BLF - THE 1986 DE-RECOGNITION OF THE ABCE and BLF IN AN ERA OF FINANCIAL DEREGULATION

The 1986 de-recognition of the ABCE & BLF in an era of financial deregulation

Synopsis: 
Because financial deregulation increased the volatility of interest and exchange rates, investors sought instant liquidity. The lead times of construction projects tied up funds, and impeded that escape. Investors, therefore, looked beyond commercial properties for security. Finishing projects on time became more vital than ever. Those conflicted yet interlocked objectives for several strata of capitalists required an overhaul of on-site operations. To achieve that end, the body representing institutional investors, the Building Owners and Managers Association (BOMA),[1] endorsed a two-step strategy. First, bust the Australian Building and Construction Employees and Builders’ Labourers’ Federation (hereafter BLF). Secondly, rein in the contractors. The latter aim, BOMA believed, depended on the former.

Outline
This paper sets out the changes overtaking money-capital in the early 1980s, and tracks the responses of its managers in the construction sector. The 1986 deregistration and de-recognition of the BLF are not examined from within the labour movement. The totality of forces arraigned against the BLF is noted, as is the necessity for agents in the il-logic of the expansion of capital. BOMA’s strategy for tightening on-site management is then detailed. The consequences for the construction industry from de-regulating the financial sector are examined, notably the demand for liquidity and the reshaping of property trusts. These issues are refocused onto the need that capitals have to accelerate turnover and to discipline labour time. Despite a revolution in materials and methods since the 1950s, construction remains quasi-industrial because the workers have more control over the application of their labour power than do those on a process line.[2] Case studies in the management of time are provided in regard to the choice of concrete or steel for high-rises; the benefits from choosing one material over another are pitched against the costs of poor management. A postscript asks whether construction capital can join the flows of money-capital and tradeables in globalisation.

Agents
Activists criticize academic Marxists for falling victim to the ‘logic of capital’.[3] Inside that iron cage, the world turns out the way that it does because everything is best for capital in this best of all capitalist worlds. This error flows from activating the category ‘capital’ into an historical person. Categories such as capital-C Capital or capital-H History can do nothing. Only real living people make history. For Marx, capitalists are the personifications of capital – in our case, Messrs Construction Capital.[4] Marx pointed to a Faustian bargain facing capitalists. Individuals could follow the il-logic of capital by reinvesting to expand, or they could consume the profits. In the first case, they might survive as capitalists. In the second, they would cease to be capitalists.[5]

Financial deregulation could not produce de-recognition and deregistration without interventions by historical actors. For the purposes of this study, the principal agents of capital are found in the officers of BOMA. They needed support from agents of the state, other strata of capital and from the rival unions.

Where that iron ring cracked, the BLF survived with its State registration intact, as in Western Australia where Kevin Reynolds had close relations with Premier Brian Burke.[6] If reducing de-recognition to personalities is naive, it is simplistic to treat that process as a disembodied instance of global financial deregulation. That equation is the crudest of economic determinisms. Not to seek connections, however, is to abandon historical materialism for anecdotes. The hindsight of this article is also a call to view the present as history. Why is Gillard keeping a Construction Stasi with coercive powers of interrogation? Which needs of capital does this policy attempt to serve?

De-recognition and deregistration
This paper does not dissect the personalities and internal politics of the BLF during the six-year campaign to demolish it, still less the aftermath. Anyone seeking details will always need Liz Ross’s Dare to Struggle, Dare to Win.[7] The story of the 1986 de-registration/de-recognition has circled around the Federal and Victorian Branch Secretary, Norman Leslie Gallagher.[8] Suffice it to say here that any criminality on Gallagher’s part was not the reason for de-registration/de-recognition, much as his lurks contributed to its success. In the Eighties, Gallagher made every mistake that he had warned Mundey against in the lead-up to deregistration in 1974, and then some.[9]

A crucial element came from demarcation disputes around concrete since the 1962 ABLF Federal Award as labourers challenged carpenters over formwork and plasterers for spraying and finishing-off.[10] Re-skilling came through changes in the materials, from timber and brick to concrete. The degradation of labour debate had relevance to the 1986 de-registration and de-recognition of the BLF. BWIU members were being deskilled while the BLs were upgrading themselves. The BWIU leadership joined forces with the employers and the state partly to preserve tradesmen against the transformation of their work practices.[11]

Forces arraigned
Even with backing from all the employers in the industry, BOMA could never have secured de-recognition. Pivotal to their success was the coordinating power of the state. The state attempts to achieve for the expansion of capital what its managers cannot do through their corporations. To that end, the state organises capital and disorganises labour. The state can disorganise the working-class by organising it, whether through compulsory arbitration or under the Accord.

