August 18 Edition.
-----
A fortnight where we have all sorts of macro-economic news dominating little Australia with the central banks in the US, UK and Japan all adjusting policy of leaving things as they are for now.
Interest rates in Australia have dropped again and overseas we see ongoing issues with other economies. Zerohedge reports that the global money supply has risen to $89 Trillion from only 10% of that just 15 years ago.
The major themes this week have been the impotence of central banks and the need for Governments to actually start making some sensible decisions.
The most important issue that was flagged this week was the issue of social inequality and its impact on the nation’s finances and public confidence in Government.
COMMENT
· Ross Gittins
The single best explanation for the rise of Mr Crazy, Donald Trump, is that over the four years to 2013, the real income of the top 1 per cent of American households rose by 17.4 per cent, while that of the bottom 99 per cent rose by 0.7 per cent, giving the top few 85 per cent of the growth.
Another country where the gap between high and low incomes has widened markedly is Britain. And what crazy thing have the Brit voters just gone and done? You remember.
I think it's a case of what physiotherapists call "referred pain" - what you feel in some part of your body is actually coming from a problem somewhere else.
Many voters are conscious that their income doesn't seem to be growing and know something's badly wrong. But they don't join the dots the way an economist would.
-----
Here are a few other things I have noticed.
General Budget Issues.
ANALYSIS
Peter Martin
Apparent strong house price growth in Sydney and Melbourne is unlikely to dissuade the Reserve Bank from cutting interest rates on Tuesday, in part because it's not what it seems.
The CoreLogic home price index jumped 3.1 per cent in Sydney and 1.6 per cent in Melbourne after the Reserve Bank cut rates in May, and then a further 1.2 per cent and 0.8 per cent in June sparking fears that the Bank had ignited a new house price boom.
The jumps were inconsistent with other data showing that sales volumes and credit growth were weak.
Now Reserve Bank watchers believe they've cracked the puzzle. CoreLogic changed the way it calculated its indexes in May, adding to the apparent increases in cities whose prices had a history of rising quickly.
-----
Peter Martin
Apartment building is set to to collapse 50 per cent over the next four years according to forecaster BIS Shrapnel, with only Sydney set to buck the trend.
Its Building in Australia 2016-2031 report says national dwelling commencements have already peaked and will begin to decline in the second half of this year.
"After recording strong growth during the past four years, we estimate that total dwelling starts reached an improbable 220,100 in 2015-16, an all-time high," said BIS Shrapnel associate director Kim Hawtrey.
"From this level, national activity is forecast to begin trending down over the following three years, with the high-flying apartments sector leading the way down."
-----
AAP – August 9 2016
Scott Morrison has stepped up the pressure to pass budget savings, saying every measure blocked by the new parliament will make it harder for families.
The federal treasurer is doing the rounds with new crossbench senators in a bid to get $40 billion in savings and revenue measures through parliament and return to surplus by mid-2021.
He has met with the Nick Xenophon Team and is due to hold talks with One Nation leader Pauline Hanson and her advisers in coming days.
"We need to all understand this - every time we don't pass a savings measure, that makes it harder and harder to retain our triple A credit rating, to ensure we don't see the further impacts of that flow-on to bank rates and other impacts on households," Mr Morrison told 2GB radio on Monday.
-----
- The Australian
- 12:00AM August 13, 2016
Outgoing Reserve Bank governor Glenn Stevens has called for a more “nuanced” debate about public sector debt in his last official speech this week, saying targeted investment in infrastructure by government could address the ineffectiveness of monetary policy.
At a time when monetary policy’s impact is waning, and speculation about the use of quantitative easing is emerging, Stevens wants to promote a third way that elevates the role of public sector investment as a driver of economic growth.
He tackled the popular debate about government debt by making three very important points that should prompt our political leaders to think more creatively about options for sustaining growth. First, he noted that households were three times more indebted than the public sector as a share of GDP, 125 per cent versus 40 per cent in gross terms, and this explained why cutting interest rates to record lows had become less effective in boosting growth.
-----
- The Australian
- 12:00AM August 13, 2016
The shocking fiscal performance of the Australian government in 2013-14 is now coming home to roost.
As the world wakes up to the failure of monetary policy to stimulate economic growth and inflation, and attention moves to the need for fiscal policy to take over, Australia is in no position to do it — because of what happened in that year.
In 2012-13, the last year of the Labor government, the deficit increased from $18.8 billion to $48.8bn.
That was then compounded by the failure of the new Coalition government to do enough to repair it in 2014 — not because prime minister Tony Abbott and treasurer Joe Hockey didn’t want to, but because they sprung the solution on an unsuspecting public and the parliament and mucked up the politics so badly that they were both sacked.
