2012 will be the year of the Carbon Tax. We are all aware of that now and so brace yourself for so much information and misinformation about what the impacts and affect will be on our building industry in Australia.

What is the Carbon Tax?

Simply, it’s a Federal Govt Tax imposed on nominated big businesses who will have to pay for each tonne of CO2 released into the atmosphere.

The purpose behind the tax is supposed to bring about two major changes: 1. It will encourage those big polluters to find more energy efficient and greener means of production. 2. It will fund alternative energy technology that will drive new industries and innovation towards efficient outcomes.

From our building industry perspective and if you do some research on the media articles and press releases produced to date then the issue seems to fall into a single question: How much will the cost of building and construction increase as a direct result of the carbon tax? Because there is no argument from any sector that the cost of construction is going to increase as a direct result of the Carbon Tax.

Over the past decade the building industry, through regulation and other initiatives have begun, in earnest, the process of becoming a more energy efficient industry. Buildings today are more environmentally friendly. Public and business awareness of the need to conserve energy in both production and manufacturing is growing and the general public perception is that: yes, climate change is a concern and that we all have to do our bit.

But as housing affordability is already at the highest its ever been by almost any measure and the industry already slowed by a variety of economic factors how will our industry look 12-18 months from now with more increases in costs?

Lets face it. The cost of construction continues to rise and will go higher again in July.

Even in a weakened economy the cost of construction materials almost never drops. Steel, concrete, glass, aluminium, bricks, plasterboard, paint are all manufactured products that require high levels of embodied energyto create. Transport and logistics are a massive part of our industry and that again will be affected. Time will tell to what extent.

The HIA who have released some early modelling data have indicated that the cost of an average house and land package will rise by between $5000 – $6000 in July, regardless of any cost increases between now and that time. More data from the HIA and MBA will no doubt be forthcoming as they drill down and model the impact on each of the big input items that are used in the building industry.

If you are a licensed builder or about to become a licensed builder then ensure that you take some time to research the impact that this will have on your business. If you are pricing projects that may carry over into  July this year then you need to start thinking about the price of the materials that you will pay for after the switch over. Prices could virtually rise over night so communicate with your customers and your suppliers so that you, as the contractor, do not end up as the financial piggy in the middle.

We will continue to post more information about the Carbon Tax and the Building Industry and will highlight any worthwhile web sites you will find useful. It will likely be one of the biggest issues of the year so stay tuned and be prepared.

In late 2011 the NSW Government passed a range of changes to the Home Building Act 1989 which includes changes to:

• home warranty insurance 
• statutory warranty 
• contract requirements.

These changes will affect all residential building and construction work covered by home warranty insurance but do not apply to claims or to legal proceedings that are pending or finalised.

The changes will commence in two stages, the first took effect on 25 October 2011, while the second will begin on 1 February 2012.

For more details we would recommend you go directly to the NSW Dept of Fair Trading website.

The list of changes according to the NSW Dept of Fair Trading are:

October 2011 changes

• Requirement to notify home warranty insurers in writing;
• Time limits on home warranty insurance claims;
• Claiming outside the home warranty insurance period;
• A notification of a loss includes a ‘related’ loss;
• Ten year limit;
• Definition of completed;
• Definition of developer;
• Proportionate liability;
• Trader–initiated disputes;

February 2012 changes

• Statutory warranty periods;
• Threshold for mandatory home warranty insurance and cooling off periods;
• New small job contracts category;
• Additional home warranty insurance benefits for homeowners;
• Definition of ‘related’ corporations to a builder or developer;

Some of these changes will require some licensed builders in NSW to contact their insurers to review their home warranty insurance policies and review any claims under their insurance that are pending, or that may be forthcoming.

This is very important information that directly affects all NSW licensed builders so we would encourage all our NSW past and present students to familiarise yourself with the new legislation.

The building and construction industry is heavily regulated by Work Health and Safety (OH&S). On January 1st, 2012 Safe Work Australia began the implementation of a new harmonised national model for Work Health and Safety (OHS). If you are a licensed builder or work for a licensed builder then this impacts you. It would be wise for you to be aware of the changes, and implement the new practices where required.

