http://www.mba.org.au/files/view/?id=594

According to the article, ‘Bank blacklist puts floor under risk’, a number of banks maintain a list of residential developments on which they are reluctant to provide finance. In some instances they are lists of specific properties; in others certain categories of property against which they will not lend or will only lend under certain circumstances.

No banks questioned by The Age would confirm the existence of a ‘blacklist,’ although some did confirm they maintained a list of properties on which finance was subject to additional scrutiny.

The Age said that, “According to mortgage brokers, the big four banks keep a tightly held list of apartment projects for which they will not give money to borrowers because of the type of building, the quality of construction or because of investors turning over units in the building too quickly.”

It said a list of unacceptable buildings circulated by one of the big four banks to its mortgage brokers late in 2010, “bars finance for all developments associated with the federal government’s National Rental Affordability Scheme, an initiative designed to boost housing for low-income earners around the country.

“Most other banks have also refused to finance investors or buyers for NRAS properties, apart from St George, which accepts borrowers for one project in Queensland.

“The list of unacceptable properties also bars or severely restricts finance for at least 146 projects in Victoria, 100 in New South Wales and the ACT and a further 127 in Queensland, most of which are serviced apartments, resorts or student accommodation”.

The Age said, “The list serves as a warning to developers to avoid projects where purchasers face stringent investment hurdles, and to buyers to be wary of entering a contract without checking if finance will be available.”

Owners in developments known to have attracted complaints may find it more difficult to sell, according to Master Builders ACT, Deputy Executive Director, Jerry Howard. He explains “if the second purchaser of a unit or apartment looks over the records of the body corporate and finds a long list of defects they will be inclined to look elsewhere”.

Lending institutions are concerned about the size of the residences. Developers looking at an apartment block or unit development, in particular serviced Apartments or Student Accommodation, with residences under 50m2 should be aware that the development will undergo more rigorous scrutiny from the banks. Purchasers may not be able to attract Mortgage Insurance on these types of residences either.

BUYERS FACE TOUGHER FINANCE FOR SOME DEVELOPMENTSXA recent article in The Age (Melbourne) contains some salutary warnings about possible risks with some categories of residential developments which banks may be reluctant to lend on.

ED

ITION

6-2011

Master Builders Association of the ACT1 Iron Knob St, Fyshwick ACT 2609PO Box 1211, Fyshwick ACT 2609

Tel: (02) 6247 2099Fax: (02) 6249 8374

Email: canberra@mba.org.auWeb: www.mba.org.au

MASTER BUILDERS EXECUTIVE COUNCILPresident – Ross Barrett Treasurer – Simon Butt Chair, Commercial Builders’ Sector Council – Valdis Luks Chair, Suppliers and Subcontractors’ Sector Council – Grace Ferreira Chair, Residential Builders’ Sector Council – David Howarth Chair, Civil Contractors’ Sector Council – David Jones Chair, Professional Consultants’ Sector Council – Hans Sommer

MASTER BUILDERS MANAGEMENT TEAMExecutive Director – John MillerDeputy Executive Director – Jerry HowardDirector Industrial Relations – Mike BaldwinSenior Management Accountant – Louise MacCallumSenior Manager - Marketing & Membership Services – David Leitch

MASTER BUILDERS GROUP TRAINING General Manager – Wendy Tengstrom

Memo to the Greens If you ever want to be remembered for making a worthwhile contribution to the environment, then act urgently on the madness being created by ‘The Great Paper Chase’. Memo ends.

Day by day business (and government for that matter) is being forced to cut down an Amazon rain forest just to cover its collective backside. The mountains of paperwork (in ‘the paperless society’) being driven in the name of transparency, accountability, safety, compliance, legal protection, responsibility transfer – business doesn’t care what you call it – it’s just madness and it needs to stop.

Safe Work Method Statements are a classic. Filled out a million times for each site, a myriad of them largely for the same activity, often never to be read, more often not to be adhered to, usually at the whim of an overzealous operative, and without making any difference to the desired outcome – improved safety. Let’s not start on documentation when dealing with your financial institutions or your insurers.

It seems as though any serious plea by business to end this ‘Great Paper Chase’ madness is lost. It’s any wonder in the building and construction game they’re trying to shorten the time it takes to become an apprentice. They need the extra year or so they save in training to have time to write the same thing down hundreds of times and file it in triplicate over the course of their working life. Of course, more often than not it then becomes a business heirloom because nobody really needed it or wanted it.

I can hear the creators of this madness saying “Don’t be so flippant.” Well that’s alright for them, they’ve usually got nothing better to do. Unlike a lot of builders (especially the small ones) who are out building all day and pushing paper all night, the perpetrators of these compliance obligations don’t have to push paper all day and then go and build all night.

