Master Builders Association of Western Australia 2016 Annual Report

MASTER BUILDERS WESTERN AUSTRALIA

ANNUAL REPORT

2016

“Our vision is ‘A strong Master Builders Western Australia for a strong building and construction industry’, where the very best companies within our industry aspire to join our pursuit of excellence. At the forefront, the over-arching purpose of [our new] Strategic Plan is to strengthen Master Builders Western Australia as the peak industry association whilst always adhering to our values and culture.”

Robert Spadaccini

Michael McLean

Master Builders Western Australia

Master Builders Western Australia

President

CONTENTS 4.

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About Master Builders President's Report Executive Director's Report New Strategic Plan Policy & Advocacy Membership Partners Master Builders Services Our People Corporate Governance Treasurer's Report

Master Builders Association of Western Australia ABN 83 590 927 922 © 2016 Master Builders Association Western Australia. No text, photo or graphic shall be reproduced, copied, published, broadcast, rewritten for broadcast or publication, or redistributed directly or indirectly in any medium without permission.

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Executive Director

ABOUT MASTER BUILDERS The Master Builders Association of Western Australia was established in 1898 by a group of prominent builders intent on raising standards within the building and construction industry.

Since that time the Association has grown to become the pre-eminent industry voice, recognised for its advocacy and strong lobbying influence. Members are universally renowned for their reliability, skill and professionalism.

A broad based organisation, Master Builders serves the needs of the entire industry, from residential to commercial and engineering businesses, principal contractors to subcontractors, professionals, manufacturers and suppliers.

Western Australia, is now Master Builders Australia National President. WA also has another important voice through Robert Shaw, a member of the federation’s National Board and Chairman of its National Residential Builders’ Council.

Master Builders assists members by providing access to a wide range of services, an impressive degree of recognition, as well as representation to government and industry. Master Builders also serves the West Australian public by fostering best practice work standards.

Master Builders works with members, industry stakeholders and governments to deliver excellence, prosperity and safety in building and construction by: 99 Improving regulation.

99 Sharing vital industry information.

99 Providing practical training to meet contemporary industry needs.

99 Assisting members with the management of safe, environmentally friendly and healthy workplaces.

99 Showcasing and rewarding construction excellence.

99 Providing workplace relations expertise.

99 Offering a range of contract documents.

99 Assisting members with contractual and tendering advice.

99 Providing industry specific insurance products.

99 Maintaining links with kindred organisations in the Asian and Western Pacific region.

Over the Association’s 119-year history, Master Builders consistently has provided innovative services for members and their clients; Master Builders exists to serve their needs. In addition to a strong West Australian presence, Master Builders is part of a national federation, Master Builders Australia, representing more than 32,000 members across every state and territory.

The role of the federal office in Canberra is to promote at a national level, the viewpoints and interests of the $200 billion building and construction industry, the country’s third biggest industry, employing more than a million people and training more than 50,000 apprentices each year. Dan Perkins, a Past President of Master Builders

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PRESIDENT’S REPORT In this, my first year as Master Builders’ President, and in the Association’s one-hundred-and-nineteenth year, I am pleased to report significant developments in the organisation.

In this, my first year as Master Builders’ President, and in the Association’s one-hundred-andnineteenth year, I am pleased to report significant developments in the organisation. We have made rapid progress in developing a strong Strategic Plan to provide a clear vision for the next three to five years.

In this regard, I am grateful to our experienced Board of Management and senior staff for the many hours’ work put into the planning. In both the Board and staff, there have been changes and renewal. On the Board, David Crothers and Jack Pleiter moved into the Vice Presidencies, Grant Burgess, a partner at Ernst & Young, became Master Builders’ first external appointment as Treasurer, George Allingame retired after many years’ service to the Association and Michael van Dongen became the most recent Board member.

The focus at this overarching level of Master Builders is to ensure we have good governance principles firmly in place and to guide the organisational capacity and sustainability of the Association.

To these ends, we made significant appointments of Graeme Dix as Business Director and Jason Robertson as Housing Director during the year. The Board and staff subsequently undertook an extensive strategic planning program under the guidance of the Business Director and consultant Colin Bell to put the Strategic Plan and ancillary documents in place.

The role of our Councils – Housing and Construction – as the chief vehicles for developing industry policy, has been brought more clearly into focus, and procedure has been put in place to aid in this role. The Association committees, the standing Safety and Training Committees, and Branch Committees, in addition to dealing with specific and local

matters, also are attuned to the policy development process.

The Board also is looking inward, considering the skills needed now and in future to keep Master Builders relevant; and addressing how the Board is constituted under the Association’s Rules and whether changes are required.

In all this planning and revitalisation, I acknowledge the willing participation of not only our volunteers, but of staff, from senior leadership through all levels.

In terms of ensuring the Association’s capacity to thrive into the future, the Board took significant steps to ensure Master Builders’ properties are being managed in the most efficient manner. There are three regional properties which, along with Construction House in West Perth, now are all under the management of VPG Property. This largely frees up Master Builders’ staff, particularly regional staff, to concentrate on the membership, not the distraction of property management and leasing.

Construction House remains the Association’s major asset and, despite the tight market, is almost fully tenanted with a good tenancy profile. To ensure the building’s marketability well into the future, we are getting under way with recladding the building’s façade to bring it up-to-date. My thanks to Immediate Past President John Ripp for leading this project.

The Board, Treasurer and Financial Controller also have guided an overhaul of aspects of the Association’s budget, changing some reporting formats and ensuring Board members have a better understanding of the financials.

On this note, we posted a very satisfactory surplus for the financial year and, despite facing another challenging year, still are forecasting a healthy 2016/17 surplus.

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Another major task this year has been to oversee a much-needed upgrade to the Association’s IT systems and to this end, a consultant firm was engaged. Staff who previously were distracted dealing with large and small IT issues now are largely free to deal with core responsibilities.

Hardware and software were updated, and the difficult task of providing an updated, comprehensive membership database management system has begun.

In conclusion, this has been a year of change and one which holds the promise of more dynamic times to come for Master Builders. My thanks to the many supporters of the Association – the Board, Councils, Committees, volunteers, Executive Director Michael McLean and the staff and, of course, our members and valued alliance partners and sponsors.