During the twenty years of struggle against the BLF before 1986, employers, politicians, civil servants, lawyers and judges had to learn by doing. The agents of capital had conflicting objectives in eliminating the union. None knew in detail how to achieve that common aim, or how best to promote their particular interests in the process. The BLF activists were blessed with no greater insight. The employers’ organisations and the state apparatuses, however, had learnt from their failures to contain the BLF in the mid-Seventies, and again in the early 1980s. A key difference between 1974 and 1986 was that the forces pressing for deregistration/de-recognition had forged a ring of steel around the BLF. The state kept the other unions and the employers in line.

In the era of the Accords, many of the once left-leaning unions had signed up to a wages policy that had no place for the militancy of the BLF as a pace-setter. This time, the BWIU agreed to take coverage of labourers’ jobs; the state financed and protected BWIU organisers on the jobs.

Although, the Master Builders and the Employers’ Federation had never lost their enthusiasm for destroying the BLF, governments had to strong-arm some developers, such as Grocon, by threatening to cut them off from government contracts if they allowed Gallagher another escape route. BOMA had its own channels into the state, by leasing properties to governments and representing their superannuation funds. It seems likely that BOMA let it be known that its members would not fund projects for any contractor who broke ranks?

De-regulation
To detail the deregulation of the financial sector into the 1980s is beyond the scope of this paper. Instead, that transformation will be book-ended with commentaries from two key players, first, from 1978, the General-Manager of Mercantile Mutual, Alan Geddes: and, secondly, from 1993, the Executive Director of Macquarie Bank, Bill Moss. The shift in their expectations is striking. In between, attention will be paid to the changes to Superannuation funds and the 1979-84 inquiries into the financial system. Subsequent discussion introduces other elements that flourished under the new financial regime, such as securitisation and trusts.

Geddes 1978 Geddes was frank when he addressed the NSW division of BOMA in October 1978 on ‘property versus shares as institutional investments’:

Superannuation funds buy shares and property only because they trust in long-term capital appreciation … Ten years ago, everybody thought that ordinary shares were a hedge against inflation.

That assumption had been plausible at the time. Since then, ‘disenchantment with ordinary shares’ had become ‘world-wide’:

Individuals quit the share market, a good thing too as share-buying is not for amateurs. The mugs are coming back again now, and once more they will lose their shirts. But still people believed that property was a sure hedge against inflation. They overlooked the degree of speculation in the market and the fact that it depended on borrowed money. World wide, property developers, were the worst casualties.

Notwithstanding these disincentives, institutions had to place ever larger sums in the categories of assets on offer. Among the non-physical ones were government securities, mortgages and debentures with fixed interest, shares and property trusts:

The beauty of shares is the ease and comparatively small cost of getting in and out. Property involves exorbitant stamp duty – and the use of lawyers – a very nasty expense.

Another advantage of shares is that you can sell part of a holding of shares in a company whereas you can’t sell part of a property, unless you go to the trouble and expense of forming a company to own the property and sell part of the shareholding.

Properties remained steadier than shares: ‘In recessions, shares had fallen more than properties’. The problem with buildings was that during a downturn almost no one wanted to buy them. Geddes summed up his experience with advice which become several times more pertinent after 1978: ‘when you buy property, your first question should be what return can I get from it, compared with the return I could get from alternative investments’.[12]

A maelstrom of money
A second oil-price shock sparked a resources boom which collapsed into the 1981-3 recession when an 11% increase in the CPI for the year to June 1983 combined with 10% unemployment.[13] The 1980s underwent the third oil shock when a collapse of prices ended the petro-chemical projects that had engorged multi-nationals such as Bechtel and Halliburton.[14] Upheavals in manufacturing, such as the ‘world car’, compounded the difficulties before the managers in each segment of finance.

The insurance industry, for instance, was a major investor in other peoples’ building projects in addition to the construction of office blocks for itself and to lease. The insurers had been in turmoil from the late 1960s as scamsters milked cash flows until a 1973 Act stabilised the sector by halving competition. The survivors were then thrown by soaring inflation, which actuaries had not anticipated.[15] Monetarism gained converts as a nostrum against inflation which peaked at 17% in early 1975, returning to 10% in 1980.

Superannuation
Where to invest had challenged the new head of the Commonwealth’s Superannuation Fund Investment Trust (SFIT), Bob Hammond, recruited from the property and finance sector. The Fraser administration had set up SFIT in 1976 to replace the Superannuation Board. Ten years later, Hammond recalled:

I inherited a portfolio already over the billion-dollar mark, heavily weighted in mortgages, Commonwealth Bonds and semi-government securities with an average return of 7 per cent and much of it invested out past the year 2000.

