December 17 Edition
Well, we have had the Innovation Statement and an indeterminate COAG Meeting, MYEFO out Tuesday and the US Federal Reserve raising interest rates earlier today. So far markets seem to be happy!
Additionally there are risks around the oil price, the junk bond market and emerging markets at present so it will be interesting to see how we go in the run up to Christmas.
Hang in as it might be rocky!
Here is some other of the recent other news and analysis.
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General Budget Issues.
Scott Morrison's department is urging him to tackle workplace relations reform
Date December 5, 2015
Adam Gartrell
National Political Correspondent
Treasury is urging Scott Morrison to embark on major workplace relations reform, pointing to a report that recommends cuts to penalty rates as an opportunity to build the case for change.
The department's "incoming government brief" to the new federal Treasurer, released under Freedom of Information laws but heavily redacted, paints a sombre picture of the Australian economy.
The document tells Mr Morrison, who took over from Joe Hockey after September's leadership coup, he comes to the portfolio "with a still uncertain international economy and the domestic economy in a difficult transition away from the mining investment boom".
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Time to get serious about tackling Budget woes
December 6, 2015 12:00am
Sunday Tasmanian
THE Turnbull Government needs to demonstrate much greater zeal in its attempts to harness the groundswell of voters wanting budget reform.
The Australian economy continues to make a healthy transition from a resource-based export economy in which the prices of key mineral exports continue to weaken.
A growing services industry sector continues to slowly replace the output of the resources export sector of the economy.
GDP growth amounting to 2.5 per cent for the year ended September 2016 was pounced upon by Treasurer Scott Morrison as a vital sign of the resilience of the economy and that it is making the transition more rapidly than expected.
The issue that differs from recent Labor governments and the Abbott-Hockey era is that all of those governments announced target dates for the return to a budget surplus.
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Growth won't fix budget: Costello
December 7, 2015 1:00am
Growth won't fix budget: Costello
Former Liberal treasurer Peter Costello says last week's economic growth figures were good, but not good enough to fix the budget.
The national accounts showed the economy grew by 0.9 per cent in the September quarter for an annual rate of 2.5 per cent, a marked improvement on the previous three months.
But Mr Costello says it needs to grow above three per cent to get unemployment down and the budget back into some kind of balance.
"We have to really kick-start this economy and it's going to take considerable reform," Mr Costello told Network Ten on Sunday.
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Peter van Onselen: Honesty best for Federal budget
December 8, 2015 3:00am
Perth Now
Economic transition will take time: Morrison
THE GDP growth numbers announced by Treasurer Scott Morrison this week were stronger than expected, but they still only add up to an annualised rate of 2.5 per cent.
To set that in context, the out years in the budget estimate put growth at closer to 3.5 per cent year on year.
It is highly unlikely that’s going to happen, given the low growth environment Australia and the world is now operating in.
The variation between actual growth numbers and what the budget keeps incorrectly predicting is one of the reasons our politicians haven’t been able to return the budget to surplus.
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Government unveils $1.1b innovation agenda
Package includes research funding, startup initiatives
The federal government has unveiled its ‘National Innovation and Science Agenda’ with a range of investments in the Australian research sector and reforms designed to boost startups.
Initiatives covered by the agenda total $1.1 billion, the government said.
The government said it wants to boost research commercialisation and increase Australian startups’ access to venture capital.
The package includes a range of changes to promote the startup sector, including a 20 per cent tax offset on investments for early stage businesses and a 10-year exemption on capital gains tax (as long as investments are held for three years).
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Innovation statement: what you need to know about Malcolm Turnbull's plan
Date December 7, 2015 - 6:14PM
Matthew Knott
Communications and education correspondent
- Free to fail in Malcolm Turnbull's new $1.1 billion innovation plan
- Mark Kenny: Turnbull positions himself as the evangelist of change
What you need to know about the newly released innovation statement:
The slogan: 'Welcome to the Ideas Boom'
The mining boom is so 2010; the ideas boom is where it's at. The slogan apparently played well in focus groups, so expect to hear more of it over coming weeks.
The spend: $1.1 billion over four years
It's cash being splashed everywhere you look, with no nasty cuts to be seen. At least not yet. Treasurer Scott Morrison can deal with the growing budget deficit later this month in the mid-year budget update.