ROBERT SPADACCINI PRESIDENT

EXECUTIVE DIRECTOR’S REPORT This annual report, the Master Builders Association of WA’s one-hundredand-eighteenth, provides a great insight into the Association’s many industry activities and service through the year. Of equal importance, however, it highlights the extensive effort which has gone into planning the organisation’s future.

As members might well be aware by now, the Association’s Board and staff embarked on an ambitious strategic planning program this year. I am pleased to say that a great deal has been achieved in a short time with our new vision being formally launched at November’s Annual General Meeting.

As noted elsewhere in this Annual Report, the Board of Management will monitor our progress under the Strategic Plan but already the Association’s activities during the past year can be seen to be fitting the more coherent structure of the Plan.

Elsewhere, the President and I have written that the Plan will lead us to recognise that we are a team in pursuit of one common cause – to strengthen and grow the building industry. We will be committed to delivering the best outcomes and exceptional customer service. A recent survey of 300 members to gain feedback on the Association and its services was very encouraging. However, we will use the information gleaned from the survey to further improve our business offerings to members.

A FRESH LOOK AT PRODUCTS AND SERVICES While we have some great enhancements in this area – notably, new alliances with HBF and AHG which, feedback suggests, are giving members and their staff significant savings – we also have carried out life cycle reviews of the Association’s products and services.

Changes are being implemented but, of course, we continue with many long-standing offerings.

Master Builders provides a range of contract documents including, this year, updates to our local head

contracts. Courses on contract law and contract administration are among the training which the Association’s training department provides.

Unfortunately, the training sector is saturated with providers (some offering dubious deals) and tight residential and construction markets mean smaller training budgets and fewer attendees at courses. Nevertheless, Master Builders continues to offer a wide range of courses, including the Building Diploma. We also signed a partnership agreement with IFAP (the Industrial Foundation for Accident Prevention) to provide greater health and safety education and to deliver specific training programs.

Following a marketing review, demand for the Association’s expert safety knowledge is growing.

Various services are available and there has been notable success in increasing our site safety inspection programs.

CELEBRATING OUR MEMBERS Many opportunities arise each year for Association members to promote their businesses. Foremost is our Excellence Awards program, with events in the metropolitan area and five regional centres.

Adrian Zorzi Builders set a precedent in winning both the Best Country Home and Top WA Home at February’s Housing Excellence Awards. Other overall winners this year were Built (Best Commercial Project), Commercial Tiling Services WA (Subcontractor of the Year) and Credentia Construction (Best Civil Engineering Works).

Association and member showcasing also came in the form of the Perth Home Show, the HOME 6

in WA television program (in its seventeenth season with Master Builders as major partner), The Sunday Times Home magazine, Excellence Awards winners’ magazines and newspaper supplements, Master Builder and BuildIT magazines and our websites.

Along with the colourful Excellence Awards functions, there were many other opportunities during the year – breakfast briefings, member nights, boardroom briefings – for members to engage with colleagues and wider industry circles. Sporting enthusiasts weren’t neglected, with golf, tennis and bowls events.

POLICY AND ADVOCACY A key pillar of our new Strategic Plan is strengthening and sustaining our industry advocacy and representation.

This will take on added importance in the lead up to the State election next year and we will adopt the ‘Strong Building Strong Economy’ theme the Master Builder movement promoted before the Federal election. The Construction and Housing Councils and senior staff are tackling policy development based on proper evidence and with wide member input.

More detailed information is included in the Policy & Advocacy section of this report.

OUR BUILDING COMMUNITY Master Builders is a strong supporter of MATES in Construction, organising the annual Ride Against Suicide in April which this year raised more than $10,000. The Association promoted the Fly the Flag initiative and in September, three Master Builders’ Board members took part in the grueling but memorable MATES Kokoda Trek on the legendary World War 2 Kokoda Track. WA ‘trekkers’ raised

about $70,000 in a national total of about $220,000.

Every year, the Association celebrates an industry champion when it presents the Robert Law Award for exceptional service to building over many years. The 2016 award went to Ross North, 1960s apprentice carpenter, but 50 years on, and with more than 10,000 homes behind him, managing director of the Ross North Group.

The Association also backs the Master Builders Bowling Club in its monthly games throughout the year.

The club won the annual interstate James Wall Cup this year and will host the tournament in Perth in May next year. It will celebrate its fiftieth anniversary in August.

BUILDERS OF THE FUTURE In addition to our training services, Master Builders continues to promote apprenticeship as a vital step in a building industry career.

Through great work by Master Builders Australia, Federal funding has been secured to start a national apprenticeship reform pilot program addressing industry’s future needs.

South Regional TAFE has been selected to run the WA program and Master Builders has met the college to provide input into the program.

The Association also champions apprentices through its Apprentice of the Year Awards. These enjoy a high reputation and excellent attendance by apprentices, their families and industry supporters.

Corey Drake, a second-year bricklaying apprentice, was announced as the Master Builders Apprentice of the Year at the most recent awards in November last year.

At the same awards, the Association continued its tradition of presenting the Ric New Medal and Ric New Rising Star Award to outstanding young industry leaders. The awards

went to Gavin Hestelow and Ritesh Bhudia respectively. The Association is looking to further foster upand-coming industry achievers by forming a young builders’ forum. In addition, Master Builders fosters greater female participation in the industry through the Women in Building and Construction program throughout the year.

In August, the subject of how the industry will look in the future came under scrutiny with a selection of high profile speakers at the Master Builders-AIB ‘Innovation’ State Conference.

CHALLENGES AHEAD While there has been a great deal of activity at Master Builders over the past year, for much of the WA industry these are quiet, if not straitened, times. The statistics show the value of residential and non-residential work has fallen over the past year, dwelling approvals are down dramatically, the State’s population growth has slowed, the construction workforce has decreased and apprentice commencements are well down. In the lead up to the State election, and under the Strong Building Strong Economy mantra, we again will be emphasising the need for reform of planning and approvals regulation, less red tape, disaggregation of public works, measures to improve housing affordability, changes to housing indemnity insurance, support for apprenticeships and sensible measures codifying proper industry behaviour on such matters as industrial relations, safety and security of payment.