Every day, SFIT had to ‘find a home for $1,000,000 of new money.’ By 1983, its managers held two billions.[16]

SFIT’s tax-free status prevented it from investing in the running of a business. Hence, it ‘had virtually been restricted to the Trustee-type fixed-interest area … We had lots of money and not much else’. Hammond knew that the Kern Corporation had a plethora of building proposals but ‘always seemed to be short of money’. He extracted a ruling from the Attorney-General that a Joint Venture in property development was possible if SFIT signed up as Tenants in Common and not as Joint Tenants. The result was a $400m investment in Grosvenor Place, Sydney.[17]

A National Partner with the UK-based provider of real-estate services, Hillier, Parker May and Rowden, James Wiseman, warned the NSW Master Builders in 1983 that they could not expect to find many benefactors like SFIT:

… the ultimate objective in developing and owning property is to accrue wealth. We compete with other avenues of investment such as the Stock Market, Securities Market and Short-Term Money Market to earn a high net profit, and if there are alternative avenues of investment which show a higher long-term return, then there is little incentive (except the one of prestige) to take the enormous financial risks of constructing and owning investment property.[18]

Late in 1984, the CEO at Leighton Holdings, Stewart Wallis, pointed to the reluctance of trading banks ‘to provide long-term fixed-rate financing’. They now preferred rollovers. The shrinkage of the long-term mortgage market left ‘the developer far more exposed to interest-rate fluctuations’.  Merchant banks stepped in with complicated packages. They structured their innovations ‘to produce capital gain, rather than development profit; deferred distribution of income; leveraged leasing and so on’.[19]

Campbell Inquiry
In 1978, Geddes ended his address to BOMA with a moan that governments would interfere more and more. Free enterprise was under attack everywhere. In truth, Australia even then had been on verge of financial deregulation.[20] Between Geddes’s making his speech and its publication, the Fraser government announced the appointment of a Committee of Inquiry into the Australian Financial System, chaired by Keith Campbell, head of the property developer L. J. Hooker. Campbell’s interim and final reports of 1980-81 chased after with changes that had been under way since the 1950s.[21] After 1962, the minerals boom had overcome the chronic balance-of-payments upsets that had underpinned many of the controls over foreign capitals and the need for industry protection.[22] The Inquiry trailed behind innovations such as a Currency Futures Market from March 1980. At the release of its Final Report, few supporters or critics spoke in terms of the upheaval that was underway. Instead, a typical commentary concerned the effect of its recommendations on housing finance.[23]

Although R. J. Hawke set up the Martin Review of the Campbell Report, he proved to be far more crash-through than E. G. Whitlam, completing the float of the dollar in December 1983. A mouthpiece for those who stood to gain most from de-regulation, Euromoney, named Treasurer Paul Keating as ‘Finance Minister of the Year’.[24] The exchange rate against the US dollar collapsed from parity late in 1982 towards banana republic status by mid-1986.

The prospect of the entry of foreign banks encouraged the local ones towards monopolising and to go global themselves. The Bank of New South Wales captured the mood by re-branding itself as Westpac for the Western Pacific at the same time as it outbid ANZ for the Commercial Bank of Australia in 1981.[25] ANZ had already taken in the Bank of Adelaide after its subsidiary Finance Corporation of Australia wrote down the value of its property from $80m. to $30m.[26]

A rise in nominal interest rates widened the gap between the returns on deposits and those from other instruments or institutions. Hence, investors stampeded into cash management trusts; their holdings in Australia went from $200m in June 1981 to over $2bn eighteen months later.[27] During 1983, the differential between interest on cash management trusts and property trusts shrank from an advantage of 8% to 3%. That contraction initiated a spurt towards the latter.[28] Hence, capital-switching occurred between segments of the building and construction industry, and not from production to construction. Capital also switched from resources to property because manufacturing was on its way down and out.[29] Demand for office space in the CBDs grew with the rise of Sydney to the status of global financial centre until vacancy rates in Sydney and Melbourne by February 1988 were, in effect, zero.[30]

Building and construction was only one of the sectors seeking funds. Corporate raiders stoked up on debt stirred the financial flux. A flood of foreign funds serviced a surge in local borrowers as Elders IXL, Bond Corporation, Bell Resources and IEL went on takeover sprees.[31] IEL raided Lend Lease via MLC’s holding, a move which provoked the target to buy up all of the insurer by late 1985.[32]

Moss, 1993
For Geddes in 1978, the prospects had seemed all too predictable, mostly menacing. In August 1984, the Chief Economist with Citicorp Australia, Ian Martin, invited investors to time-travel back to 1974 when the banks were ‘hamstrung by Government controls’. The abandonment of fixed interest rates and fixed exchange rates led him to predict ‘monetary conditions’ would result in ‘much less volatility in the real estate industry’.[33]

