The property development and construction industry is having a lend of Australia: By promoting massive migration numbers, it keeps housing and land costs high and it keeps its own costs low.
The CFMEU has called for the Fair Work Ombudsman to be abolished and replaced with a regulator that is "focused on the real issues affecting workers." Incoming CFMEU National Secretary Zach Smith said the FWO had failed to tackle wage theft, sham contracting and corporate insolvency - three of the biggest issues in the construction industry."Australia’s industrial watchdog is more like a toothless Chihuahua than any serious workplace regulator," Mr Smith said.
"The Fair Work Ombudsman's priorities are all wrong. It is fundamentally broken beyond repair.
Seven electricians had their contractor licences revoked by NSW Fair Trading after investigations found they signed and submitted compliance certificates (CCEWs) for solar panel installations despite not having carried out, supervised, or inspected the installations themselves. Six of the electricians were either overseas or interstate on the dates listed on the certificates. The seventh contractor was in Sydney instead of at the job sites in regional New South Wales.
On 27 March 2020, the AWU and Master Builders Australia jointly called on governments to ensure the continued operation of the building and construction industry, claiming that without it the economic knock-on effects would be devastating on a scale that would dwarf what we have seen to date.
There is no question that many dependencies on this very costly and demanding industry would cause more economic disruption, but what about safety with regard to COVID-19? Although the industry argues that it can be safe, we will argue that the industry is not suited to workers keeping safe distances. On the principle that a stitch in time saves nine, it would be better to shut down sooner rather than later because the later action is taken, the worse the grip of COVID-19 will be on the economy. Since the virus has caused the government to cease the mass migration that has driven huge expansion in the construction industry, demand has dropped, and now is the perfect time to massively curtail construction industry activity. In the meantime, will the industry take responsibility for the return home of the many temporary migrant construction workers from China and Indonesia who, unlike international cruise-ship passengers, are already onshore, virtually invisible, but numerous? And an industry worker argues that the industry is not capable of adapting to safe distance practice.
“The shutdown of the construction industry would jeopardise not just those employed directly, but the whole livelihoods of millions of Australians employed in precarious sectors like manufacturing. It would devastate nationally important industries in the building supply chain, like the $30 billion steel industry,” say the AWU and MBA.
This shows that we have become too dependent on this industry. It has an unhealthy hold on our economy, our political system, our politicians and political parties. This hold has destroyed business, industry and employment diversity in Australia, because agriculture and ordinary manufacturing cannot compete with the inflated profits of the rapidly metastasizing property development sector, which attracts finance away from other sectors.
The same industry has successfully lobbied decades for faster and faster population growth, via mass immigration, to drive demand for its product. Now the demand will dry up as immigration has been stopped, finally providing an interruption to property-development’s hold on our economy.
As well as importing customers, the industry has also exploited many temporary migrants, undermining immigration rules, safety, wages and other employment conditions. The industry may have profited, but prices have risen and standards have dropped, to the extent that buildings over three stories are now uninsurable.
The AWU and MBA argue that, “Forcing the industry’s closure would also blunt the impact of federal, state and territory government stimulus packages as infrastructure projects would immediately grind to a halt. Civil construction, in particular, must continue to build the nation and can do so safely given the nature of its sites.”
The cry of ‘nation-building’ has led to overdevelopment with disastrous drops in building standards and environmental amenity. Australians have suffered from constant upheaval and loss of democracy as government outsourced planning to developers. In the name of catering to unprecedented population growth, Australian cities, suburbs and regions have been taken out of the control of their residents, subjected to constant infrastructure expansion, road-building, traffic diversions, and destruction of loved environment.
The AWU and MBA’s line is: ”Indeed, the catastrophic threat of a construction shutdown means the whole construction industry has a civic duty to impress upon authorities it can operate while ensuring compliance with social distancing and hygiene requirements.”
How could anyone have confidence in an industry known for corrupting government at all levels, bullying, unaccountability, uninsurability, and lawlessness? This industry has seen thousands of Australians bankrupted and homeless. Multiple inquiries into its dysfunctionality have failed to reform it. It is time to stop dancing to the demands of this industry. Australia has been living beyond its means in an artificially and unreasonably accelerated growth period.
