultation paper on the statutory retention trust model to be operated by the Office of the Small Business Commissioner (OSBC). The consultation paper proposes that the retention trust: • Will only apply where cash retention is provided for in the contract; • Will be administered by the OBSC; • Monies will be paid into the trust fund by the head contractor; • Will be subject to joint authorisation by the head contractor and the subcontractor for monies to be paid out.

If you have any difficulties or enquiries then please contact MBA Lawyers on (02) 8586 3517.

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JANUARY/MARCH 2014

tread carefully witH Building contract variations as a lawyer practising in building and construction law Jason Dunn, of baker love lawyers in newcastle, sees many disputes between builders and property owners.

Other than the issue of defects in building work, the most common cause of litigation in building and construction matters involves variations to contracts.

A variation is an alteration to what has previously been agreed to in the building contract. A contract price change will usually occur as a result of a variation. In the majority of situations a variation will result in a price increase however there are instances where there is a price decrease.

Unanticipated circumstances or a council requirement may be the reason for varying the contract but it should be noted that an owner is not obliged to pay for any additional work if the basis for the variation is due to the builder’s error.

What are the risks with variations?

A failure to properly make variations to a building contract can result in disputes and lead to costly litigation. Some of the more common disputes include: • Disagreement as to the nature and extent of the works that were to be completed; • Whether the variation works are included in the original contract price; • Disagreement as to the cost; • Disagreement as to which payments relate to the variation and which payments relate to the original contract works.

A builder’s failure to comply with the legislative and contractual requirements with respect to variations may potentially preclude it from actually recovering its costs from the owner, and any resulting litigation may be unnecessarily complex and costly.

A failure to properly make variations is also often a catalyst for other disputes and litigation.

It is quite common for an owner to make a cross-claim against a builder for defective work once a builder attempts to recover payment for a variation that was not agreed to in writing and signed by both parties.

Where a variation has not been agreed to in writing, technical legal arguments can also arise regarding whether a payment made by an owner following variation works relates to the variation or the original building contract.

making a variation: Building contracts in NSW are regulated by the Home Building Act 1989 (NSW).

Section 7 of the Act requires that a building contract be in writing, and be dated and signed by or on behalf of each of the parties to it. In addition to the strict documentary obligations under the Act, building contracts also have specific provisions regarding the making of variations.

As a rule, all variations must be in writing, attached to the contract and signed by both the owner and the builder, or their nominated supervisor or agent. Before the work commences on the variation, the builder should provide the owner with: • A written description of the work; • Any plans or specifications for the work; and • The extra cost and details of any extra time required to complete the work.

Where works additional to those contemplated in the building contract are requested or necessary, a builder should always document those instructions as a written variation under the contract, signed by both parties.

Work pursuant to the variation should not commence until the work has been agreed to by both the owner and builder, evidenced in writing and signed by both parties.

It is so much simpler and more certain than exposing oneself to technical arguments as to the validity of a claim, unnecessary cross-claims and costly litigation. Good administration practice is the key to avoiding such disputes in the first place.

There may be occasions where a variation is needed because of a likely danger to someone or property, and there may not be time to put the details in writing. In this situation, the written variation may be done after the work has been carried out. This is a rare situation and in all other instances, variations must be in writing before the work commences.

If you would like assistance with a building contract, contact one of our building and construction team on 02 4951 5766 to make an appointment.

NB: The MBA sells Variation forms to help keep a written record of all changes to the original scope of works. They come in a pad of 20, unique colour triplicate copies.

Members $17.30, Non Members $28.90.

Buy online at www.mbansw.asn.au/shop

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legal JANUARY/MARCH 2014

Protect Your Business From the Insolvency of a Contractor or Subcontractor To protect your business from the risk of insolvency in the construction industry, you must understand the risks facing the key contractors or subcontractors.

It is important for both head contractors (relying on subcontractors to perform works) and subcontractors (relying on head contractors for payment for works completed) to take steps at various stages during the contracting process to protect themselves from the credit risks and threat of counterparty insolvency. This is an ongoing process that should be assessed at various stages during the contracting process.

Measures Pre-contract The following issues should be considered when undertaking pre-contract due diligence: • Limit reliance on individual counterparty - the loss of a key work-provider may be fatal. This applies to both

a contractor that is reliant on one subcontractor across a number of projects or a subcontractor who is critical to a particular project as well as a subcontractor that is reliant on workflow from one particular contractor.

• The risk associated with a key contractor/ subcontractor will vary depending on the relative size and complexity of the counterparty (i.e. are they SMEs, large corporates or government bodies) and also the nature of your own business and its overhead and employment structure.

Some key issues to consider include: • What is the credit worthiness of the counterparty (a government body is

considered to have a very low credit risk in comparison to an SME)?

• If a subcontractor has large fixed costs, and a portion of these costs are attributable to workflow from a key contractor, and that work ceases unexpectedly, how does the subcontractor bridge the gap and find a replacement in a short time frame, particularly considering the lead time for large scale projects?

• Can a contractor’s/subcontractor’s balance sheet sustain a large provision for debtors? Could a significant debtor provision cause balance sheet insolvency? Will a restricted balance sheet limit contractor’s/subcontractor’s ability to secure new work?

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JANUARY/MARCH 2014

• Analyse the forward book - the size of the forward book in comparison to historical turnover. Is the work being won actually profitable or is the contractor/subcontractor “buying work” to generate cash flow? In our experience, where contractors/ subcontractors are experiencing financial difficulties they will often underquote to win work, generate cash flow and hope that variations can be achieved during the contract to make the overall project ultimately profitable. In a tight market, where margins on contracts are low, a tender that is substantially lower than that of competitors is an obvious warning sign; • Perform forecast creditor assessment most creditor assessment is based on historical, often dated and unaudited information. Considering the speed at which the construction industry changes and the impact it has on contractors/ subcontractors it is important to also assess counterparty’s short and medium term forecast financial position. There are many specialised advisers in the market place that can conduct this type of forecast credit analysis.

The following factors will be generally considered in the analysis: • The current financial position of the counterparty but also where they will be during and at the end of the contract relationship. Can they continue to meet their financial obligations to you and others during the contract term?

• Could the counterparty sustain a loss on a project and to what extent?

• Assessment of the forward book, overhead structures, profitability of existing contracts and implications of the current market on current and future contracts.

• Review of the capital base, the ability of the shareholders and the directors to raise funds if needed to meet a cash shortfall gap (bearing in mind the majority of the SMEs already have limited access to commercial finance); • Review forecast surplus cash flow in comparison to the size of turnover. For example if a business is turning over $100m per annum ($8.3m per month) and surplus cash flow or cash at bank at any time is only $1m this highlights the risk that, should a progress claim be delayed, there will likely be a substantial deficiency in cash reserves to meet liabilities until the progress claim is received.

Measures During the Contract Continued assessment is critical to identify potential risks and implement strategies to mitigate them. More often than not in the construction industry, participants’ financial

position can vary substantially in a short period of time based on timing of cash flows, outcomes of litigation and contractual issues as well as on going warranty liability postcompletion. These risks are not only evident in current contracts, but also completed projects, within the warranty period. Some of the key signs to consider include: • Loss of key staff - this is an indication of an underlying problem, within a business and something that needs to be investigated further; • Program and quality control issues - this is an indicator of an underlying issue, where management are struggling to control quality of works and can highlight the requirement to manage competing issues; • Examples of contractor/subcontractors leaving or not attending site/union interventions - this is one of the more obvious warning signs as contractors/ subcontractors are the first to get paid on a regular payment cycle. If a group of subcontractors are refusing to attend site an audit should be undertaken immediately and consideration should be given (subject to legal advice) to pay the contractor/subcontractors directly; • Winding up notices - are creditors initiating recovery action?

• Deviations from core competencies - This can often include taking on additional risk for i.e. development risk or expanding into areas outside of the contractors/ subcontractors area of expertise (i.e. moving from commercial to residential); • Adverse litigation outcome – In particular warranty issues stemming from Home Building Act (NSW).

Liability warranty for the seven years following residential projects and contractual warranty for nonresidential projects, is not generally recorded on the balance sheet as a liability, and is particularly detrimental to the balance sheet where litigation is commenced many years after completion of a project takes place.

If the customer/supplier loses the litigation and is faced with a substantial damages claim, this could have a substantial impact on the performance and solvency and the business.

Where the above signs are evident and there is doubt as to the financial position of the counterparty and the likelihood of contract performance, measures should be taken to investigate further but also plan for possible outcomes.

Measures will vary on the circumstances, however in general it should include: • Securing documentation and certificates; • Additional supervision of the quality of work; • Identifying possible replacements; and

• Identifying any key staff; and • Minimising the ageing of amounts owed (in terms of a subcontractor’s payment claim).