By 1993, Moss at the Macquarie Bank, accepted that the present had become unpredictable, though its uncertainty offered opportunities. Since de-regulation, the property market had been more erratic than ever, with record rises and falls on every measure: ‘Perhaps the Australian commercial office market was the first casualty of the world de-regulation of capital flows’.[34]

Hindsight had not let Moss comprehend the forces that had brought the Macquarie Bank into being in 1985.[35] He wondered whether a multi-factorial pattern could be discerned. Before 1983, investment in property had been decided by yield, location, demand and supply. These elements remained after deregulation but were now buffeted by ‘exchange relativity, international interest rates and the availability of debt from foreign banks’. The rules for investing in property that Geddes had spelt out with confidence in 1978 had become complicated by ‘the debt-to-equity flows influenced by exchange and interest-rate speculations, particularly by foreign investors’. Hence, the market in properties became more volatile. To cope, investors demanded liquidity. If they did not get it, they priced down assets. To maintain liquidity, investors needed financial instruments which allowed prompt, preferably instant conversion to cash. How to buy and sell pre-cast concrete slabs as if they were bits of paper? According to Moss, the objective of making ‘super profits’ from deregulation had not been matched by the knowledge needed to realise that aim. The mechanisms remained rudimentary:

securitisation; syndication; debt for equity swaps; partial sales; convertible mortgages – to name but a few … [were] merely concepts developed in an ill-equipped market in response to the demand and availability of debt and equity.[36]

The il-logic of capital is subject to the learning by doing which is the essence of historical materialism. Foreknowledge is impossible.

The absence of the appropriate means for conversion later resulted in what a senior lecturer in building science called ‘The disaster’.[37] One example illustrates how the promise of big profits went awry. If a Japanese bank in 1988 had spent one dollar on Australian property, five years later it ‘would be lucky to repatriate 20 cents’. That loss had three causes: one, a 38 percent devaluation of the Australian dollar; two, a 50 percent drop in property prices; and, three, taxes (stamp duties) and transaction costs.[38]

Trusts
This reconfiguration of the market for commercial properties accompanied a change in their financing. Since the 1960s, there had been a drift away from the single owner, such as AMP, and towards securitisation with unit trusts, whether listed or not.[39] Between 1980 and 1994, the funds in property trusts grew tenfold to $100bn.[40]

According to the CEO at BOMA, Peter Verwer, the message was clear: ‘listed property is neither property nor equities. It is in a class of its own.’[41] How ‘clear’ was the new status of listed property if it had to be defined by what it was not? Its elevation to ‘a class of its own’ looked like a confession that the managers had lost track of what they were marketing. At least, Verwer realised that: ‘[i]f the eighties reinforced one home truth it’s that cash flow is sovereign.’[42] Investors’ insistence on liquidity had spurred BOMA officials to go beyond lobbying and into political activism. At this time, BOMA revived the emphasis on training with which it had started life in 1966-9. Now, its members had to become adept at managing construction contractors, not just the finished properties.

In the US of A during 1969, contractors and their clients, confronted by a wave of strikes and wage rises, set up the Construction Users Anti-Inflation Roundtable, soon known as the Business Roundtable. In waging their war of attrition against the construction unions, the employers had an uneasy alliance with the Nixon administration, despite its courting the hard-hats against anti-war and anti-segregation protesters.[43]

The BLF flourished after de-registration in 1974 by playing employers off against each other, primarily, the Master Builders against developers such as the Grollosl Lend Lease and Herscu. From the late 1970s, the losers talked about unifying their representative bodies. Bouyed by the coming de-recognition/deregistration of the BLF, the various Master Builders’ Associations revived proposals to restructure their organisation on a national basis and merge with the Australian Federation of Construction Contractors.[44]

BOMA never intended to serve on the front line against construction workers. Its members owned or managed buildings. They did make them. They accepted the advice of Lord McAlpine in his address to their 1978 Conference: a client who intervenes in the hourly practices at work makes everything worse. Yet, that hand-to-hand combat could not be entrusted to the developers, specialist contractors, or the subbies. BOMA’s strategy was to stop the builders’ retreating at the BOMA’s expense of the providers of money-capital.

The BOMA Project
In mid-1985, the Master Builders’ Association and the Australian Federation of Construction Contractors set up a steering committee to manage their campaign to de-recognise the BLF. With observer status at meetings in Sydney and Melbourne, BOMA contributed research. More significantly, it developed a vision of industrial relations beyond the parliamentary debates and legal proceedings. BOMA paraded a commitment to negotiations in ‘good faith’, allied to ‘an honest effort to honour’ agreements. Behind these platitudes, its executive had a battle plan to put ‘an end to the “never-ending war” between the workers and the boss’. BOMA railed against the BLF’s ‘irrational official philosophy best expressed in one of its pithy mottoes, “If you don’t fight, you lose”.’[45] Yet, BOMA had absorbed that message. It had resolved to fight, and to win.

