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Home and Building, Volume 37 Number 6 (1975)

Wealthy BRANZ?

page 64

Wealthy BRANZ?

Master Builders Federation members at their annual Housing Conference were surprised to hear the Director of BRANZ say that his Association had little spare money, and was having to watch its expenditure very closely. "We have had a freeze on staff replacements, let alone further appointments, for four months" the director said. This statement appeared to conflict with the credit balance of over $600,000 shown in the annual accounts for the year ended 31 March 1975, included in the Annual Report and the Association sought some explanation.

The first point is that a footnote has to be read in conjunction with the balance sheet. This shows that the outstanding costs of completing the first stage of BRANZ'S building programme ($450,000) is not far short of the cash held by the Association. This expenditure, which was committed two years ago by the Board of Management in accordance with indications given in 1972, is only now coming fully to charge.

The second point is that BRANZ income is tied primarily to the building research levy, and therefore to the level of building activity. All indications are that building activity over the next 18 months is unlikely to reach the levels of the past two years. In view of these factors the BRANZ Board has acted responsibly in holding staff members at a constant level. Even so, an operating deficit is expected for the 1975/76 year, with an even greater deficit expected for the 1976/ 77 year. These deficits can be met only be depleting the Association's term deposits.

The nett result of these factors is that without committing any further capital expenditure on buildings, and with strict control on staff numbers, the funds in hand at 1 April 1977 are estimated to be equivalent to only six weeks' working funds for the variety of services offered by BRANZ. This situation will clearly preclude financing (out of savings), further buildings, urgently needed in place of the present, inadequate rented space.

As stated by the Chairman in his recent presentation of the Annual Report, the Board of Management is first and foremost concerned to maintain activities at their present scale and level of efficiency. Every endeavour is being made to ensure adequate financial support for the technical effort required to meet the industry's most urgent needs. The Board is keenly watching the general economic situation and will be ready to provide still more services to the industry the moment it is realistic to do so.