The good news is that the Association is in a strong position to vigorously advocate for the industry and also to continue to provide worthwhile products and services for members.

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TOP LEVEL LEADERSHIP As the President mentioned in his report, there were some orderly changes in our experienced Board and two key staff appointments during the year. I would like to thank Board members and senior staff for their leadership in tackling the development of our new vision and strategies for Master Builders.

Thanks also in no small measure to all our staff for embracing the organisation’s new aspirations.

Both within Master Builders and for the industry at large, there still will be many challenges and opportunities in the immediate future. However, the Association has established clear foundations over the past 12 months which will allow us to meet those demands well into the years ahead.

MICHAEL McLEAN EXECUTIVE DIRECTOR

NEW STRATEGIC PLAN VISION & STRATEGY

In 2016, Master Builders has embarked on putting together a new Strategic Plan for the business.

This is a 3-year Plan with a 5-year horizon and has been put together with the intent to help the business grow and create further relevance to the construction industry.

The Plan was endorsed at the Association’s September Board meeting and implementation is underway. There are five pillars to the Plan.

PILLAR 1

PILLAR 2

ADVOCACY

MEMBERSHIP

Provide highly respected advocacy and voice for the growth and sustainability of the building and construction Industry.

Increase appropriate membership to maximise representational leverage and financial stability.

Master Builders has set out to strengthen this area of business by creating a measurable framework and plans for tier 1 and 2 policies.

This means members will know and understand what the policies are and how Master Builders is lobbying to get the outcomes. Members also will see how the policies are progressing and Master Builders will be measured by results.

Master Builders’ team has developed a membership framework which identifies the businesses within industry that can benefit from being Master Builder members. This means Master Builders’ whole business is focused on service-based outcomes and usable products and services that members want and need.

The framework enables us to identify the holes in membership and the linkages Master Builders needs to address so members get the strongest ROI for their membership.

The policies will be formed by evidence-based information from the industry and not by the opinion of any single entity. The Association will achieve this by a unified approach from both members and the alignment of the Association’s partners within the industry.

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PILLAR 3

PILLAR 4

MASTER BUILDERS SERVICES

ORGANISATIONAL CAPACITY & SUSTAINABILITY

Provide highly valued products and services tailored specifically to the building and construction industry.

Build our organisational strength to fulfil our strategic direction.

This is an important pillar to help deliver the whole Strategic Plan. Members will see a cultural shift in the business as the Association starts to realign structure and roles. Master Builders is developing a far more agile structure able to adapt to industry and membership changes more easily. The Association also is mapping the knowledge of senior staff so history and what the business has learnt over the years can be passed easily to a new generation. Members also will see IT capacity strengthened to help streamline the business and service delivery.

This pillar is an area which is changing rapidly. As part of the Strategic Plan Master Builders has started life cycle mapping all its products and services.

This means members will start to see revamped and up-to-date products and services they have asked for. The Association will measure these.

PILLAR 5

REPORTING The Board will monitor the Plan on a quarterly basis and make sure the Association is meeting all its objectives. It also will survey members to ensure awareness of progress and satisfaction with the outcomes.

GOVERNANCE Master Builders’ Board will provide strong leadership and governance to the organisation so it can fulfil its important role to members, industry and the community.

WINS Even though the Board only signed off the Plan in September, we already are starting to see a few of the early wins.

The signing of IFAP, HBF and AHG as alliance partners has seen a significant increase to the Association’s ability to deliver membership benefits. Keep watching as the Association’s other partners also are working on new products for members.

Over the term of the Strategic Plan members will start to see the overview of the Association’s governance model align to the changing industry. The Board will be proactive in making sure all elements of the Plan are met and communicated so members can see the difference their Association is making.

Some early wins for the advocacy and lobbying department now are being communicated on a regular basis so members can get a better understanding of the work being carried out daily.

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POLICY & ADVOCACY With construction contributing about nine per cent to Gross State Product and with it comprising about 10 per cent of the workforce (including nearly half the State’s apprentices), Master Builders has a great responsibility as the peak lobbying organisation for its members and the broader WA industry.

Master Builders recognises that reform takes time and requires a strategic approach. With the advent of the Association’s Strategic Plan, the Housing and Construction Councils changed their approach to policy creation and advocacy, adopting a framework to provide for transparency, consultation, accountability and evidence-based decision making in setting policy.

imminent technologies which will change building methods and products.

Research is underway on downsizing trends. This is crucial to the future of the residential market, and Master Builders’ project will assist the State Government’s strategic planning for residential design and precinct guidelines.

With the State economy adjusting to end of the mining and resource construction boom and immigration returning to pre-boom levels, the impact on the commercial sector has been highly competitive tendering on slim margins, and on the residential sector, the need to adapt quickly to activity levels well down on recent historical highs. In turn, Master Builders has needed to be more strategic, to prioritise and to be open to change in setting policy to meet members’ and industry’s needs.

In the commercial sector, Construction Council efforts included focus on restoration of the Australian Building and Construction Commission, the introduction of a revised WA Building Code of Conduct covering a wide range of workplace arrangements including safety standards and drug and alcohol testing and the building union’s 2016 pattern EBA. Harmonisation of WA’s laws with model Federal safety laws continued under review though Master Builders was disappointed by the WA Government announcement deferring the model laws to after the State election. The Association has lobbied for a smaller harmonisation package rather than the bloated Federal version.

The Association’s 2015-16 residential agenda saw policies approved on building in bushfire prone areas and on regulatory reform (including lobbying for private certification of town planners and, in time, further private certification of building services). Several other areas have been identified for policy development including housing affordability, housing indemnity insurance, Building Commission audit reports, energy efficiency requirements, universal access requirements and building licensing-registration requirements

Security of payment again has emerged as an important issue with the Government’s Building Management and Works agency adopting project bank accounts, the proposed WA Building Code of Conduct having a bearing and changes to the Construction Contracts Act in Parliament. As well as providing input on these issues, the Association continues to press for government (particularly BMW) to lead the way as a model client and example to industry at large.

