But what does the BPB really need? (back)

Harvey Grennan, writing in the Sydney Morning Herald on 28 October has no doubt.

"Private certifiers … are being rapped over the knuckles with a feather for issuing dodgy building approvals and failing to enforce conditions placed on developments by the local council.

One private certifier in six has been the subject of an adverse disciplinary finding.

There is one certifier who appears on the register of disciplinary action with 22 cautions and reprimands but has not lost his accreditation to operate. Another has had nine adverse findings and has been given nothing worse than a reprimand. Another has six adverse findings - one of which covers 25 separate developments - and is still operating with partial accreditation."

Well, we told you so. But with embarrassing and damning statistics like these on the competence and propriety of private certifiers, there is still more …

"Councils say the new enforcement body established last year, the Building Professionals Board, is inadequately resourced and faces a large backlog of complaints. In the intervening period many serious complaints by councils and property buyers against certifiers were never investigated or acted on, leaving hundreds of buyers with rectification bills sometimes running into millions of dollars."

Damning statistics on breaches and appalling delays in processing complaints, so what is BPB CEO Neil Cocks doing about it?

He's traipsing around New South Wales trying to get his hands on you.

Neil has never been secretive about his compulsion to have council employees accredited by the BPB. In a series of public forums a couple of years ago, he was quite open that to be financially viable, the BPB really needed to be bank-rolled by the 800 or so people doing "certifying" in councils.

We can see how ineffective accreditation really is from the analysis provided in the Herald, so we are entitled to wonder why Neil would want to shift his focus from the main game to accredit council staff. Is it really only to help fund the Board?

At a recent AIBS conference in the Riverina, Neil handed around a document of his latest fantasy in getting his hands on council staff. The document headed "Council accreditation proposals - October 2008" will be exhibited later this year or early next for public comment. Frankly, we can't wait to express our view. Not a good idea, when you have a system that is slow and ineffectual, to overwhelm it with 2 1/2 or three times the number of people you already can't handle properly.

There are also significant questions where the BPB and the government will struggle to find answers. For example, the wisdom and practicality of establishing parallel authority and accountability for council employees. For decades councils have been allocating work to those regarded as appropriately experienced and/or qualified, overseeing the quality of their work, rewarding the good work and training and/or disciplining those who don't make the grade. This is being done in a timely and effective manner and, particularly in relation to discipline, within the acceptable processes of natural justice required under the Award.

How will the BPB handle a complaint against council staff? If the past is anything to go by, slowly and ineffectually and probably some considerable time after the council has dealt with the issue in its relationship with its own employee. Unless the BPB wants to shift focus from the main game and start to put the boot into councils, of course.

And while council employees have obligations under the Local Government Act to disclose pecuniary and discretionary interests and comply with comprehensive codes of conduct, there is very little regulating the ethics of private certifiers and the commercial interests that motivate and sustain them.

If you look at the BPB website, there is minimal focus on conduct – two pages (Schedule 4) of the Accreditation Scheme and then another eight pages in a "Code of Conduct: a guide”.

Council employees need to comply with sections of the Local Government Act that deal with pecuniary interests and be identified, for all the world to see, on a pecuniary interests register. Section 430 proscribes rules for other work which might conflict with council responsibilities. There are no similar arrangements for private certifiers.

The June 2008 Draft Model Code of Conduct released by the Department of Local Government runs to 32 pages and the October 2008 Guidelines for the Model Code is 50 pages. Even then, these documents have been criticised by the ICAC for not being sufficiently thorough to pick up the sort of problems recently revealed at Wollongong.

Schedule 4 of the Accreditation Scheme also insists that other codes or ethical requirements can only supplement the flimsy two pages but “they do not have any legal status under this Act”. More significantly, if there is a conflict between codes, “particularly where the public interest is concerned, this Code will prevail for the purposes of the Act.”

Just to be clear, what that means is the BPB’s two flimsy pages will prevail over standards embodied in the more than 80 pages in the Local Government Code and Guidelines and that doesn’t make any sense at all.

But in a way, who cares about the BPB’s Code? The Herald’s analysis shows the system is rotten and the BPB is ineffective but all their Code is meant to do is assist to “maintain public confidence” in the private certification system. If there is bugger all public confidence, its easy to maintain it. The Dodgies really have come to New South Wales.

 

Our scepticism and resistance to the certification system, and our opposition to the BPB’s ambitious and ill-considered plans to expand amongst our members employed by councils, remains undiminished.

