The letter came in last week, and already seems to have been swallowed in the paper clutter. So I can only paraphrase (which is surely better than mis-quoting.) They were writing about the Defined Benefits scheme, and its sustainability. Some figures about what their actuaries said, some percentages and some comforting words about not cutting back unless it was absolutely necessary….But the bottom line was that some clause in the Trustee Act or whatever had been triggered, and that Defined Benefits were not, well, quite so secure anymore. Less well-defined is my take.
Since this came from Unisuper, a large and well-respected industry fund, it set off alarm bells in my small head. My brain has been wired for such news since co-authoring a book on the ageing society around the time Nick Leeson brought down the esteemed Barings Bank, taking many superannuants with him. At that time I wrote about super as too tempting a cherry not to be vulnerable to criminal activity.
Little did I suspect that legal activity was much more dangerous. As I write this today, Geraldine Doogue is discussing financial advisors on the ABC’s Saturday Extra. This has been a much-chewed topic, but the analysis of risk that is critical to good investment rarely goes beyond the financial markets.
The reality is that the base of the financial market is itself shaky: unsustainability is no longer just a catch-cry, it is our way of life. Almost nothing in our economy is capable of continuing much longer without severe re-orienting. Nicholas Stern authored of the Stern report on the economic consequences of climate change a few years ago,. Since then, there have been only small indicators that a shift is occurring in mitigating climate change. Stern is now touting low carbon growth as the way forward (never around, or past, always forward, but more about that prepositional bias later).
Low carbon growth will indeed be our future, and any decent advisor or industry fund should get on their bikes and find it, quick. My income isn’t much dependent on super, but yours may be. And governments need to show the way by tilting the policy pin-ball table (remember the fun?) in that direction.
In macroeconomic terms this means General Motors should be retooling for public transport infrastructure, rather than rekindling the phony dream of a car for every citizen as a God-given right. Fetching the frosty papers this morning I saw four cars huddling for warmth in our next door neightbor’s yard. It also means urban consolidation with forethought (as important as foreplay, but less common) so that social needs are met along with housing needs. Low carbon growth means services instead of products, a softening of the individual ownership mantra, and the reinvention of local food and goods.
For at least 20 years, and not just because I was a single parent who couldn’t afford a lawn mower or its maintenance, I have wondered why I need my own vacuum cleaner, washing machine, step ladder, etc. I don’t want to own, store or maintain these items.
This shared bulk goods approach has logically taken hold with cars. In Melbourne last weekend, our friends pointed out the car you can hire by the hour, day, or week. You need to join, and then you get benefits. Somebody is making money from this. This is the same approach I’ve been advocating for a Canberra climate change community group: get with the green economy. Dustin Hoffman in the Graduate was simply told ‘plastics’ for his future and for better or worse many young men took that advice in the 1960s. Now the good advice might be: Go Green, young folk, go Green!
Low carbon growth is still growth, and somewhere that too might be reconsidered. According to philosopher John Gray, the expectations for growth, whether material or spiritual, come from much deeper sources. Our actions and beliefs generally can be traced back to some very grand and influential concepts. Yes, religion. Marx was probably right in calling it the opium of the masses, but even he fell under the influence that Christian redemption beliefs have exerted on the Western world for milennia.
We can be saved, and a better world awaits. If necessary, we will bomb the bejesus out of them until they realise we know the shining path, la Via Sendosa. Those who don’t agree won’t get saved, so sign up quick. And we will bring you paradise in the form of liberal democracy, social harmony, and yes, endless defined benefits. This is the way forward, the moving forward, the forward direction we all love to hear from our politicians and our priests. All fantasies, of course, but maybe we willingly suspend disbelief. For those with an appetite for realist philosophy, read John Gray’s books, particularly Black Mass. You will see how hard it is to step outside the hope for progress.
World events, however, are making it ever easier to be pessimistic. But before we can redirect the ship of dreams from forward into becalmed evolution, we need to reject violence. Does anyone know how much of the global economy is underpinned by weaponry-driven investment, employment, research, and deployment? Those benefits are defined, but only in the negative. This is more important to track than debt per se.
Enough, enjoy your weekend. Last night I enjoyed the very violent movie The Escapist, and today we are going to the coast to watch the bush fire people do a controlled burn off on our property. There should be big flames and great heat. Yes!