Infrastructure, including the impact on strategic planning elements (such as infill development, metropolitan and sub-regional frameworks and public transport networks), is an issue identified as a high-level priority, as will be the impact of emerging, 10

HIGHLIGHTS DURING 2015-16

OUR TOP SIX ADVOCACY ISSUES:

Master Builders is acutely concerned about housing affordability, with valuations and lending criteria critical issues. The Association has engaged with leading financial institutions to address these concerns.

ISSUE 1

The Federal Government appears to be inching closer to Senate support for restoration of the ABCC. If the Government is successful, it will be a major achievement for Master Builders in championing restoration of the rule of law in the building industry.

Security of payment is an election issue. Master Builders has raised this with the three major political parties and had a significant role in ensuring reasonable mandated maximum payment terms.

Master Builders backs the Federal Government’s determination to restore the ABCC to ensure the building and construction industry has a strong watchdog to maintain the rule of law.

ISSUE 2

Bushfire reform legislation was introduced in December. Master Builders foresaw problems and urged a delay. The legislation proceeded and with no education and training and little thought to the financial implications, many issues quickly arose. The Association has formed an industry-government committee to make recommendations to the Premier on the legislation.

Regulatory reform is a Master Builders’ priority.

Two WA Government Building Summits have dealt with improving planning, local government and building approval processes and reducing regulation. The Association has actively provided recommendations and guidance to the reform project.

CODE OF CONDUCT FOR THE WA BUILDING AND CONSTRUCTION INDUSTRY Master Builders is calling for updating of the 2002 Code of Practice for the WA Building and Construction Industry to provide consistency with the 2013 Federal Code of Practice for the Building Industry.

ISSUE 3

Master Builders has lobbied the WA Government to produce an updated industry Code of Conduct. The Association is a key contributor in developing a new Code announced by the Government in late 2016.

Master Builders continues to assist members develop their own workplace arrangements, particularly when confronted with the tight market and the uncompetitive CFMEU(WA) 2016 pattern EBA.

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSION

BUILDING IN BUSHFIRE PRONE AREAS Working collaboratively with industry, Master Builders will identify improvements to the legislation, make recommendations and lobby the Government to implement the recommendations.

ISSUE 4

REFORM FOR GREATER EFFICIENCY IN REGULATORY PROCESSES AND PROCEDURES The Association continues to lobby for statutory and strategic planning reforms including progressing electronic lodgment and advocating reforms to private certification and to local government processes.

ISSUE 5

HOME INDEMNITY INSURANCE Master Builders continues to work with the residential sector and Government to resolve what needs to be done to make WA’s home indemnity insurance scheme equitable and more sustainable.

ISSUE 6

SECURITY OF PAYMENT Master Builders supports ethical contractual payment arrangements and reforms to the Construction Contracts Act but will hold the Government to account where reforms result in unnecessary red tape.

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MEMBERSHIP With strong recruitment, the Association exceeded its target of more than 2000 members by the end of the 2016 membership year. An overriding aim remains to create greater member engagement, and hence to provide greater value to every member.

Success with the Association’s member liaison program continues to grow. Over the past year, there were 1035 meetings and phone consultations recorded, resulting in members having a greater awareness of Master Builders’ services and a higher take-up of those services. It remains vital to ensure there is an understanding of where benefits lie and to get members involved.

Plan will ensure the Association can tailor what it offers and how it delivers services and communications to members. Significantly during the year, the Association added two new alliances to the Members Savings Scheme, with offerings on motor vehicles (AHG) and health insurance (HBF) now available to all employees of member companies.

The Association included two key pillars in the new 3-year Strategic Plan – Membership and Master Builders Services – aimed at understanding the emerging needs of a changing industry. While the Master Builders’ brand remains of significant value to members, particularly in the face of an industry slowdown, the inclusion of the Membership and Master Builders Services pillars in the

In addition to the broad Strategic Plan, Master Builders has cemented first class customer service and member satisfaction within its values and goals. The Association will continue to build on its strategies over the coming year to push for positive membership growth.

TOTAL MEMBERS AT 30 JUNE 2016

850

BUILDERS

NEW MEMBERS JOINING OVER 2015/2016

335 OTHER

145

15 1

BUILDERS

487

2

102

200

27

45

122

2,023

29

SUBCONTRACTORS

SUPPLIERS/ MANUFACTURERS

PROFESSIONALS/ CONSULTANTS/EDU

KINDRED ASSOCIATIONS

STUDENT AFFILIATES

SUBCONTRACTORS

STUDENT AFFILIATES

KINDRED ASSOCIATIONS

SUPPLIERS/ MANUFACTURERS

PROFESSIONALS/ CONSULTANTS/EDU

TOTAL

337

TOTAL MEMBERSHIP BY REGION AT 30 JUNE 2016

1,291

247

165

226

PERTH/METRO

GREAT SOUTHERN

94

SOUTH WEST

GOLDFIELDS-ESPERIANCE

MIDWEST-NORTHWEST

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TOTAL

PARTNERS Throughout the year, Master Builders worked closely with all sponsors, supporters and alliance partners to deliver a series of successful events and promotional opportunities.

For the tenth consecutive year, Bankwest partnered with the Association, adding the WinBaC – Women in Building and Construction – range of events to its portfolio of support.

Master Builders thanks the Association’s supporters without whom many events could not be brought to fruition. The Association was excited to bring important new partners into the Master Builders family in 2016, namely AHG – Automotive Holdings Group – announced at the Excellence in Construction Awards, and HBF, which offers Master Builder members the chance to receive discounts which could help in their businesses. We look forward to mutual success in these partnerships.

Successful delivery of the Association’s State-wide Excellence Awards program met an enthusiastic response, and The Sunday Times again collaborated with Master Builders in the production of the weekend winners’ lift-out.

As to the future, management and staff again will be striving to work as productively as possible with all the Association’s current and future valued supporters in 2017.

A series of breakfasts, lunches, forums and the State Conference were held during the year, providing the industry with information, opportunities for collaboration and networking and plenty to think about.