Measures in the Event of Insolvency The options available to contractors/ subcontractors faced with counterparty insolvency will vary depending on the stage of completion of works, the nature of the works and also the contracting relationship. In the contractor’s situation, where a subcontractor is placed into external administration, consideration needs to be given to the following: • How critical are the subcontractor’s works?

• Can they be easily replaced by an alternate contractor/subcontractor?

• Are the staff of the contractor/ subcontractor critical to the works and can they be retained/ re-employed?

• Warranty and certification issues and collating all documentation; • Managing relationships with key stakeholders, i.e. banks, principal, unions, etc; and • Defects – due to cost cutting and focus being diverted away from quality presence of potential.

In the subcontractor’s situation, where a head contractor is potentially insolvent, consideration needs to be given to the following: • Negotiating with the principal or bank in order to facilitate completion of the project; and • Protecting the outstanding claims and ensuring as much as possible is recovered.

More often than not, following an external administration, a contracting party will terminate a contract or subcontract and seek to find a replacement contractor to complete the works. In our experience there is a substantial additional cost to this process (we have seen increases of up to 40%) as well as substantial delays and warranty implications. Accordingly, consideration should be given to all options available, including the use of an insolvency practitioner to complete works where possible. Whilst this may not be viable in all circumstances, it can have the following benefits: • Continuity of workmanship; • Limit argument as to responsibility for defects (i.e. the original/ replacement contractor); • Minimise time delays and additional cost; • Maintain any Home Owners Warranty Insurance; • Creditor demands threatening legal action; and • Creditor requesting cash on delivery or stopping supply.

By Costa Nicodemou, Director at BRI Ferrier

30

industrial relations JANUARY/MARCH 2014

Federal Government Announces a Royal Commission into Union Governance and Corruption The Federal Government has announced the establishment of a Royal Commission to inquire into the activities of trade unions relating to slush funds and other similar funds and entities established by, or related to, the officers of these organisations.

The Royal Commission will address increasing concern arising from a wide range of revelations and allegations involving union officials establishing and benefiting from funds which have been set up for purposes which are often unknown and frequently unrelated to the needs of their members.

In addition, recent allegations of corrupt behaviour, unlawful kickbacks and standover tactics in the construction industry, have made it clear that there is a need for serious scrutinising of allegedly corrupt conduct, wherever it may occur.

As a result, the terms of reference are not limited to any particular organisations, particular allegations or particular industries.

The inquiry will be able to go wherever the evidence leads it.

This means that union officials, employers and any other persons who are involved in such conduct will be subject to equal scrutiny.

In order to make this a truly national inquiry, the Federal Government intends to ask each of the State Premiers to arrange for their state to issue letters patent in the same terms to confer equivalent State Commissions on the Royal Commissioner.

The Federal Government is intending to appoint recently retired High Court Judge The Honourable John Dyson Heydon AC QC to be appointed as the Royal Commissioner.

Members are also reminded that the Master Builders movement has been consistently calling for the re-introduction of the Australian Building and Construction Commission (ABCC) which will bring back

the tough cop on the beat to monitor errant behaviour in our industry.

A copy of the complete Terms of Reference for the Royal Commission is set out below.

Should members have questions regarding this matter, please do not hesitate to contact the Association’s Industrial Relations Department – Sydney Office 02 8586 3555 or Newcastle Office – 02 4953 9400.

TERMS OF REFERENCE The Royal Commissioner will inquire into and report on: 1. The governance arrangements of any separate entities established by registered employee associations or their officers, purportedly for industrial

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JANUARY/MARCH 2014

purposes or for the welfare of their members, with particular regard to: a. The financial management of such entities; b. The adequacy of existing laws as they relate to such entities with respect to: i. The integrity of financial management; and ii. The accountability of officers of registered employee associations to their members in respect of the use of funds and other assets in relation to such entities; c. Whether such entities are used, or have been used for any form of unlawful purpose; d. The use of funds solicited in the name of any such entities, for the purpose of furthering the interests of: i. A registered employee association; ii. Officers of a registered employee association; iii. Members of a registered employee association; or iv. Any other person, association or organisation.

2. Without limiting the matters in paragraph one, alleged activities relating to the establishment or operation of any such entities as they relate to the various registered branches of the following employee associations: a. The Australian Workers Union; b. The Construction Forestry Mining and Energy Union; c. The Electrical Trades Union; d. The Health Services Union; e. The Transport Workers Union; and f. Any other person, association or organisation in respect of which credible allegations of involvement in such activities are made.

3. The circumstances in which funds are sought from any third parties and paid to such entities.

4. Where such entities and activities related thereto exist, the extent to which persons represented by registered employee association: a. Are protected from any adverse effects or negative consequences arising from their existence; or b. Are informed of their existence; or c. Are able to have influence or control of their operation; or d. Have the opportunity to hold officers of such associations accountable for any alleged wrongdoing.

9. The adequacy and effectiveness of existing systems of regulation and law enforcement in dealing with any conduct of the type described in paragraphs 1, 2, 3, 4, 5 6, 7 or 8, and in particular, the means of redress available to registered employee associations and their members who have suffered a detriment as a result of such conduct.

10. Any issue or matter reasonably incidental to the above.

Definitions

5. Any conduct which may amount to a breach of any applicable law, regulation or professional standard by any officer of a registered employee association in order to: a. Procure an advantage for themselves or another person, association or organisation; or b. Cause a detriment to a person, association or organisation.

6. Any conduct in relation to such entities which may amount to a breach of any applicable law, regulation or professional standard by officers of registered industrial employee associations who hold, by virtue of their position, a position of responsibility in relation to any such entities.

7. Any bribes, secret commissions or other unlawful payments or benefits arising from contracts, arrangements or understandings between registered employee associations or their officers and any other party.

8. The participation of any persons, associations or organisations other than registered employee associations or their officers in conduct of the type described in paragraphs 1, 2, 3, 4, 5, 6 or 7.

Registered employee association means an organisation registered under the Fair Work (Registered Organisations) Act 2009, its predecessor legislation or equivalent State legislation, and as defined by section 12 of the Fair Work Act 2009.

Law means a law of the Commonwealth or of a State or Territory.

Officer of a registered employee association means any employee or elected officer holder of such an organisation.

Organisation includes any registered industrial organisation, corporate entity or association, whether incorporated or not.

Separate entity means a fund, organisation, account or other financial arrangement that is either a separate legal entity to a registered industrial organisation and/or is not covered by the statutory financial reporting obligations that the organisation is subject to under the Fair Work (Registered Organisations) Act 2009, its predecessor legislation or equivalent State legislation.

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fringe Benefits tax – veHicles considered an exempt Benefit fringe benefits tax (fbt) is separate from income tax.

A business may be liable for FBT on benefits provided to employees such as work cars used for private purposes, low interest loans, housing, entertainment or insurance expenses.

The FBT year runs from 1 April to 31 March and a business is required to calculate FBT, lodge a return and pay any FBT owing to the Australian Taxation Office. An important change to note is an increase in the FBT rate from 46.5% to 47% as of 1 April 2014.

If employees or directors are allowed private use of a business work vehicle then your business may be liable to lodge a return and pay FBT which is based on the vehicle’s taxable value. Your business may save a substantial amount on FBT if the vehicles provided to employees are vans or utes with a carrying capacity over one tonne.

If you are about to purchase a vehicle for yourself or staff and want to reduce your FBT liability please call Ogarit Kelley from Master Builders Car Search and Finance on 1300 760 366. As an MBA member you will receive the best service with car pricing and finance.

Join the Master Builders and Exchange Golf Club

Enjoy a day off with your industry professionals Formed by the Master Builders Association in 1932, the social golf club was developed for those affiliated with the building industry and/or those identified as offering supply or service to the industry.

At any organized golf day, the MB&E Golf Club has around 60 to 80 members, guests and sponsors attend its games.

We offer you an open invitation to play golf and bring your guests along. Join us on any game day of your choice for a round of golf and refreshments.

Join the Golf Club today!

Some of the quality courses we play on in the Sydney Metro area.

Ryde-Parramatta Golf Club Macquarie Links Golf Club St Michaels Golf Club Terrey Hills Golf Club Concord Golf Club New South Wales Golf Club Pymble Golf Club Liverpool Golf Club Cromer Golf Club

For further information please contact: Reynold Sciuriaga 0412 265 938 reynold24@optusnet.com.au or Graeme Degnan (02) 9584 0277 graeme@degnan.com.au or go to http://mbansw.asn.au/About/Social-Clubs

MeMbers Car searCh and FinanCe ■ Significant fleet savings on new and demo vehicle purchases ■ Maximise the value of your trade-in ■ Huge savings in time and effort by avoiding dealer shopping ■ Try us to get the best deal on price and finance Using the combined strength of your MBA membership we would like to introduce you to a powerful new member service.

