Bernie Fraser

On NRAS, black versus white roofs and why Bernie Fraser says the bad guys are winning

There’s a weird tension going on right now between truths and blurry images that masquerade as reality.

You’ll find Willow pointing to this disconnect in her deep dive into the student housing beat up by The Australian, which is trying to say somehow that the much loved National Rental Affordability Scheme is almost completely rorted by wealthy international students. (Not true).

Cameron digs it up a complex issue in his extensive special report to uncover the truth of cool roofs versus black roofs. There are people who say that the reviews of BASIX will force more people to choose black roofs so they can meet the heating standards (huh?), and there are the claims of the roofing product suppliers who say that most people choose dark roofs. Is that really a choice or a function of the selection available?

In the NRAS story we look at claims by the Oz that 40 per cent of subsidised housing is for students. But a look at the data shows that these could be school kids living with their parents. The impression from a raft of stories in the past few days implies that wealthy foreign students are enjoying the lions share of benefits, thanks to Australian taxpayers. There is little evidence to back this up.

The scheme, which subsidises rents so they are 20 per cent under market values, is not perfect. No government scheme is, just as most private enterprises have a failure rate. You only have to look at the accidents on building sites, or the fire at Barrangaroo this week for instance. Stuff happens.

The people who have championed more affordable housing are passionate in their defence of the NRAS.

Meanwhile the zealous feds ever mindful of a rort say they will review the scheme. So there are many fearful people in Australia right now.

What does this attack do to the people trying to encourage an investment grade asset class in affordable housing? People such as Lucy Turnbull and other members of the Committee for Sydney? Or Westpac Bank, which Siobhan Toolhill says is working on the same issue?

The bad guys blur everything

Bernie Fraser, former governor of the Reserve bank and chairman of the independent climate change authority tapped the zeitgeist this week when he said the “bad guys” were winning on climate change.

But it wasn’t because they are being particularly clever. He told The Guardian Australia it was because of their “brazen falsehoods”, “untruths” and “misinformation” are often going unchallenged.

A few years ago we asked climate scientist Andy Pitman at UNSW if he would critique Ian Plimer‘s anti climate book Heaven and Earth. Pitman refused. Where do you start, he said? From the first page Plimer makes mistakes, Pitman said. Fundamental mistakes; and that Plimer doesn’t even get the composition of the sun right.

We could see why Pitman refused to engage. You can’t win by playing fair and honest and truthful if your opponents don’t care what comes out of their mouth or their pen.

Bernie Fraser says people are getting bored with the debate.

“The public generally are getting bored with it all and switching off. The problem seems to be to be that the bad guys are spreading untruths and exaggerations and assertions without a lot of hard evidence and serious debate, cheered on by the big companies who make similar assertions and repeat those assertions without thorough debate.”

The “bad guys” included “the present government and some of its biggest supporters, big companies and industry associations”, Fraser said.

He had a go at the Labor party while he was at it. And rightly so. Its dithering was why “the government and the big companies are getting away with blue murder”, he said.

“I think there has been a long-term trend towards brazen false or misleading assertions and a faith that repeated brazen assertions can at least confuse things sufficiently to carry the day… Those kind of brazen campaigns have become more prominent… and there is very little institutional advocacy left for promoting the broader community interest”.


The other murky area for the property industry is the Emissions Reduction Fund, which is still in the semi-formed world of committees and green-papers-on-their-way to white papers, so that no-one knows yet exactly what shape it will take.

What we do know is that the banks and financiers don’t like it, but that the government is committed to it.

The National Environmental Law Association recently said none of Australia’s big four banks are interested in the Direct Action climate plan.

NELA said “the banks are not likely to take part in the Direct Action Emissions Reduction Fund due to too-short five-year contracts being offered by the  government”.

In the other corner is the Clean Energy Finance Corporation which the banks actually quite like and keep throwing money at but which the government wants to shut down. Even though it makes a profit and even though it attracts nearly $3 for every dollar it chips in.