CSIRO: In from the cold
The science community was fuming when the Abbott government cut $111 million over four years from the CSIRO in its 2014 budget. Now the CSIRO is back in favour. The government is creating a new $200 million CSIRO Innovation Fund to support investments in spin-off and start-up companies. The CSIRO will also get an extra $20 million to help commercialise research outcomes.
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New budget cuts will fund Malcolm Turnbull's innovation package: Scott Morrison
Date December 7, 2015 - 7:48PM
Heath Aston
Political reporter
'Release your inner revolutionary'
When Innovation Minister Christopher Pyne delivered his ideas for creating a national innovation agenda, he wasn't expecting this response from PM Malcolm Turnbull. (Poor quality audio)
Prime Minister Malcolm Turnbull's pet project, a $1 billion innovation announcement, will be funded by spending cuts in other areas to be announced later this month.
Treasurer Scott Morrison said the government's razor gang, the Expenditure Review Committee, had spent the past three months finding new cuts to offset the innovation statement as well as new imposts from the reversal of Labor's bank deposits tax, changes to fuel excise and the expected $600 million cost of resettling 12,000 Syrian refugees.
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12:24am December 9, 2015
COAG to look at radical proposal to lift GST to 15 percent
December 09, 2015: Families look almost certain to be paying more for everyday goods, with leaked documents showing a massive hike to the GST is very much on the table.
The GST could be raised dramatically in a move to generate an extra $45 billion a year, according to leaked documents obtained by Fairfax Media.
Increasing the GST will be one of the items discussed by Prime Minister Malcolm Turnbull and state and territory leaders at this Friday's Council of Australian Governments (COAG) meeting, the Sydney Morning Herald reports.
The Reform of the Federation paper contains federal treasury modelling requested by the states in July that offers eight tax reform options – six related to the GST and two Medicare Levy proposals.
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'Delusions' setting Australia up for a big budget shock: Ross Garnaut
Date December 8, 2015 - 1:51PM
Nassim Khadem
Deputy Editor BusinessDay
Leading economist Ross Garnaut says failure on the part of Treasury and government meant Australians should prepare for some 'shocking realism' about the state of the budget and has cautioned against 'easy' answers for reform like tax cuts for big business.
But Prime Minister Malcolm Turnbull has a chance to come clean about the true state of the federal budget, he said
Realism about the budget will be shocking to most Australians.
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Commodity price slide adds billions to budget deficit
- The Australian
- December 9, 2015 12:00AM
David Uren
Tumbling commodity prices that show no signs of bottoming have rattled the stockmarket and are adding billions of dollars to the budget deficit to be updated by Scott Morrison next week.
Iron ore and oil prices dropped through the $US40 mark yesterday, driving shares in the nation’s mining and energy companies to new lows. Shares in Australia’s biggest and most widely held mining company, BHP Billiton, plunged a further 5 per cent to just $17.50, its lowest price in a decade, to take its losses in the past month to 20 per cent.
Oil prices, which fell 5 per cent yesterday and have more than halved in little over a year, could now be in free-fall following the decision by the OPEC group of nations on Friday to remove all production quotas, essentially abandoning any effort to support the market.
Iron ore prices have dropped for each of the last seven trading sessions, with yesterday’s six-year low of $US38.06 marking a 12 per cent fall in just over a week.
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Morrison threatens to walk away from GST deal, saying he won't prop up state budgets
Date December 10, 2015 - 9:00AM
James Massola and Peter Martin
Treasurer Scott Morrison has threatened to kill off any reform of the GST, warning state counterparts that if they want to use the extra revenue simply to prop up their budgets, he is not interested in doing a deal.
The ultimatum comes as a second leak of documents prepared for the meeting between state leaders and Prime Minister Malcolm Turnbull on Friday reveals the states are facing combined deficits of $50 billion by 2030 unless they rein in their budgets.
Ahead of Thursday's treasurers meeting, which will be addressed by Commonwealth treasury boss John Fraser, Mr Morrison said he would consider changing the GST only if the money raised was used to cut income tax and company tax rather than passed to the states.
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COAG: income tax share for states under GST plan
- The Australian
- December 11, 2015 12:00AM
David Crowe
Sid Maher
States would be given a dedicated share of all income tax revenue under a sweeping reform plan that could also lead to an increase in the GST, on the fundamental condition that it does not increase the overall tax burden.
Scott Morrison and state treasurers yesterday threw more weight behind the reform ambitions in a bid to agree on a “tax mix switch” aimed at making room for a cut to personal income tax rates and a boost to growth.