Talk to us today, exclusively through:

OGARIT KELLEY M: 0414 919 194 PH: 1300 760 366

MASTER BUILDERS

Financial Services

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members profile JANUARY/MARCH 2014

volunteering Building skills overseas neville southon began his career in the construction industry almost 50 years ago; today he volunteers his time building much-needed facilities in the Pacific islands.

Neville at a school in Vanuatu

Over 75 years ago Neville Southon’s father completed his studies in the building trade in Sydney, and with his brother packed up their lives and rode a pushbike to Murwillumbah to try their luck in the banana industry.

Sharing the one bike and riding it, during the depression, to the Northern NSW town where they would settle down, raise their families and build a business that would span several decades and provide work for Neville and his two brothers.

While the banana growing business wouldn’t prove fruitful, a building company known as ET Southon and Sons, offering services such as renovations, extensions, house and industrial building and joinery works, would sustain the family for over 75 years.

Neville left school at age 15 and began his apprenticeship straight away, working with his father. He says, “In the early days we mixed concrete and dug footings by hand, it was a lot different to what it is today. Dad would win a contract with a handshake and that was all we needed.”

The business built a respected reputation with Neville becoming a member of the Master Builders Association in July 1976, 38 years ago. Neville’s brother Don was Chairman and was on the Executive Committee of Tweed Division Master Builders for a time.

At one stage the company employed over 20 people including Neville, his brothers and his

father. One brother eventually left for other employment, one retired several years ago and Neville himself retired two years ago at the age of 72.

Today, Neville travels once or twice a year to the Pacific Islands volunteering his retirement time building schools, clinics, bathroom facilities and anything else that the communities may need. He and a friend, Reg James who has a registered charity in Vanuatu organise groups of volunteers to join them on their projects, where they stay in the local villages and get to know the people whose lives they are changing. Over the last two years Neville has been involved in projects through his church, The Seventh - Day Adventists, building a clinic in the highlands of New

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JANUARY/MARCH 2014

The team working on a school in Vanuatu

Neville with the locals in New Guinea

Guinea. Recently in the Solomon Islands they built concrete pathways, renovated bathroom amenities also installing water tanks at a boarding school in Honiara.

Of his generous work Neville says, “It gives us satisfaction to be helping these people and to see something accomplished that is assisting others to better health and an education.�

While ET Southon and Sons no longer trades, their work and reputation lives on through Neville who, while having no immediate plans, will continue using his lifelong skills in the building trade to improve the livelihoods of others wherever he can.

School building in Vanuatu

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project profile JANUARY/MARCH 2014

Newland Constructions Newland Constructions showcases another of their challenging residential construction projects.

In the Australian building industry, quality design and workmanship speaks volumes.

Under the leadership of Emil Ajepoor, Newland Constructions Pty Ltd produces exceptional projects, ranging from luxury homes, commercial and multi-unit developments and much more. With an experienced and dynamic team, Newland Constructions realises there are many unique aspects to residential and commercial construction, and takes great pride in creating quality and state of the art solutions for their clients.

Established 10 years ago by Emil Ajepoor, Founder and Managing Director, Newland Constructions tackles every project with the utmost professionalism and enthusiasm.

With a diverse range of skills, the company is dedicated to not only finding solutions but searching for the best solutions for each client.

It is a tradition that has been set down by the ambitious Director from an early stage.

Committed to producing professional work for its clients, Newland Constructions often takes on challenging projects. Since it was established in 2004, the company has never strayed from this, enabling it to cement its position in the Australian building industry.

One of the most recent challenging projects has been the construction of four townhouses located in West Ryde. The first dwelling consists of a two storey, five bedroom plus study, three bathroom establishment with open plan living and internal access to the garage.

The remaining three dwellings consist of three single storey dwellings with three bedrooms with two bathrooms each. All dwellings have a separate garage along with an internal tandem parking space.

The ground floor of each residence was designed to allow each home equal amenity to the north- facing boundary. The project sits

perfectly within its surroundings with face brick and rendered columns. The project is set on 1200sqm of land, with a drop of 7m from the street to back boundary.

“We were given clear instructions by the client to complete the project on time and on budget”, says Emil.

This is exactly what occurred, the project was completed on time and on budget with no builder variations. This is a great result not only for Newland Constructions but also for their client.

Despite the apparent simplicity, Emil describes the initial construction process as “quite challenging”. The solution? Good old fashioned construction know-how, combined with particular attention to the engineering and design detail.

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The project involved drilling over 300 piers and almost 80 cubic metres of concrete for the piers and footings. “We had to step every ground floor slab due to the change in levels for every townhouse. Site preparation and all the civil works took time and care”, says Emil.

“We also faced the challenge of not damaging a sewer and a main stormwater easement, which the last townhouse was to be built over.

This involved encasing the sewer line with concrete and constructing concrete piers on either side of the stormwater line. We also used CCTV camera technology throughout the project to ensure the stormwater line was not damaged, as this was the main line for the rest of the neighbourhood.

“The last challenge we faced was that the last unit was also to be built in a one to 100 year flood zone. We were required to construct a portion of the last townhouse on a suspended

concrete slab supported by brick piers.

We added additional stormwater pits in the backyard along with recycled pebbles under the slab, this was not only for asthetics but also to drain run off ground water.

This dynamic and dedicated company is sure to enjoy continued success in the years to come, and this is apparent through the continued repeat business it continually receives from its many clients.

“Though the site was a bit difficult and had its challenges, it was a perfect fit for Newland Constructions’ expertise.

To find out more about Newland Constructions visit www.newlandconstructions.com.au.

All foreseeable design problems and bottlenecks were discovered in advance and resolved with all the relevant consultants so the project could continue with no stoppage time, with no cost to both parties.

The key is communication on all levels, this is achieved by constantly holding site meetings with staff and contractors and also with the client so they too can be kept up to date on issues with the project, in the event they decide to make minor changes to the design and/or finishes.

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New Members A F M Masonry Pty Ltd HABERFIELD

Australian Leader Group Pty Ltd PYMBLE

Craig Niven WATERLOO

A G P Sound HURSTVILLE GROVE

Authentic Constructions Pty Limited LANE COVE

D & C Smith Trust GULGONG

Aaron H. Chehab REVESBY

Award Pools Group Pty Ltd BAULKHAM HILLS

D & M Brown Concreting WILBERFORCE

Aaron Smith SEVEN HILLS

B & E Schrader Pty Ltd BRUSHGROVE

D 2 Constructions Pty Ltd GEORGES HALL

Act Now Building & Constructions Pty Ltd GEORGES HALL

B D C Build Pty Limited NORTHMEAD

D Brazel & M. M Miller MOREE

Adam Seymour COLYTON

Benjamin Dagg ASQUITH

Dad & Dave Bay & Basin Pty Ltd SOUTH NOWRA

Aiden Gilbert FAIRFIELD WEST

Brad Davis MILLFIELD

Daniel James Peter Atherton LANE COVE

Albert Attlee GUILDFORD

Brad Russell WARNERS BAY

Daniel P. McKee HOLSWORTHY

Alex Dawnes CHIPPING NORTON

Bradley Orford CLOVELLY

Daslar Carpentry GLOUCESTER

Alex Rogers EMU HEIGHTS

Brandon Gaddes SCHOFIELDS

David Reeve ROSEVILLE CHASE

All Steel Garages & Sheds Pty Ltd CASINO

Brendan Tully ERMINGTON

David Smith PENRITH SOUTH

Allan Kemp QUAKERS HILL

Brett Lancaster CHARLESTOWN

David Wheeler SYDNEY

Andersal Pty Ltd ST LEONARDS

Brookfield Multiplex Constructions Pty Ltd SYDNEY

Davrid Pty Ltd KURMOND

Andrew Donnola BONDI BEACH

Build Assist Trust ULLADULLA

Dennis Saltos VAUCLUSE

Andrew Jung YARRAS

Building Landmarks KIELVALE

Dion Bullman ERSKINE PARK

Andrew Willows LINDFIELD

Burak Dilber ROCKDALE

DirectBuild Australia Pty Ltd ROZELLE

Anric Developments Pty Limited HORSLEY PARK

C S R Building Products Limited SCHOFIELDS

Dominic Stanuga CHATSWOOD

Anthony Di Cello MOUNT ANNAN

Cameron Simpson WOONONA

Durham Developments Pty Ltd PEMULWUY

Anthony Tannous LIDCOMBE

Chris Rigopoulos PADDINGTON

East Coast Building Consultants BYRON BAY

Anthony Touma EARLWOOD

Christian McKeon ERINA

Emma Makinson COFFS HARBOUR

Arise Construction Pty Ltd NORTH RYDE

Christopher Hayward NARRAWALLE

Experienced Office Furniture P/L LAMBTON

Armour Roofing Pty Ltd SILVERWATER

Christopher Neary NORTH LAMBTON

Fire Refuge Unit Trust TRARALGON

Ashraf Kamha CHERRYBROOK

Christopher Zubrycki DURAL

Gabe Constructions Sydney Pty Ltd TURRAMURRA

Aspire Resources Pty Ltd BOWRAL

Ciaran Durkan RANDWICK

Gary Young SYDNEY

Austral Steel Fixing Pty Ltd PETERSHAM

Colortile With Style Pty Ltd PORT MACQUARIE

George Rodwas GREYSTANES

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New Members Glanrange Pty Ltd NOWRA