Two weeks before de-recognition, BOMA members in Melbourne geared themselves up with an harangue from a gladiator for the New Right, Andrew Hay. Under the title, ‘Australia needs radical change’, he opposed compulsory superannuation because it would give power to unions; called for the removal of the annual-leave loading; insisted on a longer working week, and spurned affirmative action.[46]

BOMA welcomed de-recognition of the BLF as ‘Sanity at last’. This victory at law had ‘been one way of finding the [BLF’s] Achilles heel – its estimated $5 million purse.’ Henceforth, labourers would pay their membership dues to other unions: ‘the BLF itself will therefore run out of money and eventually disappear from the labour market’. That loss of oxygen would take time. Meanwhile, BOMA’s executives remained clear-headed about how much more needed to be done if victory in the courts and parliaments  were not to be whittled away, as in 1974: ‘Deregistration will not ensure success. Deregistration is part of a more important strategy’.[47]

BOMA stressed that the state must to continue to marshall the forces of capital: ‘No use to remove the BLF if 10 clones spring up to take its place’.[48] First, governments had to make sure that the militants remained a minority in which ever union they joined. To cement victory, the authorities ‘will have to go one step further and thwart all moves afoot to amalgamate’ the BWIU, the FEDFA, the Plasterers, the Water Board Employees and the miners. Were such a combination to come into being,

we may see our industry becoming the first in Australia to come under the de facto management of the trade union movement. That is, after all, the only logical conclusion to the slow but steady retreat builders have followed since the war of attrition began years ago.[49]

Within a year, and in light of the BWIU’s grinding up of the BLF around the jobs, BOMA had changed its mind and favoured a single construction union.[50] This conversion did not survive campaigns for wages and conditions by the enlarged BWIU with the result that all strata in Messrs Construction Capital supported the appointment of the NSW Royal Commission into Productivity in the Building Industry from 1990.

The BOMA strategy had involved fighting on two fronts. One was against the BLF. The other was against building employers. In the eyes of BOMA, the contractors had sold the pass by doing deals with Gallagher that sent up Melbourne On-Site Loaded Building Wage by 45% between 1980-81 and 1983-84.[51] When contractors and developers cut each others’ throats, BOMA’s members were the ones to bleed:

The developer is not the end consumer – he is a manufacturer who like any other manufacturer has to pass on almost all cost rises if he is to survive business in the long run. It is the end consumer who bears the cost burdens and rises.[52]

BOMA represented the bearers of ‘the final cost’. As the lobby for the capitalists who contracted the builders, BOMA recognising that its hands-on contribution was to make its members pull the builders into line, realising them from

[t]he crude, demeaning and disruptive way of doing business which the BLF has done so much to introduce ….

Part of the answer lies in making a code of conduct a permanent and legally binding feature of contracting. It would then no longer be expedient for a contractor to capitulate to the pernicious demands for payment  … There will no longer be commercial advantage in conceding claims on a particular project, which are economic lunacy for the industry as a whole.

After April 1986, BOMA’s eye was not only on the BLF. Now, its targets included the contractors and subbies who had passed costs along the line to the owners. BOMA had no illusions about their fellow capitalists:

The battle to restore integrity will not be won easily. Too many people have profited from the long slide into corruption; too many people have made a career of opportunism and expedience. They will fight to preserve the status quo.[53]

Four years later, the Gyles Royal Commission documented the validity of BOMA’s fear about the contractors.[54]

Although that NSW investigation had been aimed at the BWIU-FEDFA, the Commissioners soon found themselves deep in the kind of corruption through which contractors had been lining their pockets long before there were unions. Leighton’s CEO, Wal King, justified his company’s use of fale invoices to conceal price-fixing as ‘the culture … and custom that had been long-standing in the industry that had been handed on for years’. Exposure of collusive tendering, price-fixing and swindles of every order made members of BOMA the beneficiaries of Gyles.[55]

BOMA’s floorplan
A year after the BLF’s de-recognition, BOMA released its plan for Industrial Relations. The chair of its national industrial relations committee, Lyn Shaddock, justified BOMA’s involvement with site management on the grounds that owners footed the bill for increased costs. The suppliers of money capital based their decisions to invest on expectations about completing on time and in budget. The deterioration of industrial relations since the 1960s had hobbled that prospect. To make matters worse, the owners had been excluded from negotiations at which builders and contractors made concessions, whether for a shopping centre or across the industry. BOMA opposed site agreements for over-award payments as a trade-off to completing on schedule. The result had been a ‘drift of traditional investors away from the property industry’. In addition, the de-regulation of the financial sector was offering institutions even more alternatives, including overseas. The chaos in Australia had made US firms reluctant to match their takeovers of mining and manufacturing with investments in commercial properties.[56]