The progress on tax comes as premiers move today to urge Malcolm Turnbull to fill a looming gap in health funding, making it a central part of their demands at a meeting with the Prime Minister in Sydney.
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11 Dec 2015 - 4:28pm
What leaders agreed at COAG
State and territory leaders have agreed on a number of issues at the Council of Australian Governments meeting, held in Sydney.
Source:
AAP
11 Dec 2015 - 4:24 PM UPDATED YESTERDAY 4:28 PM
WHAT LEADERS AGREED AT COAG
* ECONOMY: Develop a new competition reform agreement for consideration in 2016, investigate commonwealth and state tax and revenue sharing options.
* HEALTH: To take action on health reform at their next meeting in March, with interim funding arrangements if a new hospital funding scheme cannot be in place by July 1, 2017.
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COAG: No consensus on health, education funding but leaders agree a solution is 'necessary'
By political reporter Stephanie Anderson
State and territory leaders are no closer to addressing the $80 billion gap in federal funding for health and education, as tax reform options remain open to investigation.
Premiers and chief ministers are facing a March deadline for agreement on tax reform, which they are hoping can address funding shortfalls in the health system.
Queensland Premier Annastacia Palaszczuk described it as the nation's "number one priority" following discussions with Prime Minister Malcolm Turnbull in Sydney today.
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Leaders sound alarm on budget as economists predict billions wiped from revenue
Date December 12, 2015 - 6:27AM
Gareth Hutchens, Matt Wade, Mark Kenny
Australia's federal and state leaders have issued a stark warning of growing budget pressures across all levels of government amid calls for the federal government to reset voter expectations about the health of Australia's public finances.
Some of Australia's top economists are predicting that the federal government's mid-year budget update on Tuesday will show the collapse in iron ore prices and record-low wages growth will wipe billions from Commonwealth revenue. Three different analyses in the past fortnight show the federal budget deficit will be between $33 billion and $39 billion worse than expected over the next four years.
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Sweatbands, lycra and fluoro: why we need tax reform to prevent a return of the 1980s
Date December 11, 2015
Jessica Irvine
Senior writer
Former Treasury secretary Martin Parkinson believes a measure of reform is required to ensure national living standards grow over the next decade.
Sweat bands, Lycra and fluoro. The 1980s was a time of serious crimes against fashion.
It was also a time of serious crimes against the tax man.
When the late Kerry Packer told a federal committee hearing in 1991 that if "anybody in this country" didn't minimise their tax, they needed their "heads read", he was embodying the spirit of an age.
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Health Budget Issues.
Luye Medical coughs up $938m in Healthe Care purchase
- The Australian
- December 7, 2015 12:00AM
Bridget Carter
Australia’s third-largest private hospital group, Healthe Care Australia, has been acquired by Chinese hospital operator Luye Medical Group.
The business was sold by private equity operator Archer Capital for $938 million, as revealed exclusively online yesterday by The Australian.
Healthe Care operates a portfolio of 17 hospital sites with more than 1800 beds, in excess of 50 operating theatres and 4500 employees.
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7 Dec 2015 - 4:50pm
Govt plan to turn research into medicine
The Turnbull government will set up a $250 million fund to translate medical research into treatments.
Source: AAP
7 Dec 2015 - 4:18 PM
Life-saving treatments could be available sooner after the federal government pledged $250 million to turn research into medicine.
The independent Biomedical Translation Fund, to be established in 2016 as part of the federal government's new innovation agenda, will invest in biomedical businesses.
It aims to bridge the "valley of death" between biomedical research and getting a product ready for use by patients - a lengthy and costly process few investors are willing to take a gamble on.
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Health reforms could save hospitals $1.5bn
- The Australian
- December 9, 2015 12:00AM
Sid Maher
National leaders will consider a dramatic health reform plan that could save up to $1.5 billion a year by cutting the number of avoidable hospital admissions to pay for increased federal funding to state health budgets.
Victorian Premier Daniel Andrews will put a plan to the Council of Australian Governments under which the states will develop co-ordinated patient care plans to reduce preventable admissions to hospitals in return for Malcolm Turnbull lifting post-2017 growth in hospital funding from 4.3 per cent to 7 per cent.
The plan will involve finding ways to improve communication between the various branches of the health system, such as commonwealth-funded GPs and allied health professionals and state-funded public hospitals.