Principal Partner:

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MASTER BUILDERS SERVICES Throughout the year, Master Builders continued to improve, promote and deliver business support services to members. The expertise of key staff provides enormous benefits to members who have taken up the opportunity to use these member services.

LEGAL & CONTRACTS

TRAINING

Navigating commercial and residential construction documents can be daunting. Aside from offering a range of documents for sale to the public and at discounted prices for members, Master Builders members can get help on other issues such as selection, completion and interpretation of contracts either in hard copy or online, tendering procedures, copyright matters, dispute resolution and interpretation of legislation and regulations. Our Construction Legal Advice Hotline, provided by Jackson McDonald Lawyers, is available to members with the option of up to 15 minutes’ free immediate legal advice.

Accredited, non-accredited? What do I need? Can I access CTF funding? Can I arrange this for my staff on site? These questions and many more are answered daily by Master Builders’ dedicated and knowledgeable training team. Assistance with finding the right course, booking it or even simply talking about future training needs is day to day business for Master Builders Training. The breadth of the Association’s training available to industry is second to none. From an initial white card through to forklift, scaffolding, working at heights and specialist tilt-up training delivered by our partner IFAP, Master Builders has an ongoing commitment to the expansive list of courses on offer.

Members unable to meet us in the city have three regional locations to assist in keeping skills up to date and refreshing existing skills and knowledge.

WORKPLACE RELATIONS Master Builders members are backed by an experienced workplace relations support team trained in all types of employee relations and workplace issues. Examples include wage-rates, leave and award provisions, termination of employment policies, redundancy, portable long service and superannuation obligations, industrial advocacy, current union campaigns and right-of-entry, policies and procedures including drug and alcohol policy, workplace and enterprise bargaining agreements and employeeversus-subcontractor working arrangements.

INDUSTRY INFORMATION Master Builders dedicated research and information team, including State and national-based economists, guarantees members are assured of receiving up-tothe-minute industry news and, importantly, current changes to the economic and regulatory environment.

Members access this information via e-newsletters (Express), the Master Builder magazine (distributed five times annually) and industry events like our highprofile Commercial Property Breakfast, CEO and Managers Lunch or through our awards program. Other publications include Excellence in Construction Awards magazine, Winning Homes magazine and BuildIT.

SAFETY Occupation safety and health play a significant role in any building and construction project. Master Builders’ Safety Department assists members meet their OSH obligations through a variety of training and auditing services. Accredited and non-accredited training courses including risk management, first-aid, tiltup, safety inductions, monitoring safe workplaces, job safety analysis, leadership in OSH and accident investigation are run in partnership with Master Builders’ registered training organisation and other training providers. We also provide safety advice, audits and inspections, compile safety management plans, mentor supervisors and employees and produce safety induction booklets.

MEMBER PROMOTIONAL OPPORTUNITIES Master Builders’ brand strength is worth its 119 years.

Taking advantage of that brand is available through membership, advertising or events sponsorship – opportunities only available to members. Members are encouraged to promote their status far and wide, to be a part of Find-a-Member, the Association’s online products and services search tool, and to use the member logo on stationery, websites and any other business promotion platforms.

Members who want to know more about what is available to them need only visit Master Builders’ website www.mbawa.com, contact our Membership Department or simply ring in to the office to be assisted by one of our friendly team.

TECHNICAL ADVICE Understanding the Building Code of Australia and referenced Australian Standards can create headaches.

Help is available from Master Builders’ specialist technical staff. Support is also on hand in dealing with local authorities and other regulators and the Association delivers interpretative courses on BCA Basics, Energy Efficiency Requirements, Access to Premises Standards and Basic Plan Reading. These courses are held at Master Builders’ facilities but also can be tailored for delivery at members’ premises.

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MASTER BUILDERS SERVICES With an experienced, specialist team and a track record of providing the building and construction industry with professional advice and comprehensive products for more than 20 years, MBA Insurance Services is an integral component in the value of Master Builders’ membership.

• Strengthening the product range, with more capability in the surety, professional indemnity and trade credit aspects of the business

MBA INSURANCE SERVICES MBA Insurance Services has continued to grow its market share, delivering another excellent financial performance for its shareholders. MBAIS now has nearly 60 construction specialist staff in six offices, making it one of the largest specialist construction brokers in Australia. This means greater bargaining power with insurers, resulting in more competitive premiums and broader coverage for members.

From a local perspective, the WA team performed well despite a very challenging environment, triggered by the downturn in housing. The slow down in housing starts flows through to the insurance sector, affecting both new business and retention, with many housing builders seeing significant reductions in output.

HIGHLIGHTS FOR THE 2016 YEAR INCLUDE:

From a financial perspective, some of the year’s highlights included:

• Continued growth in both policy count and income, despite the sharp fall in the residential sector.

• Achieving very strong income growth (+18 per cent) and strong margins (+30 per cent), due to improved customer service levels and more efficient processes within the business.

• Continued improvement of the team’s technical capabilities, resulting in better outcomes for clients.

• Managing more than $80 million of members’ premiums.

• Broadening product expertise beyond standard covers, including surety, trade credit, cybercrime, contractors pollution liability and specialist professional indemnity for SME builders.

• Maintaining customer retention rate of more than 90 per cent.

• Introduction of a housing indemnity corporate account manager to assist larger residential builders with their HII challenges.

• Achieving the largest ever income month in June 2016.

• Increasing net assets to more than $2 million, allowing investment in the business into the future.

From a future perspective, the difficult WA market conditions are set to continue into the next financial year. Some challenges include:

• Increasing the market value of the business to approximately $30 million.

• Continued uncertainty surrounding the HII scheme in WA.

Over the next three years MBAIS will return more than $13 million to shareholders (including Master Builders WA) which ultimately will be re-invested in the building and construction industry.

• Further contraction of the residential sector, placing intense pressure on new business and retention of income.

Operationally, the business also implemented some excellent initiatives to improve the overall customer service offering to members. Some of these included:

• A significantly increased number of builder insolvencies.

• Increased claims leading to pressure on premiums, particularly for housing indemnity and crime policies.

