Thursday, July 09, 2015

2016 Budget - Seems To Have Been Accepted But Not Delivering Much Stimulus!

July 9 Edition
Budget Night was May 12, 2015.
Parliament has risen so we are in for a few quiet weeks.
Sadly for the Government the consensus figures for our economic health are not as good as they might hope:

BusinessDay Economic Survey: Real estate the only bright spot for the economy

Date July 4, 2015
First, the good news. None of the BusinessDay forecasting panel expects a recession this coming year. But Australia's terms of trade are set to dive further and wage growth will be so low it won't match inflation, sending real wages backwards.
It’ll be 2014-15 all over again: another year of drifting, without much of an economic or budget recovery. 
Unemployment will be contained, house prices will climb for at least another year, business investment will slide much further, the dollar will slip, there will be a chance of another cut in interest rates, and the budget deficit will almost certainly be worse than forecast. It'll be 2014-15 all over again: another year of drifting, without much of an economic or budget recovery.
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It is also interesting that we have not seen a kick up in retail sales and business activity as measured by the CBA since the budget. The tradies seem have kept their hands in their pockets so far.
Here is some other of the recent other news and analysis.

General Budget Issues.

TPP - what we don't know may hurt us

Date June 30, 2015 - 12:37AM

Peter Martin

Economics Editor, The Age

The TPP explained

Peter Martin explains what the Trans-Pacific Partnership is and why you should be concerned.
The US Senate has given the green light, and Australia is set to buckle. If you don't yet know what TPP stands for, listen up. Our government could sign it within weeks. Only then will we really know what's in it.
That's right. As with the China-Australia Free Trade Agreement and the Japan-Australia Free Trade Agreement, the content of the Trans-Pacific Partnership will remain secret right up until the day it is signed. Afterwards, our parliament will be able to look at it, but not to change it. Alice is inside the looking glass.
It's hard to know that you need to write a submission if you don't know what's being proposed. 
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30 Jun 2015 - 11:50am

Budget cuts at right pace to grow: Hockey

Treasurer Joe Hockey does not believe he is cutting the budget too fast as to hurt economic growth.
Source:
AAP
30 Jun 2015 - 11:46 AM  UPDATED YESTERDAY 11:50 AM
Treasurer Joe Hockey has dismissed suggestions from some banks that he is cutting the budget so quickly that it's causing a drag on economic growth.
"People can look at the tea leaves, every bank seems to have six different opinions on that, but from our perspective ... I would say we are moving at about the right speed," Mr Hockey told Bloomberg television on Tuesday while in Hong Kong.
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Grattan Institute hits out at Treasury and federal budgets based on 'hope'

Date July 1, 2015

Gareth Hutchens

Australia's most respected public policy institute has savaged the Abbott government's approach to crafting federal budgets, warning Australia's economic future is being based on "hope" instead of real policy reform.
The Grattan Institute is calling on the federal government to seriously consider increasing tax collections if it wants to repair the budget and prevent future generations from being saddled with too much debt. 
It also wants Treasury to change the way it produces its economic forecasts, saying Treasury's erroneous modelling has led successive federal governments —  Labor and Liberal — to believe that budget surpluses are just on the horizon, with dire consequences for voters.
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The $129 billion budget black hole

  • July 03, 2015 8:31AM
  • Frank Chung - News Corp.

Income crackdown

SUCCESSIVE federal governments since 2008 have squandered $129 billion in borrowed cash on welfare handouts and other ongoing spending, doing serious damage to Australia’s growth prospects, a new report argues.
Between 2008-09 and 2013-14, the federal government borrowed $266 billion, only $137.3 billion of which was spent on infrastructure projects, according to the analysis by free-market think tank the Institute of Public Affairs.
The rest was directed to current consumption and transfers, including interest payments on borrowing. Those interest payments are increasingly crowding out more efficient public spending, and already represent the seventh largest expense item in the budget.
In 2015-16, the government will spend $15.561 billion on interest payments — 14 times the annual budget of the ABC.
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Health Budget Issues.

