COP28 Climate Science Denial – Avoiding Transition to Renewable Energy Sources

There were recent comments by the COP28 President in UAE denying climate science around fossil fuels, hence, no need to transition from the same; but no credible support for his claims?

These talking points are very common across right wing media for ageing and less educated voters to support fossil fuel right wing policies, often with ‘Koch Network’ in the background, but simply promoting deflection and conspiracies? 

In 2022 Burn-Murdoch showed in Financial Times how following economics makes for fast transition from fossil fuels & carbon emissions to renewable sources, result? Lower emission and higher economic growth.

‘FT Opinion Data Points Economics may take us to net zero all on its own. The plummeting cost of low-carbon energy has already allowed many countries to decouple economic growth from emissions’

‘COP28 president is wrong – science clearly shows fossil fuels must go (and fast)

Steve Pye

Associate Professor in Energy Systems, UCL

According to the president of COP28, the latest round of UN climate negotiations in the United Arab Emirates, there is “no science” indicating that phasing out fossil fuels is necessary to restrict global heating to 1.5°C.

President Sultan Al Jaber is wrong. There is a wealth of scientific evidence demonstrating that a fossil fuel phase-out will be essential for reining in the greenhouse gas emissions driving climate change. I know because I have published some of it.

Back in 2021, just before the COP26 climate summit in Glasgow, my colleagues and I published a paper in Nature entitled Unextractable fossil fuels in a 1.5°C world. It argued that 90% of the world’s coal and around 60% of its oil and gas needed to remain underground if humanity is to have any chance of meeting the Paris agreement’s temperature goals.

Crucially, our research also highlighted that the production of oil and gas needed to start declining immediately (from 2020), at around 3% each year until 2050.

This assessment was based on a clear understanding that the production and use of fossil fuels, as the primary cause of CO₂ emissions (90%), needs to be reduced in order to stop further heating. The Intergovernmental Panel on Climate Change (IPCC) says that net zero CO₂ emissions will only be reached globally in the early 2050s, and warming stabilised at 1.5°C, if a shift away from fossil fuels to low-carbon energy sources begins immediately.

If global emissions and fossil fuel burning continue at their current rates, this warming level will be breached by 2030.

Since the publication of our Nature paper, scientists have modelled hundreds of scenarios to explore the world’s options for limiting warming to 1.5°C. Many feature in the latest report by the IPCC. Here is what they tell us about the necessary scale of a fossil fuel phase-out.

Fossil fuel use must fall fast

A recent paper led by atmospheric scientist Ploy Achakulwisut took a detailed look at existing scenarios for limiting warming to 1.5°C. For pathways consistent with 1.5°C, coal, oil and gas supply must decline by 95%, 62% and 42% respectively, between 2020 and 2050.

However, many of these pathways assume rates of carbon capture and storage and carbon dioxide removal that are likely to be greater than what could be feasibly achieved. Filtering out these scenarios shows that gas actually needs to be eliminated twice as fast, declining by 84% in 2050 relative to 2020 levels. Coal and oil would also see larger declines: 99% and 70% respectively.

In fact, oil and gas may need to be eliminated even quicker than that. A study by energy economist Greg Muttitt showed that many of the pathways used in the most recent IPCC report assume coal can be phased out in developing countries faster than is realistic, considering the speed of history’s most rapid energy transitions. A more feasible scenario would oblige developed countries in particular to get off oil and gas faster.

A fair and orderly transition

The International Energy Agency (IEA) has added to evidence in favour of phasing out fossil fuels by concluding that there is no need to license and exploit new oil and gas fields, first in a 2021 report and again this year.

This latest IEA analysis also estimates that existing oil and gas fields would need to wind down their production by 2.5% a year on average to 2030, accelerating to 5% a year from 2030 (and 7.5% for gas between 2030-40).

A separate analysis of the IPCC’s scenarios for holding global warming at 1.5°C came to the same conclusion. Since no new fields need to be brought into development, global production of oil and gas should be falling.

A fair and orderly transition

The International Energy Agency (IEA) has added to evidence in favour of phasing out fossil fuels by concluding that there is no need to license and exploit new oil and gas fields, first in a 2021 report and again this year.

This latest IEA analysis also estimates that existing oil and gas fields would need to wind down their production by 2.5% a year on average to 2030, accelerating to 5% a year from 2030 (and 7.5% for gas between 2030-40).

A separate analysis of the IPCC’s scenarios for holding global warming at 1.5°C came to the same conclusion. Since no new fields need to be brought into development, global production of oil and gas should be falling.’

For more related articles and blogs on Climate Change, Economics, Environment, Fossil Fuel Pollution, Koch Network, Political Strategy and Science Literacy click through:

Environment – Fossil Fuels – Climate Science Denial – Populationism – Anti-Immigration – Far Right – Tanton Network

Jeff Sparrow in Overland rebuts a counter critique of his book ‘Crimes Against Nature’ by a faux expert Edward Smith who appears to be au faire with faux environmental and anti-immigrant arguments promoted by the US Tanton Network linked NGO Sustainable Population Australia.

