The CFMEU’s Bold Proposition: Levying a Super Profits Tax to Tackle Australia’s Housing Crisis

CFMEU calls for ‘circuit breaker’ super profits tax to fix housing crisis

By Daniel Jeffrey

8:47pm Jul 25, 2023

Australia‘s building and construction union, the CFMEU, is urging the federal government to implement a new tax on excessive corporate profits as a means to address the ongoing housing crisis. CFMEU secretary Zach Smith launched the union’s campaign, proposing a 40% “circuit breaker” tax on companies with an annual turnover exceeding $100 million. The revenue generated from this tax would be used to alleviate Australia‘s shortage of social and affordable housing.

Zach Smith emphasized the urgency of the situation, citing research commissioned by the CFMEU from Oxford Economics, which revealed a deficiency of 750,000 social and affordable homes. This figure is projected to increase by 26% over the next two decades. Smith laid out the task at hand, stating, “[We need] to build about 52,600 dwellings a year between now and 2041.” He acknowledged that there are constraints that may affect the ability to meet this target, but reaffirmed the feasibility of achieving it by 2041.

The Need for Funding

To address the housing shortage adequately, the CFMEU estimates that an investment of $511 billion will be required between now and 2041. Smith acknowledged the significant financial commitment, stating, “That is half a trillion dollars. Needless to say, $511 billion is real money, so let’s get utilitarian. How can you raise $511 billion whilst causing the least amount of suffering? The answer to us is clear: a super profits tax.”

Smith argued that implementing a super profits tax would not only address the housing shortfall but also help rectify income inequality. He stated, “Super profits are a failure in our economic system. Profit should only be sufficient to motivate private enterprise to do what it does. The rest is inefficiency.” Smith further criticized Australia‘s current economic landscape, highlighting the prevalence of monopolies and oligopolies across sectors such as mining, banking, supermarkets, telecommunications, and aviation.

A Long-Term Campaign

The CFMEU plans to launch a years-long advertising campaign to promote the super profits tax. Their aim is to garner support from the Labor Party (ALP) and push for the policy’s adoption by the federal government. The Greens, who have expressed concerns about the government’s housing policy, welcomed the CFMEU‘s initiative. Greens housing spokesperson Max Chandler-Mather stated, “This bold plan from the CFMEU is a brilliant example of the scale and ambition that we need to deal with the rapidly worsening housing crisis.”

However, there are critics of the proposal. The opposition argues that such a tax would drive up the cost of living for everyday Australians.

Editorial

The CFMEU‘s call for a “circuit breaker” super profits tax to address the housing crisis raises important questions about the role of corporations in society and the responsibilities they hold. Income inequality and the lack of affordable housing are significant challenges plaguing Australia, and it is essential to explore innovative solutions that promote fairness and social progress.

Avoiding Suffering and Raising Revenue

Zach Smith’s argument for a super profits tax is grounded in the idea of minimizing suffering while generating the necessary revenue to tackle the housing crisis. The proposal aims to address inefficiencies in the economic system by curbing excessive profit margins and directing those funds towards social infrastructure.

While the concept may seem appealing on paper, the practical implementation of such a tax requires careful consideration. Striking a balance between raising sufficient revenue and preventing unintended consequences, such as potential increases in the cost of living, is crucial. Collaborative discussions and comprehensive analyses are necessary to ensure the effectiveness and long-term viability of this proposal.

Advice

As the CFMEU takes their campaign for a super profits tax forward, it is crucial for policymakers to engage in constructive dialogue with all stakeholders. Open discussions that include industry leaders, economists, social advocates, and representatives from affected communities can help shape a robust and inclusive policy.

Moreover, it is important to consider supplementary measures that complement the proposed tax. Invested revenue should be utilized in a strategic manner, focusing not only on the construction of new homes but also on sustainable urban planning, infrastructure development, and targeted support for vulnerable populations.

Australia‘s housing crisis requires innovative solutions and collective action. The CFMEU‘s proposal for a super profits tax serves as a starting point for necessary conversations about corporate social responsibility and the use of economic resources to address systemic social challenges. The path ahead requires careful planning, collaboration, and a commitment to ensure a fairer and more equitable future for all Australians.