The AWU and MBA try to present a picture of reform and responsibility:
“That means everyone in the industry has to step up and be accountable. Construction companies and project managers must ensure that protocols at their site are enforced. Construction workers owe it to each other and their families to be responsible and do the right thing. This is only the only way the industry can continue working while reducing the risk of COVID-19 transmission.”
Unsafe: Safe distance mostly impossible in Construction industry
An industry worker, who prefers to remain anonymous, says:
“Practising safe distance at building sites for most activities is impossible.
It is generally not safe for one person to work alone in the industry. Usually construction sites involve many people in many activities simultaneously, crisscrossing each other in small and often confined spaces, sharing narrow temporary paths and causeways.
In multi-storey building construction, hoists are used to bring people to various floors. These hoists are always crammed with people. It is not affordable to take people (or loads) one at a time.
Concreters work closely together when they lay concrete, frequently in small areas. You might have one worker using a scrider, and two others using a shovel or a vibrator, not even half a meter from each other. You will often get four or five people a couple of meters square, due to the need to act together to carry out the work. It would be hard or impossible for one person to do such work alone. It would be uneconomical for less than four or five.
High-rise work employs huge crowds of skilled and unskilled workers. It is common in the construction of a multi-storey building to have 40 steel-fixers and 40 form-workers operating simultaneously on one floor.
The nature of the industry entails very basic conditions of hygiene and shelter. Disinfection and maintenance of disinfection in such areas, where many workers are coming and going, would require a large-scale dedicated team of cleaners and supervisors with the authority to stop and start work. It would be dangerous to have such teams present on building sites.
Construction sites are scenes of intense activity, with many people interacting on many processes, helping each other. The cost of construction means that things are done as quickly as possible.
When trucks are unloaded, you often have many labourers unloading next to each other.
It is rare for one person to work alone. Generally speaking, in this industry, safety requires workers to work in pairs or in larger groups.
People are often required to work in confined space and they then need another person to assist with tools and equipment, physically handing these from one person to the next.
Transport is often shared. People habitually organise to come and go to work in one vehicle because many jobs are not accessible by public transport.
Many temporary migrants are moved in and out of construction sites in busloads from densely shared accommodation. A large proportion are Chinese and Indonesian. They often do not speak or read any English, and certainly not enough to know how to protect themselves. They tend to be insecure in their employment and visa status and are not likely to exercise their rights to safety, if they know them. These workers are like a separate population on construction sites, with whom only basic communication is possible, usually via their own foreman.
Will the industry now take steps to finance these workers’ return home?”
The AWU and the MBA say in their press release:
”In times of crisis people look to unions, industry, and government to work together. We have to show we can not only slow the spread of COIVID-19 but ensure there's an economy left when the crisis is over.”
The problem is that unions and government have been working for industry and against democracy for too long. Let’s hope the AWU and the MBA, the Property Council of Australia and all the other corporate coercers who have been calling our tune start to adapt to reality for a change.
This is the second in a series of interviews with Nerrida Pohl about lack of proper regulation of the construction and development industry in Australia. Nerrida talks about the 30 story appartment building in Victoria, where she bought two appartments 'off the plan'. The building is a shared commercial/private one, that is meant to share one plan, but Nerrida has discovered with some amazement that there are actually two different plans. Although the Victorian Civil and Administrative Tribunal (VCAT) ruled, in a dispute between the developer and Stonington Council, that residents would share the building's loading bay with commercial occupants, this right was sold off by a member of the building management for $1.00 per annum peppercorn rent. This has meant that moving vans park at the front entrance, causing traffic problems in a very busy area. The front doors are propped open so that furniture etc can be brought into the building, creating a security risk. Furthermore, the ''Residents Meeting Room' specified in the plan, has been occupied by a real-estate agency. This means that residents have no formal or designated place to meet, communicate, and organise for their own benefit. It is especially hard because many appartment owners dwell overseas and cannot easily be contacted by other owners who, when they ask, are only given overseas mailing addresses, which might be PO boxes or legal firms in distant cities.
VIDEO UNPUBLISHED: Unfortunately the person interviewed in this video has asked me to unpublish it because the publicity she has received has apparently caused her problems.