One would not bother using high level analysis to rebut low level faux science nativist agitprop inspired by former ZPG Zero Population Growth types, namely deceased white nationalist John ‘passive eugenics’ Tanton whose colleague was Paul ‘Population Bomb’ Ehrlich, with support from the Rockefeller Bros., ‘limits to growth’ PR constructs promoted by Club of Rome and drawing on Malthus, Galton and Madison Grant.

Conspiracy of Denial – COVID-19 and Climate Science

Some would not be surprised with the doubts and confusion being created round the COVID-19 crisis, especially by those wanting all economic activity to continue and ignore the human costs. 

However, much of this agitprop, astro-turfing and junk science used by non experts has much in common with the information, media and political techniques used by radical right libertarian think tanks funded by the fossil fuel sector and related media, to influence society on climate science to avoid constraints and preserve income streams, with some eugenics in the background.

Nativist Conservative MPs for Fossil Fuels versus Science, Education, Research, Analysis & Society

Interesting article from a science journalist at The Guardian on comments made about ‘woke’ science by the Tories in the UK at the Conservative Conference in  ‘Science hasn’t gone ‘woke’ – the only people meddling with it are the Tories’ by Philip Ball.

However, this is neither unique to the UK Conservatives nor dissimilar elsewhere, but it is a long game strategy against grounded science, research and analysis, like Trojan horses to disrupt curricula and universities, why? 

Climate Change Science Attitudes Australia and Koch in USA

Climate science or climate change denialism have been apparent for some decades since the 1970s with Koch Industries being central along with ‘big oil’ of Exxon Mobil etc. in funding through ‘Dark Money’ academia, research, think tanks, media, politicians and PR techniques to influence society.  Now we see the results including wide-spread climate denialism, avoidance of environmental protections and negative media PR campaigns; meanwhile the roots of this strategy have become more transparent with legal action following.

Nativist Conservative MPs for Fossil Fuels versus Science, Education, Research, Analysis & Society

Interesting article from a science journalist at The Guardian on comments made about ‘woke’ science by the Tories in the UK at the Conservative Conference in  ‘Science hasn’t gone ‘woke’ – the only people meddling with it are the Tories’ by Philip Ball.

However, this is neither unique to the UK Conservatives nor dissimilar elsewhere, but it is a long game strategy against grounded science, research and analysis, like Trojan horses to disrupt curricula and universities, why? 

It’s both protection for fossil fuels and avoiding climate science (Covid too) while denigrating centre right through left moderate attitudes and policies as e.g. ‘woke’, to energise older right (and too many left) voters including Brexit, Trump and now in Australia ‘The Voice’ Referendum on Aboriginal recognition.

The fulcrum globally is Koch Network think tanks found at Tufton St. London, of course the US, Australia and other parts including links via Atlas Network and in Hungary, Heritage Foundation partnered with Danubius Institute, sharing anti-EU and pro fossil fuels sentiments, shared with Putin’s Russia and fossil fuels oligarchs, also includes the EU’s regulation for environment and financial transparency.

Overall, like Covid and climate science denial, denigration of experts, analysis and universities, with the nativist Tanton Network that shares donors with Koch in the US, is used to deflect from climate science by highlighting immigrants and population growth as environmental hygiene issues.

The end game is more alarming with their and e.g. Murdoch media support for corrupt nativist authoritarian leaders and governments who deny climate science and humanity?

‘Science hasn’t gone ‘woke’ – the only people meddling with it are the Tories

Michelle Donelan’s plan to “depoliticise” science with new guidelines on sex and gender research is a chilling move

The science secretary, Michelle Donelan, told the Conservative party conference this week that the Tories are “depoliticising science”. Or as a Conservative party announcement later put it, in case you didn’t get the culture-war reference, they are “kicking woke ideology out of science”, thereby “safeguarding scientific research from the denial of biology and the steady creep of political correctness”.

Scientists do not seem too delighted to be defended in this manner. “As a scientist, I really don’t know what this means,” tweeted Sarah-Jayne Blakemore, professor of psychology and cognitive neuroscience at the University of Cambridge. “This is totally shocking and is something I never thought I would see in the UK,” said Buzz Baum, a molecular cell biologist for the Medical Research Council.

What exactly does Donelan think science needs protecting from? What is this woke threat? At the conference, she expanded on that. “Scientists are told by university bureaucrats that they cannot ask legitimate research questions about biological sex,” she claimed, adding that Keir Starmer thinks the “legitimate concerns of the scientific community” on these issues of sex and gender “don’t matter”. She said she will launch a review of the use of gender and sex questions in scientific research, apparently to be led by Alice Sullivan, a professor of sociology at University College London, which will be used to formulate guidance.