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Plan to raise $15 billion by doubling Medicare levy to be discussed at COAG
December 8, 2015 10:24pm
Herald Sun
A PLAN to raise $15 billion in extra taxes by doubling the Medicare levy to 4 per cent is one of several major taxation reform proposals to be discussed by the nation’s political leaders on Friday.
But the proposal, modelled by Treasury at the request of the Queensland and NSW governments, is a discussion point and not a firm proposal.
Documents obtained by the Herald Sun show eight options for reform modelled by Treasury will be handed to state and territory leaders when they meet Prime Minister Malcolm Turnbull in Sydney.
These include expanding the GST to 15 per cent on its present base (raising $32.5 billion), increasing it to 12.5 per cent and including food and non-alcohol drinks (raising $25 billion) and increasing the GST to 15 per cent and including food, non-alcoholic drinks, water and sewerage (raising $45 billion annually).
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10 emerging healthcare trends for 2016
December 8, 2015 | By Julie Bird
Bedless hospitals. Mega hospital and insurer mergers. A growing consumer appetite for virtual health interactions.
Those are among PwC's predictions for top healthcare industry trends for the new year in a report released today.
"2016 will be a year of firsts for players within healthcare as the industry adapts to the main forces driving the new health economy: The rise of consumerism, the focus on value, downward pressure on costs, technological innovation and the impact of new entrants," PwC said in an announcement.
The upcoming year will also be marked by how well the healthcare industry handles greater demand with rising costs and trends like industry consolidation, according to Kelly Barnes, PwC's US health industries leader. "It will be businesses that prioritize addressing consumer needs and increasing value that should succeed," Barnes said.
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Federal health funding plan will cost lives, Victorian Premier Daniel Andrews says
By Sabra Lane and Julia Holman
The Federal Government's plan to cut indexation for hospital funding will "cost lives", Victorian Premier Daniel Andrews says.
Speaking to the ABC's 7.30 program, Mr Andrews said the Commonwealth's plan to cut billions from the state's health funding, announced in the 2014 federal budget, meant that patients would suffer and receive inadequate care.
Mr Andrews made the comments as he prepared to meet Prime Minister Malcolm Turnbull and other state and territory leaders in Sydney on Friday for the Council of Australian Governments (COAG) leaders meeting.
There has been considerable attention ahead of this meeting about a possible change to the Goods and Services Tax (GST).
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Vaccinations could have saved thousands from hospitalisation
Date December 10, 2015 - 1:00AM
Craig Butt
More than 30,000 people nationwide were hospitalised last year for conditions that could have been prevented if they were vaccinated, a new report has found.
The majority of admissions were for diseases including whooping cough, chickenpox and severe childhood diarrhoea.
The report, by the National Health Performance Authority, also found 12,000 people over the age of two months were hospitalised for vaccine-preventable pneumonia and influenza.
Paediatrician and immunisation expert Dr Nicholas Wood cautioned against reading too much into the figures without knowing if they included people who had not received their full course of vaccinations before being hospitalised, or if they included strains of diseases not covered by vaccines.
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8 facts on government health spending
10 December, 2015
- Federal government health funding per person averaged $2725 in 2013/14 - $653 more in real terms than 2003/04 but just $30 more than 2012/13.
- Federal government funding for hospitals was $892 per person - $132 higher than in 2003/04 and $1 higher than 2012/13.
- The ACT received the biggest increase in federal hospital funding over the decade at 5.3% per year.
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COAG: Health funding schism remains unhealed
- The Australian
- December 12, 2015 12:00AM
Sid Maher
The fight over health funding between the commonwealth and the states started last year when Joe Hockey scaled back generous increases for hospitals agreed to in the final year of the Gillard Labor government but not funded beyond 2017.
Then treasurer Wayne Swan’s last budget in 2013 locked into the forward estimates increases in hospital funding from $14 billion in 2013 to $18.96bn in 2016-17, embedding funding increases of between 8 per cent and 9 per cent.
The Swan budget boosted state hospital funding by $16.4bn over the life of the agreement from 2014-15 to 2019-20, compared with the previous funding formula.
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Superannuation Issues.
Retirement living standards aren't so bad. You don't need much super
Date December 8, 2015 - 12:00AM
Peter Martin
Economics Editor, The Age
Retirees’ cost of living is not as outrageously high as the industry would have us believe.
The Association of Superannuation Funds estimate of how much a 65-year-old couple need to live is absurdly high.
