Call for a super profit tax to create affordable housing is on the mark

By Joe Montero

One of Australia’s biggest unions. The Construction Forestry Mining Maritime and Energy Union (CFMMEU) is launching a push for a major rise in government investment on affordable housing. The union’s national secretary Zach smith says this is necessary to take on the housing crisis that so many are facing in his country.

The union had commissioned Oxford Economics to analyse of the impact of a super profits tax on the biggest corporations to fund the construction of new affordable homes. The resulting proposal is a “permanent 40 percent tax on super profits for companies with a turnover of over $100 million a year. This would apply to only 0.3 percent of companies and would raise around $29 billion a year and go a long way towards meeting the need for 750,000 new dwellings.

Photo from The Australian: CFMMEU National Construction Division secretary Zach Smith

Proposing a super profits tax might seem like quite a radical move. It isn’t. It’s the least of what is needed for Australia to meet its obligation as a signatory to the 1966 International Covenant on Economic, Social and Cultural Rights, which codified and mandated housing as essential to human right.

Even if this convention didn’t exist, adequate housing for all would be taken up by a society that values the principle that dignity and a standard of living in line with community expectations should be available to all.

Australia has a responsibility to ensure this becomes a reality.

Advocates of social housing have long been pushing for far more action to meet the need. Programs to date, including the current Housing Australia Future Fund policy of the Albanese government, have been far too little to make a noticeable difference.

Zack smith and his union agree and call for “bold solutions.”  “Our economy is meant to serve our society. But it is failing on a fundamental level,” he said in an advance copy of a speech to be delivered at the National Press Club.

He added that “millions of Australians are worried about their capacity to afford the most basic of human needs.”

The union will launch an advertising blitz around the country to get the message to the public and intends to present a motional to be voted on at the Labor Party’s August national conference in Brisbane on 17-19 August..

Prime minister Anthony Albanese, who has stood firm against pressure from the Greens to lift his government’s commitment to social housing, now faces pressure from another front.

Condemnation from the corporate world and its political allies will be quick and vicious. They will defend what they consider their own interests. Expect the usual claim of an attack on business and to warn that the economy and Australia are at stake.

The reality is that only a few businesses will be affected, and they will still enjoy healthy enough profit margins to continue investing.

Cartoon by Paul Dorin


Support for the CFMMEU initiative should be a non brainer, and the super profits tax could be boosted with other initiatives, aimed at releasing already existing housing stock, and deflating the property price bubble. Advocates of change have long been arguing for the downscaling of negative gearing and Capital Gains Tax provisions and imposing a tax on properties deliberately kept untenanted. These measures would add substantially to the available housing stock.

State and federal government must stop gutting the public housing stock and rebuild it as an important part of the solution. Public housing meets specific needs and should not be sacrificed to the broader category of social housing. Doing this has already resulted in the failure to meet the needs of those for who this is the best form of housing.

Support for a rent rise ceiling has been rising, and this will have a damping effect on rising home prices.

These further measures are important because the affordable housing crisis is not fundamentally a problem of shortage of supply. It is a problem of not been accessible at the price of either buying or renting. The problem is a housing market failure. This must change.

For this reason, the proposal for much more housing construction must be tied to direct government provision and avoid further feeding of the failed market. On the contrary, it must be used to counter the market and force down property prices and rents. This is the bullet that a government wanting to seriously take on the housing affordability crisis must bight.

One thought on “Call for a super profit tax to create affordable housing is on the mark”

  1. Good on the mighty CFMEU advocating for a super profit tax and housing policy ….much needed and will get alot of public support ….folks are over years and years of looking after the rich instead of looking after the working class

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