http://singularityhub.com/2012/01/21/why-dont-we-have-abundant-solar-power-blame-financing-and-industry-not-science/

Permaculture ethics could be summarised as People Care, Earth Care, Surplus Share and Limits Aware.  Ethicalsuper is about surplus and about managing the financial side of this game of life we are in.     The Rockneath Report will be about the living and practical side of things.    Or it could be a complete surprise.  It will always be worth reading.

PAUL MELENG

————-   THE ROCKNEATH REPORT , Setting the scene ——————

A colleague concerned about climate change wrote today:

“Scientists face one long-standing obstacle to public communication and one new factor.

The old difficulty arises from limits on our ability to detect expected change in a chaotic climate system, especially concerning the significance of specific regional events.

The new factor is the likelihood of being pilloried for reporting evidence of a human role in climate change.”

I replied:

A third issue is the pervasiveness of a legalistic approach: firstly, “prove it”, then I can appeal, then, let’s find a compromise.  I am sure one of the tobacco companies has used “Prove it wasn’t something other than smoking ” as a defence against a case for death from lung cancer.

Another more insidious one, which is being manipulated by the lobbies anyway, is the bureaucratic approach: fundamentally looking to the government to solve the issue is not going to get the result we need in the time frame required.   Individuals need to be convinced to take the matter into their own hands.  “The land of the free”???   Look at how inept the combination of the lobbies and the bureaucracies are in handling the financial crisis…

I attended one of the last lectures Fritz Schumaker made, in Perth WA, in 1974.  The Winthrop Hall at the University of Western Australia was absolutely packed – about 2000 people.  He gave a wonderful lecture, on the theme that in the long run of history, people would look back on this 150 years or so as the age of the exploitation of millions of years of the natural manufacture of oils and gas, and see it is a totally aberrant way to power a culture.

At the end someone asked him a rather plaintive question: “Fritz, there are so few of us, what can WE do??”  This little round man, in a crumpled suit, looked down, lifted his head, and with a rather cherubic grin said: “You will not like my answer.  All you (sweep of hand to audience) have to do is so NO.  It is what you buy, what you do, that causes the problem.”

That is why for thirty odd years now, we (my family) have been reducing the “out-go”, rather than maximising the in-come.

By locating ourselves here (333927S 1150446E) we have insulated ourselves from the more aberrant climate we anticipate.  We’re on the top of a 140m hill, within 4kms to the sea in two directions:  the height is for orographic and so more reliable rainfall, the proximity to the sea for no frosts, and extra humidity to absorb heat, and so reduce maxima.

We have a passive solar house that requires no heating, and have designed it so we have NO input costs other than bottled gas.  We are still on our first 40 Kg bottle of gas after living here for fifteen months.   Our solar panels are now earning us about 10 dollars a day from government subsidies of 47c/Kw, as we only consume about 5 KwHrs a day.

The house is also designed to be cyclone proof; we specified the structure for category five (250+ kts), and then upped the spec, taking all fastenings up at least one notch in strength and longevity.  The house has a very simple roof line, and no eaves.

We are about to invest in another large water tank (180Kl – 45,000 gals) to augment the present 135Kl (30,000 gals) one, to allow plant irrigation through potentially 9 months of drought a year (which we had last year, for the first time in sixteen years in the area). Our roof gives us a 6 to 1 multiplier: 1mm of rain gives 6 mm in the tank, so 350 mm (13.7 in) will fill a tank from empty – our worst year so far was 685 mm (27 in).

We have nearly completed planting, irrigating and protecting a food forest of around fifty fruit and nut trees. We run pigeons for meat. The major food item we do not produce is milk.  We have said for years that we need three people capable and willing to milk, so no one person/family is too tied down.

On transport: we have minimised usage incredibly by living adjacent to our three grand-daughters.  We drive an Hyundai i30 for 21 kms/litre (59 mpg).  As soon as an electric car is available here, we will add 4 KwHrs of panels, and get all of our local transport for no emissions.