You would need to have been hiding under a rock not to appreciate that questions of sex and gender have become controversial, bordering on incendiary, in some areas of academia. As a recent exchange by evolutionary biologist Richard Dawkins and professor of humanities Jacqueline Rose in the New Statesman revealed, academics are often talking at cross-purposes: Dawkins defended the binary nature of human sexes from an evolutionary angle, Rose the socially constructed aspects of gender identity. On top of that, there are the complications of developmental and cognitive biology, which, among other things, can produce intersex individuals and conditions where, say, people with a Y chromosome can be anatomically female.

But one doesn’t need to take a strong stand about rights or wrongs in these debates to recognise that they are difficult and subtle – and to acknowledge it is proper that they be rigorously discussed. Arguably, this is an area where science can’t supply definitive answers to all the germane societal questions.

This is not a case of academic research being trammelled by an imposed ideology, but rather, of a range of differing views among academics themselves. Besides, rather than await clarification, Donelan has evidently formed her opinion already: she called guidance that data on sex should only be collected in exceptional circumstances “utter nonsense” and a “denial of biology”. What is the point of a review if you have decided already what it must say?

More to the point, why is the government getting involved in the first place? What chills Baum is the idea of “politicians telling scientists about the nature of biology”. Some scientists can’t help thinking of previous instances where governments imposed their views on the subject: the spurious “race science” of the Nazis and the anti-Darwinian denialism of Stalin’s regime. While that might sound a slightly hyperbolic response to a transparently desperate ploy to stoke culture-wars division, the principle is the same: a government deciding an approved position on science and demanding that academics toe the line.

Much as Donelan tries to position herself as a champion of the objectivity and freedom of science, this intervention supplies more evidence of the government’s distrust of academics in general and scientists in particular – it’s of a piece with Rishi Sunak’s assertion that scientists were given too much power during the pandemic. Witness the disturbing way this policy direction is framed. However contested and emotive this particular issue, it is hardly relevant to the large-scale practice of science – yet Donelan is seeking to leverage it to imply that all of science somehow stands at risk from “woke ideology”, as if the integrity of truth itself were at stake.

That is perhaps the most ominous aspect of this announcement. The creation of a fictitious, ubiquitous enemy to scare the population is indeed straight out of the fascist playbook. It was thoughtful of the Conservatives to drive this point home with the spectacle of party member Andrew Boff, chair of the London Assembly, being escorted from the conference hall by police on Tuesday when he voiced protest at Suella Braverman’s criticism of the term “gender ideology”.

The notion that science can be “depoliticised” at all, let alone by an agenda-driven political party, is understood to be nonsensical by those who study the interactions of science and society. Of course political agendas should never dictate research results. But the questions asked, priorities decided and societal implications of advances made absolutely make science inextricably tangled with the political landscape – not least in a controversial area like sex and gender. That entanglement can get messy, but no true democracy tries to control the narrative.’

• Philip Ball is a science writer and the author of the forthcoming book, How Life Works: A User’s Guide to the New Biology

For more related blogs and articles on Climate Change, Conservatives, Environment, EU European Union, Fossil Fuels, Koch Network, Media, Science Literacy, Tanton Network and University Teaching Skills click through

Conspiracy of Denial – COVID-19 and Climate Science

Anglosphere Oligarchs – Koch Atlas Network Think Tanks

Radical Libertarian Disinformation Machine – Koch Network by Nancy MacLean

BBC: 55 Tufton Street London – Libertarian Think Tanks – Koch Network

Rishi Sunak and US Radical Right Libertarians in UK – Koch Atlas Network Think Tanks

55 Tufton Street London: US Koch & Tanton Networks’ Think Tanks – Radical Right Libertarians and Nativists

Koch Industries: How to Influence Politics, Avoid Fossil Fuel Emission Control and Environmental Protections

Climate Change Science Attitudes Australia and Koch in USA

Trojan Horses – Ultra Conservatives Disrupting Education Curricula to Influence Youth

Critical Thinking or Analysis: Importance for Education, Media and Empowered Citizens

BBC: 55 Tufton Street London – Libertarian Think Tanks – Koch Network

The BBC has, finally, woken up to the influence of 55 Tufton Street think tanks, promoting ‘radical right libertarian’ socioeconomic policies, although presented in a purely domestic and native context (apart from a mention of Brexit) e.g. PM Truss’s ‘Trussonomics’ is also known as ‘Kochonomics’.

55 Tufton includes PR and lobbying organisations masquerading as (oxymoronic) ‘think tanks’ which are overpopulated by right wing pseudo-experts promoting old beliefs as economic theory, socio-economic policy, report topics and talking points for media and the government, preferably a Conservative one.

Further, although these anti-EU and Brexit supporting think tanks are nominally native or organic to the UK, most are in and influenced by Atlas Network (founded by IEA’s Fisher) and more generically known in the US as the libertarian #KochNetwork; there is also a migration NGO which can be linked to the US nativist #TantonNetwork. 