It’s just incredible say over the last two decades how many times we’ve heard that wonderful political mantra from all sides of politics – “We’re going to do something about red tape.” Nobody in business really blinks anymore, they just laugh. They laugh because deep down they know that they are being forced to shuffle more paper than ever in order to meet regulatory requirements and to satisfy insurers, the legal world and anyone else in ‘The Great Paper Chase’ food chain.

Nobody is suggesting there isn’t a place for maintaining records or keeping a reasonable account of proceedings. The sad thing is that everyone talks about ‘The Great Paper Chase’ and nobody is willing to seriously do anything about it. What is it that’s fuelling this need? Who is going to take responsibility? If we are going to have any more summits in this country, why don’t we have one on ‘The Great Paper Chase’? Let’s do some serious research and take the pulse of business to see if I’m right or wrong. It’s tiring, it’s often totally irrelevant and it’s killing innovation and productivity.

Yes, this has been a whine but it comes with a message. Anyone in politics who is willing to take this challenge on will win a lot of lifelong friends and maybe the next time they face the polls they won’t get hammered.

HAMMERTHE

hits the nail on the head

The ACT Master Builders has put quite a focus on the outcomes of failed waterproofing in a number of recent publications. As a result the MBA received enquires from a number of parties interested in obtaining training at the Certificate III level in waterproofing.

The Master Builders Group Training hosted the waterproofing course on 18 – 21 July which was presented by Kevin Donovan from the Australian Institute of Waterproofing. Kevin has had over 30 years experience in waterproofing in the construction industry and is Trainer and Assessor of the Australian Institute of Waterproofing.

Twelve participants attended the course over the four day period which covered procedures and the products used for internal, external, below ground and remedial waterproofing. Kevin first started with instilling in participants the important principal of incorporating barrier, drainage and diversion design features to prevent water ingress in the structure in regards to all three of the above mentioned areas.

Participants not only received extensive training on the requirements of the referenced AS 3740 – 2010 for the waterproofing of internal wet areas but also the importance of understanding and applying products in accordance with manufacturer’s specifications. For example applying the correct wet film thickness of a liquid membrane to achieve the correct dry film thickness required to achieve maximum performance of the product. The required thickness of wet film application differs between solvent and non-solvent based products due to a difference in evaporation rates. The maximum performance of a product also relies heavily on adhering to manufacturer’s requirements for priming of substrates prior to application and curing times of the product.

The external waterproofing section of the course saw participants gaining further knowledge of design principals including expansion and control joints and an introduction to the use of sheet membranes. They were also advised of the requirements of AS 4654.2 Part 2 for design and application of waterproofing above ground level. AS 4654.2 Waterproofing membrane systems for exterior use – Above ground Part 2 Design and installation, will be a referenced Australian Standard under the 2012 edition of the National Construction Code and will be required reading in relation to balconies and parapet details.

The below ground and remedial sections of the course was most informative with participants being exposed to a range of issues associated with these areas and again the focus was on choosing the correct product for the application. All participants were exposed and tested on the application of liquid and bitumen sheet products supplied by Parchem. The participants were also treated to instruction on the application of these products from Parchem representatives Geoff Owen and Brett Laudess.

Whilst there is currently no requirement to hold a waterproofing license in the ACT, the qualification obtained at this level satisfies the requirement to obtain a license in the NSW jurisdiction. If you hold a trade certificate or have had experience in the application of waterproofing membranes and are interested in attending this course please contact Norma Inglis at Master Builders Group Training on 6175 5960 for further details.

Below: Participants attend the four day course at the Master Builders Skills Centre in Fyshwick.

WaterproofingCert III in Waterproofing - MBA Group Training

Jason Grieves - Technical Services Manager

The manufacture and laying of roof tiles has been with us since Julius Caesar ran Rome. You would think in the intervening couple of thousand years that we should now be in a position to lay our roof tiles to provide a weatherproof structure, given what we have learned through history. However, this is not the case, as some recent examples would suggest that there is systematic non-compliance with the Australian Standard for the installation of Roof Tiles.

Some examples:

Roof tiles unsuitable for the pitch and manufacturer’s specifications not complied with. This required the roof to be re-laid with the appropriate tiles suitable for the pitch.

Sarking not installed where required on lower pitch roofs. This resulted in water inundation causing serious damage to the plasterboard ceiling; resultant action being to remove the existing tiles and roof battens, install sarking and re-lay the roof tiles.

The two costly instances above could have been avoided if the manufacturer’s specifications were followed and the correct tiles were selected for the purpose and the requirements for sarking specified in AS2050 were followed.

There are also other factors that affect the weather tightness of the roof structure and this includes inadequate attention to the fixing of tiles at valleys, inadequate overlap of tiles in valley and sarking where required not lapping over the valley gutter.