One of the really enjoyable outcomes of our efforts is that our grand-daughters, now 5,7, and 10, are now able and willing to take visitors (including their school friends) on tours.  We hear them giving detailed expositions on the strawbales, the double glazing, the solar design aspects, the breeze control, the dry composting toilet, the pattern language, the fire protection measures.   Isn’t osmosis a wonderful teaching tool?  I have no doubt at all as to what sort of lifestyle they will lead, which is of course the major reason we’re doing it.  What more important legacy could we leave them?

Why all this information?  We see ourselves as role models of the only realistic alternative available: DO IT YOURSELF. Do not expect anyone else to deal with climate change issues.  We are not saying it is easy, but we are proving day to day that it is possible, sensible, and that it can be done with minimal impact on your life style.  And we meet a wide range of interesting people as we share our knowledge, and show people some hope and some practical things to do.

Warwick Rowell

Rockneath

https://www.moneysmart.gov.au/

I can recommend this as a sound source of reference.  Have a look at Publications and the booklet on Superannuation.  It  is a good starter in very clear language.

Written by Ross Kendall 

Read more……

http://www.ethicalinvestor.com.au/index.php?option=com_content&task=view&id=4412&Itemid=402

A calm and timely approach from Paul Hawkin of “Triple Bottom Line” fame. This is one of a series of video clips on the MECU site.It is the current one but may be archived if you are coming in later. I found it helpful.

What are you prepared to pay for it?   What is “Advice” anyway ?

Robin Bowerman, Principal, Corporate Affairs & Market Development at Vanguard Investments Australia makes many good points in the following piece.  The confusion though, as you will see later, is in what we actually mean by “advice”.

Here is Robin….

“Historically, investors may have said that the primary job of the financial planner was to pick winning investments. That remains a recipe for disappointment. The best and brightest brains in the investment world globally regularly fail to pick market movements so it is unrealistic to expect your local financial planner to do that.

The value of financial planning lies in the development of a long-term plan that will achieve your personal financial goals with a weather eye on the risks that you are comfortable taking. There are many ways a financial planner can add value – building a diversified portfolio, advising on super contribution and tax strategies and retirement income plans. And that is before you get into the area of estate planning and insurance.

 So let us move to the second question: what are you prepared to pay for professional financial planning services? If you are typical of investors researched in Australia, the answer will be somewhere between $300 and $500.

Yet industry data says that the cost of delivering face to face comprehensive advice is around $2500.

 Clearly that is a massive gap in terms of investor expectations and adviser’s business costs.

 The financial planning industry has had to deal with the challenges that global markets have thrown them along with the regulatory sands shifting under their business feet.

 But perhaps the biggest challenge still lies ahead: demonstrating to investors the real value of financial planning.”

Thanks Robin.   Here is my clarifying explanation about costs.  But first let me say that the survey was not of “investors” but of members of superannuation funds.  There is a difference.

There is also a difference between a Financial PLAN and simple limited advice on one topic.        Before we start, a reminder . Financial advising is now a highly regulated profession.   The more the rules and information keep changing and the more demanding the role, the more time has to be spent in background work before a word is spoken or typed.   I just paid $100 for a proper technician to drop in for 15 minutes and adjust a few things on the fridge.  The recommended rate for a solicitor is $530 an hour.  Like Solicitors, Financial planners and advisers work with information that is in constant change and need a back office too.   I usually say I “work” until Wednseday lunch to know what to advise, stay licensed and run a business.  I work the rest of the week for my expenses , my income and the tax man.