Below is a full article from the BBC which also has a podcast accompanying.

‘55 Tufton Street: The other black door shaping British politics

By Jack Fenwick

BBC Politics

On a rainy afternoon earlier this month, Liz Truss walked through the famous black door of No 10 Downing Street for the first time as prime minister.

But under a mile away, there’s another black door that’s had a lasting effect on the previous decade in British politics – and looks like being influential under this administration too – No 55 Tufton Street.

The building houses organisations including the TaxPayers’ Alliance and the Global Warming Policy Foundation – and is the former home of many others, such as Vote Leave and Brexit Central.

Just hours after Liz Truss made her first speech on the steps of Downing Street, she announced that her new economics adviser would be Matthew Sinclair, a former chief executive of the TaxPayers’ Alliance.

And a couple of weeks later, the new chancellor, Kwasi Kwarteng, delivered the most consequential financial statement for a generation, ripping up decades of economic orthodoxy.

He was pictured celebrating with Mr Sinclair – a man who made his name working behind that other black door.

The influence of TaxPayers’ Alliance began in 2008, when the financial crash led to bank collapse around the world.

“If you didn’t want that to happen in the UK, you had to get growth higher,” says Andrew Lilico, chairman of Europe Economics and Matthew Sinclair’s former boss.

“One way you could get growth high was just to get spending down and it might not be a very pleasant way of getting growth higher, but needs must in these kinds of circumstances.

“There was a TaxPayers’ Alliance report called How to Save £50 billion, which to some extent breached the dike on where things were going. And very shortly after that, others all chimed in. So quite quickly there were proposals for cutting spending by £150bn and £200bn.”

In 2010, David Cameron became prime minister and ushered in a new age of austerity.

The TaxPayers’ Alliance was no longer a fringe group frustrated with the Conservatives’ approach to the economy. Instead, they became a key public backer of the government’s approach to the economy.

“The newspapers or the broadcast media would have a spokesperson from an organisation, it could be the TaxPayers’ Alliance, it could be another think tank,” says Nicky Morgan, a Treasury minister in the coalition government.

“As a minister, if you’re going to advance a difficult or a controversial idea, it’s no surprise that before you announce such a thing, what you try to aim for is that phrase ‘rolling the pitch’. You’ve got people outside saying, ‘this is what we need’. So when you announce it, one hopes that it’s going to be well received.”

Think tank donor anonymity

But the organisations at No 55 had started to attract controversy too.

Many of them have a long-standing policy of protecting the anonymity of their donors, something the Lib Dems wanted to change.

The coalition government did change the rules on lobbying. But the BBC understands the Lib Dems wanted those changes to go further – and to include think tanks, which do not come under lobbying rules.

Few would suggest that David Cameron and his chancellor George Osborne were Tufton Street’s natural allies – one senior member of Osborne’s Treasury team describes the TaxPayers’ Alliance as “a bit of a joke”. But they were useful in helping sell those austerity policies to the public.

After the 2015 election, David Cameron pledged to hold a referendum on EU membership – and that’s when the relationship changed.

Vote Leave, which would go on to become the official leave campaign, was originally based at No 55 as well. Andrew Lilico, who was Vote Leave’s chief economist in the latter days of the campaign, says the think tanks there were natural Brexiteers.

“I think that they are people who are quite optimistic about what the market can achieve. And they’re quite pessimistic about grand state projects.

“So the European Union, as a supranational, multinational body would be an iconic example of something that they would be sceptical about.

“Matthew Elliott, in particular, who’s the chief executive of Vote Leave, comes directly out of that that setting. He was the chief executive of the TaxPayers’ Alliance.”

After the Leave campaign won the referendum, the fight shifted again. The battle over how exactly to define Brexit had begun.

“People thought that the referendum would be the end of it, and of course in many respects it was just the beginning of the argument,” says David Jones, minister for exiting the EU from 2016.

“Vote Leave wound itself up so there was nobody there. A number of other organisations did spring up to fill that vacuum.

“And Brexit Central was a very important one.”

Headed up by Jonathan Isaby, another former chief executive of the TaxPayers’ Alliance, Brexit Central also ended up being based at 55 Tufton Street.

“So it became almost required reading for those who were on the pro-Brexit side of the argument,” says Mr Jones. “Every day you’d check in at Brexit Central and see what they were reporting.”

Think tanks going mainstream

Boris Johnson’s victory in 2019 – and his pledge to take the UK out of the EU’s single market and customs union – was another huge moment for Tufton Street.

After the financial crash, once-fringe views on public spending had become mainstream – and now the same happened with Brexit.

The apparent influence made the argument around who funds these groups rear its head again.

But while privately critical of where the money comes from, the Labour Party hasn’t made it a public priority to reform the rules governing this area of politics. Until now.