And while we are on the BPB, it's delightful to see ex Department of Planning director-general Sue Holliday appointed as its President. We enjoyed butting heads with Sue in 1996 when she was charged by Craig Knowles with the responsibility of setting the private certification scheme up - and as one of the people we can genuinely blame for its introduction, it will be a karmic challenge for her to try and fix all the problems we told her in 1996 would arise, while she was naively and confidently setting it up.

Forget Etheridge, Red Hot Rees gives WorkChoices a shellacking? (back)

Our August Bulletin carried the good news from the Federal Court that they had found Etheridge Shire Council not to be a constitutional corporation and therefore not affected by Federal industrial relations law.

In September we noted the move towards the decorporatisation of councils and the option of excluding local government from coverage by the Workplace Relations Act in the Federal legislation itself. Some saw decorporatisation as step one towards a step two excision from the Federal Act. We thought going straight to stage two would have removed any anxiety or complications about "unintended consequences" or side-effects from decorporatisation.

Despite Etheridge, there was no shortage of fools rushing in to proclaim that the Federal Court decision did not affect their personal resolve and conviction about councils being constitutional corporations. Two of them won prizes in our September Bulletin and we have another prize to award further into this Bulletin.

The local government unions and employers had explored options to legislatively protect councils from WorkChoices in 2007. The opportunity for everyone to be employed by the general manager would have resolved the issue but this was opposed by the USU (who didn't want general managers to be that powerful), the LGSA (who were worried that there would be no real role then for councillors) and from many of the general managers themselves (who were worried about being in charge!). So nothing happened.

But with the zealots and a flag-wavers in favour of WorkChoices denying the undeniable implications of the most authoritative and recent judicial judgement, someone had to do something to fix it once and for all.

And there is something very satisfying about that decisive action being taken by the new NSW Premier Nathan Rees - a person who funded his literature degree by working at nights as a garbo for Parramatta Council. Talk about work/life balance – and great training for the mess he has to clear up now.

The Local Government Amendment (Legal Status) Bill 2008 is currently cruising its way through the NSW Parliament. It puts beyond doubt, even for those who deny most rabidly, that local government employees and the unions to which they belong will remain happily within the jurisdiction of the NSW Industrial Relations Act and the user-friendliness and accessibility of its tribunals: with Awards and enterprise agreements, with no prohibited content, and containing precisely what the parties to the Award want included as conditions of employment.

There is now no doubt that employees covered by the Local Government (State) Award will receive a pay increase of 3.2% from the first pay period on or after 1 November. Some councils are offering additional money but others, bloodymindedly and inexplicably, still think there's such a thing as a NAPSA and that to pay the 3.2% councils will need to sign memoranda of understanding, or referral agreements or council agreements.

Let's be clear here: all those councils originally covered by the State Award are now, without any impediment or confusion, covered by the State Award and the Award increases and conditions underneath that Award have the force of law. Unions can prosecute councils for breaching the Award and secure a financial penalty. Any nominations?

Despite all this, as recently as last week some councils (GMs or HR managers really) were still thinking that agreements should be signed to facilitate the payment of something that has the force of law. And from one of those councils, comes our third winner …

Another fool rushes in - and this time it's a General Manager (back)

We had some great entries in our "Fools Rush In" competition launched in the August Bulletin. The September Bulletin noted the significant contribution by two HR managers.

Thanks to those who participated in our on-line survey on just how stupid Taree HR manager Tony Surety’s letter was. An even split, half of you thought Tony's letter was the stupidest letter written this year and the other half thought it was the stupidest letter ever written. We have to call it a draw but have high expectations that Tony will figure in more Bulletins in the future.

We now have a further nomination worthy of a prize and its Tweed Shire Council's General Manager, Mike Rayner. He sent a memo to all staff that stated in the opening paragraph:

"Under the Local Government State Award, November was traditionally the time when an annual salary increase was awarded to staff. This has remained Council's practice even though staff are no longer covered by the State Award."

But wait, there's more. Not only does Mike win an award for rushing in, he is also the recipient of some very clear and easily understandable advice from depa. He was the only general manager on 30 October insisting that no one would get paid in November without a written agreement. If you need to be absolutely idiot-proof clear on the question of industrial jurisdiction, you can read our letter to Mike as well.

LGSS terminates contribution holiday (back)

Since 1998, the LGSS has provided a contribution holiday for councils with employees in the defined benefit scheme, or Division B. (This will be a story of interest only to a few of you.)