The Financial “advice”  at $2500 (and upward)  is more of  a “comprehensive plan” with written statements of advice covering a review of the whole situation, a lot of discussion and client education and assistance. It includes clarification of goals, calculations and expressions of the possibility of those goals and subsequent adjustment. Where investments are contemplated it must include assessments of your understanding and tolerance of investment risk (and more client education), a look ahead at major life expenditures and stages, then the development of a saving and investing plan to work towards that and to aim for a satisfactory retirement.  It takes an informed look at insurance needs to take care of interruption to the financial plan by death or disability or trauma and may look at the whole family situation for that. It also looks at whether people have suitable wills, powers of attorney and such important estate planning issues.  It looks at a suitable superannuation fund as a vehicle to meet the main savings goal, provide some of the insurance and integrate with the estate planning so that the will is not confused by provisions for beneficiaries in the superannuation member’s instructions.  There is no upper limit to what might be required for a comprehensive Plan. The whole thing must be written and presented in a very particular way prescribed in great detail by regulation. Our work is randomly audited by The Australian Securities and Investments Commission and we are in big trouble if it does not follow the rules (which keep changing ).

Such a Plan might cost a whole lot less when you are young and the first steps are obvious;  It is almost an “off the shelf plan” (it is in my book) , what we call the “Foundation Stage”.   Create a Reserve Fund of 3 months living expenses, Save 10% of all you earn, insure yourself properly, fine tune your Super and pay off your “bad” debts.

But “plans” may become more complex and critical and hence more expensive (but well worth it) as families, assets, incomes and ideas become more complicated and the choices more numerous.

Finally a well crafted retirement strategy with a decent sum of money and complexities of interaction with part aged pension and so on might justify a very thorough plan at that time.

Included in the real Planning process might be some help by the adviser in getting couples or the whole family “on the same page” about where they are going and what money management they have to co-operate on and do together.  I have written plans where one party has mostly worked it out themselves and my role has been to check, verify and fine tune or correct minor matters etc but most importantly to “umpire” a discussion whereby the other party comes to a clear understanding and genuine agreement with the more financially dominant partner and then both parties sign acceptance of “The Plan”.    I have also written up “plans”  where there was already a brilliant plan built up over many years. A plan involving many millions of dollars and a lot of thought about the children and grandchildren and client from who I learned much.  But the plan was in many parts and the actual logic of it was in his head and on notes and in various files and the client was 85 and smart enough to get my help to write it all down and turn it into one comprehensive document while he was still making sense.

Having a really well worked out plan provides the framework for all the particular “bits” of advice about the one issue moves, the “limited” or “scaled” advice.

The public in fact knows very little at all about real financial planning and the “advice” that starts at $2500 but sets up the game for long running certain  success.

Most people imagine advice in the form of specific issues.   “Help me get my super fund in order”. Or…. “Please help me to arrange insurance for my Life and Income in the best way “.    Or… “My mates at work are investing in this XYZ scheme. Is it OK?”

In the jargon of the advice regulators that is called “Limited Advice” and the public perception about what they would pay for it is not too far short of the mark.

In the past and still, far too many situations that only require limited or scaled down advice have been dressed up with a computer generated Plan of hundreds of pages to somehow justify unconscionable entry fees on large retirement superannuation rollovers or contributions.  No wonder the public seemed confused.   Regulatory change is now seeking to drive that practice out, mostly from the large institutions that make up 80 % of the public’s experience so far.

In our small world of ethical advising the change will make little difference because we never played in that game.

A couple looking to achieve a comfortable retirement will need to spend $55,316 a year, while those seeking a ‘modest’ retirement lifestyle need to spend $31,767 a year, according to new figures released today for the ASFA Retirement Standard.

The updated figures follow the trend of the last several quarters as the amount needed by retirees to fund their post-work lifestyle continues to increase.

The aggregate costs for a couple living comfortably in retirement were up by 0.7% in the September quarter 2011 from the June quarter 2011.

The increase in costs over the quarter for retirees was similar to the 0.6% increase in the All Groups Consumer Price Index (CPI).

Retiree households on average have different spending patterns to the rest of the population.

Along with generally owning their own home outright (so cost increases for housing are less important for retirees), they don’t tend to spend as much on education services.

In contrast, food, health, transportation and recreation spending form a large part of retiree budgets.

Between the June quarter 2011 and the September quarter 2011, retirees had a 0.2% decrease in the cost of food but over the year to the September quarter, there was an increase of 6.4%.