-----
Mark Kenny
Remember when they started telling you about "good" cholesterol? It took a bit of getting used to.
Dire warnings about stroke, heart attack and peripheral artery disease meant the switch to embracing a new form of cholesterol was barely credible.
Such had been the take-out from "cholesterol equals an early death," that some people had immediately given away butter and eggs altogether.
Could debt be the same? Could there be good debt as well as the more common bad variety?
Does debt have to be like plaque building up in our economic arteries, lumbering future generations with unconscionable liabilities, and narrowing their opportunities?
There's no doubt Australians had been led to this simple conclusion and if any missed it, Tony Abbott came along to make it explicit: Debt and deficit equalled disaster.
-----
Health Budget Issues.
Rania Spooner
Australians are paying five times more than Britons for medical care, causing many people with chronic health conditions to forgo treatment because it's too expensive.
Nearly half of Australians living with depression, anxiety and other mental health conditions have skipped medication or therapy because of cost, according to a study by James Cook University and the NSW Bureau of Health Information.
As had more than 30 per cent of those with asthma and emphysema, 27 per cent of those with diabetes, 25 per cent with arthritis and 20 per cent of cancer patients, according to the study recently published in the Australian Journal of Primary Health.
Asthmatic Stephanie Horan, 27, was clinically dead for 12 minutes after she stopped her medication for social reasons and suffered a near-catastrophic asthma attack as a teenager.
-----
More than one-fifth of patients with chronic conditions say they skip care because of the costs, Australian research has found.
As patients deal with the financial impact of the Medicare rebate freeze and looming increases to PBS fees, the struggle of those needing regular care has been revealed in a survey published in the Australian Journal of Primary Health.
One-quarter of patients with arthritis said they avoided care because of costs, a figure rising to 27% for those with diabetes and 44% for those with depression, anxiety or other mental health conditions.
The figures are based on a survey of 1988 adults by the Commonwealth Fund in 2013.
-----
Kate Aubusson
They may be the most common drug in medicine cabinets across the country, but statins have been bumped from the top spot in the latest rankings of Australia's most costly drugs.
The cholesterol-lowering drugs used to help prevent heart attacks and stroke were the most prescribed and dispensed pharmaceutical in Australia, PBS data revealed.
But the sheer volume of prescriptions for the relatively cheap medicine paled in comparison with the dizzying price tag of Adalimumab; an anti-inflammatory biologic used to treat autoimmune conditions including rheumatoid arthritis and Crohn's disease.
-----
Pharmacists will give diabetes health checks under a trial program being rolled out by the Federal Government.
In a major reform speech to pharmacist leaders last week, Health Minister Sussan Ley (pictured) said three separate pilot trials were being developed with $50 million in funding under the Sixth Community Pharmacy Agreement.
The first was diabetes health checks, the second was a trial designed to improve medication management for Indigenous patients and the third would look at improving patients' medication management after discharge from hospital.
-----
Belinda Merhab - AAP on August 1, 2016, 1:01 am
It's hailed as a turning point for the health system but doctors say it's being stymied by a lack of money from the federal government.
Prime Minister Malcolm Turnbull unveiled Health Care Homes earlier this year to keep Australians with chronic disease out of hospital, labelling it one of the biggest reforms in the history of the health system.
The government is spending $21 million on a trial of the program next year, involving 65,000 patients at 200 medical practices.
But health experts and consumer advocates have teamed up to call for the program to be expanded and accelerated, insisting the existing system is disconnected.
-----
Sarah-Jane Tasker
Australia’s largest private health insurer, Medibank, has warned that “market failure” in the nation’s healthcare system is fuelling an increase in costs, making some surgical procedures more expensive here than in the US and Europe.
“The increase in prices cannot be explained by increasing complexity of procedures alone when the cost of a procedure in Australia is more expensive than in other comparable countries,” Andrew Wilson, Medibank’s executive general manager, told The Australian.
Mr Wilson pointed to a study which found cataract surgery in Australia in 2013 was more expensive than in the US and twice as costly as in Europe.
-----
- The Australian
- 12:00AM August 9, 2016
Overseas-trained medical practitioners would no longer be granted visas to work in Australia, under a contentious proposal from the Health Department that heralds the end of the nation’s shortage of locally trained doctors.
With thousands of foreign doctors currently in the system, and an increasing number of local graduates, the department has secretly argued that Australian-trained doctors will struggle to find jobs if the immigration pathways are not closed.