To clean up the mess, the specialist contractors had to be represented in negotiations for the Awards and decisions. BOMA supported sub-contracting and rejected the unionisation of subbies as an attack on incentives among the workers. Its policy deplored ‘treating all workers as equally valuable regardless of skills or application’, but did not mention piece-rates.[57]

The ‘costs of time’
New building methods and materials had reduced the time taken to run up a multi-storey block. A floor every five or six days became standard. These advances should have slashed the time during which the client had to pay interest or forgo dividends. Those savings in the ‘cost of time’ had not eventuated. Part of the reason had been capitulation to the BLF on labour costs. In addition, contractors were incompetent and crooked. Pressed by the costs of turnover time on their money capital, Building Owners and Managers lent on contractors to discipline labour time.

Time is no abstraction for the capitalist who is obsessed with the turnover time of investments, and with disciplining labour-times to boost the rate of exploitation. Henry Ford’s particularisation of labour was profitable because the production line allowed the continuous flow of components.[58] The discipline inherent in process work assured the degradation that Harry Braveman identified with the separation of planning from execution. That degree of control at the point of the production of surplus value does not apply to building and construction.

Off-site production of windows, cupboards and doors, pre-cast concrete brought two benefits to the disciplining of time. First, factory conditions allowed for mass production and continuous flows. Those workplaces were often outside the BLF Award coverage  Secondly, on-time delivery of components or semi-finished materials reduced delays at site. Workers did not have to wait for each tradesman to produce fittings, or labourers to mix a batch of mortar. Yet subbies were still getting in each others’ way, causing traffic jams around sites. Dogmen made or broke projects by their control over the flow of men and materials.

Economies of time depend on the quality of management. The building trades had relied on architects and quantity surveyors to estimate the labour and materials needed to complete a contract in the stipulated time. With that data, a contractor should have make a bid which would return an average rate of profit and not incur a penalty for lateness. However, quantity surveying remained rough and ready.[59] Engineers like Arup, Belgionro-Nettis and Dusseldorp took over from architects in managing labour-time and material flows.

Parties to a contract employed specifiers to clarity responsibilities. Sloppy documentation persisted.[60] Grosvenor Place highlighted what could go wrong. With the project nearly eighteen months overtime, Bob Hammond from SFIT confessed in 1988:

Although we had a contract for a completed project at a fixed price with horrendous penalties for non-performance, the paper war between architect, builder and developer made necessary by such a tight contract, resulted in huge administration problems with the potential for major disputes and a real killing for the legal profession, who could have finished up the only winners. It is only now towards the end of the project that a truce in this war looks like being called with both sides accepting that their attitudes to interpretation of the contract, although necessary, had been unreasonable.[61]

The appearance in 1982 of a new learned journal, Building and Construction Law, demonstrated how deep the quadmire had become.

Even if a quantity surveyor or specifier managed to save a general contractor from under-bidding, the sub-contractors were still in the lap of the architect and the clerk-of-works – if any - once a project got underway. In the 1910s, a U. S. engineer, Henry Laurence Gannt, developed a visual tool to alert the builder to time and cost over-runs. A Gannt Chart showed the actual progress against that scheduled. The Charts are still in use, with computerised versions for larger scale projects.

The plenitude of devices designed to manage labour-time indicated how much of it was being lost, and with it the chance to profit out of surplus value. When CSIRO studied 329 projects completed during the three years to June 1967, its researchers found that only forty-one had come in on time: ‘The average extra time taken was more than 40%’. Most delays did not result from industrial disputes or acts of god:

the majority of the projects seems to have drifted along without experiencing any remarkable upsets. Rather they were afflicted with multitudinous variations many of which seemed to be associated with clients who do not make up their minds quickly enough. This can happen when members of the design and construction teams do not succeed in conveying to the client the magnitude of delays likely to follow major design changes.[62]

The managers attempted to overcome their own failings by sweating their workforce. When this slave-driving provoked strikes, the overseers blamed the unions for their own incompetence.[63]

A 1987 survey showed some improvement. During the ten years to 1986, the average delay in completion on non-government projects had come down by 20 percent. However, the fraction late to any extent had fallen only slightly. Fixed-price contracts came in on time more often than those that allowed for rises and falls.[64]

In response to these numbers, an ex-General-Manager of Leightons, Graham French, acknowledged that ‘many delays … [were] caused by the contractors themselves’ through ‘indecision, poor pre-planning’. For instance, to win a contract, the principal bidder priced one or more component too low. In addition, he based the total price on guesstimates of the time needed to perform the operations. That main contractor then wasted time in trying to sub-contract that section to ‘the greater fool’. The eventual taker caused further delays because he cut costs by under-resourcing his crew. This shortage of cash and the pressure to rush provoked industrial disputes, leading to further hold-ups.[65]