John Marinucci MORTLAKE

Martin Joachim ROSEVILLE

Global Bound Pty Limited EPPING

John Vitocco EDMONDSON PARK

Matt Ferry Carpentry Pty Ltd SPEERS POINT

Gofigar Bookkeeping Pty Ltd NORTH PARRAMATTA

Jonathan Ballone TAREN POINT

Matthew Andreasen PUNCHBOWL

Good Manors Property Services Pty Ltd DRUMMOYNE

Jordan Cope TOWRADGI

Matthew McKenzie CLOVELLY

Gregor R. McLean EPPING

Josbuild Pty Limited FAIRFIELD HEIGHTS

Max Baker BUNDEENA

Guardian Building Consultants ROUSE HILL

Joshua Jones LOWER PORTLAND

MCR Property Maintenance FORSTER

Harrison Lloyd Coombs GYMEA

Joshua Navybox WEST PENNANT HILLS

Merrvine Homes Pty Ltd KEIRAVILLE

Hire A Hubby ARTARMON

Justin Jon Rogers BRONTE

Metin Huseyin WEST HOXTON

Hire A Hubby Blacktown KURRAJONG

Karen Bowditch NAMBUCCA HEADS

Michael Lloyd WINGHAM

Ian David Brands PYMBLE

Keaton Ross ILLAWONG

Michael Milosevic HORSLEY PARK

Impero Pacific Group Pty Limited WILLOUGHBY

Kellyville Building Pty Ltd KELLYVILLE

Midnight Waterproofing PUNCHBOWL

Indeco Australia Pty Ltd ALTONA NORTH

Kevin Toun WETHERILL PARK

Milad Khouzame BANKSTOWN

Isaac O’Connell TATHRA

Killard Excavation Pty Ltd RYDALMERE

Milan Peric EASTLAKES

J E J Carpentry & Building BERRARA

Kostas Iconomou WEST PENNANT HILLS

Minas Romanakis ENFIELD

James Duignan LANE COVE

Lachlan Hutchinson BANGOR

Mitchell Anderson BELLA VISTA

James McMullan GRAFTON

Logos Group Pty Ltd OGARAH BAY

Mould Rescue Pty Limited GYMEA

Jamie Probert NARARA

Lucas Gechevski LEUMEAH

N S W Steelfixing Pty Ltd PETERSHAM

Jason Blake NEWTOWN

Luke McArthur ELANORA HEIGHTS

Nagrommada Tech Pty Limited BONDI JUNCTION

Jason Nessi WOODBINE

Luke Sacilotto MOOREBANK

Nathan Wood KINGSGROVE

Jason Roumanos PUTNEY

Luke Tannous HOMEBUSH

New System Homes Pty Ltd GLENMORE PARK

Jason Vinecombe INVERELL

M Q Realty Pty Ltd LIDCOMBE

Jeffrey Sloman BANORA POINT

Maple Building & Design BULLI

Newsteps Building and Pest Consulting Group Pty Ltd VOYAGER POINT

JMichael Constructions ROSE BAY

Marek Kazmierczak SPIT JUNCTION

John Drake LANE COVE

Mark Bosson ANGLEDALE

John Hodkinson MILPERRA

Mark Jameson SEVEN HILLS

Noack Building Contractors Pty Ltd CHARLESTOWN North Coast Stylin’ Tiling OCEAN SHORES Ocean Carpentry NORTH BONDI Omega Maintenance Group Pty Ltd CAMDEN

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New Members Omran Allam LIDCOMBE

Rork Projects Pty Ltd HUGHES

Triston John Hannan BURRANEER

Opec Systems Pty Ltd FRENCHS FOREST

Ryan McClure BELLA VISTA

Triton Pool & Spa Inspections Pty Ltd OYSTER BAY

Ozy Vejzovic AUBURN

Ryan Whittaker KINGS LANGLEY

Troy Loh LEICHHARDT

P W G Constructions Pty Ltd COLLAROY PLATEAU

Ryszard Dudek BANKSTOWN

Urban Estate Constructions Pty Ltd MOUNT DRUITT

P. L. Biddington KURRI KURRI

Sam Chapman CHARLESTOWN

Urban Tippers Pty Ltd PANANIA

Painting Services Pty Ltd EASTWOOD

Samuel Eskaroos BRIGHTON-LE-SANDS

Waller Corp Pty Ltd CLOVELLY WEST

Paul Christopher LANE COVE

Saverio Russo CHISWICK

Wano Carpentry COOGEE

Peter Ceroli KENTHURST

Scott Crippen GLADESVILLE

Wayne Nelson PORT MACQUARIE

Peter Johnston PORT MACQUARIE

Scott Harrison Sole Trader BOLWARRA

White Lion Projects Pty Ltd PADSTOW

Phillip O’Leary RAGLAN

Scott Young ALEXANDRIA

Yaozhuo Liang RYDE

Prestigious Renovations and Constructions DURAL

Seth Foy TAMWORTH

Zoe Porter FEDERAL

Prime Carpentry & Building RIVERWOOD

Setsquare Projects Pty Limited VAUCLUSE

Proline Floors Pty Ltd KURNELL

Shane Auld AUSTRAL

Promaster Builders Pty Ltd HURSTVILLE

Shane Mayberry Builder TURA BEACH

Reconn Pty Limited NORTH SYDNEY

Southern Star Windows (Tamworth) Pty Ltd TAMWORTH

Remedial Building Solutions Pty Ltd PETERSHAM

Stallion Elevators Pty Limited MASCOT

RJ & JA Grant Pty Ltd BEGA

Stephen McGrath THORNLEIGH

Robert Elias SOUTH WENTWORTHVILLE

Steven Pitomac WALLSEND

Robert Gregory GUILDFORD WEST

Teokotai Paki MERRYLANDS

Robert Moise KILLARA

The De Beaumont Family Trust PENRITH PLAZA

Robert Musgrove NEWPORT

The Tile & Bathroom Supermart Albion Park Pty Ltd ALBION PARK RAIL

Robert Taboas GREYSTANES Rocash Contracting Pty Ltd EPPING Ron Bakker Contracting SUFFOLK PARK Ronit Sharon ALLAWAH

Tom Hargreaves NEWPORT Tony Barbalace FRESHWATER Trendy Constructions Pty Ltd BELLA VISTA

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Masonry Contractors’ Association of NSW & ACT

Awards For Excellence In Brick and Block Laying – 2013 Celebrating 20 Years - 1993 to 2013

The Masonry Contractors’ Association of NSW & ACT conducted the Annual Awards and Dinner for 2013 on Friday 8 November and also celebrated the 20th Anniversary of the Association, held at Doltone House – Jones Bay Wharf with 200 members, suppliers and guests.

Mr Geoff Noble, CEO of Australian Brick and Block Foundation, was again the Master of Ceremonies for the evening.

All 2013 award winners

Newly elected President Trent O’Sullivan from Trade-Up in the ACT welcomed members and guests. Trent gave an outline of his vision as President along with his support for greater security of payment legislation for all subcontractors in NSW and ACT. There were 36 entries received over the seven categories. The quality of work exhibited was of an excellent standard as judged by the teachers from the Brick and Block laying department at Nirimba TAFE. One of the highlights of the evening was the presentation to Silvano Maffi for over 40 years service to the brick and block laying industry. Those present were regaled and amused

by Silvano’s story of starting up his business as a non-English speaking migrant in Sydney in the early 1970’s.

Geoff Noble MC

Members and guests were entertained by the sounds of guitar virtuoso Claudio Meyer along with the comedy styling’s of award winning comedian Darren Sanders.

The MCA look forward to another 20 years of proving to their marketplace that brick and block work is the obvious choice for construction selection providing durability, low cost maintenance and timeless aesthetics.

