Thursday, July 16, 2015

2016 Budget - Financial Chaos Emerges And The Lead Economic Ministers Are All AWOL!

July 16 Edition
Budget Night was May 12, 2015. We now await economic data reporting how successful it was.
Parliament has risen so we are in for a few quiet weeks.
Sadly, while Mr Abbott focusses on the Grocery Retailing Code Of Conduct (see Insiders on ABC1 this week), we are seeing a range of Global Financial Issues coming from Europe and China which the Grattan Institute and The Australia Instituteare suggesting - among other things - might cause considerable economic pain.

Update July 16, 2015.

Anyone who thinks the issues in Greece and China are resolved is smoking something I want more of. The Chinese have lost it and Greece has been so severely raped and pillaged that a return round of issues are inevitable (They are broke and someone in power needs to admit it!) - mark my words!
Concern about the Budget would seem to be growing. See here:
Jul 11, 2015

The government's $14.2 billion budget fantasy to sell an election

While the government is looking for any distraction it can find from the economy, it is banking on unlegislated budget cuts hidden beyond the next election.
Treasurer Joe Hockey confers with Prime Minister Tony Abbott.

Prime Minister Tony Abbott calls it a “very clear commitment”. Richard Denniss, chief economist of progressive think tank The Australia Institute, calls it an “outrageous lie”.
Whatever you call it, it represents a big loss for people who can ill afford it.
We’re talking about Abbott’s oft-repeated recent assertion that there would be “no adverse changes in superannuation under this government in this parliament”.
Denniss says, quite correctly, that Abbott in fact promised quite the opposite before the 2013 election: that he would make adverse changes to superannuation. “What’s more,” Denniss says, “he passed them.”
Denniss is referring to a worthy initiative called the Low Income Superannuation Contribution scheme, under which lowly paid workers – those earning less than $37,000 – currently have their super contributions modestly supplemented by up to $500 a year.
Here is some other of the recent other news and analysis.

General Budget Issues.

Tony Abbott’s 2015 Budget sees massive drop in voters worried about their finances

July 5, 2015 6:27pm
John Rolfe News Corp Australia Network
OF ALL the analysis to emerge since the Abbott Government’s second Budget, this is perhaps the most telling politically and economically — new research showing a huge drop in the number of households left feeling worse off.
As the Coalition attempts to belt-tighten without being belted by voters, a national survey reveals a 38 percentage point plunge in the proportion of people concerned they will be in the red as a result of the 2015 Budget, when compared to reactions to the 2014 fiscal blueprint.
The ME Bank Household Financial Comfort Report, based on a poll of 1500 Australians, finds 29 per cent expect the 2015 Budget will have a negative effect on their financial situation over the 12 months, down from 67 per cent after last year’s budget.

New warning: Budget at risk

Exclusive Shane Wright Economics Editor
July 6, 2015, 12:55 am
The Abbott Government’s own independent fiscal cop fears the Federal Budget has been built on rosy assumptions that put the nation at risk of never running a surplus in the next decade.
As the Government that pledged to tackle Australia’s “debt and deficit” crisis prepares this week to set its own $100 billion debt milestone, the Parliamentary Budget Office has warned some of the most important assumptions underpinning Treasurer Joe Hockey’s second Budget are already at risk just a few days into the new financial year.
When Tony Abbott took office in September 2013, the amount of debt the Government had to repay was $273 billion.
Promising to tackle government spending, Mr Abbott recently told Liberal Party faithful that the nation’s prosperity over coming years would not be built on “debt and deficits”.

Budget facing multi-billion dollar hit after record fall in iron ore prices

Date July 10, 2015

Gareth Hutchens

The Abbott government is facing the possibility of a multi-billion dollar hit to budget revenues after the global iron ore price collapsed overnight.
It means Treasurer Joe Hockey's budget repair task could become even tougher, after he endured a $20 billion write-down in forecast tax collections in May.
The global iron ore price plummeted to $US44 a tonne this week - the lowest for recent records - with Australia's major iron ore producers exporting the commodity in record volumes despite weak global demand for it.
The precipitous fall in the price of iron ore has added to a sense of panic in global markets, with China's stock market in seeming freefall and Greece's banking system seizing up after its government defaulted on a multi-billion euro loan from the International Monetary Fund last week.

Federal politicians spend $500,000 on Australian flags - but Tony Abbott does not buy one

Date July 9, 2015

Kate Aubusson

Federal politicians spent over half a million dollars on Australian flags in the second half of 2014, according to parliamentary records.
If the quantity of flags were a reliable indicator of patriotism, Liberal MP John Alexander and his Bennelong electorate would be awash with national pride, topping the flag spending tally on $17,949, according to the Australian Financial Review.
Bob Katter is the second most fair-dinkum MP with a flag spend of $13,320 and National MP Bruce Scott comes in third on $12,236.
"I'm utterly ashamed of myself that I was number two. I have a lot of work to do," Mr Katter said.
The $502,000 spend on flags coincided with the national terrorism alert level rising to high over IS threats, high-profile terrorist raids in Brisbane and Sydney and the Lindt Cafe siege in Martin Place.

Health Budget Issues.

