Many Australians hope to build their own home, provide a safe haven for their family and live the ‘Great Australian Dream.’
Few realize the fundamental fact that once beguiled into the ‘Game of Building,’ they have contracted into the realm of gambling. Constrained in a contest of unequal competing interests in a game played on an unfair playing field, for unwitting players, the high risk of harm is hidden. These players, sadly, are odds on to lose.
Building is the biggest game in town
Australians who embark on having a home built know it will be the biggest investment of their lives, but most view it as an ‘ordinary’ activity, with little likelihood of loss. Building and owning a home is central to Australians’ thinking, integral to the Australian character and cemented into our culture. People believe there’s a fair system in place with protection to safeguard their interests – in game parlance, it seems a pretty ‘safe bet.’ And such views are perfectly understandable.
First, this is set against the backdrop of Australia as the land of opportunity, where fair working conditions and decent pay have defined the egalitarian values of the ‘lucky country.’ Through hard work and sensible saving, building the ‘dream’ has been advocated as an achievable goal.
Second, the strong message from all governments has been solid endorsement: “Build your own home. There are rules and it’s safe and secure!” Successive governments have further propagandized by providing financial sponsorship for first home buyers to build – a kind of benevolent bribery configured as ‘First Home Buyer Grants’ courtesy of Australian taxpayers. And even if our young people have insufficient savings, this has been reckoned irrelevant!
Third, the big building players (banks, insurance companies, developers, ‘industry associations’) and all involved in the building game have used their marvelous marketing to support the ruse that ‘building’ is supremely secure.
Two examples of some builders’ promotional puffery illustrate the flawed but persuasive promises. In a recent TV advertisement, potential home buyers were given the assurances “We will give you $20,000 of Love” and “A $10,000 cash back from us at Handover!”
We ask, will the "$20,000 of Love" not be built into the price before, if ever it’s given back?
And beyond that, for how many owners will there be "final handover" which gives them a chance to collect their $10,000 cash back?
Past experience offers insight. First, mull over how many cases you know where money has been returned after being taken? Second, how many owners have had a ‘love’ experience in building? Furthermore, there are many, many owners who fully paid for their houses, but never got to ‘handover’ and never lived in the house!
Speculating against the odds
For building owners, the facts are full-on frightening. The 2011 statistics reveal that 30 per cent of Aussie "gamers" suffered detriment – three in every 10! In Victoria in the same year, 40 per cent of owners suffered financial detriment, according to a CAV report.
What has been the loss to Victorians over time? CAV notes that in 2008, the financial loss was $1.6 billion. That sounds bad, but over the three years from 2008 to 2011, the percentage of building consumers financially damaged increased 2.5 times, from 16 to 40 per cent! Staggering! However CAV, a major player on Team Building, declined to disclose the dollar detriment figure for 2011.
So to quantify the loss, if we take the 2008 $1.6 billion loss and multiply it by 2.5, the 2011 loss computes to a hideous $4 billion! Even if we take a conservative approach and bump it down by a full billion, that's still an inexcusable $3 billion.
With no Government statistics divulged in the five-year period from 2011 to 2016, but being conversant with the limited official information and the ample anecdotal evidence on gamers’ outcomes (worsening exponentially since 2011), we can extrapolate from the known to the unknown. Thus we can estimate the financial detriment to Victorian owners in 2016 to have risen greatly, perhaps to as high as $12 billion. In the interest of being objective and conservative, let’s moderate our guesstimate of Victorians’ loss this year to a lower figure of $10 billion. Scarcely trifling, especially if you’re one of the devastated losers.
Reflecting on the effect across the nation, given that Victoria accounts for around one third of all building, we can conclude Australian owners’ financial detriment to be around three times that of Victorians, making Australians’ loss in 2016 $30 billion. Imagine that a new hospital costs between $140 million and $800 million; if we take an average of $500 million, the $30 billion loss to Australian building owners would cover the cost of building 60-plus new hospitals!