Australia's construction industry is corrupt, but protected by government. This has left building consumers in a terrible situation. A current scandal is that they are being forced to pay billions for builders' mistakes in a situation where no building over 3 stories is insured. This video is of an interview with Nerrida Pohl about the dangers of inflammable cladding on skyscrapers, using her own building as an example. The location affords views of similar problems on surrounding skyscrapers in South Yarra. It also illustrates the irony of having one's view built out, even when one lives in a skyscraper, as massive population growth an deregulation accelerate infilling and raise heights. Nerrida was a speaker at the Victorian Building Action Group AGM this year.
VIDEO UNPUBLISHED: Unfortunately the person interviewed in this video has asked me to unpublish it pending her dealing with some pressure she has received in response. Because this was a very educational video, I am regretfully unpublishing it for the time being.
VBAG is the only organization representing building consumers in Australia. VBAG estimates conservatively that for 2019 more than one million Australians will lose more than $400b on shonky building, as well as suffering decades long distress from disputes, leading to deaths, suicides, shattered families, and ruined lives. Come along and inform yourselves and participate.
VBAG AGM is on 26 August 2019 at 7pm at 1 Wendell Street, Brunswick. (Best to enter from Victoria Street.)
Topic: ‘Dream into Nightmare: In the SHOES of Building Consumers’
VBAG's conservative estimate for 2019: more than 1 million Australians will lose more than $400 Billion. This without considering the toll of the years or decades’ long distress from disputes, and without taking account of the deaths and suicides, shattered families, the lives forever ruined.
This is the reality of living in the lucky land of Oz! Here we have no - NO - consumer rights, no human rights, no freedom of speech and no 'fair go'!
Please make the effort to come, and bring your family and friends. This corrupted industry does not discriminate. Everyone is a building consumer and all are at high risk. People from all walks of life have and will continue to be ensnared into the wicked web of building fraud - because ‘shelter’ is a basic need delivered for three (3) decades by a lawless ‘industry’!
HELP US with strategies to reclaim our rights as the number ONE stakeholder, to speak as ONE united CONSUMER VOICE and to end this biggest ever man-made human disaster.
Enquiries: Telephone or text President Anne Paten on 0401 226 048
Building is more than risky business; it's a killer
As the only registered building consumer organization in the country, we have been working hard on behalf of owners for 13 years, but the powerful vested interests who
control the industry and our politicians have locked us out, rendered us utterly voiceless.
The destruction of the con-struction industry has delivered a massive man-made disaster, a horrific human tragedy. This was preventable, but profits count more than people!
- We supposedly live in a first world country, but our built environment is third world.
- Deregulated in 1993, the 'governance framework' underpinning the industry was con-structed to support a lawless industry and to crush consumer cash-cows.
- The biggest con: Big business directed our governments to steal our rights and to authorize legalized fraud.
- The cowboys have destroyed our families and shamelessly left millions of them broke and broken. This year more than one million owners will lose an estimated $400b. Yes, $400 BILLION!
Victoria’s Planning Minister, Richard Wynne recently dropped a bombshell on thousands of apartment owners whose buildings are covered in flammable cladding.New loan laws likely to be passed by Parliament have been billed as a kindly gesture to help owners of apartments covered in the flammable cladding to ffund the rectification costs. This news might seem a worthy initiative, except that the most iniquitous elements in this scandalous swindle are unspecified. Principally, Wynne’s decree provides that owners who bear no blame for this combustible catastrophe are to be burdened with a debt that could run into billions of dollars. [Article first published at https://www.thefifthestate.com.au/innovation/materials/apartment-owners-dodgy-cladding/ on 13 September 2018.]
Why are building owners forced to foot the bill?
The answer to this question is very simple. In line with past policy, the government has decided to protect rogue builders and transfer responsibility to blameless owners.
As always, there has been superlative spin, secrecy and incredible storytelling. Unearthing the truth required a long, complicated and tortuous path to find what has been hidden – that consumers remain wholly unprotected.
The Burning Question
After years of dodging the question of who would be forced to pay to rectify the potentially lethal cladding bill, Wynne has waved through an answer of sorts, in the form of his new building amendment. But it is double-speak.
Wynne’s resolution does not include the full facts, nor the horrendous implications. In addition, this new legislation has been made more difficult to comprehend because of the missing link between this reform and his earlier consumer protection laws passed in 2016.
You need to look at what underpins it, and that can take many laborious hours. Only once you decode the cryptic core of the amalgam do you discover the deceitful laws that have been secretively enacted.
