In another example of the rapidly developing crisis engulfing Australia’s construction sector, Condev Construction announced on March 15 that it would appoint a liquidator. The Queensland-based company said it suffered a 25% increase in costs over 18 months. It specializes in multi-unit residential constructions, business and commercial premises, industrial units and warehouses.
The announcement came after the company’s developer customers rejected an urgent request for around $25 million in aid. Condev’s latest financial report showed a loss of $358,772 in 2021, following a profit of $536,332 in 2020. Last year’s loss came despite an increase in revenue from $175 million to $181 million. dollars.
Condev’s liquidation will add to the already mounting job losses and contractor bankruptcies across the industry. While Condev directly employs only 128 people, like other large construction companies, the bulk of the work on its sites is carried out by numerous contractors and subcontractors employing several hundred workers.
Condev currently has 18 projects underway, 14 of which are on Queensland’s Gold Coast, including the 17-storey Natura building in Burleigh Heads and Aria Property Group’s 124-apartment project at Kangaroo Point in Brisbane.
Condev’s failure follows the collapse of major construction company Probuild, which was suddenly placed into administration in February after its parent company, South Africa-based Wilson Bayly Holms-Ovcon (WBHO), refused to continue funding its struggling Australian operations.
At the time it entered administration, Probuild had $5 billion in unfinished projects in three Australian states and liabilities worth $401 million, of which $311.6 million appeared in its annual accounts in as “suppliers and other payables”.
Condev had no direct business relationship with Probuild. A spokesperson for Condev, however, said a number of companies it relied on for labor and materials had been hit by the collapse of Probuild and left unable to trade. , causing Condev “to seek other suppliers and subcontractors at an increased cost that cannot be exceeded by contract. to.”
Condev director Tracy Marais said the company has also been hit by labor shortages due to absences caused by COVID-19. Additionally, recent flooding in South East Queensland has delayed the completion of projects and was “the straw that broke the camel’s back”.
While Marais lamented the impact of the pandemic on labor supply, since March 2020 the Australian construction industry has continued to operate virtually uninterrupted. With the full backing of the unions, the major construction companies successfully lobbied Labor and Liberal-National state governments to exempt the sector from the closures.
In addition to direct calls on the government to exempt the industry from safety measures, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and other construction unions downplayed the importance of the deadly disease, concealed by the lack of preventive measures in the workplace. sites and ensured workers stay on the job and maintain income.
The labor shortage caused by the rapid and continued massive spread of COVID-19 is the direct product of this reckless disregard for the health and lives of workers and their families.
The collapse of Probuild and now Condev follows a number of other failures in the construction industry over the past year. Queensland-based homebuilder Privium went into administration in November with $40 million in debt and around $17 million owed to contractors and suppliers. In the same month, Sydney-based interior construction specialist Cubic, whose projects included Campbelltown Hospital, went into liquidation with debts of more than $10 million.
There are already signs of a wave of supplier and contractor insolvencies in the wake of the Probuild and Condev collapses.
Less than two weeks after Probuild failed, Queensland aluminum window and door manufacturer Hitec Glazing went into administration. The company had a $20 million contract to supply materials to Probuild’s waterfront residential tower project in Brisbane, which was plagued with delays and well behind its end-2021 completion target.
Another worrying indication is contained in a 2021 Australian Tax Office (ATO) report showing that construction-related businesses have racked up a mountain of unpaid tax bills.
According to the report, outstanding debts to the ATO soared by almost a third to $58.8 billion in the two pandemic-hit fiscal years, much of it owed to construction companies. The ATO is now set to collect much of that debt, in a process that could push many companies currently on the brink of bankruptcy.
Additionally, a recent report by the Housing Industry Association found that the current construction boom will likely end by the middle of 2022 and described the nearly 33% increase in construction projects since 2019 as unsustainable.
For decades, the CFMMEU and other construction unions have worked to facilitate the destruction of working conditions and the massive increase in casual, hired-labor, and shadow contract agreements in the construction industry. construction. The unions justified this assault by reproducing the false managerial line that it was necessary to ensure competitiveness and preserve jobs in the future.
Now, in the wake of recent corporate collapses and amid a growing crisis in the sector, the union is telling workers they can do nothing but accept the inevitable further job destruction.
Speaking after Condev’s collapse, CFMMEU Queensland Construction Secretary Michael Ravbar said there will ‘probably be more pain in the industry’, adding: ‘We are going to see a lot more losses jobs – unfortunately other builders and contractors will go bankrupt because we’ll see a ripple effect.
The current crisis in the construction sector is a graphic expression of the irrationality of the capitalist system. As workers are pushed into the corner and skills and resources are wasted, there is a desperate need to build vital social infrastructure such as schools and hospitals. A massive program of social housing construction is also urgently needed to tackle rising homelessness and the current lack of affordable housing.
But for the big financial investors who dominate the industry, production takes place for profit and to increase shareholder dividends. If sufficient returns are not made, companies are split up and their assets sold to pay off the debt of major secured creditors such as banks and financial institutions.
To defend jobs and fight for better wages and working conditions, construction workers must consciously break with unions, which function as enforcers of management demands and agents of the financial elite. Workers must form their own organizations, including rank-and-file committees at every job site, and reach out to workers in the construction industry and the working class at large to build a united mobilization against the subordination of the means of workers’ livelihoods and security for the benefit of enterprises. .
The construction crisis places before the working class as a whole the urgent need to undertake a struggle for a workers’ government and for socialist policies to bring construction and other critical sectors under public ownership and democratic workers’ control. . Only then can these vital industries be reorganized to meet social needs rather than serve the profit interests of the capitalist class.