The department wants 41 health roles — including general practitioners, resident medical officers, surgeons and anaesthetists — to be removed from the Skilled Occupations List in the hope that Australian doctors will fill areas of need, particularly in remote areas. While its recommendations were not accepted by the Turnbull government in visa changes made before the election, they will be revisited within months and Health Minister Sussan Ley has foreshadowed broader workforce reforms next year.
-----
- The Australian
- 12:00AM August 10, 2016
Sean Parnell
The Turnbull government is split over the Health Department’s call for foreign-trained medical professionals to no longer be fast-tracked into jobs that could be filled by Australian graduates.
The Australian yesterday revealed the department had recommended the commonwealth “remove all medical occupations” from the Skilled Occupation List for 2016-17, nominating 41 jobs including GPs, resident medical officers and anaesthetists.
The move is an acknowledgment by policymakers that local graduates may struggle to find training places and jobs if the immigration pathway remains open.
Yet 28 of the 41 occupations have not even been flagged by immigration officials for future review.
-----
Health Insurance Issues.
- The Australian
- 12:00AM August 9, 2016
Sarah-Jane Tasker
A leading US chief medical officer has warned Australian doctors it is only a matter of time before health insurers accelerate the “never events” for which they refuse to pay.
Peter Edelstein, chief medical officer at the world’s largest science information company, Elsevier, said Australian doctors should avoid what their counterparts in the US did, which he said was bury their heads in the sand and hope the issue went away.
“If that happens, then the insurers make all the decisions about what gets paid for what, which is not the best for patients,” he said.
“Physicians have a fantasy they are in control, but when we’re talking about this much money, they are not in control any more.
-----
Medical Home Issues.
1 August 2016
IT'S hailed as a turning point for the health system but doctors say it's being stymied by a lack of money from the federal government.
Prime Minister Malcolm Turnbull unveiled Health Care Homes earlier this year to keep Australians with chronic disease out of hospital, labelling it one of the biggest reforms in the history of the health system.
The government is spending $21 million on a trial of the program next year, involving 65,000 patients at 200 medical practices.
-----
Pharmacy Issues.
PSA16’s panel discussion on improving pharmacists’ remuneration acknowledged widespread concerns in the industry
Employees are worried about pharmacist wages, said PSA CEO Dr Lance Emerson in opening the panel discussion at the conference on Saturday 30 July.
“It’s the single largest issue facing the profession in community pharmacy,” he said.
“We hear your concerns about low income and wages. The PSA is actively working with others to look at that, but we’re also looking at diversifying with evidence-based roles.”
-----
Superannuation Issues.
- The Australian
- 10:48AM August 9, 2016
Robert Gottliebsen
The government needs help on superannuation. It is now clear it rushed into badly thought out superannuation changes on advice from Treasury.
Treasury for years has deliberately issued false statements about the cost of superannuation to the Australian nation and, unfortunately, has no credibility in giving advice on this subject. (Treasury’s hoax is tormenting the super debate, March 9 2015)
A more experienced Treasurer would have known this but Scott Morrison got caught. It’s now up to the Senate to get both Morrison and the country out of the mess that has been created. At this stage, I am not going to tell the Senate what to do in detail but let’s set up a few guidelines.
-----
- The Australian
- 12:00AM August 9, 2016
Judith Sloan
The superannuation package Scott Morrison announced in this year’s budget is turning into a complete shemozzle.
The Liberal Party’s membership is in revolt — that is, among those members who haven’t already resigned.
There is a widespread sense of betrayal. There are also some specific criticisms about the package: it’s over-engineered, unworkable, unfair and the figures are wrong.
The real reason Malcolm Turnbull knocked back Kevin Rudd had nothing to do with Rudd’s poor interpersonal skills but rather Turnbull’s realisation that his party base would go into complete meltdown had he supported the former prime minister’s candidacy for the position of UN secretary-general.
-----
Mike Taylor writes that the major parties need to understand that notwithstanding the delicate make-up of the Senate, it is time to end the uncertainty around superannuation.'
It may have been only at the margin, but three months after tabling the Federal Budget in the Parliament, and a few days after confirmation of the make-up of the Senate, the Treasurer, Scott Morrison, began signalling the Government's preparedness to concede changes to its Budget super settings.
Speaking on commercial radio early last week, Morrison said while the proposed $500,000 lifetime cap on top-up contributions out of post-tax income would remain, he was prepared to write in exemptions for people experiencing "major life events".
In doing so, he cited pay-out as a result of an accident or similar as monies which would be exempted from the $500,000 cap.
-----
I look forward to comments on all this!
-----
David.