The pictures below show ridge pointing and bedding dislodging and loose. This is occurring less than two years after the roof has been completed. This is a totally unsatisfactory situation as the ridge pointing (flexible pointing) is meant to provide a mechanical fixing to prevent the ridge tiles dislodging during high winds.

In the projects we have examined, the bedding material appears to be totally inadequate and can be scratched loose with your finger, displaying a powdery loose substance; certainly not the mix proportions specified in the Australian Standard, i.e. for bedding – 1 cement to 4 sand and it is clear that, in some instances, the sand that has been used has been left over onsite from the brickie.

The flexible pointing, as can be seen from the photographs, has not been applied in accordance with the manufacturer’s requirements. It has not bonded to the tiles and has not bonded to the bedding. It has been applied in a thin film and does not satisfy the requirements of the BCA or the Australian Standards as a mechanical fixing for the ridge tiles. The resultant problem, in this case, is that the ridge/hip tiles became loose and slid down the hip causing water to enter the ceiling void resulting in water damage and mould growth in the plasterboard ceiling.

What are the lessons from the above???

Builders, architects and designers must ensure that the correct tiles are specified for the appropriate roof pitch. The roof tilers must be properly supervised by the builder and the builder must insist that the roof tiles are fixed and laid in accordance with AS2050.

Weather tightness and roof tiling are inter-related

photo 1: Bedding loose and crumbling. Flexi pointing totally dislodged.

photo 2: Flexi pointing applied paper thin and bedding crumbling, resulting in flexi pointing dislodging.

Jerry Howard - Deputy Executive Director

Master Builders have been invited to a briefing on DV306 by ACT Planning and Land Authority on 5th October.

In our submission on the document, we have raised concerns that our industry is confronted with yet another complex planning document. Given that we are always led to believe that guidelines must be clear and unambiguous, this document certainly does not achieve the objective of being clear and concise; it is both confusing and complex in its intent. We, in the industry, still refer to the current planning system as the “new” planning system, given that it has only been in place for two years, yet we are called on again to comment on another set of documents. The industry was just coming to terms with the current planning system and had arrived at a position where we were generally comfortable with the fact that the system had incorporated some of the Development Assessment Form (DAF) key principles. Further refinement of the current system could have taken place without the need for wholesale changes as proposed in DV306.

It is likely that DV306, if implemented in its current form, will create an environment of uncertainty, continuing the culture of decision by appeal to ACAT. It is also quite likely that a large percentage of applications that were previously dealt with through the Exempt Development process in RZ1, will now end up in Merit Track due to the difficulty of satisfying the building envelope criteria now proposed in DV306. The end result being further resources required within ACTPLA to deal with Merit Track applications which were previously dealt with by the private sector. This has the potential to cause excessive delays as previously experienced, resulting in increased costs to industry and excessive holding charges. The negative impact of this is that these additional costs are passed on to the consumer, therefore further frustrating the industry’s desire to deliver affordable housing.

As an industry we are certainly hoping that sanity will prevail and this document will be subject to independent review.

FURTHER CHALLENGES FOR THE INDUSTRY IF DV306 IS IMPLEMENTED

On 5 September 2011 Master Builders hosted a seminar held at MBA ACT conducted by the Commonwealth Attorney-General’s department on the Personal Property Securities Act 2009 (PPSA). PPSA has been due to start on a number of occasions, with the latest commencement date of 1 November 2011 now being postponed to 30 January 2012. The PPSA introduces major and fundamental change to the operation of the law in relation to how interests in property, other than land, are secured. The legislation has major ramifications for the building and construction industry, some of which were set out in a submission to the Minister for Small Business the Hon Nick Sherry in December 2010, which was expanded in a submission to the Attorney-General asking for funding for education. That request translated into the holding of a pilot seminar.

Feedback from the pilot was that the material was too difficult to understand and that a range of new terminology introduced by the legislation is confusing. In particular, the idea of a security interest is defined so broadly under the PPSA that it is likely to apply to the giving of security by a builder and, less commonplace but still a practice within the industry, the giving of security by a developer or homeowner. A large number of transactions not traditionally considered to be providing or

creating a security interest are now subject to the new regime. In order for builders and others to protect their rights in the relevant transaction they will need to register their interest on a new Commonwealth register which was described in detail by the presenters from the Attorney-General’s department.

If the property is unperfected (that is, not registered) it risks becoming part of the pool of assets available to creditors where an insolvency of the person who has the benefit of the transaction (known as a grantor) becomes insolvent. Suppliers or contractors in the industry were therefore alerted to the need to “perfect (or register) a security interest.” Otherwise they would no longer be able to recover goods or equipment in the event of a purchaser or principal’s insolvency even where a retention of title clause was in the underpinning contract.