Silvano Maffi and MCA president and past presidents

Trent O’Sullivan MCA president

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Awards For Excellence In Brick and Block Laying – 2013

winners

Overall Winner 2013 Project Blue Mountains Cultural Centre Contractor Conrina Builder Richard Crookes Brick Supplier Boral Bricks Architect Hassell

Category 1 Brickwork Single Dwelling Winner Project House at Concord Contractor Anything Bricks Builder Joe Moses Brick Supplier Austral Bricks Architect Adam Moses

Judges Comments Matched to heritage surrounding, displaying mitred corners, extensive solider courses, multi colored banding and Garden features.

Judges Comments Attention to detail and finish are evident in the workmanship.

Category 2 Brickwork Medium Density Winner Project Rosella Contractor Heritage Masonry & Stone Builder Bill Kanaan Brick Supplier Austral Bricks Architect LSB Architects Judges Comments High quality round ironed jointing, solider courses and squint corners.

Category 3 Brickwork Commercial Merit Award Winner Project Australian Hearing Hub –DJD Judges Comments Merit for large scale glazed brickwork panel workmanship.

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Awards For Excellence In Brick and Block Laying – 2013

winners

Category 3 Brickwork Commercial Merit Award Winner Project Hornsby Ku-ring-gai Hospital – Macarthur Bricklaying

Category 3 Brickwork - Commercial Merit Award Winner Project Woy Woy Rehabilitation Unit – Conrina

Judges Comments Merit for challenging colour blending requirements.

Judges Comments Merit for extensive glazed brickwork and screen wall features.

Category 3 Brickwork Commercial Winner Project Blue Mountains Cultural Centre Contractor Conrina Builder Richard Crookes Brick Supplier Namoi Bricks Architect Hassell

Category 4 Blockwork Residential Winner Project Student Residence Robert Menzies College Macquarie University Contractor Conrina Builder Grindley Construction Block Supplier Austral Masonry Architect Allen Jack & Cottier Pty Ltd

Judges Comments Matched to heritage surrounding, displaying mitred corners, extensive solider courses, multi coloured banding and garden features.

Judges Comments Extensive large scale polished block panels in stack bond.

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awards JANUARY/MARCH 2014

Awards For Excellence In Brick and Block Laying – 2013

winners

Category 5 Blockwork Commercial Winner Project Royal North Hospital Douglas Building Contractor Favetti Bricklaying Builder Thiess Brick Supplier Adbri Masonry

Category 6 Ornamental Brickwork Merit Award Winner Project House at Beecroft – Greg Poopley Judges Comments Merit for Flemish bond indented panels and quadrant ramps to walls. Including bonded capping course.

Judges Comments Combination of split face and smooth block panels, integrated with polished/honed blocks.

Category 6 Ornamental Brickwork Winner Project Kogarah Town Centre Forecourt Contractor AFM Masonry Builder Structus Brick Supplier Austral Bricks Architect Peter Marshall

Category 7 Blockwork Ornamental Winner Project House at Bondi Contractor Antony Vitellaro API Group Builder Jackline Sassine & Aaron Crothers Block Supplier Austral Masonry Architect Andrew Burges

Judges Comments Large scale garden beds, including multiple mitred corners at differing inclines. Numerous double bullnose cappings and bullnose mitres. All work in English Bond.

Judges Comments Precision gauging 5mm bedjoints to create a decorative feature using capping blocks. Creating walls, garden beds and garden features including step treads in the same material.

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apprentice of tHe year awards new south Wales apprentices of the Year First Year – Apprentice of the Year nathaniel forbes – Newcastle TAFE Second Year – Apprentice of the Year Dean gough – Wollongong TAFE Third Year – Apprentice of the Year nathan trindall – Wollongong TAFE

Nathaniel Forbes – Newcastle

Dean Gough – Wollongong

Nathan Trindall – Wollongong

Jeremy Braun – Queanbeyan

the australian capital territory apprentice of the Year First Year – Apprentice of the Year Jeremy braun – Queanbeyan TAFE

Award winning family business trading for over 50 years Providing authentic clay fired bricks and pavers with unique natural colours to compliment all types of buildings and landscaping.

We send staff out to site and assess people who have prior learning Craig Hunter TAFE Teacher

Build Your Career with Hunter TAFE

2013 Master Contractors Association, Excellence in Brick and Block Awards, Overall Winner in Commercial and Public Buildings – Brickwork – Blue Mountains Cultural Centre-Katoomba 37-39 Mullaley Road, Gunnedah NSW 2380

T: 02 6742 0533 | F: 02 6742 3230 | E: sales@nvbricks.com.au

www.nvbricks.com.au

Hunter TAFE Building Industries covers a range of Certificate and Diploma programs in study areas which include: • Building & Building Design • Building Finishing • Civil Engineering & • Air-conditioning & Surveying Refrigeration • Electrical & Electronics • Plumbing • WorkCover Licensing • Cleaning & Pest Management

Google Hunter TAFE Call 131 225

MA14017

Building Industries

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AW Edwards Employee on Site

Hiring a Female Apprentice Omesh Jethwani, highlights why the male dominated construction industry should throw its support behind the employment of female apprentices.

“We are all apprentices in a craft where no one ever becomes a master.” Ernest Hemingway.

NSW Schools and RTOs are reporting an increase in students from Year 10 onwards signing up to learn how to be carpenters, shopfitters, cabinetmakers, electricians or plumbers and what is even more fascinating is the sudden increase and interest of female students.

It seems that more females are now choosing to train in the building trades, saying no and rejecting the more traditionally “female” roles of hairdressers, childcare workers and beauticians. Welcome to the growing trend of future tradeswomen who are trading in their high heels for boots and mingling with men on the work site.

A shift in the trend is due to organisations similar to the Master Builders Association of NSW who have been promoting apprenticeships in schools in a way that challenges traditional gender stereotyping from an early stage, and will continue to do so.

The NSW Government will spend $200,000 on programs to overcome some of the biggest stumbling blocks to female participation.

Minister for Women the Hon. Pru Goward said 70 per cent of girls did not go on to university after finishing high school, and opening up trade apprenticeships would, “help these young women realise they can do other things beyond those roles traditionally reserved for them”.

The difference between a male and a female candidate is that once a female candidate makes up her mind about pursuing a male dominated trade she has either researched and/or completed a pre-apprenticeship course in school or through an RTO and she usually ends up making a better apprentice.

Gender should not play a role if an individual has the right attitude, determination and the willingness to learn. Females tend to have an eye for the finer details and are generally more committed to the job.

Several Reasons Why Employers Should Hire a Female Apprentice: • It will help address the skills shortages in the building industry and reduce youth unemployment; • Employers will be able to attract more skilled workers. Employers can tap into a large pool of unskilled and under-utilised candidates. Female candidates are as capable, responsible and hard working as the male candidates; • Employers can revitalise their business with a fresh outlook. It is a well-known fact that females see things differently.

Females have different life experiences and are able to offer new perspectives, new approaches and a fresh outlook. Female candidates are able to assist businesses to innovate for a real competitive edge; • Businesses will automatically improve their public image and market reach. Employers will be able to improve and increase their clientele if female apprentices are employed. If a company has women clientele it is beneficial to have female staff.

Females understand the needs of female clients and can assist with identifying new opportunities and markets; • It will help businesses improve morale and employee retention. Female candidates will stay and work longer with an organisation if they are accepted, accommodated, inducted and provided with a career pathway within the organisation.

• Companies from different industries who have already adopted this attitude have proven that hiring female apprentices can improve productivity and their bottom line.

It is also a known fact that employees want to work for organisations that are appealing, vibrant, innovative and willing to adapt and adopt new ideas and offer career progression.

• To break the gender stereotyping even further, State and Commonwealth Governments should create better training and employment opportunities for young people and challenge gender stereotyping.

The Master Builders Association will run a pre-apprenticeship course and mentoring program for female building apprentices in the first half of 2014.

If you are interested in employing a female apprentice contact our CAMS Team: Omesh Jethwani, NSW State Manager or Jack Long, Apprenticeship Mentoring Officer on 02 8586 3555 or email ojethwani@mbansw.asn.au or jlong@mbansw.asn.au.

The NSW Government through Women NSW supports the Women In Construction project.

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The Importance of Workplace Mentors NSW State Manager, Omesh Jethwani discusses the importance of mentoring in the workplace and how to set up a successful mentoring program.

Emma Willing, Professional Development & Promotions Coordinator; Michelle Bass, Skills Development Manager

“Tell me and I forget, teach me and I may remember, involve me and I learn” Benjamin Franklin.

What is Mentoring in the Workplace?