The CEFC’s Meg McDonald and Oliver Yates said on Thursday there was more money pouring in, this time $30 million from NAB for its EUA fund with Eureka Funds Management, bringing the total up to $80 million.

The point is there is plenty more funding for energy efficiency programs, at least until July, after which the government might succeed in having the CEFC dismantled, which it’s promised to do, when the new Senate takes control.

Yates said the corporation has a mandate to lend another $1 billion on top of its existing commitment before July, but there’s no hurry, he says. Deals still have to stack up commercially, and ensure they return a profit to the government.

Yates says the CEFC looks good to the banks because they can get some comfort from the accumulated expertise the corporation has shored up in energy efficiency programs. With the ERF banks would need to invest in new risk management and cope with the ERF’s five year time frame, considered too short for most programs to come to fruition.

But why don’t corporates fund their own upgrades, given they will get the benefits?

In property we know the split incentive kick in –  the owner pays the tenant gains.

In small businesses Oliver says, owners struggle to pay themselves a wage, so tend to lack the cash reserves. By contrast, big companies might have the resources but not the inclination, preferring to invest in core business activities which can promise greater, more secure returns, in an area they have some comfort with.

All that might change with the expected spike in gas prices, Yates says.

That’s where the know-how of the CEFC could come in very handy, argue McDonald and Yates.

Waste, the hidden resource

Matthew Clark of Common Capital who is now advising private and government clients after working in the thick of NABERS and leading it for some years says the review of the NABERS Waste rating tool by Sustainability Victoria is good thing.

The missing piece in the jigsaw of reducing waste is measurement, he says. With energy it’s easy, you just look at the bill. With waste, it’s not so easy.

“If we take control of the measurement we start to take control of the waste streams,” he said in a recent chat.

“We’ve got no idea of what waste is coming or going at the tenancy levels, which we need. If you think about waste as a resource it would be like having energy or water unmetered. The more we understand what’s going on in a building, the more we are encouraged to take control.”

See our recent article on TerraCycle for a hint at the fortune can be built on waste. The company, run by Tom Szaky has recently expanded into Australia to deal with difficult to recycle materials.

Here’s a good news story, from a formerly bad apple

We hope you didn’t miss that the much maligned Apple (on ethics and sustainability grounds) is starting to take environmental goals more seriously.

CEO Tim Cook told the National Center for Public Policy Research, “If you want me to do things only for ROI [return on investment” reasons, you should get out of this stock”.

He’s promised to slash greenhouse gas emissions and invest in sustainable energy.

The outburst came at the company’s annual meeting a few weeks back when Cook “became visibly angry when questioned by a radical right-wing think tank about the profitability of investing in renewable energy.”

Read this for a lift

And something clear, like a bell

Richard Florida, pinup author for the cities agenda has turned his powerful sights onto social sustainability issues, in a recent article in Atlantic City. He wrote:

Last month, the fashion retailer Gap, Inc. pledged to raise wages for 65,000 of its lowest-paid employees, to $10 an hour, by 2015. As the company explained on its website, the decision wasn’t a mere publicity stunt. It was motivated by an underlying economic driver: Higher wages will allow their stores to “attract and retain great talent,” ultimately leading to a far better experience for customers.

For Zeynep Ton, a leading scholar on the connection between wages and profits at retail and service companies, the Gap’s decision to increase wages came as no surprise. Ton has spent the last few years studying how upgrading traditionally low-prestige, low-pay service-class jobs can benefit workers, the businesses that employ them, and even customers.

In her new book The Good Jobs Strategy, Ton draws from more than a decade of detailed research at Harvard Business School and MIT’s Sloan School of Management to show the links between higher wages and higher profits in the service economy. Too many service companies — and too many Americans, for that matter — buy into the line of thinking that the only way for restaurants, retail, and other service companies to profit is to pay the lowest possible wages. As she explains, “in service industries, succeeding at the expense of employees and at the expense of customers often go together.”

In the US  there are47 million people on food stamps.