Crafting the camouflage
Crafting the myth that building is ‘safe as houses’ was clever camouflage to conceal the perilous risks inherent in building. Thus the lack of skilled, experienced practitioners is unseen, their incompetence ensconced in ‘registration’. The ‘rules and regulations’ were developed as a decoy, comprising mock directives made and unmade, cobbled together to crush consumer contestants. And as the number of the cowboys continues to escalate, despite their abysmal, unethical conduct, fewer player misconduct cases are heard, names are suppressed and the records protected in the oft out-of-sight Practitioner Disciplinary Register.
Just a few of the building policy stratagems demonstrate the dire straits of defenceless consumers. Attempts to do their ‘caveat emptor’ research are stymied, unfair contracts (legal under ACL) are biased, false certifications of non-compliant and unsafe building work are widespread, warranties and guarantees are non-existent, the prejudicial, adversarial legal forums are unbalanced, the scam insurance is inaccessible, and the list of issues goes on. This is all facilitated ‘legally’ to enable the advantaged to be the winners.
The weighty work of the reputed umpires has been crucial in safeguarding the delinquent players and sequestering the isolated gamers to the danger field. Those in command of the legal system have worked collaboratively with Team Building United. To the further detriment of Team Owners, they have reduced the already shrunken case lists to undetectable. A fabulous formula, it’s been a knock out, one nullifying any possibility of the stunned to stand up.
In this way, the privileged players were indulged and the bull’s eye of boosting industry was reached. To succeed, the package was wrapped up in spin to disguise the lawless building industry and inspire false confidence in consumers. The facts were secreted away, the ‘rulebook’ was buried, camouflage obscured the truth, delivering ever more innocents to play the game whilst bolstering the booty for the beneficiaries.
Now to the congruence between gambling and building. Both are risky, but there’s a critical difference. Gambling on sports offers unrestricted access to the facts so players can evaluate the best chance of winning, and relatively rigid rules and impartial umpires add further assurance. In racing, the horses’ breeding and form, trainers’ records and the jockeys’ history can be scrutinized. If taking a chance at the casino, despite the house advantage, it’s possible to cogitate what is at stake.
However in building, ordinary, hard-working Australians making the biggest investment of their lives think they’re on a ‘safe bet’, clueless in conceding to a big gamble! Intentionally uninformed, foiled from finding out the facts, they are gullible; assigned the status of the unprotected. The game of building has been calculated to cover up the set-up, with no way for the naïve to reckon on any rationality of the unintelligible, or to fathom beating the odds.
Presently, if we want to guess Victorian building gamers’ risk, we have to assess three elements in relation to consumer financial detriment:
- Look at the available statistics spanning 2002 to 2011, with attention to the significant increase in the numbers damaged and their monetary loss over the period.
- Factor in the substantive reliable, verifiable empirical evidence gathered by consumers.
- Respect the opinions of those ‘in the know’ who work in the industry.
Of utmost importance are the second and third of these. The second, based on extensive experiential consumer research, includes hundreds of thousands of case studies, incorporating 10 years of soaring growth in owners’ financial detriment. Over the past five years, this data has been collected and analysed by the Victorian Building Action Group. The appraisal demonstrates the chronic climb in detriment, rising from 40 per cent in 2011 to 50 per cent in 2016. That's one in two - an even money bet!
The last evaluation to take into account is the first-hand experience of the building industry, the reliable knowledge base of those who work in the building/building dispute industries providing the best gauge. Their rational, perceptive judgments are more judicious than consumer research and far more chilling. The opinions of the experts and most worldly wise on building (builders, lawyers and others) back up the proven exponential increase from 2006 to 2011 to 40 per cent, with a current update. Their assessment on consumer detriment risk in 2016 is 60 per cent! Yes, that's even worse than the consumer estimated 50 per cent, confirming the seemingly limitless, spiralling detriment scale!
The quintessence of building is the subtly fashioned illusion that nothing is “as safe as houses." Thus, few Australians are conscious that they are gaming, or that a bet on ‘building’ may be the biggest gamble of their lives. Envisage outlaying $300,000, $500,000 or $1 million with the odds against!
Indeed, building is a risky business. It’s a game for fools, where manufactured misconceptions are the rules and the mass of shattered lives total the score. Most germane, in this game, you’re odds on to lose!