Workplace mentoring is a learning partnership between employers and employees for the purpose of passing and sharing institutional knowledge, technical information and insights. In today’s business world more and more companies are embracing the concept of mentoring as a professional development tool.

Through mentoring, organisations are seeing improvements in efficiency and productivity and leadership skills from one generation to the next. Mentoring began with the Ancient Greeks, making it one of the oldest forms of influence and knowledge sharing.

How To Set Up A Mentoring Program in the Workplace Depending on the structure and culture of the organisation, a mentoring program can be set up either formally or informally.

Management support and approval is one of the main ingredients. Involving top management contributes positive energy and seriousness to the initiative. In fact top management should be participating, encouraging and getting involved from the very beginning of the initiative.

Make the mentoring program part of the organisation’s policy, culture and annual review process. The mentoring program can be accessible to all employees irrespective of their positions.

Define and establish clear and precise objectives — an organisation should know exactly what it is trying to achieve through its mentoring program.

Recruiting the right mentors is crucial to the success of the mentoring program.

It is beneficial to have both male and female mentors from different walks of life who have the right skills and experiences and who are also culturally sensitive.

Matching a mentee with the right mentor is crucial to the success of the program. It is like an arranged marriage. Knowing the objectives and goals of the mentee would be beneficial as it will assist in matching

with a mentor’s skills and expertise within the same area, trade or occupation.

explaining why employees should participate in the program and how it will benefit them.

Mentoring relationships should be formatted when the pairing is completed. Introducing some basic steps would help both parties.

The first step would be to establish an agreement, followed by the mentor and mentee having a conversation about their expectations, confidentiality, and the boundaries of their relationship. The next step is establishing the agreement phase whereby the mentor helps the mentee work out a plan with clear tasks for achieving goals. Last but not least the mentor supports the mentee in following the plan as well as providing feedback and accountability.

Generally most organisations value their employees and tend to be committed to providing career opportunities to retain employees and allow them to grow within the organisation. These organisations are ideal candidates for initiating a mentoring program.

When an objective or goal has been established, an organisation has to find ways to measure whether or not the program is making progress. One way is by surveying mentors and mentees on how their experiences were achieved.

A mentoring program can only be successful if an organisation has an internal structure to support the program. These can include but are not limited to a performance management program, management development program, diversity training, strategic business objectives, developed competencies and a successful planning process.

One last note to remember is that there is no template that you can take from one organisation to another as two organisations are never the same.

Communication is vital to the implementation and success of the mentoring program. It builds employees trust, relationships and provides clarity as well as collaboration with the employees. When an organisation communicates smoothly, it can improve workflow and overall productivity. By making an effort to improve an organisation’s communication processes, it can build a stronger organisation that will have staying power in the market.

The CAMS project is a nationally coordinated approach to supporting apprentices in the building and construction industry delivered through Master Builders’ network of 33 offices around Australia, including major regional centres. CAMS is being implemented by Master Builders around Australia, with funding assistance from the Department of Industry, Innovation, Science, Research and Tertiary Education under the Apprenticeship Mentoring Program.

Do not make the mentoring program mandatory. Rather take the approach of

By Omesh Jethwani, NSW State Manager Apprenticeship Mentoring.

48

training JANUARY/MARCH 2014

plug tHe leaks in waterproofing training for your organisation each quarter master builders are asked to complete an online survey canvassing their views on the national economy and conditions within their own enterprises.

In a national building industry survey, waterproofing topped the list of the ‘10 most common defects’ in every state and territory.

The NSW Government 2013 Planning White Paper comments on addressing waterproofing and notes the significance of waterproofing defects is not confined to internal areas, as external balconies and decks are also problem areas and waterproofing failure is a significant problem across the industry.

The White Paper suggests that ‘certain’ buildings would be required to demonstrate compliance with relevant standards, namely AS 3740-2010 (Waterproofing of Domestic Areas). The minimal approach (rather than the best practice approach) for

waterproofing and certain inadequacies of the standard are part of the problem. There is an absence of appropriate training in the selection of appropriate systems, knowledge in the compatibility of products and correct application methods that are resulting in waterproofing defects and failures.

The White Paper also proposes that the builder will need to be satisfied the installer has an appropriate level of knowledge, understanding and experience to perform waterproofing work. Waterproofing is a class of work required to be licenced by NSW Fair Trading which, in turn, requires an applicant for a waterproofing licence to be competent, experienced and hold a Certificate III qualification in Construction Waterproofing.

In many cases it is important for contractors to understand the right procedure to follow when using materials together (for example, the specific coatings that should be used for specific materials). There are also new materials coming onto the market in Australia and it is essential that contractors working with them are trained properly in the way they should be used.

In November 2013, NSW Fair Trading also advised industry and the community of the major causes of residential building disputes – that being, water ingress and consequential damages due to failed or poorly installed water membranes to shower recesses, wet areas, planter boxes, balconies and podium levels.

Master Builders NSW has been assisting industry gain the waterproofing knowledge, skills and qualification required to ensure they minimise their liability of failed waterproofing on projects. We have been able to develop and deliver a training course that will minimise off the job time and successfully allow participants to complete the relevant qualification.

The Construction Waterproofing Certificate III course is designed to up skill experienced practitioners in the building, construction and waterproofing industry. Upon successful completion of this course, participants will be eligible to apply to NSW Fair Trading for a waterproofing license.

During 2014 Master Builders are offering the four day waterproofing training/assessment on the following dates: course number

Day 1 – saturday

Day 2 – sunday

Day 3 – saturday

Day 4 – sunday

1

22-feb-14

23-feb-14

01-mar-14

02-mar-14

2

04-apr-14

05-apr-14

11-apr-14

12-apr-14

3

13-Jun-14

14-Jun-14

20-Jun-14

21-Jun-14

4

08-aug-14

09-sep-08

15-aug-14

16-aug-14

5

17-oct-14

18-oct-14

24-oct-14

25-oct-14

To find out more about this waterproofing course or to confirm your booking please contact our Skills Development Centre on 8586 3578.

This innovative course is designed for participants to gain the up to date skills and knowledge necessary to meet current industry needs for the internal/external waterproofing sector. Successfully completed participants will receive a nationally recognised qualification in Certificate III Construction Waterproofing. To enrol in this course, you must meet one of following criteria: • Have carried out waterproofing, with at least two years full time experience, or; • Be a licensed builder, carpenter, plumber, tiler or renovator with at least three years waterproofing experience, or; • Other trades, with at least five years part time waterproofing experience.

Master Builders NSW are conducting this training over four days. The four day course includes training and assessment (additional training may be required for individuals, therefore, will extend the duration of the course).

50

feature JANUARY/MARCH 2014

Concrete Spalling An introduction on why attention to detail matters in reinforced concrete design and construction.

As with building and construction generally, the erection of concrete structures is a cost intensive process. Those funding reinforced concrete projects deserve maximal return on their expenditure by way of a build quality that withstands the onslaught of the elements and is for the long haul. This requires attention to detail that, without proper supervision, can fall by the wayside.

Concrete spalling, also called “concrete cancer” generally refers to the deterioration of steel reinforced concrete either by oxidisation, chemical ingress, or fire. Unfortunately, the cost associated with rectification of concrete spalling is usually a burden brought about by poor building design and construction process which proper attention to detail should otherwise avoid. Early intervention is required to ensure deterioration does not proceed beyond what might otherwise be a rectifiable situation.

What is Concrete Spalling?

Spalling is a word that refers to a process of either external or beneath the surface activity causing obvious surface failure and visible breaking away of something.

Concrete spalling is the deterioration of reinforced concrete characterised by cracking, rust and breaking away of sections of concrete. It usually has a relatively minor cause, and then progresses in stages, which unchecked may lead to serious structural problems. The end stage of unchecked concrete spalling may include actual structural failure and the need for demolition and substantial rectification works.

What are the causes of Concrete Spalling?

Concrete spalling is generally caused by disturbances to steel embedded within concrete by way of oxidation or chloride ion ingress. Usually the affected steel members are the steel reinforcement bars used to give the structure strength. However, other steel objects such as beams windows or pipes, either completely or partially embedded in the concrete that comprise part of or the whole structure can be affected.

Oxidation and Corrosion Naturally, one might wonder why steel in concrete doesn’t begin to rust at the time of concrete pour, given that concrete is part comprised of water. A key principle of reinforced concrete is that concrete has a high alkaline content which means that chemically speaking, under normal circumstances, the steel is protected from corrosion. This protective property of concrete does not permit the oxidation that begins the rusting process on steel, and will last so long as the concrete retains its high alkalinity. The way to ensure that this is the case is to ensure that the concrete area is maintained by way of maintenance in good condition and repair.