Master Builders is reviewing its own contracts and will modify the presentation given by the Attorney-General’s department to hold education seminars elsewhere. In the meantime, Master Builders applauds the Government’s further deferral of this major new law, which is little understood by the business community, so that the understanding can grow and business practices modified.

Master Builders Pilot Seminar on Personal Property

The Australian Building Codes Board (ABCB) has produced an Information Handbook, titled “Using On-site Renewable and Reclaimed Energy Sources”, to raise awareness of the opportunities to use on-site renewable energy sources and reclaimed energy sources as part of complying with Volume One and Volume Two of the Building Code of Australia (BCA).

The Handbook identifies a range of on-site renewable and reclaimed energy sources and discusses how they can be used for services such as domestic hot water, space heating and cooling, and swimming and spa pool heating. Some of these energy sources are specified in the Deemed-to-Satisfy Provisions, while others could be considered as part of an Alternative Solution.

While the BCA enables the incorporation of on-site renewable and reclaimed energy sources into buildings, these energy sources have been considered to be a companion to, and not a replacement for, good levels of building fabric performance.

The Handbook has been peer-reviewed by the Clean Energy Council to ensure the technical accuracy of the information and the feasibility of finding products that use on-site renewable and reclaimed energy sources.

Members should note however that this Handbook is provided for general information only and should not be taken as providing specific advice on any issue. In particular, this Handbook is not mandatory or regulatory in nature. Rather, it is designed to make information on this topic readily available to the industry.

Neither the ABCB, the participating Governments, nor the groups which have endorsed or been involved in the

development of the Handbook, accept any responsibility for the use of the information contained in the Handbook and make no guarantee or representation whatsoever that the information is an exhaustive treatment of the subject matters contained therein or is complete, accurate, up-to-date or reliable for any particular purpose.

The ABCB, the participating Governments and groups which have endorsed or been involved in the development of the Handbook expressly disclaim all liability for any loss, damage, injury or other consequence, howsoever caused (including without limitation by way of negligence) which may arise directly or indirectly from use of, or reliance on, this Handbook.

Users should exercise their own skill and care with respect to their use of this Handbook and should obtain appropriate independent professional advice on any specific issues concerning them.

In particular, and to avoid doubt, the use of this Handbook does not:

•guarantee acceptance or accreditation of a design, material or building solution by any entity authorised to do so under any law;

•mean that a design, material or building solution complies with the National Construction Code (NCC); or

•absolve the user from complying with any local, State, Territory or Australian Government legal requirements.

Handbook on Renewable EnergyA copy of the renewable energy handbook is available at the Master Builders Association of the ACT website:

www.mba.org.au

The ACT Government has called tenders for the design of the $288 million Majura Parkway.

Tenders for the design stage close on 13 October.

The Minister for Territory and Municipal Services, Simon Corbell, said that “once constructed, Majura Parkway will provide an important north-south transport link and will provide a direct connect between the Federal and Monaro Highways”.

“The completed Majura Parkway is forecast to carry 40,000 vehicles a day by 2030, of which 15 percent will be trucks. The Parkway will play a significant role in improving the main national and regional freight route and the ACT will also benefit from additional capacity on its road network”, he said.

The Majura Parkway will replace the Majura Road linking the Monaro Highway and the Federal Highway. The Majura Parkway when completed will be approximately 11 kilometers of dual carriageway with 2 x 3.5 metres traffic lanes, a 2.5 metre roadside shoulder and a 1 metre offside shoulder.

The existing Majura Road is a single carriageway road approximately 11 kilometres in length between Fairbairn Avenue and the Federal Highway. The road has a rural character with no kerbing, no footpaths, few property accesses and simple intersections at connecting side roads. Majura Road will remain and act as a service road to various properties.

The $288 million project is jointly funded by the ACT and Federal Governments, with each contributing $144 million.

The Federal Minister for Infrastructure and Transport, Anthony Albanese, said

the design process would build on the preliminary work that was undertaken as part of the initial Environment Impact Statement. “The Parkway is the single largest road infrastructure investment in the ACT and completing the detailed design is an important step that will allow construction to start next year,” Mr Albanese said.

“This new road is an investment in Canberra’s future, with Infrastructure Australia putting its long term economic, social and environmental benefits at close to $1 billion.”

The project has its own website: http://www.majuraparkway.act.gov.au/home

Information on the tender process for the detailed design can be found at http://www.procurement.act.gov.au/tenders_advertised/tender_download/open_tenders/2005.0140.0501

Tenders called for Majura Parkway

Information sessions, held across Australia in September and October, will help businesses learn how to access and best use the new R&D Tax Incentive to drive the development of new ideas, products and processes.