• Eleven per cent increase in staff numbers, demonstrating a significant investment in the quality of service to members.

• Competing brokers using misleading and deceptive practices to maintain their decreasing revenues.

• Implementation of technical and soft skills training to ensure staff adopt world’s best practice procedures.

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OUR PEOPLE

With about 150 Association staff and volunteers around the State all championing building, Master Builders has a team dedicated to success.

The experience and knowledge within the group means Master Builders is firmly focused on the entire industry, both as it stands today, and into the future.

Master Builders’ team of volunteers and staff remains stable and strong, ensuring members and other stakeholders can access quality services and industry representation. At the same time, the Association is thoroughly appraising the skill sets that will be needed to keep at the forefront of meeting the industry’s challenges.

BRANCHES In addition to members from across the metropolitan area, Master Builders has four country Branches covering the Great Southern, Midwest-Northwest, South West and Goldfields-Esperance regions.

Liaison officers are based in Kalgoorlie and Esperance and Regional Managers and administration staff at the Association’s Branch offices in Albany, Bunbury and Geraldton. Branch committees are elected annually.

BOARD OF MANAGEMENT Under Master Builders’ Rules, the Board of Management has wide powers and overarching responsibility for the Association’s finances, membership and operations.

A significant focus is on higher strategic issues and approval of policy developed at the level of the Association’s Councils. The Board comprises members elected annually by, and from, the Councils but the Rules permit the co-opting of several Board members.

In addition to canvassing and responding to local matters, the Branch committees provide input to the Councils and standing committees, ensuring the Association’s policies and advocacy represent State-wide industry views.

OPERATIONAL LEADERSHIP AND STAFF

COUNCILS

Leadership of Master Builders’ day-to-day operations is evolving under the new Strategic Plan and currently falls to a broad senior group. The Association also has a lean operational team in Perth and the regions. New initiatives are in place to redefine roles and to embrace values and service culture to ensure Master Builders delivers exemplary service and tangible outcomes benefiting members and industry.

The Construction and Housing Councils are elected by members and are the Association’s main policy and advocacy forums. Each Council has 12 members elected for two-year terms and a number of co-opted members.

Council elections are structured such that half the elected Councillors retire each year (though they may stand for re-election).

COMMITTEES

See the Corporate Governance pages for a detailed list of Board, Council and Committee members and staff.

Master Builders has two main standing committees, the Safety and Training Committees. They, together with Branch committees, are responsible for providing input and recommendations on policy and industry issues to the Councils as well as dealing with operational matters within their particular areas.

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CORPORATE GOVERNANCE Master Builders corporate governance is based on good faith, diligence and care in advancing the organisation’s vision, mission and values. The Board of Management is committed to providing strong leadership and governance to enable the Association to fulfil its important role for members, industry and the community.

OFFICE BEARERS AND BOARD MEETINGS

audits for training organisation re-registration and random audits. Master Builders Training successfully completed a renewal audit in 2016. It also submits:

Master Builders’ Board is the Association’s supreme governing body, overseeing management of the organisation. It comprises a minimum of nine and maximum of 12 members. Each year, the elected Chair and Deputy Chair of the Construction and Housing Councils automatically take seats on the Board. Each Council also elects two further Board members from among its elected Councillors. The Immediate Past President is automatically a member of the Board. If the Treasurer is not elected from among the Board members, an external appointment can be made and the Board also can co-opt a further two people provided one is an Association builder member.

• Annual AVETMISS reports relating to qualifications trained and issued in the previous 12 months.

• Annual reports to the Construction Training Fund showing the number of CTF-subsidised people trained.

• Biannual reports to WorkSafe on white cards issued.

POLICIES AND PROCEDURES Master Builders has comprehensive policies and procedures in place across all worksites and regulating the practices of the Board, Councils, Committees, staff and volunteers. Policies cover Organisational Governance, Financial Management, Staff, Administration and Members, Information Technology and Workplace Health and Safety.

The Association’s President, Senior Vice President and Vice President are elected annually by, and from among, the Board members. As noted, the Treasurer can be elected from among the Board or be an external appointment.

The Association is committed to protecting the privacy of personal information and always seeks to comply effectively with the Privacy Act 1988 and other laws regulating collecting, holding and administering such information. Master Builders also has a strong antidiscrimination policy.

The Board meets monthly except in January. It has approved a Decision Authority Matrix governing levels of decision-making by members, Board, Treasurer, Councils, Committees and at various staff levels.

COUNCILS

COMPLAINTS

The Association’s Construction and Housing Councils are responsible for formulating policies and recommendations on industry issues. Each Council comprises 12 Councillors elected by, and from, the builder membership. Councillors serve two-year terms with half retiring (or standing for re-election) annually. Councils also may co-opt members. The Councils generally meet monthly.

Master Builders records complaints against, and by, members and attempts to help with prompt resolution.

Intractable matters and those involving non-members are referred to relevant agencies or to professional advisers.

ETHICAL BEHAVIOUR As an industry leader, Master Builders encourages high ethical standards. The Association’s Code of Ethics establishes a best practice guide by which members are expected to abide. In addition, the Association has a comprehensive Code of Conduct governing Board, Council and Committee members and management and staff.

STRATEGIC PLANNING The 2016-2018 Strategic Plan was developed during the first eight months of 2016 and approved by the Board at its monthly meeting in September. The Board is charged with quarterly monitoring of the progress of the Plan’s objectives and with approving corrective actions.

REPORTING REQUIREMENTS Master Builders is an incorporated body by virtue of registration under the WA Industrial Relations Act 1979 and furnishes an annual audited Financial Return to the WA Industrial Relations Commission in accordance with the Act. Master Builders Training is accredited with the WA Training Accreditation Council which conducts 5-yearly

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CORPORATE GOVERNANCE GREAT SOUTHERN COMMITTEE

MASTER BUILDERS BOARD OF MANAGEMENT AS AT JANUARY 2016

Chairman: Andrew Holmes Nathalie Wauters; Brad Eastough; Rohan Trott; Asher Schlager; Brian Hoskins; Marcus Hodge; Robyn Powell; Wes T'Hart.