While the contribution holiday operated, councils received a benefit of around $600 million - money which they did not have to contribute to the Scheme because the employers’ contribution was coming from the Scheme's surplus.

The only employees in the industry who benefited from a holiday when those employees who were employed on TRP arrangements where superannuation was included as part of that total remuneration package. Obviously if there is a component that doesn't need to be paid, then it remains in the package to be paid to the employee as cash.

This was a good arrangement for the employees concerned (and we had to take a number of councils to the Industrial Relations Commission to stop them pocketing the cash themselves) but it was also a good arrangement for the councils. They were able to employ people and provide them with better cash benefits than the actual TRP would allow. It allowed them to retain staff and more generously reward them – all courtesy of the LGSS.

The LGSS Board resolved that the contribution holiday would end on 30 June 2008. Those employees and councils which had benefited from the holiday now have to deal with a number of employees having their take-home pay reduced by the superannuation contribution. For some employees that reduction in take-home pay can be very, very significant.

The last meeting of the Committee of Management resolved to encourage employees suffering this reduced cash payment to make a claim upon the Council for the TRP to be topped up so that there is no reduction in the compensation. Please contact the office if you need assistance making this claim.

DLG and Department of Water and Energy wreak havoc with plumbing inspections (back)

In many councils in the western area of the State, plumbing inspections are carried out by building surveyors and other people who are not licensed plumbers. This has operated like this for years.

DLG Circular to Councils No 08-61 headed "Plumbing inspections: NSW Plumbing and Drainage Code of Practice (2006) has invoked a requirement that plumbing inspections now only be carried out by a qualified plumber or a person under the immediate supervision and control of a qualified plumber.

This was clearly a decision of the two departments made without consideration of staff and resourcing issues in western NSW. Many councils will not have licensed plumbers to carry these inspections out. What do they do?

depa is discussing this issue with LGSA to develop a common strategy to deal with this change in practice. We encourage all members working in councils affected by this decision to also contact the LGSA and the DLG.

Don't waste your time contacting the contact person at DWE (because they are on leave) and there is no replacement person who can deal with it.

A good time to have your money under the bed (back)

 

It's difficult not to be affected by the alarming news about how all our superannuation accounts are being decimated by the current credit crisis and the threats to financial institutions and markets in what is being described in short as the global economic crisis or GEC.

It must be some financial crisis to have that bastion of free enterprise, the US Republican administration partially nationalise banks, nationalise the country's biggest insurer and now contemplate taking a stake in most of the country's major insurance companies. This was the land of supreme confidence in the concept of free enterprise, the "logical" or "efficient" market, the financial industry managing itself, the removal of regulation of that industry and reduction in the size of government.

Two weeks ago the former Federal Reserve Chairman Alan Greenspan appeared before a congressional committee established to examine what had happened with the US credit meltdown. Greenspan, who had run the Federal Reserve for two decades, apologised that he was nothing but an ideologue with what, in retrospect, was clearly a misplaced faith in the ability of financial markets to regulate themselves. Well, duhhh.

Some parts of the credit crisis are easy to understand. Greedy, dodgy salespeople, being paid commissions sold mortgages to people who couldn't afford to pay them. That's easy to understand, commission-based selling means that the seller doesn't really care how good or bad the service is, or whether you really need it, or whether you can really pay for it. All they care is that it sold at and they get the commission.

The next step is the hard bit to understand. Someone thought it would be a good idea to bundle up all of this bad debt as a "security" and sell it to people who should know better - all the big banks and finance institutions. They didn't know better, they fell for it. It is almost impossible to conceive how many of them did fall for it and how much bad debt was bought and spread right across the world economy.

Sadly, superannuation funds along with everyone else are invested in, or have some financial relationship with, those banks and financial institutions that should have known better. It doesn't matter how much bad dept you bundle together, it is still bad debt. It seems really obvious to those of us without any economic expertise.

The smart advice continues to be to keep your hands off your superannuation investment options. Some funds are reporting up to 20% of members changing their investment option from high growth to cash. (It's always the high growth options that lose more money just the same way that it's always the high growth options that make more money and history shows that high growth will make much more than cash for four out of every five years or so). The problem with this is that moving your money out when things are low means you concrete in your loss. Cash will never recover the losses.

If you are thinking about changing your LGSS investment choice should contact FuturePlus Financial Services for financial advice before doing so.

 

 

Ian Robertson

Secretary