Innovation Minister Senator Kim Carr, said the R&D Tax Incentive, as the program will be now known, will support and reward the creativity of Australian businesses.

“The Tax Incentive effectively doubles the support for small firms to 15 cents in the dollar and increases support for all other firms by a third, to 10 cents in the dollar,” Senator Carr said.

The R&D Tax Incentive starts retrospectively from 1 July 2011.

To register for an information session or for more information on the R&D Tax Incentive, visit www.AusIndustry.gov.au

R&D TAX INCENTIVE ALL SET TO SUPPORT AUSTRALIAN BUSINESSES

“The Tax Incentive effectively doubles the support for small firms to 15 cents in the dollar and increases support for all other firms by a third, to 10 cents in the dollar,”

There is little doubt the harmonised laws will proceed and those urging a delay face a tough fight.

Master Builders Australia chief executive Wilhelm Harnisch said the MBA wasn’t seeking to thwart the legislation, because it supports harmonisation, but that more time was needed. He said that with 21 codes still to be tabled and finalised, of which seven deal with the building and construction industry, the MBA is concerned there won’t be enough time to digest the big changes.

“It’s not a hidden agenda, it’s about a phasing in,” Mr Harnisch said. Assuming a deferral isn’t granted, he predicted a “mad scramble” by the industry to try to adapt, “with all the attendant risks of a poor implementation.”

New legislation implementing the harmonised law has recently passed the ACT Legislative Assembly. Under the new laws only the industry authority, WorkSafe, is able to initiate prosecutions, removing the right of unions to initiate prosecutions.

A spokeswoman for Chief Minister Katy Gallagher said the ACT Government had received $1.6 million as part of these reforms, with another $7 million available over the next two years as reward payments for facilitating these changes. “In the end we believe that a harmonised law is good for business and workers so that there is one law which works right across the country,’’ she said.

Federal Workplace Relations Minister Senator Chris Evans said the regulatory impact statement for the harmonisation of health and safety regulations found the economic benefit of a national system would result in productivity gains of $2 billion. “In a modern economy where businesses operate and trade across state boundaries, it is inefficient to have nine different OHS statutes and more than 400 pieces of regulation covering the same responsibilities,” he said.

A paper was prepared by Master Builders Australia for the implementation of the harmonised laws, Losing Control? The impact of the primary duty of care argues that concern about

a more onerous duty of care on builders under the law, has been exaggerated.

The paper concludes that concerns that principal contractors will be held responsible for every aspect of work on a construction site are partly misplaced because the notion of control will be relevant when considering what is reasonably practicable for a duty holder to do. Control is also used in the legislation to apportion responsibility for meeting duties of care between duty holders.

A paper prepared by lawyers Minter Ellison says, however that employers generally will have to review and consider new requirements such as extension of duties, consultation, right of entry, elections of health and safety representatives and training.

The paper also warns about the need to have appropriate safeguards in place for projects that straddle the start-up date, which will be caught by the new requirements.

The new legislation includes tougher application of discrimination laws and an amendment to the standard required to establish Category 1 offences (the most serious offence) to provide that ‘grossly negligent’ conduct which exposes a person to risk of serious injury or death would be a Category 1 offence. The Bill currently provides for a test of ‘recklessness’ for Category 1 offences – which is a higher standard than ‘gross negligence’.

Also, Safe Work Australia has recently issued a revised Model Work Health and Safety Act (Model Bill), to incorporate amendments made since the Model Bill was finalised in November 2010. The amendments include:

• changing the onus of proof (from the prosecution to the accused) in criminal proceedings concerning discriminatory conduct;

• deleting references to an inspector having immunity from criminal liability for an act or omission.

“It’s not a hidden agenda, it’s about a phasing in”

OHS HARMONISATION DUE TO START

1 JANUARY 2012The Master Builders Association has joined a growing number of organisations urging a delay in the start-up of harmonised national OHS rules due to begin on 1 January 2012.

The Government has introduced its Carbon Tax legislation in Parliament with the legislation expected to pass on 15 October with support from the Independents and Greens.

At the same time the MBA has called on the Government to hold a Consultative Forum on the impact of the tax and MBA ACT has warned it could have a disproportionate impact on the ACT.

Under the Government’s plans, which are likely to proceed, a fixed Carbon Price of $23 /tonne is due to start in July 2012, moving to a market-based pricing mechanism in 2015.

The Government and the Greens have agreed to ‘’guillotine’’ the carbon tax bills and other critical legislation through the Senate by the end of the year in the face of an expected Coalition strategy to use delay tactics.

Labor introduced the 13 carbon tax bills in mid-September. The Government insisted the bills should be referred to a joint committee of MPs and Senators that runs concurrently with the parliamentary debate, with a Lower House vote in mid-October.