The best site for information on the new model is:
Safe Work Australia Website

Safe Work Australia has a guide to the new regulations that you can download from their website:
Safe Work Australia WHS Regulations

There are transitional arrangements for the regulations and these have been developed as a set of principles that set out how existing WH&S (OHS) regulations will change and move to the new harmonised system. Again these are available for download:
Safe Work Australia Transitional Arrangements

The changes to the regulations will affect everyone in different ways. In the past there have been different WH&S (OHS) regulations in each state. So depending on which state you reside in the changes may be minor or major.

A very brief recap of the changes that might impact you as a licensed builder or someone working under contract to a licensed builder are:

1. The new act has a broader definition of what is a “worker” and work environments.
2. The new act makes it clear that company officers have a defined obligation to exercise due diligence in relation to duty of care.
3. Unions will no longer have any rights or power to prosecute for an WH&S (OHS) offence. Unions will also have their rights of entry to a workplace redefined for WH&S (OHS) matters.
4. New guidelines will be implemented in relation to employee consultation requirements.
5. Incident notification procedures will be harmonised across all states and territories with strict guidelines for all employers and principle contractors.
6. The role and actions of regulators and inspectors will be made consistent across all states and territories and there will be changes that include a new Code of Practice.

If you are in the industry and haven’t already, then now is the time for a full review of your current policies and procedures. Then consider and implement the changes required to comply with the new Act. The transitional period will be temporary and you could be liable and responsible for the changes.

This is another well needed boost for the building and construction industry.

The program will be a targeted partnership in which the Government will provide $45 million and industry $42 million to support training across Australia.

“This investment will mean more Australian plumbers, builders, engineers and electricians,” Senator Evans said.

Due to the nature of the partnership it gives industry the opportunity to ensure the training is specifically tailored to their workers and their business needs.

“Today we’ve announced that in partnership with industry more than $87 million will be provided to help skill and up-skill 23,777 workers through more than 250 industry driven projects including 33 projects with a focus on the construction sector and 51 with a focus on the aged care sector,” Senator Evans said.

“These are critical industries for our economy. They are industries facing ongoing skills shortages which require employees with high levels of specialised training.

“The funding will mean employers can recruit and train new employees for available positions, and existing workers will also be given the opportunity to upskill.”

“Today is just the first instalment of our $558 million National Workforce Development Fund partnership with Australian business. It’s an investment in the skills of Australian workers, the strength of Australian business and the national economy.

“I congratulate the businesses who have come onboard to make the investment and I encourage businesses across Australia to consider taking part in coming funding rounds through Industry Skills Councils.”

Senator Evans recently paid a visit to Ford Civil Contracting in Sydney, a successful partner for funding under the National Workforce Development Fund Government-industry partnerships. Trainees are currently working on earthmoving and excavation of the site for a multistorey construction project.

The Civil Contractors Federation NSW will receive more than $645,000 to allow more than 40 employers, including Ford Civil Contracting, to design and implement training to more than 200 workers across NSW.

Under the program Government funding is supplemented by a co-contribution from industry. Government contributes at higher levels for small businesses. Large enterprises contribute 66 per cent of the cost of training, medium enterprises 50 per cent and small enterprises 33 per cent.

More information is available at the: Australian Government Funding for Training WebPage

Once again the Federal Government has indicated that the building and construction industry remains a key target for training and skills development due to the ongoing skills shortages being felt across the country even though the industry remains subdued in terms of output.

On January 1 2011 the (ACL) Australian Consumer Law was introduced.

For more information you can go to the Australian Consumer Law Website.

What’s in it?

1. A national law that sets out unfair contract terms, covering standard form contracts.

2. A national law guaranteeing consumer rights when buying goods and services, which replaces existing laws on conditions and warranties.

3. A new, national product safety law and system for enforcement.

4. A national law to regulate unsolicited consumer agreements, which replaces existing State and Territory Laws on door-to-door sales activity and other direct marketing activity.

5. Simple national rules for lay-by agreements.

6. New penalties and enforcement powers and options for consumer redress which will apply nationally.

The ACL will apply on a national level in all States and Territories. It will be applicable to all Australian Businesses.

In summary, it simply means that every consumer now has the same rights across the entire country and that therefore affects the relationship that licensed builders have with consumers in the market. It would be wise for you to visit the government web site and learn more about what the ACL means to you and your business.