Surveys of sub-contractors in the early 1980s showed that a general contractor’s reputation for falling behind schedule was the major cause of subbies’ lifting the price of their bids. The other two determinants were variants on that concern – previous experience with that general contractor, and his record of prompt payment for work done.[66]

Bad management, sloppy contracts and inadequate specifications continued to impede the accumulation of capital by the developers, clients and owners. A year after de-recognition, French lamented the impasse:

We have invented the Project Manager, the Construction Manager, Fast Track systems, the Critical Path, Programmers and a score of other “cure ‘em alls” to help solve our difficulties, but, in essence, have we not merely succeeded in adding to the problem? We have added further disintegration to what is a very fragmented industry.  … we have more parties to provide direction and decisions which unions can manipulate by playing one off against the other.[67]

When the men who controlled the money had seen that something more must be done, they concentrated on demolishing the BLF.

Turnover
Capitalists seek to reduce the time between their outlay of money capital and the realisation of profit. The more often they can turnover their capital in a year, the more chances they have to accumulate.[68]

Most buildings are financed with borrowed money. Any delay to the circuit of capital adds several charges. Interest payments pile up. Worse still, interest rates may rise. Meanwhile, rents are foregone. The general contractor incurs penalties. In addition, movements in the exchange rate bankrupted Australian developers who borrowed overseas. Protection through a futures market was less appropriate for long-term undertakings such as commercial buildings.

Labour-time
The Employers’ Federation had buttressed the MBA throughout its 1970s struggles against the BLF.[69] On 26 April 1984, the Federation’s Executive Director in New South Wales, a certain Alan Jones, addressed the Legacy Luncheon on ‘The Economic Reality Ahead of Us’. In attacking the improvements won by trade unions, Jones played the National Building Trades and Construction Award as his trump card.

Jones spun his case around working time. By tallying the days-off to which building workers were entitled, he computed that they worked only 37.6 weeks a year. Excited by that decimal place, he turned to the other benefits and obligations that employers had to carry: annual-leave loading, long-service leave, payroll tax, workers’ compensation, and bereavement and jury leave. Calculating their cost in terms of working time, Jones arrived at the equivalent deduction of 19.82 weeks. He declared that ‘one worker really costs 184.6% of his own productive value’.[70]

The arithmetic of this school-master turned broadcaster need not detain us. We can also pass over his failure to deduct over-time. Some of us, however, will pause to marvel at the rate of exploitation that must operate elsewhere in an economy to allow building workers to be paid almost double their contribution to the store of wealth. As significant as these doubts are, Jones deserves praise for giving more recognition to labour-time than does many a union official. His treatment was rhetorical yet his focus was not aberrant. 

Jones and his employers had reason to be alarmed. In 1982, and despite a recession, NSW BLs had won a 38-hour week, with the guarantee of 35 hours next year. Capitalists could not ignore this loss of labour-time. Those five hours represented a fair slice of the labour time that added surplus value. The managers had to find ways to add the same value in a shorter time. The militancy that had won the reduction in hours for the BLs meant that any attempt to impose piece-rates, speedups or other overt intensification would provoke disputes, and hence further delay completion. Few employers were capable of lifting their own performance as supervisors. Some clients and general contractors sought, therefore, to maintain the rate of exploitation through changes to design and the choice of materials, for example, the decision to go with concrete or steel.

Design proved a two-edged sword. Clients for commercial ‘landmark’ projects demanded treatments which were ‘imaginative’ so as to attract higher rents. At the same time, they insisted that any unique or novel features be ‘risk free’.[71] Clients put their faith in the most time-efficient materials. Some went for concrete, others for steel. Again, the absence of a simple answer can be shown by case studies of each material from the years following de-recognition.

Concrete
From the 1950s, concrete and cement had led the way to reductions in labour-time with ready-mix, pre-cast and sprays. Each innovation contributed to a continuous flow on sites.

The advantages also applied to the laying of concrete slabs on which to erect suburban houses. A CSIRO survey of cottage work found that 78% of the labour time went on direct working 17% in getting ready, packing up or consulting the supervisor. The remaining 5 % was lost waiting for concrete to arrive, or rectifying bad work. The aim was to eliminate that 5% loss of time. One way was to begin adjacent sites with the operation at a different stage on each block. If concreting were held up by the weather, supervisors prepared other allotments so that ‘when the weather finally clears several slabs can be poured sequentially, on the same day’.[72] High-rise projects sought the same end, though by different means.