The Government’s Senate leader, Chris Evans, said: ‘’The Government is determined to pass key legislation by Christmas. We will allow adequate time for debate but we will not allow the Opposition to use delaying tactics.’’

According to modelling by Master Builders Australia, the cost of a new house could rise by $14,000 by the middle of next year because of tougher mandatory energy efficiency ratings.

MBA also says the carbon tax could also force prices up.

The cost of building a new house could rise by between 1.1 and 1.6 per cent, according to the preliminary findings of modelling commissioned by the

Master Builders Australia, as builders pass on higher materials, energy and labour costs related to the carbon tax.

This carbon tax impost translates to the median cost of a house rising by $7000 in Sydney, $6700 in Melbourne, $5900 in Brisbane and $6400 in Perth, the MBA told a Senate select committee into the tax. Nationwide, for a “modest” house, the added cost would be $5000.

Having to comply with a six-star - rather than five-star - efficiency rating would also add to the cost.

Master Builders chief executive Wilhelm Harnisch conceded the preliminary findings of his modelling did not take account of the government’s compensation package for industry.

The office of Greg Combet, the Minister for Climate Change and Energy, has disputed the figures, saying they were “way out of line with estimates from a range of credible sources”.

Master Builders Australia called on the Government to establish a special government-industry panel to examine in detail the impact of the proposed carbon tax on the building and construction industry.

Mr Harnisch said: “The proposed carbon tax will have a substantial, adverse impact on the building and construction sector. According to the Treasury’s own forecasts, the carbon tax will reduce output in the construction sector by some 5.6 per cent by 2050, much more than the 4.3 per cent predicted for mining and the 2.8 per cent expected for manufacturing.

The Government-industry panel to review the impact of the carbon tax should have as key terms of reference, detailed modelling and forecasting of the impact of the proposed carbon tax on housing affordability, especially for first home buyers, for

commercial construction, and for the small businesses who are the backbone of the sector, the MBA said.

“An effective transition package for the building and construction sector will reduce the adverse effects of the carbon tax particularly on first home buyers, on housing affordability, and on the hundreds of thousands of small businesses who are the backbone of the sector”.

The Executive Director of the MBA-ACT, John Miller said he endorsed the national building industry sentiment that there were few benefits in the carbon tax arrangements for home owners or the building industry, but believed the deficits were magnified by Canberra’s higher income demographic.

“Canberra is widely acknowledged as having higher average weekly earnings than almost any other Australian capital and it follows that it will be a lesser beneficiary of Government compensation targeted at those earning less than $80,000 a year,” he said.

Mr Miller said there could be little doubt that the carbon tax would cascade through the supply chain and increase the cost of housing. “As has already been pointed out by our national spokesman, the Government’s compensation package may be adequate to cover increases in energy charges but it will not cover the cost of new housing which will be at least $5,000 for a modest home,” he said.

Mr Miller said that in circumstances where the compensation package would cut out at incomes over $80,000 and where the mortgage repayments would need to increase to cover higher input costs, many Canberra families stood to be at a particular disadvantage.

CARBON TAX EXPECTED TO PASS

Reserve Bank Governor Glenn Stevens has joined the growing chorus of concerned voices, including the MBA, critical of Australia’s continuing under-supply of new housing.

In his quarterly appearance before the House of Representatives Economics Committee, Mr Stevens expressed concern at the nation’s lack of housing stock, saying it was driving up the costs of housing.

‘’How is it that a country of our size - we are not short of land - cannot add to the dwelling stock for the marginal new entrant more cheaply than we seem to be able to do?’’ he asked the committee.

Mr Stevens said interest rates played a role in housing affordability, but so did issues of zoning, transport and infrastructure that made it possible for people to get to work and home.

‘’There is a very big inequality between generations that is building up. I think that is a social problem as much as an economic one,’’ he said.

He said there had not been enough addition to the dwelling stock, even though population growth had slowed.

“But—without denying that interest rates have an effect on the housing market, obviously—it seems to me that this goes to a whole group of things on supply, zoning, transportation, infrastructure.” He said that better transport “could in a sense increase the amount of well-located land—that is, land you can live on and from where you can get to and from your job quickly.”

Also, he said, “the rental returns on the rental stock I suspect have actually been lower than really needed, because people were getting part of their return through capital gain, so the rental yield can be low, but I do not think we can keep having indefinite capital gain. To get the return, you actually need the rental yield to offer the investor a return.”

It has been estimated that Australia

would need to build 178,000 homes a year for the next nine years to avoid underbuilding. That would be 29,000 more homes a year than it has averaged over the past 20 years. NSW has the greatest shortage, followed by Western Australia, Queensland and Victoria. The ACT is performing comparatively well.