Currently every state has slightly different rules. There are rumblings however that much like the recent Harmonisation of OHS Legislation to form a national standard, the Federal and State Governments are discussing the process of creating a similar nationally consistent builders licence qualification.

After all, the Building Code of Australia is a single standard. Engineering qualifications are nationally recognised and the current standard qualifications; Certificate IV in Building and Construction and Diploma in Building and Construction are nationally recognised qualifications.

So what is the likely outcome of a national standard for builders licensing?

Well let’s take a look at the current requirements:

Of those states that are most similar: NSW, Qld, ACT, Tasmania and NT are very close. Licences are based firmly on the two main qualifications being the CPC 40110 Cert IV and the CPC50210 Diploma.

WA has their own specific qualification which is a variation on the Diploma course, and SA has their own which is a variation on the Cert IV.

Victoria does not require a specific qualification in most cases where experience is the more important requirement. However, the Cert IV program is looked upon favourably when it comes time to be assessed for the builders licence application.

The likelihood is that the combination of formal qualifications, trade certification and experience will take the shape of a hybrid between the NSW/ACT system and the Qld system. Why? Because every state, bar one, is already in agreeance that a mandatory qualification is required and they are not going to drop that requirement. So the industry is now planning with that in mind.

If the last 10 years of change is anything to go on… it is not going to get any easier to get a builders licence – anywhere in Australia. If you are in the Construction Industry and plan to obtain your builders licence sometime in the next 2-3 years then the time to prepare is now.

With that in mind we are putting together a series of articles which will delve more deeply into the Certificate IV in Building and Construction and the Diploma in Building and COnstruction program. If you are planning to undertake either of these courses, then be sure to read the articles to help you be preapred for your studies.

Nationally recognised qualifications are coming and we will do our best to help you prepare you for the future.

Herald Sun: Drug Test Victorian Workers

In this article the Victorian Premier Ted Baillieu says that random drug testing on building sites will now be considered after concerns raised in the press. Building Company Leaders want new powers to force random drug testing on unionised construction workers amid growing concerns about criminal gangs in the industry.

But Premier Baillieu has suggested that this should be ironed out between unions and employers without conflict.

“It is something that isn’t necessarily adversarial,’’ Mr Baillieu said today.

The Premier said he would prefer to see a situation in the building industry similar to that already in place with airline pilots and truck drivers who are tested routinely.

It’s an interesting article as this issue could ultimately affect the entire building and construction industry on a national level over time, as there are legal and OHS issues at stake.

The Australian: Engineering a Change to Build on Construction

This next article highlights that the manufacturing industry continues to slide, and although the construction industry has slowed in the last couple of years, it will always be there. The ability to re-train and re-skill from outside the building industry to fill the skills gap in this industry will be a critical goal in the years ahead.

The article tells of an Engineer with a background in Manufacturing who now owns and operates his own construction company in Victoria. Claude Salvatore says his father warned him off his interest in construction when he was younger.

“My dad always pushed for me not to be a tradie – he pushed for me to go to school and do better than that.” he said. “I decided to pursue engineering.”

An engineering degree led Mr Salvatore into the manufacturing industry, where he worked for a large bearings company. He now owns a company focusing on new homes, extensions and renovations in Melbourne.

Motivated partly by the obvious signs of a weakening in Australian manufacturing, Mr Salvatore’s career change represents the shift in Australian employment over the past 25 years.

There is strong evidence of the shift amid the housing market as well. One Melbourne manufacturing company told the paper that of the last 10 employees who had left the company over the past two years, eight went into the building and construction industry.

Understanding the trends in our major industry will help us understand the training and skills needs we need to obtain to meet the jobs of tomorrow.

If you are active in the Building and Construction Industry then do yourself a favour and bookmark these sites. Also be sure to register for updates and news articles.

The Building and Construction Industry Improvement Act 2005

The Office of the Australian Building and Construction Commissioner

Australian Consumer Law

Problem No. 1: Shortage of qualified trades across many sectors of the building and construction industry.
Problem No. 2: High levels of illiteracy within the building and construction industry.

The industry is saying they need more qualified tradespeople and the federal government is aiming to tighten the English Language Literacy Testing for all inbound skilled migrant applicants. So the tougher testing regime is likely to worsen the growing trade shortage, according to the article.