The decrease in the cost of food between the quarters was due to falls in the prices of fruit and vegetables owing to seasonal factors and favourable growing conditions. The annual increase is influenced by the cost of bananas increasing nearly four-fold over the six months to June 2011 due to shortages created by Cyclone Yasi.

The cost of water and sewerage services rose by a substantial 8.6% in the quarter with property rates rising 5.2%. Electricity costs rose on average by 7.8%, reflecting substantial price increases in a number of states.

Transport costs were little different between the quarters with an increase in the cost of motor vehicle servicing offset by a fall in the price of petrol.

The prices of leisure goods and services rose by 0.9% between the quarters, with the cost of overseas holidays increasing by 5.1%.

The fall in the price of health services reflected a fall in pharmaceutical prices with more individuals benefiting from the Pharmaceutical Benefits Scheme safety net.

The ASFA Retirement Standard is now an independent initiative by the Association of Superannuation Funds of Australia (ASFA) benchmarking the annual budget needed by Australians to fund either a comfortable or modest standard of living in the post-work years.

To those of us who follow Permaculture thinking it is interesting to see the effect of food, energy and utilities on retirement lifestyles.

A point to remember for retirees is that 5 out of seven are on partly their own income and partly aged pension.   Anything that is an integral part of the home is not counted as an asset . Income above a low threshold reduces pension by 50 cents per dollar.  So it follows that a “sustainable” highly efficient home that has low running costs is a very good investment.   A dollar saved is twice as good as a dollar earned.  It is also a protection against rising costs.  Passive solar design,  water wise garden, home grown food, solar hot water and electricity, grey water re-use, living close to most daily needs.  Here at Ethicalsuper that is all part of  ”The Plan”.

Monday, 14 November 2011 12:20pm

By Rachel Davis  of the Financial Standard | In Superannuation

Australia has been ranked as having the best prepared retirement savings system followed by Sweden, Denmark, New Zealand and the Netherlands, according to Allianz Global Investors.

The Allianz Global Investors Pension Sustainability Index (PSI) measures the pressure on governments across the globe to reform their pension system and uses a range of indicators such as demographic developments, public finances and pension system designs.

“Taking all these indicators into account, Australia’s retirement savings system received the lowest score and is considered to be the best prepared for the future,” said Allianz Australia Managing Director, Terry Towell.

“In this current study, Greece, India, China and Thailand show the greatest need for pension reform, although not due to a common cause,” said Towell.

According to the PSI, which charts the relative sustainability of national pension systems in 44 countries around the world, Greece is under the most pressure.

Despite pension reforms initiated as a condition of the austerity packages from the International Monetary Fund and European Central Bank, the retirement age in Greece is still low and public replacement rates (the percentage of a worker’s pre-retirement income paid out by the pension system upon retirement) are too high.

“At the other end of the spectrum is Australia. Australia’s two-tier system of lean public pensions and highly developed funded superannuation pensions means we are best prepared with respect to the potential future burden on public finances, thus, Australia is under the least pressure to reform,” said Towell.

Over the last decade, almost all Western European countries have been trimming their public pension systems in an effort to make them more sustainable.

A key driver of the PSI results this year was the increase in sovereign debt as a result of the financial crisis, with Greece and Ireland the most affected.

In Asia, comprehensive pension systems remain the exception rather than the rule, and increasing the coverage of the pension system is still a challenge.

“Pay-as-you-go systems are moving towards funded systems, defined benefit towards defined contribution systems, and family support structures towards more formalised public systems,” said Towell.

“These are characteristics of Australia’s superannuation reforms over the last couple of decades and, along with initiatives such as the Future Fund, are key reasons why Australia’s retirement savings system ranks number one in the world in terms of sustainability.”

This story was found at: http://www.financialstandard.com.au/news/view/12484478

Printed: Monday, 14 November 2011 4:58pm

Most “stimulus” has gone back into propping the old “Brown” economy . Here is a different approach and a clear argument as to why intelligent green is pro economy and not anti economy as claimed by old interests. This is what we mean by “a better future for us all”.