Fundamentally, the Andrews’ government has shifted legal liability from delinquent builders to owners. For Wynne’s winners an unsurprising get-out-of-gaol windfall. For owners, another titanic bombshell.
Part 1 2015: First building bite
Here’s what you need to know.
While the public might have thought that the government was taking its time to deliberate the enormity of the question about who pays for the replacement of dangerous flammable cladding, its plan was discreetly put into action in early 2015. Nonsensically, it was peddled as a consumer protection strategy.
Minister Wynne, and all his helpful advisors, needed time. The scope of works for this serpentine strategy had to be schematised.
Paradoxically, this decision to sentence consumers was selected as the strategic keystone four years ago. The spin doctors suppressed the news.
This was mixed in with Wynne’s inaccurate statements. For example, after the tragic Grenfell towering inferno in June 2017 where he told The Age a fire of the magnitude of the Grenfell Tower blaze would “not happen here in Victoria… or Australia, in fact. Because we have the strongest building codes of any first world country.”
Now to the first step in the narrative: Wynne’s Building Legislation Amendment (Consumer Protection) Bill tabled in 2015. Just like the current bill, the draft of this legislation was denied to the public until it slipped into parliament to be passed effortlessly in early 2016.
Consumers and activists made repeated unsuccessful attempts to access and read the draft bill. By the time the news became public, it was too late.
Naturally this triggered suspicion. Why all the secrecy and what was to hide?
Well, Wynne had agreed to insert an explosive Clause 37B into the Building Legislation Amendment (Consumer Protection) Bill 2015. It was designed to deprive the Victorian Building Authority (VBA) of its powers to order rectification works once owners had taken possession of a building. Additionally, Wynne removed other clauses to diminish the VBA’s broad powers to virtually nil.
Then, in October 2017, LU Simon Builders, who constructed the Lacrosse Tower (Australia’s only reported cladding fire in Melbourne in 2014) set out to test the VBAs powers. The builders mounted a legal challenge in the Supreme Court to stop the VBA ordering it to fix another six multi-storey towers which it had also constructed with the non-compliant cladding.
The Supreme Court’s judgment came on 22 December 2017. LU Simons lawyers found the helpful Clause 37B. It delivered a whopping win!
Part 2 2018: Second building amendment bite
Let’s examine Wynne’s current Building Amendment (Registration of Building Trades and Other Matters Bill 2018 which he slipped into the Legislative Assembly on 26 July 2018. Classified top secret, it was withheld from the public until 7 August 2018. This Bill amends the Building Act 1993 and the Local Government Act 1989. In the Assembly, Wynne summed up the biting intention of his Loans Scheme “to provide for agreements to rectify defective cladding on buildings and charges to fund the rectification”(Hansard).
Referring to Cladding Rectification Agreements (CRAs), Wynne omitted to mention loans, or to cite owners as the target group.
This shadowy oration ended on an optimistic note claiming the Scheme would, “create a pathway for people to follow if they have been asked to rectify non-compliant cladding.” (Hansard p2435)
This was sinful scheming. The people vaguely referred to in these laws are owners, unfairly designated as blameworthy by the government and bonded to the pay pathway. How could owners be the punished when it was builders and developers who ignored building regulations and installed highly dangerous cladding? For those conversant with the bizarre building rule book, this lunacy lies at its bedrock.
The minister postulated misinformation about people being asked to rectify when he, of all people, knows that he agreed to owners being ordered to rectify.
Wynne’s speechifying to the house on the entire bill was settled in a scanty 244 words, the charade over quicker than you could boil a kettle! Unquestioningly, the hot potato issue with its CRAs was the most momentous. Hence, Wynne shunned attention, depressed difficult questions and sidestepped ever so swiftly. Instantly the Loans Laws all wrapped up!
In relation to announcing this news, there was little fanfare and negligible media coverage. The minuscule media release Helping Remove Dangerous Cladding, purported, “This scheme is the first of its kind anywhere in the world and offers owners the cheapest and most efficient way of removing dangerous cladding from their buildings.”
There’s nothing praiseworthy about this “world first”. Fancy wishing to lead the pack in the race to the bottom in third world building and safety standards. Hardly heroic!
Wynne further enlightened that his Bill was about “making properties safe and compliant with building laws, these financing agreements allow cladding to be removed quickly, without affecting property prices.”