Secretariat: Linda Gibbs

Robert Spadaccini President John Ripp Immediate Past President David Crothers Senior Vice President; Construction Council Deputy Chairman Jack Pleiter Vice President; Housing Council Chairman; Jason Kunkler Construction Council Chairman Michael Vermey Housing Council Deputy Chairman Andy Peppercorn Safety Committee Chairman; Construction Council Philip Kemp Training Committee Chairman; Housing Council Michael van Dongen Construction Council Robert Shaw Master Builders Australia Board Representative; Chairman National Residential Builders' Council Dan Perkins Master Builders Australia President Grant Burgess Treasurer

SOUTH WEST COMMITTEE Chairman: John Buckingham; David Hunt; David Atkinson; Dean Baker; Charles Grist; Trevor Jackson; Peter Jurgenson; Sam Karamfiles; Damien O'Donoghue; Shaun Palfrey; Keith Palmer; Ian Prosser; Terry Rogers; Rick Ruhen; Anton Smith; Shane Stirling; Justin Trewren.

Secretariat: Geoff Bosustow MIDWEST-NORTHWEST COMMITTEE Chairman: Peter Bisby Serena Giudice; Paul Mandosio; Andrew Crothers; Paul Kerr; David Blakemore; Janette Brennan; Ross Conti; David Crothers; Dave Dibble; Laurie Dines; Shane Richards.

Secretariat: Dianne Gilleland GOLDFIELDS-ESPERANCE COMMITTEE Chairman: Brett Partington Glenn Briers; Michael Young; Ken Norton; Bobbi Norton; Dylan Pinchin; Gerry Harp; Lionel Trotman; Gavan Dixon; Steve Drake; Dan Bell; Julian Little; Andrew Dover; Colleen Horton.

Secretariat: Douglas Backhouse, Sarah Hinton

CONSTRUCTION COUNCIL Chairman: Jason Kunkler Deputy Chairman: David Crothers Paul Carter; Anthony Chillino; Basil Georgiou; Paul Goodheart; Kam Hishmeh; Daniel Hunt; Troy King; Michael Lawson; Greg Mithen; Steve McConkey; Rob McLaughlin; Rod O'Neill; Mark Parish; Andy Peppercorn; Peter Pugliese; John Ripp; Max Rivett; Stuart Taylor; Mark Thompson; Rob Torrance; Michael van Dongen; Rory Vinnicombe; Martin Wisker.

Secretariat: Charles Anderson; Kim Richardson

SAFETY COMMITTEE Chairman: Andy Peppercorn Justayn Bean; David Bohan; Ron Grant; Clinton Long; Paul McGuinness; Andrew Moore; Chris Patten; Paul Rees; Brent Stewart; Stephen Temple; Miles Tilzey; Julian Timmis; Wally Tyler; Garth Unger.

Secretariat: Kim Richardson; Neil Du Rand; Michael Fitzgerald

HOUSING COUNCIL Chairman: Jack Pleiter Deputy Chairman: Michael Vermey Robert Spadaccini; Philip Kemp; Ryan Cole; Basil Arasi; Cliff Kearns; Paul Maslen; Robert Romberg; Ray Kershaw; Peter Bisby; Paula West; Lorenzo Cassiani; Robert Shaw; Simon Cherry; John Clifton; Chris Del Paggio; David Hunt; Mike Jinman; Ben Meakins; Adam Marcolina; Steve Sutton; Jim Thorogood; Marc Wallis; Nabil Yazdani; Ryan Lucev; Mark Anderson; Liam Harpley; Romina De Santis Secretariat: Jason Robertson

TRAINING COMMITTEE Chairman: Philip Kemp Alan Davis; Eric Durnthaler; Elaine McGrath; Geoff Geary; Dean Pearson; Stacey Rimene; Adam Spadaccini; Mandi Welch; Jeff Williams.

Secretariat: Neil Du Rand; Michael Fitzgerald

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REGIONAL STAFF

HEAD OFFICE STAFF Executive Director

Michael McLean

Executive Assistant

Jayne Cranston

Construction Director

Kim Richardson

Contracts & Administration Manager

Charles Anderson

Contracts & Administration Officer

RenĂŠ Wooler

Business Director

Graeme Dix

Housing Director

Jason Robertson

Technical Advisor

Romina De Santis

Marketing & Partnerships Manager

Kelly Dewar-Matusik

Events Manager

Monique Milne

Events Officer

Rachelle Negus

Graphic Designer & IT Assistant

Paris Speak

Communications Officer

Emily Stone

Membership Services Manager

Veronica Mill

Membership Consultant

Karl Millard

Membership Assistant

Daiane Clemente-Camilo

Training Director

Neil Du Rand

Safety Manager

Mike Fitzgerald

Training & Safety Coordinator

Carolyn Fitzgerald

Student Builder Liaison Officer

Kellie Szczepanik

Administrative Assistant

Rebecca Evans

Financial Controller

Kanishka Kumarage

Accounts Assistant

Eva Xu

Receptionist

Vicki Fleetwood

Smart Waste Consultant

Michael Norriss

Midwest-Northwest Branch Manager Administration Assistant

Dianne Gilleland Crystal Bagley

South West Branch Manager Administration Assistant

Geoff Bosustow Cheryl-Maree Davies

Great Southern Branch Manager Administration Assistant

Linda Gibbs Emily Rowley

Goldfields-Esperance Kalgoorlie Liaison Officer Esperance Liaison Officer

Sarah Hinton Douglas Backhouse

MBA INSURANCE SERVICES

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WA State Manager Senior Account Manager Senior Account Executive Account Executive Assistant Account Executive

Nick Vernon Kathryn Scovell Brian Martinovich Victoria Gash Juanitta Evans

TREASURER'S REPORT

As can be seen from the net asset position, the Association has a strong balance sheet. It was pleasing that bank debt reduced by approximately $2.7 million and we anticipate that it should be fully repaid by the end of the 2020 financial year.

In 2016 the WA economy experienced one of its most challenging years on record. In spite of this Master Builders was able to increase its net assets to $29.86 million (reflecting a modest increase of 2.9 per cent).