Preparations for the 53-level Bourke Place, in Melbourne, began in March 1987. Its owners were being pressed by the concomitant erection of rival high-rises at the zenith of the city’s biggest ever boom in commercial properties. Therefore, the general contractors needed to secure access to labour and materials. Failure to guarantee either resource presaged peril. The clients had to get into the market first to sign on prestige tenants at premium rents. At the outset, the design team decided on a concrete core but were uncertain whether to use concrete or steel for the floors and perimeter columns: ‘The length of construction time for both operations was our next consideration’. The designers consulted the Bureau of Meteorology for wind patterns that might delay hoisting the steel. The two significant factors were the variation in Net Rentable Areas (NRA) and the ‘cost of time’. Although steel offered the greater NRA, the ‘cost of time’ tipped the decision towards concrete.[73]

Nearby, the builders of Melbourne Central expected to reduce their ‘cost of time’ with high-strength concrete:

formwork to elements on the critical path for construction can be stripped at an earlier time than would be the case with lower strength concrete. For Melbourne Central, core forms were stripped at 16 hours, with a strength of 8MPa, allowing a four-day cycle in the core construction.

High-strength concrete demanded the strictest quality control and supervision. Failure to achieve the required strength would ‘hold construction up considerably’.[74] That delay could have been catastrophic.

The costs to building owners from the poor supervision of concreting were chronic. A survey of concrete cancer revealed that, only 40% of the buildings studied had the requisite depth of cover, with 5mm of concrete instead of the necessary 30mm. Half of these problems from concrete cancer resulted from failures by designers or on-site supervisors. In addition, steel-fixers needed more training. Many of the problems resulted from ‘a lack of attention to detail in the design or the lack of supervision on site [which is] the worst place to decide on specifications because everyone is too busy’.[75] The incompetence in concreting added to the maintenance costs for BOMA members.

Steel
By the mid-1980s, every segment of the Australian construction industry had become comfortable with reinforced concretes. Local contractors were among the most efficient in the world. Had this success blinded clients and contractors to the possibility of better results from structural steel? Steel producers campaigned for its adoption. By the early 1990s, more than one-third of new office-floor space was in structural steel buildings.[76] Proponents of steel pointed out that its frames were erected by small crews of experienced personnel, which meant that fewer workers had to be lifted to their points of production:

one of the most critical areas in high-rise construction is that of the efficient movement of the workforce from the lunch sheds to the workface. The most difficult area to serve is the structural frame construction. In the case of steel, we have a workforce a quarter the size of an equivalent concrete frame thereby giving immediate advantages.

Not only did it take less time to shift the smaller crews, but there was less likelihood of stragglers so that the crew could begin together. For safety reasons, work could not start until everyone was in place.[77]

These claims about the advantages from steel highlight how aware managers are of their need to discipline labour time. The example also illustrates the indirect methods adopted in pursuit of that outcome.[78]

Steel was the only option for the Governor Phillip Tower, the second tallest building in Sydney’s CBD when it opened in 1993. The legacy of Green bans meant that the NSW government dared not ignore the uncovering in 1982 of the foundations of the original 1788 government house. The pressure from urban environmentalists cornered the government into providing a plaza for the display of colonial stonework. The campaign also led to the preservation two rows of terrace houses. As a result, the land available on which to build provided next-to-no Net Rentable Area. The design solution was as striking as it was demanding. Sixty upper floors were cantilevered on three steel trusses, each weighing 250 tonnes.[79] The detailing involved in this concept eliminated all possibility of design changes on site. The ‘pre-assembly of essential building elements’ contributed to ‘continuity in construction’. Moreover, those methods allowed ‘concurrent site assembly with core construction.’[80] The trusses were moved into position as soon as the core was clear of the gantries. The builders started work on the higher floors without delay. The excavation went on while the office levels were being put in place, some twenty floors above: ‘This jump-start technique saved fifteen weeks construction time’.[81] The central core with the lift shafts was in place before the concrete walls. Elevators were installed while the building was under construction.[82]

Postscript
Throughout the 1970s, several left-wing critiques of the transformation of work circled de-industrialisation.[83] After that, analysts took up globalisation, yet neglected the its impetus in the universalising of social labour times.[84] Authorities on both models paid little attention to their place in the construction sector, perhaps because few of the components or final products were tradeables. The impossibility of importing office blocks deprived Messrs Construction Capital of the benefits that a less regulated market in tradeables was delivering to overseas producers and local commerce at the expense of Australian-based manufacturers. Transnational flows of money-capital for construction remain miles in advance of the globalisation of its production phase. Although we will never see a Grosvenor Place built in China before being floated into Port Jackson, the range of prefabricated components is less limited by complexity, size or weight. When bathrooms arrive from China to be snapped into apartment blocks, can pre-cast concrete sections be far behind?[85]

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