Here Wynne failed to state that “safe and compliant” buildings are now mandated as the owners’ obligation. As for his preposterous claim that property prices will not be affected, many industry experts have confirmed this is clearly in the realm of the ridiculous.
Blueprint for Blame
In 2015 the Consumer Protection Act was created. Significantly, in 2017 its Clause 37B secured the Supreme Court ruling to shore up the present bill, contiguous with the loans laws. The crucial link from 2015, fastening it to the loathsome loans in 2018, was wisely stowed away, restricted to seemingly minor other matters– presumably to discourage and deter public interest.
Thus, the delay was never about time to weigh up the consequences for consumers or the community. It was not about “safety”, or builders being “compliant with building laws”, or “helping” owners.
It was solely about buying time to delimit the legislation to achieve the planned objectives. From 2015 to 2018, under the façade of protecting consumers, officialdom’s strategy was pushed in progressive stages, each sliding seamlessly and silently to stitch up the swindle.
Wynne had to hold off on any announcements until the time was right. This required Wynne’s poker face, the block-out and the lockout of the real stakeholders, and dogged determination to hold steadfast under pressure to pull it off.
With the full deck of cards, all our money – and under the direction of the beneficiaries – once the hand was laid down and the trump played, it was an “open misere’, an unbeatable winning hand. In reality, the blueprint for blame was drawn long ago, constructed to guarantee that the intended victims were clueless, utterly defenceless and unable to prevent impending disaster.
Loans Laws: Cladding Rectification Agreements (CRAs)
In a nutshell, the Act and attending Explanatory Memorandum specify the purpose of Cladding Rectification Agreements (CRAs) as expediting a tripartite agreement between owners (or owners’ corporations with 75 per cent of owners to consent), a lending body and the council to “provide a mechanism to rectify non-compliant cladding” by “facilitating the provision of funds”.
These funds are demonstrably loans, but in this legislative arrangement the English language definition is adjusted. No longer a mortgage, although referred to as money loaned in Clause 79 of the Explanatory Memorandum, this debt has been ingeniously dubbed a service charge. It seems there are no limits to innovative reform genius.
To consider the most significant corrupted characteristics.
First, councils are the pivotal players. They may, or may not, decide to sign up for this Scheme. There is a carrot for councils however – the charge of an administration fee.
Second, because they have no alternatives, this deal will propel financially able owners to secure a loan “with prohibitive costs”. Selling is not an option.
“Losing up to 90 per cent of the value of a property would spell financial doom for home owners and investors alike”.
Third, and self-evidently, it depends on whether owners can afford a loan. Notably, in recent weeks, some owners who have received orders to rectify (without knowing of the loans scheme) have declared on radio that their circumstances would not allow them to take on any more financial debt. So what happens to them?
Ultimately, as controlled consumers, their choices are limited. Take a loan or liquidate and lose everything. Not a choice. So distraught owners, up against the wall, will try to ward off the wolf and opt to repay the loan with interest “in equal instalments” to councils over 10 years.
There are a number of specific conditions pertaining to CRAs. For example, before signing up, owners must declare any debts and existing mortgages to the council, and also notify their mortgagee and obtain agreement.
Other unmistakably troublesome issues are hidden in the fine detail of the explanatory memorandum. For example, the Council must declare the charge, and of course it “may be varied”.
In addition this charge on the land attracts penalties, “subject to recovery, along with any penalty interest”
This Loan and penalties apply to owners. Therefore, should desperate and financially impoverished owners be driven to sell, or be sold up because they cannot make the repayments, they will lose their life’s savings.
Finally, if an apartment owner tried to sell, the loan is on-sold with the property. This invites the question of, who would purchase such an apartment?
To conclude, from a reading of the 7 September 2018 transcript of the Legislative Council speeches (Hansard), it seems that much of importance in this bill remains concealed. As usual, not in the public interest.
The damage bill
Let us analyse the likely damage bill. Although precise statistics are unknown (official estimates are incomplete and unreliable) we can formulate an educated guesstimate.
In Victoria, industry experts estimate that between 5,000 and 20,000 buildings are contenders in the potentially lethal cladding stakes.