“55 Tufton Street shouldn’t have any more influence than any other street in the UK,” says Angela Rayner, Labour’s deputy leader.

“That street seems to dominate particular policy and what’s happening in government and legislation and it’s not transparent enough.

“Labour would consult on the wider definition of what lobby groups are – so that would include what is currently known as think tanks because we don’t believe that the definition is wide enough, but also around transparency around where their funding comes from as well.”

The BBC did ask representatives from the organisations mentioned for an interview, but no-one came forward.

Labour may want to change the rules – but for now, that’s not in their gift.

Instead, last week’s financial statement seemed to confirm that Liz Truss is more aligned with the ideas floating around No 55 than any of the previous recent occupants of No 10.

So what sort of new policies might the government start to enact?

The TaxPayers’ Alliance has had a long-running campaign to crack down on paid time off for trade union officials, including when Mr Sinclair was chief executive.

The new Business Secretary, Jacob Rees-Mogg, met the TPA in March.  The BBC has used a freedom of information request to discover that the meeting was called to discuss paid time off for trade union officials – something Liz Truss has now pledged to crack down on.

Still, no one can be sure exactly what will take place behind the famous black door of No 10 over the next few years.

But perhaps by paying closer attention to what’s happening behind the other black door, we might get a good idea.’

For more related blog and articles about Conservative Britain, Economics, EU European Union, Global Trade, Government Budgets, Libertarian Economics, Media, Political Strategy, Populist Politics, Radical Right Libertarian and Russia click through:

55 Tufton Street London: US Koch & Tanton Networks’ Think Tanks – Radical Right Libertarians and Nativists

IDU Global Networking of Conservatives, Nativists, Libertarians and Christian Leaders

Immigration Restriction – Population Control – Tanton Network

Rishi Sunak and US Radical Right Libertarians in UK – Koch Atlas Network Think Tanks

Brexit, Conservatives, Nativism, Libertarian Strategy, Single Market and the European Union

Koch Industries – Putin – Russia – Ukraine – Koch Network – Think Tanks

Putin’s Russia – Dugin – Alt Right – White Christian Nationalism – the Anglosphere and Europe

The Beast Reawakens 1997 – Review – Radical Right Populism in Europe and the Anglosphere

Australia might be saving our democracy. Can the UK and US?

Property Market – Real Estate Investment – Gross Returns on Price vs. Net Returns on Value

Interesting article re-published by Graham Hand who is Managing Editor of Firstlinks on real estate or property investment, and some lessons for owner occupiers too, on expenses and value e.g. an empty property has expenses lowering net income vs. shares with mostly net income i.e. very low costs, plus franking credits or dividend imputations, increasing income further.

Additionally, while the real estate market in Australia is more about PR public relations, indirect metrics and sentiments, reinforced daily by legacy media, focus is upon headline prices i.e. not value, assuming population growth in a working age decline.

Two value metrics for valuation are simply calculating long term market rental price for the area, annualising, then converting to total via benchmark of 5%, 7% (standard) or 10%; the 7% benchmark equates to the price doubling every ten years.

On the other hand one can use the final metric to calculate the value of one’s home from the time of purchase; if it hasn’t doubled every decade then it’s losing value, i.e. at best ‘treading water’. 

In the background are ageing demographics in the permanent population, the working age has passed the ‘demographic sweet spot’, to be followed by lower fertility generations and potential permanent population decline; OECD data parses through and shows the future trends:

OECD working age data comparing Australia with Anglosphere and OECD.

The First Links article follows from here:

‘What real estate agents don’t tell you (redux)

Introduction. This article was originally published in 2015, and is reproduced here after a friend told me he was looking to buy an apartment in a holiday resort. One of the attractions is the ability to stay in the apartment when it is not rented out for short-term holidays. He said there was no point leaving money in the bank earning nothing and shares are too risky. This sounds like a scenario many readers contemplate as they look for income in new places.

I’m sure he thought I would smile pleasantly and he would drive off to buy his dream with a view. I sent him this article and he’s definitely having second thoughts. I have not changed any of the numbers so please read it knowing it is seven years old. The arguments remain valid. These resorts are a crap shoot.

Coincidentally, I stayed on the Gold Coast last week, this time further south than usual in an apartment at Bilinga, near Coolangatta. From there, the thousands of towers of Surfers Paradise and Broadbeach loom large on the horizon, a mass of short-let apartments ranging from the luxury to the downright trashy. The experience of owners no doubt covers the full range from wonderful to woeful, but anyone buying into a resort for short-term let should know what they are going into … mainly financing the holidays of other people. 

Explore the rear entrance of an apartment hotel or resort that is more than five years old and take a look at the contents of the skips in the lane outside. They are often full of sofas, dining chairs, mattresses and televisions. Seven years earlier, when the proposal for a shiny new building was just a model in a display apartment for off-the-plan sales, hundreds of dreamers signed up to buy apartments. They also agreed to a furniture package for $40,000 to allow the building to operate as a hotel or resort. After years of people on holidays staying in the rooms, jumping on the sofas and leaning back on the chairs, the furniture needs replacing. Over the five years, that’s another $8,000 a year of costs to write off for each owner. It’s not such a dream now.