Federal health budget review: ” There is a failure to realise that health is central to the well-being and wealth of individuals and nations”

Michelle Hughes | Jul 08, 2015 12:02PM | EMAIL | PRINT
Many thanks to Dr Lesley Russell for this insightful analysis of the federal health budget.
Dr Russell writes:
Every year since 2007 I have done a detailed analysis of the health provisions in the federal budget.  I do this in the light of current and past strategies, policies, programs and funding and support my work, where possible, by data drawn from Medicare, the Pharmaceutical Benefits Scheme, reports and published papers.
It’s become an increasingly difficult task and, as was the case last year, this year’s analysis has been delayed as I have spent endless hours trying to sort out what is going on. The budget papers are even more impenetrable than those from 2014-15, provisions in the Budget have already changed as the Abbott Government struggles to sell its policies, and new announcements have been made in the weeks since the Budget was released.
The impacts of the 2015-16 budget must be assessed in light of the previous Budget, which casts a long shadow.  Australians’ health and wellbeing depends not just on their ability to access quality and affordable healthcare services when they need them, but on a range of other services, of which education, employment, social justice and welfare supports are the most important.

Health insurers fly solo in talks

Sarah-Jane Tasker

Australia’s private insurers, set to start negotiations on next year’s premium increases, are concerned about the process under its new regulator, with warnings it could become politicised.
The new regime under the Australian Prudential Regulation Authority faces a key test, with private health insurers losing an advocate that represented their annual premium increase submissions to the health minister.
The Private Health Insurance Administration Council has been dissolved and the financial regulator will now supervise the sector. But APRA has said it will not take on the role of representing companies in annual premium increase talks.
PHIAC’s role, which was only introduced a few years ago after complaints from both sides about the process, was to assess the first round of submissions from insurers and provide advice to the minister. PHIAC would take applications from each fund and test the figures against their own financial models — actuarial calculations similar to what each fund would do, from an actuarial sense — and use that position of knowledge to query any discrepancies.
  • Jul 10 2015 at 12:15 AM
  • Updated Jul 10 2015 at 5:23 AM

Medibank Private washes hands of Calvary's dying

Strong-arm tactics by Medibank Private to reduce its hospital costs may push dying patients and the chronically ill on to the struggling public system.
Medibank, which was privatised by the Abbott government in a $5.7 billion float last November, said last week it had dumped Catholic operator Calvary Health Care as a supplier after contract renegotiations broke down
Calvary chief executive Mark Doran said Medibank was acting unreasonably. His concerns have been supported by four other private hospital executives, who have also questioned Medibank's tactics and demands. 
"They are dictating and are not prepared to negotiate on any reasonable set of terms," Mr Doran told Fairfax Media.
About every two years insurers and hospitals embark on negotiations over what the insurer should pay for care, such as a night in a rehabilitation bed or a hip replacement.

Medicare Locals (RIP).

Medicare Locals and the future of primary health care research

Jennifer Doggett | Jul 05, 2015 11:50PM | EMAIL | PRINT
The 30th of June saw the end of Medicare Locals, the primary health care bodies that evolved from Divisions of General Practice and were recommended by the Rudd Government’s National Primary Healthcare Strategy.
After only four years (at most) of operation, these organisations had yet to reach their potential but many had made promising gains in the areas of consumer engagement, population health planning and chronic disease management.  
Hopefully these gains will not be lost in the transition to the next evolution of primary health care meta-organisations, Primary Health Networks.
In a statement this week, Walter Kmet, CEO of one of the new Primary Health Networks, WentWest, made it clear that his organisation will be building on its previous achievements as a Medicare Local, “As an organisation committed to improving the health of western Sydney, we will continue to work with General Practitioners, Allied Health Professionals, our long-standing partners and numerous other not for profit organisations to fulfil our responsibilities and focus on the common health priorities”.

Pharmacy Issues.

New revenue streams, wider role key now 6CPA is underway: Quilty

With the Sixth Community Pharmacy Agreement signed and now operating, now’s the time to consider how to enhance the role of community pharmacies in the wider health system, Guild executive director David Quilty writes in this week’s edition of Forefront.

“The safe dispensing of medicines will continue to be the core business of pharmacies,” he writes.
“The 6CPA ensures that dispensing remuneration is maintained in real terms for the next five years and is already delivering tangible benefits to Australia’s 5,450 community pharmacies.
“However, the 6CPA outcome does not change the fact that pharmacies must secure new revenue streams in order to grow and prosper, and enable their highly trained staff to practice at the top of their profession to the maximum benefit of their patients.”

Choice report exposes ideologically-driven claims against pharmacy: Guild

The Pharmacy Guild has welcomed a report from Choice released today titled ‘A better deal on drugs’ comparing pharmacies and supermarkets on price, range and value in relation to a number of common over-the-counter medicine categories.

The report found that pharmacies are very price competitive and “equalled or beat supermarkets on price when comparing brand for brand.”
Guild Executive Director, David Quilty says that the report found that pharmacies were not only as cheap if not cheaper than supermarkets in many medicine categories, but they also provided a wider range of brands and pack sizes.
“Importantly, the report found that pharmacies, unlike supermarkets, provided customers with health related advice and assistance, when they were purchasing these medicines,” Quilty says.
“This report exposes the ideologically-driven claims that community pharmacy is not competitive.
It is going to be very interesting to see what happens to the polls and consumer confidence over the next 2-3 months. With the pollies away in their electorates things should be stable for a while. Last week, probably because of issues and Greece, China etc. it just fell of a cliff!

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