The closer we get to taxing superannuation properly the more we are going to hear about how important it is and how much we are going need to live on in retirement. Don't believe it. It's almost all propaganda, almost all paid for with money taken out of our superannuation accounts.
The latest scary figure, produced by the Association of Superannuation Funds, is $58,784 per year. That's how much it says a 65-year-old couple needs to live on in order to enjoy a "comfortable" retirement.
At the risk of stating the obvious, after tax and rent or mortgage payments most working Australians couldn’t afford such comfort.
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Health Insurance Issues.
Sussan Ley playing political games: Bupa boss Dwayne Crombie
- The Australian
- December 7, 2015 12:00AM
Sarah-Jane Tasker
Bupa’s Australian health insurance boss, Dwayne Crombie, has accused federal Health Minister Sussan Ley of playing “political games” following her threat to scrutinise insurers’ financial statements before agreeing to premium increases.
Amid an ongoing insurance review, the minister has said she would not sign off on massive premium increases for health funds that had significant cash reserves or were rewarding shareholders with large dividends.
Dr Crombie, who pointed out that 90c in every health insurance premium dollar went into paying health providers, said Ms Ley did not have much “political courage” to have a real debate on the issues in the sector.
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Sickest private patients may be pushed into public system by Medibank deal
Date December 7, 2015 - 6:09PM
Julia Medew
Health Editor
Smokers and diabetics may find themselves getting pushed out of private hospitals that have done controversial performance-based deals with Medibank, doctors say.
In a cost cutting drive, Australia's dominant health insurer has signed agreements with 120 private hospitals that force them to cover the cost of patients suffering potentially preventable problems such as falls and post surgical infections.
The contracts, now signed by 70 per cent of Australia's private hospitals, mean Medibank will not pay for the cost of members being readmitted with an unexpected or preventable condition within 28 days of discharge from hospital.
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Bupa calls for iSelect to face tighter regulation
Date December 8, 2015 - 7:18PM
Tim Binsted
Reporter
ISelect is facing calls to disclose commercially sensitive information such as commission rates, raising the prospect that an increased regulatory burden will be added to the comparison website's woes.
In the midst of a wide-ranging federal review into private health insurance, Bupa health insurance managing director Dwayne Crombie told Fairfax Media there needed to be tighter regulation of comparison websites.
"Web comparators like iSelect, they've got no regulation at all at the moment and they are probably doing a third of the sales in the [private health insurance] industry," Dr Crombie said.
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Health funds lobby government to increase excess on policies by 300 per cent
December 10, 2015 12:00am
News Corp Australia Network
EXCLUSIVE
Greedy private health funds have lobbied the government for permission to increase the excess on insurance policies by a whopping 300 per cent.
The maximum excess — the amount fund members have to pay when they use a hospital before their cover kicks in — is currently $500 for a single and $1000 for a family.
Insurers claim these levels were set in 1986 and health inflation should have seen the level rise from $500 to $2000 and $1000 to $4000.
They argue raising the excess could help reduce premiums, however it also means health fund members who pay an excess will have to pay more out of their own pocket when they use their health cover.
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Government’s secret plan to dump private health insurance rebate
December 13, 2015 12:00am
The Sunday Telegraph
THE private health insurance rebate would be scrapped with payments for treatment made directly to hospitals under secret plans to overhaul the medical system, revealed in leaked COAG papers.
Rebates would be paid directly to hospitals regardless of whether people opt to be treated as public or private patients under changes outlined in the Council of Australian Governments (COAG) papers.
Health Minister Sussan Ley confirmed the voucher style scheme is “on the table’’ with other options for the first time.
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Pharmacy Issues.
Fear forcing HIV-positive locals to boycott local chemists
Sherele Moody | 7th Dec 2015 6:40 AM
FEAR of stigma and discrimination is forcing Northern Rivers residents with a serious illness to boycott their local chemists.
Health experts told APN Newsdesk many HIV-positive locals refused to get their medications from the region's chemists because they were scared of being outed as having the disease.
They are also hiding their HIV status from local doctors, nurses and other medical professionals for the same reason.
In July, the Federal Government made it possible for HIV-positive people to collect their antiretroviral CORRECT therapy medications from community pharmacies.
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Health is also clearly under review as far as its budget is concerned with still a few reviews underway and some changes in key strategic directions. Lots to keep up with here! Enjoy.
David.
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