A few years later, the apartment will probably need a new bathroom and kitchen. How many years of income will that cost?

If you don’t believe a sofa lasts only five years, you’ve probably never owned one of these short-let apartments. Hundreds of kids and honeymooners and party animals have enjoyed themselves on the furniture while on holiday. Have you ever watched coverage of schoolies week?

Gross yields the most misleading number in investing

Real estate agents quoting gross yields on residential property are using the most misleading number in investing. The costs associated with residential property consume most of the income, leaving uninformed investors blind to the actual returns until the expenses start to come in. In an era where the professionalism of financial advisers is slammed daily in the media, many property agents get away with poor disclosure without comment.

Obviously, this is not a marginal asset class few people care about. Residential real estate in Australia is worth $5.8 trillion, and it dwarfs listed equities of $1.6 trillion and superannuation of $2 trillion. It accounts for over half of Australia’s wealth (see CoreLogic Housing and Economic Market Update, April 2015).

Why are gross versus net yields so important for real estate?

Invest in a term deposit at 3% and you will earn 3%. There are no other costs involved. In equities, the effective yield earned can be better than the quoted dividend rate when imputation credits are added back. But residential property is the opposite. Net yields should be the main focus because expenses are high and unavoidable, even if the property is left empty.

A typical commentary on a real estate ‘entertainment’ programme goes like this:

“Is this a buy or a sell? It’s a one-bedder only 10 kilometres from the centre of Sydney, close to buses, 65 square metres, asking $750,000, would rent for $650 a week.”

“Well, the starting point is you don’t want to be out of this market,” replies the agent confidently. “This place will be worth $50,000 more in a year – that’s $1,000 every week. And look, $650 a week is about $35,000 a year, that’s a yield of 4.5%. Where can you get that today?”

Can you imagine what ASIC would do to a licensed adviser who spoke like that, or included it in an offer document? Prices do not always rise, and that yield is not available by buying that apartment.

CoreLogic quotes rental rates of 3.7% for ‘combined capitals’ across Australia, but this number is gross rental yields (for example, see page 7 of above-linked report). It’s the number the industry loves to talk about. But even if we put aside stamp duty, legal costs, borrowing costs and vacancies, what about the regular costs of owning a property? These are the ongoing drains on income that are often overlooked. According to a Reserve Bank of Australia Research Paper, ‘Is Housing Overvalued’ (June 2014), the running costs of long term rental properties are 1.5% per annum, and transaction costs of 7.3% averaged over ten years are 0.7%, giving costs of 2.2% per annum.

That takes the net yield to 1.5% before allowing for repairs and maintenance. Reality is completely different than the real estate brochures and entertainment programmes convey.

How do management rights work?

When a large apartment building is constructed, the lots or units are purchased either by people who want to live in them (owner occupiers) or let them (investors). The ‘management rights’ to the building are sold by the developer, which gives the manager the right to charge a fee to look after the building and in some circumstances, run a letting scheme. The manager estimates how much income the building can generate when deciding how much to pay for the rights.

Of course, there are hundreds of thousands of different schemes in Australia, ranging from small premises run by mum and dad to professional managers (including listed companies) who may pay up to $15 million to manage a large, prestigious building by the beach with great views. The management rights might include running a restaurant, a reception centre, housekeeping, a real estate business as well as the letting and maintenance. Income includes payments from the body corporate, plus owners who enter a letting agreement pay a percentage of the letting charges, say 8% for long term letting and 12% for short term. The vast majority of apartment buyers in a hotel or resort sign up with the manager because there are efficiencies in one person managing the whole building. But what the buyer does not realise is that every change of a light bulb, every adjustment of the remote control, and every time the room is cleaned is a money-making opportunity to recover that $15 million.

Higher income, higher expenses

An apartment costing say $500,000 might rent permanently for $500 a week, but as part of a hotel, $250 night in high season. How can this not be a better deal? Consider these actual examples of well-established apartments in hotel or resort schemes targeted at short-term letting:

Table 1: Extracts from tax returns for typical short-term letting apartments

The expenses from short-term letting are far more than permanent, especially costs such as cleaning and replacing equipment. Owning an apartment for short-term letting can be an annoying experience of monthly expenses to maintain the apartment to the standard required by the hotel or resort manager. Here is more detail from the tax returns of these apartments:

Table 2: Detailed income and expense returns

It’s hard to believe a small apartment can incur $47,000 in costs a year. People who put their apartments into these letting pools are probably prepared for some of the same costs as long term rentals, such as strata fees and council rates, but who expects regular costs such as these:

Table 3: Examples of specific expenses in short term letting

It’s a monthly crap shoot. The owner pays $360 a year for the phone system, and could buy the television for a year of hiring fees. The dry cleaning can be $100 a month. The cost of cleaning a one-bedroom apartment after one night is an unbelievable $73. How long does it take to clean a small apartment in a building with 200 such apartments? If you think the management fee should cover the quick visits to the apartment and complaints by guests, read the fine print. There is no way of knowing how often a light bulb is replaced or a bed cover dry cleaned. Who dry cleans a shower curtain every month? That $1 light bulb costs $23 to replace. This is a big money earner for the manager. A guest might stay for one night and after expenses such as booking agent fees, advertising levy, housekeeping and repairs, little is left for the owner. It’s not worth the wear and tear on the apartment.

Who cares, capital gains and tax deductions are more important than income

Many investors may consider the income to be a minor part of the expected return, especially if they realise it’s only likely to be 1.5%. Residential property prices in Sydney were up 14% in the year to March 2015, so a few dollars in expenses is tolerable (although it was less than 5% per annum for the decade before 2015).

There’s a problem here as well with short term letting. Most owner occupiers do not want to live in a building where the majority of other tenants are holiday-makers. These visitors are out to have a good time. They party late at night, crash their suitcases into the lifts and walls, drag their wheels across the floorboards or carpets, return from the beach in their towels and drip on the furniture. The kitchen benches get scratched, the carpet must be cleaned regularly and equipment is stolen. People who assume guests look after the room in the same way they look after their own home don’t know how some people live. A permanent resident living in a building does not want to battle a lift full of suitcases every time they leave their apartment.

So the secondary market sales of these apartments are usually not to owner occupiers, and the building gradually becomes dominated by short term lets. The major buying force that pushes up the price of real estate, the person buying their dream home, is not in the market. 

The premises are also subject to intense wear and tear, and the foyers are full of holiday brochures and bags and screaming children and people waiting to check in or out. So these apartments are worth less than in owner occupied buildings. Investors ask to see the net return after five years, the tired furniture and dirty carpet, and the income yield is not enough to create demand unless the price is relatively low. In many locations, these apartments in hotel schemes are the cheapest in town. It’s no surprise the two-bedder listed above made a large capital loss after expenses (stamp duty, agent’s fees, legal fees) despite seven years of ownership.

At least the loss is a tax deduction, able to be offset against other income. But buying an asset to create a loss and a tax deduction is a strange way to build wealth. Many investors talk about the ‘tax deduction benefits’ as if that is a good aim in itself. The only reason it’s a tax deduction is because it’s a loss.

OK, but at least I can holiday there

How about justifying the purchase by using the apartment once a year for a holiday? Forget it. The time of the year when the rent is the best is also when the owner wants to use it. Don’t confuse an investment with a lifestyle decision such as a holiday. Anyone who wants a week in a resort should pay for a week in a resort, not a year of problems owning the place.’

For more blogs and article click through Consumer Behaviour, Demography, Economics, Finance, Statistical Analysis & Taxation:

Economic Business Risk – Property – Real Estate – Australia – Core Logic

Property – Kylie Sells House in Melbourne – Nominal Profit or Treading Water in Real Terms?

Population Decline in Asia is Near with Africa to Follow

Economic Growth of Transactions vs. Consumption of Resources

Libertarian Curricula – Science and Culture Wars vs. University Maths Teacher Training

Recently in Australia, Alan Tudge, the Minister of Education in an embattled ruling LNP conservative coalition, approaching an election, proposed changes to maths teacher training at universities in Australia with an emphasis upon ‘explicit instruction’ versus the more contemporary ‘constructivist approach’ of building knowledge and self learning.

The report is quite unclear on what the evidence is for the need to introduce regressive steps for teaching methodology; based upon supposed correlations with headline test scores including PISA and text analysis of subject or course descriptions, to count how often key words e.g. constructivism occur, but not actual classroom observations?

In short, explicit instruction is teacher centred and directed while constructivist approach is learner centred allowing deep experiential understanding.  Nonetheless, both styles are acceptable depending upon the situation e.g. the UK RSA Cambridge TEFLA or CELTA, for the teaching of English as a foreign language, uses both, and more.  

This is exemplified in the PPPP model Preview, Present, Practice and Produce when used in a lesson starts teacher centred with explicit instruction (or direction), includes much student to student interaction, then moving towards more constructivist methods to finish with student centred production and formative ‘testing’ of individuals to judge outcome, or not.

However, support for changes comes from a report produced by the Sydney based CIS Centre for Independent Studies which is part of the Koch Network’s global Atlas Network of think tanks; another think tank in Melbourne, the IPA Institute of Public Affairs, informs often any climate science denying LNP government, and on libertarian socio-economic policies.

The CIS according to Sourcewatch is described as neoliberal and socially conservative, coincidentally was founded by a maths teacher to replicate, now another Koch linked economics think tank, the IEA in the UK which supported Brexit.  

