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  VANGUARD  
 
Building homes on the shaky grounds of capitalism
 
 

Nick G.                         14 July 2019

The residential building sector is seeing record numbers of builders going bankrupt, leaving  home buyers and construction workers in dire straits.

The sector is particularly vulnerable to the boom and bust cycle of capitalism owing to the over-reliance of all parties on credit supplies via the big banks.

Profit-driven construction is blind to demand.  Over-supply of high-density apartments and suburban housing is the Achilles heel of the industry.

In SA, ten builders have gone bust since last November, leaving scores of houses unfinished and hundreds of tradespeople unpaid.  The situation is probably worse in the two states that have been at the forefront of mining booms – Queensland and WA.  More than 50 building companies have collapsed in Queensland since 2013.  Many subbies are still chasing companies for payment of wages and other expenses or entitlements. It is not unusual for a collapsed housing company to owe millions of dollars to creditors, many of whom are former employees.

When home building is on the decline, spokespersons for the capitalists in the industry, such as the Master Builders Associations and Property Councils around the country, call for assistance from state and federal governments.  Blind to social needs, they demand stimulus measures such as removing compulsory requirements for rainwater tanks in new dwellings, scrapping energy efficiency audits, and fast-tracking approvals for demolition of older housing in favour of newer high-density and multi-level apartments. Two days ago, the WA Chamber of Commerce and Industry called for reductions in payroll tax. States compete with each other to reduce costs for business even at the expense of reducing the revenue they need to pay for health, education and infrastructure.

Whilst union coverage is not particularly high in the residential housing sector, denial of right of entry to union organisers and other legislative restrictions on union activity make the policing of payments and health and safety requirements difficult to enact.

Meanwhile, land and housing remain out of the reach of millions of Australians, and rises in the rental markets exacerbate problems related to affordable housing.  Homelessness is a permanent feature of our nation’s urban and regional population centres.

Historically, the only countries to have made effective provision for low-cost or free housing have been socialist countries where the state has replaced privately-owned construction companies, has controlled and guaranteed the availability of credit to state construction agencies and planned housing provision to meet peoples’ needs. Today, the latter must include generous amounts of open space as well as environmentally sustainable building practices and construction outcomes.

We have a relatively small population in a resource-rich country.  If we took control of the economy out of the hands of imperialist corporations and other capitalists, we could place the provision of housing for all on the stable foundation of socialism.