Market madness: `Oversupply' of water tanks during a record water crisis!

By Dave Holmes

Melbourne, February 26, 2009 – Australian plastics manufacturer Nylex has been placed in the hands of receivers. Nylex is a well-known name — the company produces the iconic Esky, water tanks, wheelie bins, hose and garden fittings and interior trimmings for car manufacturers. According to the February 13 Melbourne Age, “The drought and a government rebate stimulated demand for water tanks, but oversupply pushed down prices and demand collapsed after substantial rain in Queensland and NSW.”

The slump in the auto industry also contributed to the company’s woes. In the end, the banks (ANZ and Westpac) called in their loans.

The jobs of its 700-strong work force are in the balance. The receivers may or may not find a buyer for Nylex, but any new owner is likely to heavily restructure the company, leading to substantial job losses.

However, the notion of an “oversupply” of water tanks when Victoria is faced with an unprecedented water crisis is utterly ridiculous. Any “oversupply” is purely the result of the capitalist economy and government policy.

The moment we stop thinking about corporate profits and start to think about what is objectively needed to ensure the survival of the state’s five million people, then things look rather different.

The centrepiece of the Victoriam Labor Party state government’s water plan is the A$3 billion-plus Wonthaggi desalination plant. This monstrosity will produce large amounts of greenhouse gases, further driving global warming. It will be privately run, effectively privatising a significant part of our water supply.

The water will be hugely expensive and Melbourne residents will be heavily slugged to pay for it.

Emergency program needed

A far better strategy would be to invest instead in a large-scale emergency program of water conservation, waste water recycling and stormwater harvesting. One key part of strategy this would surely be to provide every house and block of flats with an adequate water tank (and grey water recycling) system.

Part of Labor Prime Minister Kevin Rudd’s “stimulus” package is the pledge to provide free insulation (including installation) to every residential dwelling in Australia. That, at least, is something we can support.

The state government should do the same with water tanks. Furthermore, it should require all commercial buildings to be similarly fitted out. Such a program would require some millions of water tanks in all specifications. The “oversupply” of water tanks suddenly evaporates.

The Victorian government should put Nylex under public ownership and control. It should become the monopoly producer of water tanks and set about hiring thousands more workers to staff the production facilities required. Thousands more jobs would be created in all associated areas.

Global warming has been caused by profit-mad capitalism (which is really, with apologies to Kevin Rudd, the only sort of capitalism). The economic meltdown, which is now devastating our economy and wrecking the lives of thousands, comes from the same source.

The only way for us to have any hope of a future is to fight to bring our economy under public ownership and control, with the charter to restructure our activity to make it sustainable and people-centred.

Capitalist anarchy

The collapse of Nylex is yet another illustration of the sheer anarchy of the capitalist economy. Under capitalism the means of production are owned privately and companies live or die according to whether they are profitable.

Naturally enough, the idea of a socially owned economy, driven by the imperative to meet social needs, doesn’t get a look in. Whole armies of media pundits and academic experts will tell us that such a notion is dangerously utopian and simply won’t work.

Suffice it to say that climate change and the economic crisis are putting such nostrums to the most severe of tests. If capitalism survives, most of the world’s people will not.

[This article firest appeared in Green Left Weekly issue #785, March 4, 2009.Dave Holmes is a member of the Democratic Socialist Perspective, an Marxist organisation affiliated to the Socialist Alliance of Australia. He live in Melbourne.]