FOR EMPLOYERS IN THE VICTORIAN CONSTRUCTION INDUSTRY
Welcome to CoINVEST News!
The last few months have seen a significant shift in the construction industry and financial markets, as we grapple with inflation, rising interest rates, supply chain delays and labour shortages. This is not only impacting the construction industry, as outlined in our Industry Focus article ‘Chain Reaction’, but all of us in our daily lives as we pay more on our mortgages, petrol and living expenses. With a lot of those macro pressures out of our control (the war in Ukraine, rising energy costs and floods impacting food supply), we are all being asked to adapt in these uncertain times.
We understand the pressure employers are under as they struggle to maintain their businesses under these difficult conditions. Whilst contributions to the long service leave scheme remain compulsory by law, we ask that you get in touch with us if you are experiencing financial pressures to see how we can assist.
We also understand the pressure on our workers who are dealing with job uncertainty, frustrated customers and their own cost of living pressures. In support of their mental health and wellbeing, workers can use their long service leave to take a break from work, recuperate from the mental and physical demands from the role, and come back to work refreshed and reinvigorated.
CoINVEST is also not immune to these market pressures as the Fund’s investment return has also been impacted by the volatility of the financial markets. However, the Fund remains in good shape with a healthy surplus that more than covers our long service liabilities and ensures we continue to be able to meet workers’ long service leave claims with confidence.
As I mentioned in my last update, we are moving forward with our transformation journey. The last Executive to join the team is our new General Counsel, Catryn Tuckwell. Catryn will complement our existing legal capability and ensure we have access to the best advice in administering the scheme.
We are on the build for a better experience for you, our members. We’ve been listening to our members and understand there is great opportunity to improve how employers and workers interact with us. We are just at the beginning of investing in a better future and our focus is firstly to deeply understand your experience; we will be seeking your input to help us improve our long service leave product, mobile app and website that will enable a simpler and easier experience.
We are making good progress on resolving worker members’ service investigation requests, compliance follow ups and employer adjustment requests, making a substantial reduction in these areas over the last couple of months, and they will remain a priority to resolve as we move into the new financial year.
As we reflect on the end of another financial year, I would like to thank the Board and all the staff at CoINVEST for the hard work that has gone into this past year, and I look forward to the great achievements ahead of us in 2022-23.
Chief Executive Officer, CoINVEST Ltd
As we close off the 2021-22 financial year, let’s take a look at some of the key messages and current talking points from CoINVEST.
The April to June 2022 Workers Days and Wages (WDW) submission is now available for employers to complete on the CoINVEST Portal.
The due date for submission is 14 July 2022.
As the industry regulator and Trustee of the Construction Industry Long Service Leave Act 1997, CoINVEST applies strict legal and financial consequences for non-compliance relating to worker registration and return submission.
All employers should familiarise themselves with the requirements as an employer under the Act and the consequences of non-compliance at our Employer Obligations webpage.
If you require assistance or are unable to submit your WDW before the due date, please call our Member Assist team on 03 9664 7677 or 1300 COINVEST.
In the early stages of the Covid-19 pandemic we had to close our customer phone line. Technical difficulties in the transition to migrating our whole workforce to work from home presented some barriers with our phones system. In late 2020 we were able to open our phone lines back up, but only at reduced hours.
We have now been able to extend our phone support hours back to 9:00am – 5:00pm AEST. Members will now receive phone support for the full business day schedule Monday to Friday. Feedback from our members has helped to highlight areas such as this where we can improve our response and turnaround times for member queries. We are delighted that members can now benefit from this improved experience.
To contact our Member Assist team, call 03 9664 7677 or 1300 CoINVEST (1300 264 683).
In May and June we welcomed many new faces to the CoINVEST family, including three new team members in executive positions:
– Darren McConnell as Chief Finance and Investment Officer
– Catryn Tuckwell as General Counsel
– Carly Hendon as General Manager People and Culture
This now completes the newly expanded executive team and we are delighted to have Darren, Catryn, and Carly on board.
CoINVEST’s organisational structure has been designed to encompass a ‘whole of business’ approach in the way we support the business and deliver our services. This structure is supported by the Executive Team to ensure that the organisation is meeting its strategic goals in providing a great experience for members. To read more about our Executive Team, click here.
With the construction industry making up 9 per cent of the Australian workforce, and contributing to around 9 per cent of Australia’s GDP (generating $360 billion in revenue annually), changes to the industry can often act as a bellwether for what’s to come for Australia at large. While the country currently grapples with sudden increases to the cost of living, the cost of doing business in the construction industry foreshadowed these broad economic woes much earlier.
The pinch has been most keenly felt by construction outfits in the last six to twelve months, due in large part to the skyrocketing cost of materials – timber rose by 50 to 100 per cent in 2021, steel by 30 to 60 per cent, and concrete by 20 to 40 per cent. The Covid-19 pandemic undoubtedly caused huge disruption to supply chains on a global scale, which drove up the price of many imported materials; but other factors have also played their part to now increase demand and reduce supply.
The floods in NSW and QLD in early 2021 left around 5,000 homes damaged and thousands of others requiring urgent attention, demanding labour resources and materials on a huge scale. With immigration of skilled workers halted in the height of the pandemic, and increased demand for building supplies after Covid-19 lockdowns; the burden on an already stretched workforce throughout the nation was already starting to show signs of real stress.
Russia’s invasion of Ukraine then added fuel to the fire – disrupting supply chains further still, and even cutting them off completely for those who sourced timber from Russian suppliers that have now been blocked under international sanctions. The war in Ukraine has also impacted domestic energy costs due to embargoes on Russian gas exports in the global marketplace. The price of gas and wholesale energy has risen dramatically in Australia since the beginning of the war, directly affecting the energy-intensive steel manufacturing process.
Each of these pressures has caused an immense amount of strain on a sector which operates on very tight margins. Many large developers have already gone into administration, liquidation, or are thought to be on the brink of collapse. For developers who work on fixed price contracts, profit margins are squeezed by the shifting sands of material costs. As resilient as construction workers are, we have reached a point where intervention of some sort is now needed.
So what does this mean for the future of construction? How are businesses reacting? And what can be put in place to help ease some of the stresses on businesses and individuals?
Some economists are predicting that building approvals will continue to fall from their historic highs as interest rates rise and house prices fall, which may help to ease demand. But even before the effects of that might kick in, some builders are voluntarily reducing the jobs they take on to maintain profitability. In some instances, building firms are starting to insert conditions in contracts which make customers aware that there are certain costs which may increase; safeguarding the business from the burden of any price surges, but making customers more cautious when considering building work.
Treasurer for the Victorian State Government, Tim Pallas, had already announced in October 2021 a $196.6 million package of one-off payments to eligible construction businesses affected by the industry shutdown in Melbourne, Geelong, Surf Coast Shire and Mitchell Shire. According to the Herald Sun, the Victorian State government is now also considering some form of support package which would help Australia’s largest home builder, Metricon, and other firms survive after recent financial struggles saw them allegedly near the brink of collapse.
Many businesses and workers may remain in an uncertain situation for some time. Members who have an eligible entitlement with CoINVEST are reminded that their long service leave is available for them when they need to take a well-earned break.
In an industry represented predominantly by men, International Men’s Health Week in June has also been a timely reminder of the importance of how we can better support the mental health of men in the construction industry. Incolink’s BlueHats suicide prevention programs offer assistance to workers who are doing it tough by providing someone to talk to on site. Organisations such as Beyond Blue are available for those who need support on 1300 22 4636.
GPO Box 4368, Melbourne, VIC 3001
T 03 9664 7677
T 1300 COINVEST