If we take the lower end of the estimated number of buildings, 5,000, and then count 50 lots (apartment owners) in an average strata block (some 80, some 400), that would total 250,000 owners. Even more are impacted if we include all family members. With each owner taking an average loan of $70,000, including interest over 10 years of $45,000 (based on a Macquarie bank loan calculator) this would total $115,000 per owner.
Then if we multiply that debt by 250,000 owners, the aggregate bill is $28.75 Billion. Stop. Take a breath. Yes, you did read $28.75 billion!
If we take the upper end of the estimated number of buildings with cladding as 20,000 and multiply as above, the aggregate bill is $115 billion.
Compute the upshot of the cumulative loss to owners and the ballooning booty bequeathed to the builders/developers. Be mindful this is a very conservative, measured evaluation to quantify the devastating damage bill, and only for Victoria.
Compare and contrast consumer safety in the auto industry: targeting Takata airbags
By way of illustration, the mandatory recall of dangerous Takata airbags exemplifies the conduct of the auto industry. Currently it is sending a powerful alarm to car owners:
“Are you travelling with a killer in your car?”
A persuasive signal of clear and present danger. An urgent killer call to action. The car manufacturers have accepted paying the rectification costs. It is their obligation and in the interest of people’s lives. Logically this is as it should be.
In stark contradiction, owners paid, in good faith, for a compliant, safe home. They were defrauded. Now powerless and helpless, our government has compelled them to pay for the second time (some via a loan with interest). The outcome is a double whammy!
If we compare the cost of an average car at say $50,000 with an average apartment at 10 times the price (for most people the biggest investment of their lives), it is inconceivable that owners could be so unprotected? Then there is the risk factor. A one in two chance of the inflator airbags rupturing in an accident, and possibly an equal or greater chance of harm from the cladding-coated buildings.
Let’s contemplate the threat to human life. By comparison with cars, the loss of life in one building would be way higher than in the case of one car accident – hundreds of people could die. How could a government gamble so readily and remove all requisite obligations for the big end of town?
People’s lives should count.
This is an incontrovertible case of profits ahead of people. Another shocking story will illustrate what builders will do to control reputational damage in their “commercial interest”. In October 2017, LU Simon Builders publicly promised to rectify the hazardous cladding on the Lacrosse Tower. The outstanding Council Order on the owners required rectification by July 2018. Astutely, LU Simon asserted their commitment as a “gesture of good faith” but it was purely a publicity stunt.
No action was taken.
In September 2018, the killer cladding remains on the Lacrosse building. This is four years after the raging inferno, and when, given the intensity of the fire, the experts were incredulous that no-one died. Now, long after the rectification was to be completed, the owners have been notified about taking loans and are facing huge expenses to fight the builders in VCAT. This likely to be a triple whammy – Wynne’s solution for the victims.
We know a killer fire could flare at any time. We know that the financial burden placed on millions will drive far too many to bankruptcy, to end up broke and broken. At the mere stroke of a pen, millions of people have been targeted to prop-up the untouchables.
It is unimaginable that the servants of the people have empowered a small elite to ignore consumers’ and public safety. Most telling is the preparedness of those in power to limit the fundamental rights of the majority of people. This is in defiance of our own state and federal consumer laws, and contrary to the international organizations to which we are signatories.
This scenario is not science fiction. It is happening right here, right now.
This critique does not take account of the Australia-wide damage bill for this cladding – liable to be hundreds of billions of dollars.
Nor is there any examination of the plight of tenants. Nor the predicament of future purchasers. Nor the financial, building and safety legacy to the community. Through information asymmetry, untruthfulness and corrupted government and governance, we have all been nullified, compelled to be the uninformed. Literally thrown to the wolves!
No protection and no consumer rights. Denied the right to even pursue preventative buyer-beware research for self-protection: this too stolen from us all.
More perversely, apart from rendering the innocent victims as responsible, these latest ruthless reforms have reinforced the fail culture and buttressed an industry constructed on the law of no consequences. This is a red flag for an ever-worsening disaster.
The privileged remain protected, legalized fraud lingers, and all of us are left to suffer in silence as the biggest losers.
We are in a minefield, one char-grilled over 40 years, the architects of the plan knowing that one day the bomb would detonate.
The aftershocks and the full fallout for consumers lie ahead. What we do know is that there will be horrific losses for the community and far-reaching, painful consequences for families.
We also know that our government will continue to hide the truth. Brace for the future shock!