1 Jul 2015 - 7:59pm

Govt freeze forces rise in GP fees

Pensioners and other patients are being forced to pay more to see a doctor because of the federal government's freeze on Medicare rebates.
Source:
AAP
1 Jul 2015 - 7:10 PM  UPDATED 1 HOUR AGO
Patients are bearing the brunt of the federal government's freeze on Medicare rebates as some medical practices bump up their fees.
Doctors say they are being forced to pass on costs to patients, including pensioners, because of the government's indexation freeze on the Medicare rebate that it pays when patients visit a GP.
They say they have received hardly any increase in rebates since 2012 and with a new four-year freeze on all MBS rebates beginning on Wednesday and set to remain until 2018, they are struggling to cope with rising costs.
Brett McPherson, practice manager at the Melbourne-based Collins Street Medical Centre, said he had no choice but to raise fees.
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  • Jul 2 2015 at 2:02 PM
  • Updated Jul 2 2015 at 3:40 PM

Medibank Private's action on hospitals reveals its weaknesses

Medibank Private's stunning axing of hospital operator Calvary Health Care is a classic negotiating tactic, which will do little to control the insurer's ballooning medical claim costs and may even backfire.
The market-leading insurer, which the federal government sold in a $5.7 billion float last November that was the biggest listing since Telstra, said on Wednesday night that contract negotiations with Calvary had broken down.
The relationship between private hospitals and insurers is fraught. One would not exist without the other, but they have divergent goals.
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GPs passing on cost of rebate freeze

2nd Jul 2015
SOME GPs say they are being forced to pass on costs, confirming doctors’ warnings that patients would bear the brunt of the federal government’s freeze on Medicare rebates.
Patient Medicare rebates were not indexed yesterday, the start of the new financial year, following a previous freeze on patient rebates for GP consultations in 2013.
The RACGP and AMA have warned the freeze is a co-payment by stealth which will leave GPs with no option but to pass on the additional cost to patients.
Doctors say that with virtually no increase in rebates since 2012, and with the new four-year freeze on all MBS rebates beginning yesterday, they are struggling to cope with rising costs.
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Health sector 'omni-shambles': report

30th Jun 2015
THE health sector, still reeling from the impact of harsh health measures introduced in the 2014 budget, continues to suffer under a $1.3 billion MBS rebate freeze.
It faces uncertainty over hundreds of millions of dollars in cuts meted out in the 2015 budget, according to an interim report of the Senate select committee on health chaired by Labor senator Deborah O’Neill, which has recently held 19 public hearings across Australia.
The report characterises the Abbott government’s health policy as an “omni-shambles”. Testimony from around the country reveals particular concerns about a cut of nearly $600 million to 14 of 16 flexible funds that underpin diverse programs ranging from chronic disease prevention to drug recovery and workforce measures.
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Federal Budget impacts on Indigenous issues – new report

Jennifer Doggett | Jul 03, 2015 8:01PM | EMAIL | PRINT
The health gap between Indigenous and non-Indigenous Australians is Australia’s most urgent and serious health challenge.  Despite this fact, Indigenous issues barely rated a mention in the Federal Government’s most recent Budget.  This, however, does not mean that Indigenous communities are unaffected by the Budget measures.  In fact there are a broad range of impacts from the Budget which will affect Indigenous Australians but these can be difficult to determine as the relevant Budget measures are spread across a range of programs in different portfolios and often not clearly articulated in the Budget papers.
As mentioned in Croakey last week, Dr Lesley M Russell, Adjunct Assoc Professor, Menzies Centre for Health Policy University of Sydney, has trawled through hundreds of pages of Budget papers and scoured the balance sheets to extract and analyse the relevant data. Her analysis shows that in fact the level of funding for Indigenous issues is going backwards, despite the fact that the inequality gap between Indigenous and non-Indigenous Australians is widening.  This disturbing finding is compounded by the fact that Indigenous self-determination and representation is being undermined in a number of ways, including through the threatened forced closures of remote communities in Western Australia.
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Medicare Locals (RIP).