This is necessary as concrete is porous making it liable to absorb water and contaminants present in the atmosphere generally.

The problem with such absorption is that the protective alkalinity of concrete may be compromised due to acidic process that neutralizes alkalinity and then creates an environment conducive to oxidation.

This process is known as carbonation and commences on the outside of the concrete, moving inwards towards steel reinforcement inside the concrete.

The onset of oxidation leads to corrosion.

When steel reinforcement inside concrete corrodes, it is well documented that the corrosion products can take up many more times the volume of the original steel. This hidden expansion exerts forces on the concrete that it is unable to handle resulting in cracking and damage around oxidized steel. These cracks expose the interior of the concrete and steel further to the elements, which if unchecked, leads to progressive breakdown of the concrete.

Chloride Ion Ingress — Another process, found particularly in areas close to the sea, is linked with seawater salt introducing chloride ions to concrete. This ingress may lead to outcropping of rust nodules forming on steel reinforcement bar. This can cause cracks in concrete when the formation of such nodules unduly stresses the concrete from within. As with carbonation outlined earlier, the process is degenerative as cracks results in further chloride ion attack and concrete dilapidation.

In light of the above, much like the human disease of cancer, concrete spalling in concrete structures originates through insidious microscopic process leading to mutation that causes dysfunction. Left unchecked, it is a process that leads to total failure and destruction.

feature 51

JANUARY/MARCH 2014

One should also note that spalling of concrete can be caused by fire. In this context the spalling can be classified in terms of the following: • Aggregate spalling — the bursting of the concrete’s aggregate near the surface of the concrete; • Corner Spalling — the spalling of concrete originating at the corner of a structure such as a beam or column; • Explosive spalling — which is the complete failure of heated concrete.

Depending on the intended use of a concrete structure and the conditions it is exposed to, certain measures can be implemented to guard against fire spalling. An Engineer specialising in this field can advise you of guarding in respect of spalling by fire. A more extensive commentary can be read in the work of Dr Raymond Connolly (1997) noted at the end of this article.

Naturally, the questions that arise are, how can concrete spalling be identified, and what can be done about it?

Given that spalling originates with microscopic process not entirely visible to the naked eye,

there will usually be a delay between the time that concrete spalling problems commence, and the time they become evident on physical assessment. Generally speaking in the context of oxidative process, the problem has its first visible symptom in rust staining in the area affected.

Another tell tale sign of concrete spalling is visible cracking and deterioration of sheaths of concrete in affected areas arising from the inability of concrete to contend with sheer forces caused by the internal expansion of steel surface changes whilst embedded in concrete. Diagnostically speaking, it should be noted that not all apparent rust staining is necessarily a symptom of concrete spalling.

A chartered professional engineer who has the necessary skill, qualification or experience to advise you about the affected areas in question should determine whether concrete spalling is in fact a problem at your site.

How it can be prevented/treated?

It is impractical to suggest that because spalling seems to commonly originate with steel becoming affected by degenerative

process, that steel should not be used in concrete structures. Concrete has a relatively high compressive strength but low tensile strength. Steel, on the other hand has a high tensile strength. Combining these two materials together can lead to the construction of the primary structure of breath taking building structures such as the Beirj Khalifa skyscraper in Dubai, at 828m tall. Despite this, concrete cancer is the Achilles heel of reinforced concrete structures. Concrete and steel work very well together, and much can be done to prevent or treat the problem of concrete spalling such that the problem is arrested and eliminated.

The first line of defence against concrete spalling is attention to detail in the construction phase.

It is the writer’s experience that cost pressures, time pressures, lack of experience, a lack of education or sheer ignorance can lead to mistakes that cause unacceptable rectification work costs down the road for building owners.

Proper supervision and intervention as necessary will avoid these undesirable costs arising.

Reinforced steel must be suitably covered by the concrete at the time of pour. Whilst different sites, conditions and requirements may necessitate

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52

feature JANUARY/MARCH 2014

different minimum levels of cover one good rule of thumb is to ensure that concrete covers steel reinforcement by no less than 25mm. A perusal of, and compliance with the Australian Standard AS 3600 “Concrete Structures”, current edition, will be considered by your Structural Engineer in relation to your project.

One should ensure that supervision is effected such that proper coverage is achieved, and that suitable curing techniques are affected to achieve maximal concrete strength. One might contemplate and implement a system that aims to prevent causative agents at the genesis of the concrete spalling affecting embedded reinforced steel. Several reputable manufacturers of appropriate coatings exist.

They offer products that aim to prevent the ingress of moisture and harmful agents into concrete to protect your building.

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In the instance of established concrete spalling requiring repair one might consider retaining a Structural Engineer to advise on the extent of damage and to implement a solution. Typically, this will involve a removal of deteriorated steel and concrete, the imposition of remedial measures to rectify and structural defects arising as a result of the spalling, the application of any relevant coatings to steel, the application of binding agents, and the careful repair of spalled areas.

Finally, concrete spalling is a problem that arises due to exposure of concrete structures to the forces and dynamism of nature. Whilst an eye for detail and excellence under the watchful eye of a professional can largely ensure that it is entirely avoided by way of superior construction technique, concrete spalling may originate at a microscopic level. When left unchecked, it may become progressively worse. Fortunately, early intervention can restore a concrete structure to a good condition and without major ongoing concern for building owners.

By Nicholas Abelas, Principal at Sydney Engineers.

References: Connolly R., The Spalling of Concrete, Fire Engineers Journal, January 1997, p38-40 About the author: Nicholas Abelas is a chartered professional Structural Engineer. His experience is in the structural design and documentation of building structures and the provision of advice and reports for all manner of projects in Sydney, Illawarra and Greater NSW region. He is the principal at Sydney Engineers — www.sydneyengineers.com.

BCMG is a professional, serviCe driven orGanisation that has developed a solid reputation for MetiCulous Care and attention to all our work.

Remedial building and restoration | Building maintenance | Building repairs | Concrete cancer Concrete spalling rectification | Concrete expansion joints | Structural repairs | Protective coating Waterproof membranes Combined with our great workmanship and excellent service, we believe we offer the best value for your dollar. we’ve Built our Business By providinG professional & reliaBle serviCes for all CustoMers.

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“Our business success is directly dependant on our client satisfaction” Through reputation in business, focus on performance and years of unsurpassable experience, MDP Group continues to consolidate its position as one of the leaders in the building remediation industry. Conscious of the need for effective service in the remedial industry, MDP Groups aim is to provide clients with professional process, personal attention and long term solutions.

Concrete spalling projects have ranged from 1,000 Litres at 175 Pitt St, SYDNEY to 10,000 Litres at 3 Campbell Pde, BONDI and 25,000 Litres at UNSW Kensington Mechanical & Electrical Engineering Bldgs G17 & J17.

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175 Pitt St, Sydney ‘In Progress’

Please visit our website www.mdpgroup.com.au to browse our many specialised areas of remedial works such as waterproofing, polymer rendering and balustrades through to total building remediation.

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54

advertorial JANUARY/MARCH 2014

If You Employ Site Workers, Don’t Get Yourself in the Poo! Viking Rentals is one of Australia’s small company success stories. The company was founded in 2006 when Jim Noort rented a dirty portable toilet from a large company and thought that there must be a better way.

OHS regulations require that an employee shall be provided with reasonable access to hygienic toilet facilities.

Access to toilets is essential for the maintenance of good health. It has been demonstrated that if toilet access is not readily available, employees may reduce their fluid intake, leading to dehydration and fatigue. This also can lead to increased risk of kidney and bladder infections, kidney stones, and heat stress in hot or arduous work conditions.

Where the toilet is not connected to the sewerage system, self-contained, fresh water flushing, portable toilets should be provided. These should be regularly serviced in accordance with the supplier’s information and instructions, no less than monthly.

To provide an acceptable standard of hygiene and privacy, the toilet must be: • Kept clean • Weatherproof • Well lit and well ventilated, either naturally or artificially • Provided with a hinged seat and lid • Provided with a door that can be locked from inside • Provided with a well-drained floor above ground level that is covered with a durable waterproof material • Provided with a plentiful supply of toilet paper • Set up to remain level and stable under all working conditions

The recommended servicing interval is fortnightly for a small building site with one to five workers and upward from there.

Where female workers are present on site, appropriate measures for sanitary item disposal should be made, such as a disposal unit provided in the portable toilet or sewer connected toilet closet.

Viking Rental’s standard toilet comes with fortnightly servicing included in the rental price. Oh, and servicing isn’t just pumping out the waste but includes a full cleanout, sanitisation and restocking of the toilet paper and hand soap. Viking has earned its reputation as the “Dunnies with Dignity”.