The Master Builders Australia has responded by submitting to the Federal Government to reconsider these stricter changes to the English Test process amid a shortage of qualified workers in both the construction and mining industries. 

“These new tests will make it almost impossible for migrant tradesmen to enter the country”, according to employers. And they say we need more foreign qualified tradespeople because young Aussies “don’t want to get their hands dirty”.

In the MBA submission to the recent federal inquiry into sustainable population, they have expressed concern about the Government’s move to introduce a much higher English testing standard for prospective skilled migrants from July 1.

“It will make it virtually impossible for most tradespeople to pass the new points test,” said the submission to the Department of Sustainability and Environment inquiry.

William Harnisch, MBA Executive Director, has urged the Government to consider a more balanced approach.

“The level of English competency should really be commensurate with the requirements of the trade or the skill level and shouldn’t necessarily just be university-focused,” he said.

But the opposing argument from Monash University migration expert Dr Bob Birrell said allowing low-skilled workers with poor English into the country was unnecessary.

“The immigration program is supposed to be about skilled workers and we’ve got lots of potential people in Australia who are not gainfully employed who could be doing semi-skilled work,” he said.

Dr Birrell said there was no need to “dilute English standards because many tradespeople could still pass on their work experience and demand for their skills”.

Mr Harnisch said many young people were choosing more “attractive” careers. “Some don’t want to start at 5 or 6 o’clock in the morning, some don’t want to get their hands dirty,” he said.

“That’s a disappointment because the building industry remains a very rewarding and profitable career for young people.”

A spokesman for Immigration Minister Chris Bowen said an independent review had found that English skills were critical to ensuring foreign workers were less vulnerable to exploitation.

“Australia is and will continue to be an attractive destination for skilled migrants, putting us in the enviable position of being able to select the best and brightest from that pool,” he said.

It is interesting that amongst all these points there was no mention of the occupational health and safety risks posed by having people in the building industry having poor english literacy skills. I guess we can sum it up by saying more training across the entire industry, at many levels, is needed to meet the future needs of both the building and construction industry and the mining sector. Stay tuned for more industry and government announcements as they try to tackle it in their different ways.

Occupational Health and Safety impacts the building industry at every point. We are all aware of how difficult it is to comply and in particular how to manage compliance across different state boundaries.

Currently all states, territories and the Commonwealth are responsible for making and enforcing their own health and safety laws. Although these laws are similar in foundation and approach they are different in how they apply in the workplace.

As builders and trades people, how are we affected by these inconsistent laws?

• They cause confusion and frustration because they create opposing environments and safety standards across jurisdictions. 
• They lead to duplication and inefficient work practices that chew up valuable time and resources within our businesses.
• There has been quite a bit of news over the last couple of years about industry calls for greater national consistency in the area of OH&S (WHS). In response the Commonwealth and State Governments have finally agreed on a framework and will implement a nationally consistent OHS (WHS) legislation platform commencing on the 1st of January, 2012.

The model will be one in which the Governments will be responsible for making and enforcing the laws which are set down in the legislation within their jurisdictions. However the laws themselves will be harmonised (made consistent) so that the jurisdiction will not determine the difference in the law.

The benefits to the building and construction industry from the introduction of the Harmonised OHS (WHS) legislation will be positive progress for our industry. Some of these benefits will include:

• A uniform, effective and equitable safety standard and protection system for all workers in the building and construction industry. 
• All jurisdictions will apply the same compliance and regulatory standards so that licenced building companies can operate under one OHS (WHS) system regardless of the jurisdiction. 
• The interaction between government agencies and the building industry will be more efficient and consistent. 
• There should be a significant and continual improvement in workplace safety within the building and construction industry, resulting in lowering incidents of injury and death on our work sites.

We will continue to cover this in more detail in coming months as we lead up to the introduction of the legislation framework in early 2012.

For more information visit the QLD Govt Website that sets out the Harmonisation process in more detail. 

There are many other sites (Govt and Non-Govt) that are putting information out there into industry sectors. Please seek out this information and begin planning for the new rules. Your business will benefit.

If you or your staff need specific training in Occupational Health and Safety then please contact us or visit Cert IV in Occupational Health and Safety.