Master Builders’ Association ACT Deputy Executive Director Jerry Howard said more than 5000 new dwellings had been built in Canberra in the past year. “The ACT has had a chronic under-supply and we are slowly catching up,’’ he said. “We had a dramatic increase in residential building in the past year and that has helped with the shortfall. There was a lot of pent-up demand and then the land started coming online.

‘’We are about 1200 short in the ACT at the moment. The important elements going forward are for rates to stay on hold.

‘’Also it’s important to try to keep the regulatory charges down and try to keep control over the prices of land - those are critical things the Government has to do.’’

Peter Jones, Master Builders Australia chief economist said, “Residential building has failed to kick-on after recovering ground lost in the GFC and is in danger of weakening further unless policy changes.”

“At the very least, a long period of interest rate stability from the Reserve Bank is vital to ensure an upswing in the interest-rate-sensitive residential building sector becomes entrenched.”

Mr Jones said, “Governments at all levels need to address inefficient developer charges and other policies that add an unfair cost premium to new dwellings. Supply restricting policies are preventing the residential building industry from meeting a serious undersupply of housing, risking higher rents and house prices as more people chase less stock.”

“What’s needed is several years of strong residential building to not only meet the demands of a growing population, but to make inroads into the accumulated deficit of housing that’s arisen because of previous underbuilding.”

Master Builders will continue to push for government action to address developer charges, land release regulations and the approvals process as part of reforms to remove impediments affecting the supply of housing, he said.

At the same time, a new coalition of housing, welfare and community organisations has been formed to more effectively advance the issue of Government support for affordable housing.

The Australians for Affordable Housing Campaign was launched in Canberra with the release of a report, Australia’s Broken Housing System, which documents the grim state of the Australian housing market for those trying to find affordable housing.

The report says that over the last ten years, house prices in Australia have risen by 147 percent, while incomes have only risen by 57 percent. In the last five years rents have risen at twice the rate of inflation.

The report says that between 1997 and 2007 the number of public housing properties in Australia shrank by 30,000 – but during this same time the population grew by over 2 million. Despite the significant, but one off investment in social housing through the Nation Building Stimulus package, Australia still has fewer public housing units than in 1996.

AAH says there is no single cause of Australia’s housing affordability crisis. Rather, it is the result of a range of problems in the home ownership, private rental and public housing markets, all of which need to be tackled in a comprehensive and coordinated way.

The campaign is calling for changes to tax arrangements that benefit investors over low income and first home buyers, more investment in low cost housing in Australia, more support for low income renters, and a single Cabinet level housing minister who is responsible for delivering these changes. AAH is also calling on the Government make housing a central issue of debate at the Government’s upcoming tax forum.

Growing concerns at housing supply shortages

The Government has announced details and published a Discussion Paper ahead of its planned Tax Forum on 4-5 October.

The Forum was part of the Government’s deal with the Independents in return for their support of the minority government following the August 2010 election. The Forum will involve over 180 invited participants discussing priorities for changes in tax policy and administration.

Treasurer Wayne Swan said the Tax Forum is an opportunity for government and other policy-makers to set the priorities in building a more prosperous nation.

Mr Swan said changes to the tax system could help ease the burden on trade-exposed industries such as manufacturing and tourism, which were struggling under a high Australian dollar due to Asian demand for the nation’s resources.

“The tax system has a critical role in helping our economy adjust to this change and spreading the benefits of the mining boom to all corners of the patchwork economy,” he said.

Releasing the Discussion Paper and announcing the initial list of participants, Mr Swan said, “The Tax Forum will also help identify further reforms to make the most of the opportunities and challenges ahead for Australia, such as the shift in global economic weight from West

to East, the ageing of the population and the transition to a clean-energy future. The Tax Forum will help identify further reforms which build on the Government’s priorities of:

• making our economy stronger, by boosting participation and productivity, and providing better incentives to work, save and invest;

• making our tax system fairer, by ensuring concessions are appropriately targeted and tax rules achieve their original policy intent; and

• making our tax system simpler, by removing unnecessary complexity.”

The discussion paper includes a section on each of the six sessions that will be held at the forum: personal tax; transfer payments; business tax; state taxes; environmental and social taxes; and tax system governance.

Mr Swan said the Tax Forum is an opportunity for government and other policy-makers to set the priorities in building a more prosperous nation. “Addressing the challenges posed by different parts of the economy growing at different speeds has been a guiding principle behind the government’s approach to tax reform,” he said.

Prime Minister Julia Gillard flagged possible changes to the business tax system that could follow the Forum.

Ms Gillard told the Australian Industry Group that she wants the Tax Forum to consider how to make business tax more flexible. She said this would carry on work the government began in its 2010-11 Budget when it made changes to the treatment of tax losses incurred on investments in infrastructure projects.