As explained below the report writers have unclear higher qualifications to research, evaluate and propose methodological solutions to improve maths teaching and student outcomes; the report validity was questioned by various experts.

Anything Koch, IPA, CIS and LNP related generally includes strong antipathy towards universities and higher education, research, gender studies, LGBT, CRT, teaching, learning and science, especially climate science, and later the same networks were linked by DeSmog UK to Covid resistance to related science, vaccinations and measures to protect society.

This has been discussed previously in blog titled Climate Confusion, Astroturfing, Pseudo-Science, Population Movement and Radical Right Libertarians.  The aim appears to be neutralisation of competitive and other threats e.g. regulatory, round big business or large corporate entities, especially fossil fuels and related.

What are the outcomes of explicit teacher instruction?

Firstly it precludes peer to peer learning, like word of mouth is trusted, and is a valid way of learning, includes the ‘school of life’.

Secondly it suggests rote learning, and avoids the higher level skills according to Bloom’s Taxonomy beyond simply know, understand and apply, but higher level skills of analysis, evaluation and synthesis.

More deeply, the roots of radical right libertarian socio economic ideology, whether economics of Adam Smith, on population with Thomas Malthus, or Galton on eugenics, is to keep a major part of any society, especially voters, unenlightened on climate science, higher education and now Covid science to maintain 18th or 19th century power relationships favouring the more deserving ‘top people’ over less deserving society.

Final outcome would involve the ‘hidden curriculum’ that explicit instruction would encourage and condition i.e. a teacher is a figure of authority in imparting knowledge or facts while students are not required to apply higher level skills.

Encouraging a return to master serf relationships and not questioning authority.

From The Campus Morning Mail of Stephen Matchett:

‘Tudge warns teacher education faculties (again) November 29, 2021

For the second time in a month the Education Minister has warned education faculties the “Government will use the full leverage of the $760 million it provides” if they continue to use teaching methods he does not approve of.

Last week Mr Tudge criticised a “constructivist approach” in initial teacher education maths courses, as opposed to “explicit instruction,”(CMM November 26). In October, he warned that “ideological resistance” in teaching training limits the use of explicit instruction and phonics.

The ITE peak body did not respond to what could be a threat and might be a promise from the minister on math teacher training, with the Australian Council of Deans of Education declining to comment on Friday.

However, the Media Centre for Education Research did issue a statement, quoting Macquarie U maths education academics, Dũng Trần, Michael Cavanagh and Rebecca Bull commenting on the Centre for Independent Studies report which informed Mr Tudge’s new statement. They questioned some claims and suggested some of its evidence was not “robust,” adding “we would welcome a more comprehensive discussion about the intricacies of effective mathematics teaching.”

Summary of the report is here:

‘Policymakers have increasingly looked to improvements in Initial Teacher Education (ITE) as key to overcoming declining education outcomes.

The analysis in this paper validates this concern and places a specific lens on ITE for beginning mathematics teachers.

Despite clear evidence of the efficacy of explicit instruction, it is not practiced consistently and regularly in Australia’s mathematics classrooms. The analysis shows that high-performing countries more frequently apply the principles and priorities consistent with explicit instruction.

An analysis of ITE courses for beginning mathematics teachers finds a lack of emphasis on explicit instruction. This significantly contributes to insufficient implementation of evidence-based practice — particularly explicit instruction — in Australian schools.

For Australian students’ mathematics outcomes to improve, ITE must improve with it. For this reason, ITE providers require clear and unambiguous expectations for genuinely incorporating evidence-based practices into their mathematics ITE courses.

Some examples of practices that teachers should be able to demonstrate on completion of mathematics ITE include:

• Clear teacher demonstrations that recognise implications of cognitive load.
• Guided, scaffolded practice opportunities that allow students to students to verbalise.
• Immediate corrective feedback to clarify and confirm students’ progress.
• Spaced and interleaved practice to facilitate cumulative review of content.’

The full report ‘Failing to teach the teacher: An analysis of mathematics Initial Teacher Education’

Glenn Fahey, Jordan O’Sullivan, Jared Bussell   25 November 2021 | AP29

The writers of the report above have indirect expertise and unclear qualifications e.g. Fahey is economics, whilst the other two, Sullivan and Bussell are apparently teachers but have no qualifications listed, simply a general biography on the CIS website.

Related links of interest, articles and blogs:

Covid Misinformation – Gut Instinct & Beliefs vs. Science & Critical Thinking

Covid-19 Climate Science Vaccination Misinformation PR and Astro Turfing

Eco-System of Libertarian Think Tanks and White Nativism in the Anglosphere

Conspiracy of Denial – COVID-19 and Climate Science

Anglosphere – Radical Right Libertarian Socioeconomics and Authoritarianism

Think tanks’ call for ‘freedom’ really promises authoritarianism