Abbott government's rebadged Medicare Locals tied up in legal stoush over name

Date July 1, 2015 - 7:42AM

Heath Aston, political correspondent

The private sector Primary Health Care Ltd is trying to stop the government from using the name 'Primary Health Network'.
It's the type of bureaucratic blunder that could provide the script for an episode of Rob Sitch's satire Utopia or Yes Minister.
With just hours until the doors are due to open for the first time, staff at the Abbott government's new Primary Health Networks – the rebadged Medicare Locals – have been instructed to postpone the printing of any stationery and prevent the display of new signage.
The 11th-hour setback relates to a dispute with private sector operator Primary Health Care Ltd, which is suing the government in the Federal Court to protect the use of its name.
The company also has a trademark application over "Private Health Network".
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Department of Health tells providers they can't use 'primary health network' in any marketing, branding

Exclusive by medical reporter Sophie Scott
Posted yesterday at 7:06pm
The launch of the Federal Government's new primary health networks has been thrown into confusion with the new organisations told they cannot use the name "primary health network" in any marketing or branding without independent legal advice.
The ABC has obtained copy of an email sent from the Department of Health to all CEOs of primary health networks (PHNs), saying:
"As you may be aware, there is currently litigation in the Federal Court by Primary Health Care Ltd in relation to its trademark applications to register the terms 'Primary Health Care' and 'Primary Health Care Limited'.
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Pharmacy Issues.

Medical report is good medicine

The first Report from the Review of Medicines and Medical Devices Regulation has highlighted the need for more timely access to new medicines and medical devices and less red tape.
The Panel, led by Lloyd Sansom, assisted by Will Delaat and John Horvath, identified opportunities to enhance the regulatory frameworks for medicines and medical devices with a view to positioning the Australian National Regulatory Authority (NRA) for the future.
The second Report, addressing the regulatory frameworks for complementary medicines and the advertising of therapeutic goods, is due to be delivered to the Minister for Health in the coming months.
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Biosimilar dispensing backlash goes international

30 June, 2015 Meg Pigram  
Former Pharmacy Guild president Kos Sclavos has criticised a backlash against the PBAC decision to allow pharmacists to dispense biosimiliar alternatives to expensive biologic medicines.
He says big pharma and other detractors should embrace the opportunity for pharmacists to make clinical decisions.
But Medicines Australia, some doctors, consumer groups and a US biologics safety group have criticised the move which comes into effect on 1 July as part of the PBS reform package.
Australia would be breaking “widely held international standards by becoming the first and only nation to allow pharmacy-level substitution of biologic medicines without physician involvement”, says the US Alliance for Safe Biologic Medicines.
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Pharmaceutical firms accused of inflating costs to reduce taxes

Mark Coultan

Leo Shanahan

The Australian Taxation Office has vowed to clamp down on tax avoidance by multinational pharmaceutical companies after their chief executives were accused of artificially inflating the costs of drugs in order to minimise the tax they paid in Australia.
Most of the executives of nine of Australia’s biggest pharmaceutical companies appeared ­before a Senate committee yesterday, claiming ignorance about the costs of producing drugs in other countries.
Independent senator Nick Xenophon suggested they might be fans of Sergeant Schultz of Hogan’s Heroes fame — “They know nothing, they see nothing.”
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Victoria, ACT and Tasmania fall behind on vaccinations

3 July, 2015 Meg Pigram
Victoria, ACT and Tasmania have are have become the only states and territories in which pharmacists are not allowed to administer the flu vaccination.
This follows a move by NSW to allow pharmacists to administer the shot themselves from Thursday.
So far the Pharmacy Guild has trained 175 pharmacists to administer the vaccine.
 The change is “great news for the pharmacy profession and great news for the public of NSW”, says the state’s PSA Branch Director, Steven Drew.
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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.
Enjoy.
David.

2 comments:

Ben Dudley said...

http://www.themonthly.com.au/issue/2015/july/1435672800/richard-denniss/clowns-and-treasurers

Anonymous said...

The hoped for stimulus will be neutralized by the problems in China, Greece and ECM, combined with contraction of the mining industry, meddling with superannuation and the ripple down effect of more bad news stories around bad behaviour in the financial services sector.