This was a model for further reforms to enhance flexibility, she said. “The Tax Forum will be an opportunity

to start to discuss options for a business tax system which supports decisions to change,’’ she said.

‘We need to be sure that Australia’s business tax system doesn’t hold industry back.’’

The head of Treasury, Martin Parkinson, backed a move to wind back or abolish real estate stamp duties saying they make it hard for workers to move west and north to take advantage of the mining boom.

Asked at an Australian Industry Group forum which taxes were the biggest drag on productivity, he nominated state taxes on housing which he said inhibit economic adjustments, “whether they be individual workers moving from the Illawarra to Queensland or Western Australia to work in the mining sector, or whether a firm is trying to restructure its business”.

“We need to encourage change, not to stand it in its way. That’s why I make specific reference to state governments,” he told the conference.

The Henry Tax Review reported that “ideally there is no place for stamp duty in a modern tax system”. It found they discourage property turnover and penalise property improvements.

Since the release of the Henry Tax Review in May 2010, there has been criticism of the Labor Government for initially adopting only a handful of its 138 recommendations.

“The only positive feature of stamp duty - its relative simplicity - has long since ceased to justify its continued use in the face of the costs it imposes on Australian society,” the review said, recommending they be replaced by a broad land tax.

Government Tax Forum4-5 October 2011

MILLION

// To Insert New Data Goto Object/Graph/Data• Copy and Paste Pivot Table Data into Data

$0

$30

$60

$90

$120

$150

Aug-11July-11Jun-11May-11Apr-11May-11Apr-11Mar-11Feb-11Jan-11Dec-10Nov-10Oct-10Sep-10

Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11Additions and Alterations (Residential) 14.37 1.5 0.7 0.95 0.345 5.7 17.3 14.87 4.97 10.00 5.52 0.30Commercial Building Work 39.91 17.82 130.32 131.16 20.42 12.5 22.50 41.42 14.20 12.3 7.91 85.0Garages, Pools, Decks and Similar Structures 11.49 35.74 10.08 11.27 3.96 4.7 7.16 5.14 6.90 6.00 7.0 7.35Multi Unit 95.7 31.46 78.4 148.8 5.92 50.4 53.62 54.66 8.81 66.5 96.0 7.70New Housing 9.31 7.3 13.53 7.3 6.02 15.2 19.05 12.82 7.43 5.00 5.5 1.07

The above graph and table below summarise private sector building activity for the various building sectors in the ACT over the past 12 months. The values for each month are depicted in millions of dollars.

ACT PRIVATE SECTOR BUILDING ACTIVITY

COMING EVENTS FOR 2011

Annual General Meeting Date: 11 October Where: Master Builders Skills Centre, Fyshwick

The 2011 AGM of the Master Builders Association of the ACT will be held on 11 October at the Master Builders Skills Centre in Fyshwick in rooms 5a/5b at 4.45pm. Following the AGM there will be drinks and nibbles for attendees who wish to stay and chat for a while.

Annual Dinner Date: 27 October Where: ANZAC Hall, Australian War Memorial

This year’s Master Builders Annual Dinner will be held in ANZAC Hall at the Australian War Memorial. The guest speaker will be Robert Gottleibsen. Robert Gottleibsen is one of Australia’s leading business commentators and has a long history of business journalism in this country.

TRAINING DATES FOR OCTOBER 2011

HEIGHT SAFETY Date: 6 October (Contact Norma Inglis at ninglis@mba.org.au to book your place)

The working safely at heights is a 1 day course designed for those workers performing work at heights in a range of situations and circumstances. This course is nationally recognised and participants receive a certificate of attainment on completion.

ASBESTOS AWARENESS Date: 6 October (Contact Norma Inglis at ninglis@mba.org.au to book your place)

This is a nationally recognised course, approved by the ACT Government, to satisfy the regulatory requirements of the ACT Building Act, designed to meet the needs of tradespeople, services workers, builders, building certifiers and community members.

CONFINED SPACE Date: 13-14 October / 25-26 October (Contact Norma Inglis at ninglis@mba.org.au to book your place)

Safenet offer these short courses at the Master Builders Skills Centre in Fyshwick. The Confined Space course is a 2 day course designed for workers who may be required to enter / manage a confined space or hazardous atmosphere. The course is nationally recognised and participants receive a certificate of attainment on completion.

WORK SAFETY REPRESENTATIVES COURSE

Date: 17 October (Contact Norma Inglis at ninglis@mba.org.au to book your place)

This 4 day course is split over 4 weeks (8:00am-4:00pm Monday) and will provide participants with the information they require to become a Work Safety Representative in their organisation.