Although revenue dropped slightly to $8.14 million the Association was still able to post a surplus of just under $850,000 (representing a significant increase of around 189 per cent from the prior year).

The Association anticipates 2017 to be another challenging year and is forecasting a surplus of just under $250,000 for the 2017 financial year.

The surplus growth was driven by greater rental income (an increase of just over $500,000) and a focus on reducing costs (decrease of approximately 8.28 per cent).

Unfortunately, most other revenue sources declined during the year.

The auditors (RSM Australia Pty Ltd) have completed their audit and have confirmed that the accounts represent a true and fair representation of the Association’s financial situation.

The Association is fortunate to have the services of Kanishka Kumarage as its Financial Controller. Kanishka and his team are diligent and committed to ensuring the Association’s accounts are properly maintained and strong financial governance is in place.

I have learnt a tremendous amount about the building and construction industry over the past months and am the richer for it. I consider my role as Treasurer to be a true honour and privilege and thank the Board members for their support and encouragement.

GRANT BURGESS Master Builders Treasurer

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STATEMENT OF INCOME & EXPENDITURE FOR THE PERIOD ENDED 30 JUNE 2016 2016

2015

2014

$8,144,612

$8,248,060

$7,509,758

- $7,295,068

- $7,954,064

- $7,490,290

$849,544

$293,996

$19,468

Accumulated Surplus at 1 July

$10,630,812

$10,336,816

$10,317,348

Accumulated Surplus as at 30 June

$11,480,356

$10,630,812

$10,336,816

$1,266,796

$2,304,831

$766,888

$495,141

$763,982

$1,167,201

-

-

$1,965,000

$6,584

$17,178

$27,411

$1,768,521

$3,085,991

$3,926,500

Investments

$120,000

$120,000

$120,000

Fixed Assets

$31,417,728

$31,805,660

$32,055,985

Total Non-Current Assets

$31,537,728

$31,925,660

$32,175,985

Total Assets

$33,306,249

$35,011,651

$36,102,485

Creditors

$1,552,182

$1,481,980

$1,445,395

Bank Loan Facility

$1,455,825

$4,150,000

$5,600,000

Prov for Long Service Leave

$253,212

$245,071

$237,694

Prov for Annual Leave

$148,117

$120,407

$134,199

$3,409,336

$5,997,458

$7,417,288

Financial Liabilities

$33,176

-

-

Total Non-Current Liabilities

$33,176

-

-

$3,442,512

$5,997,458

$7,417,288

$29,863,737

$29,014,193

$26,685,197

Reserves

$18,383,381

$18,383,381

$18,348,381

Accumulated Surplus

$11,480,356

$10,630,812

$10,336,816

$29,863,737

$29,014,193

$28,685,197

Income from ordinary activities Expenses from ordinary activities Operating Surplus from ordinary activities

Assets Current Assets Cash on Hand and at Bank Debtors Land Held for Sale Stock on Hand Total Current Assets Non-current Assets

Current Liabilities

Total Current Liabilities Non-Current Liabilities

Total Liabilities Net Assets Members' Funds

Total Members' Funds 21

2016 BEST COMMERCIAL PROJECT BUILT. OLD TREASURY BUILDING ST GEORGES TERRACE, PERTH Built’s $90 million heritage refurbishment of the Old Treasury Building dominated the 2016 Master Builders-Bankwest Excellence in Construction Awards.

The project involved conversion of the neglected but historically important heritage building into a 48-room luxury boutique hotel and retail and hospitality areas. Restoration included jarrah timber floors, the slate tile roof and all the heritage elements such as Juliet balconies, dormer windows, mansard roofs and the postal hall.

The erection of a glass rooftop restaurant in the project won a Judges Innovation Award for the approach to its modular construction.

The Old Treasury Building is a significant component of Perth’s Cathedral Precinct.

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2016 TOP WA HOME ADRIAN ZORZI BUILDERS WITCHCLIFFE HOME WICKHAM ROAD, WITCHCLIFFE Adrian Zorzi Builders’ 2016 Top WA Home previously was awarded the Best Country Home at the 2015 South West Building Excellence Awards.

It was judged against other regional Best Country Homes at the 2016 Master Builders-Bankwest Housing Excellence Awards and having topped that category, took its place among, and ultimately was triumphant over, the remaining finalists for overall Top WA Home.

The winning project is a Southern American style home showcasing the best craftsmanship of the South West’s trades.

The highly detailed construction includes curved decorative plasterglass cornices and custom-stained American oak floors.

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MASTER BUILDERS ASSOCIATION OF WA With offices in Perth, Albany, Bunbury and Geraldton and staff in Kalgoorlie and Esperance, Master Builders' coverage of the WA building and construction industry is unmatched.

HEAD OFFICE 35 Havelock Street, West Perth PO Box 167, West Perth 6872 Tel 08 9476 9800 Fax 08 9476 9801 Email mba@mbawa.com Web www.mbawa.com

MBA INSURANCE SERVICES 35 Havelock Street, West Perth PO Box 167, West Perth 6872 Tel 08 9476 9890 Fax 08 9476 9801 Email wa.insurance@mbais.com.au Web www.mbais.com.au

GREAT SOUTHERN 30 Graham Street, Albany PO Box 1518, Albany WA 6332 Tel 08 9841 6232 Fax 08 9841 6522 Email albany@mbawa.com

GOLDFIELDS-ESPERANCE PO Box 2066, Esperance WA 6450 Tel 1300 550 262 Email esperance@mbawa.com Email kalgoorlie@mbawa.com

@MASTERBUILDERSWA

@MBAWA_NEWS

MIDWEST-NORTHWEST 4 Walton Close, Geraldton PO Box 1525, Geraldton 6531 Tel 08 9921 5061 Fax 08 9965 5025 Email geraldton@mbawa.com

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MASTER BUILDERS ASSOCIATION OF WA

SOUTH WEST 19 Clifford Street cnr Ray Jordan Way, Halifax LIA, Bunbury PO Box 253, Bunbury WA 6231 Tel 08 9726 0939 Fax 08 9726 0949 Email southwest@mbawa.com

MASTERBUILDERSWA