• Viking Rentals Toilets • Modern plastic fleet • Foot Operated Flush • Hand Wash Basin • Fortnightly Servicing Viking Rentals specialises in a range of portable toilet equipment - and we concentrate on doing those things really well. We have 30 trucks, 3,500 portable toilets for hire, thousands upon thousands of metres of temporary fencing, and many hundreds of temporary power poles. We also have unique products designed especially for our customers. Examples are our mini site offices - suitable for the inner city builder working on tight sites, and our world first 16 shower block (48 showers in one B-Double trip!).

Viking Rentals is a leader in providing hygienic affordable portable toilet hire and liquid waste management services around Australia.

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56

advertorial JANUARY/MARCH 2014

ACRS – eliminating breaks in the ‘Chain of Certification’ Quality construction projects require quality materials with demonstrated compliance.

Selecting construction materials based on price alone can end up costing significantly more than using materials that are selected on the basis of quality and performance – particularly if it is determined that fault in law could be found.

Major construction clients, designers and contractors worldwide, recognise and even specify ACRS and its product certification scheme to confirm the technical competence of suppliers and gain assurance of consistent product quality.

Put simply, it doesn’t matter how well you build if you have built in a high risk of structural failure through using unverified materials from an uncertified supplier.

ACRS is the expert, independent, third party product certification scheme for construction steels supplied to AS/NZS Standards.

ACRS was created in 2000 as a not-for-profit body to provide a cost effective, but credible means of verifying through direct, factory and in-market assessment, that the construction steels supplied to building sites consistently meet the requirements of engineers, specifiers, builders, building certifiers and customers.

ACRS certification from the mill to the end supplier gives you the simple tool to manage this risk - the supplier's ACRS certificates.

Steel reinforcement, prestressing steel and structural steel are integral parts of any building or structure. While to the casual observer, all steel may look to be created equal, in reality this is far from the case.

Whether as a result of inferior raw materials, contamination during manufacturing, incorrect or inappropriate manufacturing processes, or manufacturing to alternative Standards, there are steel reinforcing, prestressing and structural steel products which quite simply do not meet the requirements of the relevant Australian and New Zealand Standards.

Notwithstanding the potential safety issues that can result from using sub-standard construction materials, in these days of widespread litigation and strict ‘chain of responsibility’ legislation, the use of noncompliant steels can spell disaster for engineers, certifiers, specifiers, suppliers and builders in more ways than one.

ACRS – expert third party steel assessment With these issues and risks in mind, the Australasian Certification Authority for Reinforcing and Structural Steels (ACRS) provides fully independent, non-biased, expert third party assessment and verification of steel construction materials supplied to the construction industry, to ensure that they meet Australian and New Zealand Standards.

Quite simply, ACRS certification reduces the risk of buying and using steel which does not meet minimum requirements, and enables feedback and corrective action in case problems arise.

Independent of any commercial interests, ACRS assessors, auditors and management are all experienced engineers, certifiers or metallurgists with extensive experience in steel manufacture, supply, design and construction.

ACRS provides a centralised, streamlined certification process for: • Reinforcing bar, wire and mesh • Prestressing bar, wire and strand • Cold-formed steel hollow sections • Hot-rolled steel plates, bars and sections • ACRS currently certifies over 150 manufacturing locations, in 15 countries around the world, and has undertaken more than 700 technical conformity assessments to AS/NZS steel Standards.

These include: • AS/NZS 4671 – Steel reinforcing materials (Manufacturing and processing of materials) • AS/NZS 4672 – Steel prestressing materials • AS/NZS 1163 – Cold formed steel hollow sections • AS/NZS 1594 – Hot-rolled steel flat products • AS/NZS 3678 – Hot-rolled plates, floorplates and slabs • AS/NZS 3679.1 – Hot-rolled bars and sections • AS/NZS 3679.2 – Welded I sections WARNING Just because the steel originally came from an ACRS certified mill, does not mean the end product is “ACRS certified.”

When it comes to ACRS certification, there are only ever two options, either: The supplier is ACRS certified and all of its materials are declared, assessed and verified to AS/NZS standards; OR The supplier is not ACRS certified (and therefore the onus is on the customer to verify the supplier’s claims of conformity).

It is fraudulent for a supplier to claim that a product is “ACRS certified” simply because the end product used materials from an ACRS certified mill.

The full ‘chain’ must be ACRS certified. Failure to verify that the products are from an ACRS certified supplier may result in you using non-compliant materials for which you may be held liable.

ACRS certificates – quick and easy web-based verification ACRS also gives you real choice. ACRS certifies not just domestic suppliers, but also world-class overseas manufacturers, giving Australian and international customers the widest choice of products complying with Australian & New Zealand Standards.

With ACRS it’s easy for your suppliers, easy for your customers and easy for you!

For further information about the validity of supplier certification for any materials being supplied into your project contact ACRS. Be safe – be sure – only use ACRS certified products.

For more information contact: Phone (02) 9965 7216 Website www.steelcertification.com Email info@steelcertification.com

Don’t leave steel compliance to chance.

• Whether you’re an engineer, certifier, builder or supplier – using and signing off on non-compliant steel is simply a chance that’s not worth taking.

• If the integrity of your structure fails, loss of reputation and financial liability could just be the beginning of your problems.

• Building with steel that appears less expensive could also mean it doesn’t comply with Australia/New Zealand Standards for construction.

• ACRS Certificates of Product Compliance help check compliance to Australian/New Zealand Standards and the Building Codes.

• How do you know your building or construction is safe if you don’t know if the materials are compliant?

• Understanding how you can protect yourself is critical. You have the power to refuse to use non-compliant steel.

• So ask yourself this – is it worth building without an ACRS certificate?

It’s not a risk worth taking.

Demand the ACRS Certificates of Product Compliance.

Contact ACRS on (02) 9965 7216 or info@steelcertification.com or visit www.steelcertification.com ACRS – The Australasian Certification Authority for Reinforcing and Structural Steels Ltd ABN 40 096 692 545

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58

what’s new JANUARY/MARCH 2014

50 New rUrAl resorts

“ENDLESS” PROFIT SOUP FOR A HUNGRY BUILDER

Developing australia’s 8,500 fast food stores, mcDonald’s, Kfc etc; were those who made and keep making, large profits. they were the FIRST contractors and suppliers to these first developments. as ceo, marc aussie-stone, of Rural tourism Development task force, and previous five Kfc store franchisee, i similarly invite expressions of interest from an

ENDLESS PROFIT HUNGRY MASTER BUILDER to be a contRactoR to builD ouR 50 PlanneD ResoRts WitH tHe 1st bencHmaRK KeY ResoRt neaR gloucesteR’s baRRington toPs building all fifty, 250 cabin Resorts over the following 5 years we estimate will earn $50,000 profit from the sale, lease back and management of each their total 12,500 fully furnished, equipped, torrens title, Holiday cabins. that totals $625,000,000 development profits. these profits, besides contractor’s build profits, will be shared between contractor and others.

Views by former newcastle lord mayor, John mcnaughton and cooperating task force business leaders can be seen on

WWW.RURALDISCOVERYRESORTS.COM for more information contact: dudley mobile: 0428 600 120 email: ruralprogress@netscape.net

NEW WILSONART PRODUCT LINES FOR AUSTRALIA FROM HVG Exclusive Distributorship Offers Complete Market Solution.

Since May 2012 when Wilsonart and HVG Decorative Building Products announced their exclusive partnership to service Australia, the two firms have collaborated on developing a broader portfolio of Wilsonart products to create stylish and functional spaces. The companies have released two new product lines: Wilsonart® Decorative LPM Panel (Low Pressure Melamine) and Enliven, a new collection of Wilsonart® Decorative HPL Panels (High Pressure Laminate).

Wilsonart and HVG continue to develop product to provide the Australian market with greater design options at a high quality standard. Coupled with the dedicated service both Wilsonart and HVG are known for, Australia has better options than ever before in laminate choice from Wilsonart. www.hvgbuilding.com.au

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We have a range of online contribution payment options, including the Cbus Clearing House which will allow you to pay your employees’ super into multiple funds using the one system.

Access to financial advice for Cbus members.

Regular communication with members and employers.

At Cbus we invest back into the building and construction industry as part of our investment strategy, thereby creating jobs.

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Read the relevant Cbus Product Disclosure Statement to decide whether Cbus is right for you. For a copy: call Cbus on 1300 361 784 or visit www.cbussuper.com.au Cbus’ Trustee: United Super Pty Ltd ABN 46 006 261 623 AFSL 233792 Cbus ABN 75 493 363 262.

60

the way we were JANUARY/MARCH 2014

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