September 15 Edition.
The big issue for this week will, for once not be focussed on just what a mess politics seems to have become.
Now two weeks back and already the 45th Parliament is seeming rather disorganised and messy. I note the Financial Review last weekend gave the PM a D+ grade for his first year! Heavens knows just how we can get sane government from all this.
However it seems globally things seem to have rather come apart with huge falls here and in the US recently. The message seems to be that now eight years since the GFC the Central Banks are losing their potency and that the artificial heights markets have been at might be coming to an end.
My suggestion is to ‘buckle up’ – it might be a wild ride.
This article from last weekend gives the flavour:
- September 10 2016 - 8:53AM
US stocks end two-month snooze with plunge
· Joseph Ciolli
After two months in which even a 50-point move in the Dow Jones Industrial Average was reason for excitement, investors were shaken out of their slumber as central bankers signalled reluctance to extend stimulus and sent US stocks to their worst week since February.
Damage was worst in the final session, when Boston Federal Reserve president Eric Rosengren warned against waiting too long to raise interest rates.
Selling built after European Central Bank president Mario Draghi downplayed the need for more measures to boost growth a day earlier. When it was over, the S&P 500 Index was down 2.3 per cent to 2127.81 on the week, with Friday's plunge wiping out a slight gain over the first three days.
Among the many beacons of complacency that went dark on Friday was a trading range in the S&P 500 that had stood as the tightest ever recorded, a stretch of calm in which no move took the benchmark index above 2190.15 or below 2157.03 for 40 days.
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This is also useful:
- Sep 7 2016 at 9:38 AM
Central banks' era of easy returns is coming to end
by Mohamed El-Erian
Friday's US jobs report, coupled with developments in Japan and what is likely to be an unchanged ECB policy stance this week, raise questions as to whether central banks will remain such a great blessing for investors.
With increasing concerns about the longer-term impact of their unconventional involvement in financial markets - which, so far, has delivered to investors the dream team of high returns, low volatility and profitable correlations - financial valuations are now likely to be influenced a lot more by economic and corporate fundamentals, as well as some rather crowded portfolio positioning.
For years, students of markets were warned, "Don't fight the Fed". After all, the central bank controlled the liquidity "punch bowl" - the more it served, the more supportive the environment for asset values.
But this was never meant to be an open-ended party. The punch bowl was to be withdrawn when officials saw threats to the maintenance of low and stable inflation.
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Thursday Update:
Good to see we have had some super sanity emerge and some extra Budget savings agreed. Maybe the country can move forward - we will wait and see!
Thursday Update:
Good to see we have had some super sanity emerge and some extra Budget savings agreed. Maybe the country can move forward - we will wait and see!
Here are a few other things I have noticed.
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Budget Issues.
- September 5 2016 - 5:37AM
Super tax fairness is the key to budget repair
Ross Gittins
Scott Morrison can use scare tactics in seeking greater support for his task of getting the budget back on track, but he'll do better by spreading the needed sacrifice more fairly. That means holding the line on his superannuation reforms against his own backbenchers.
Morrison isn't alone in fearing that our completion of 25 years of continuous economic growth has left many of us complacent, unaware of the tough measures we needed to put up with to make this success possible and, equally, the further discomfort needed to keep it going.
There's truth to this, no doubt. But I doubt that scare tactics are the way to puncture that complacency and win wider acceptance that we all need to take some pain for the greater good.
Morrison's claim in his latest speech that, given a host of dire but unstated assumptions, federal gross debt could reach a trillion dollars in a decade, is an easy way to get a headline but is unlikely to make anyone more amenable to unpopular budget measures.
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'Splintered Senate' a challenge: Moody's
September 5, 20162:33pm
A major global credit ratings agency has again expressed concerns about Australia's ability to repair the budget in the face of a "splintered Senate".
However, Moody's Investors Service says Australia's triple-A rating remains supported by sustained robust growth, even as the economy adjusts to dampened revenue due to lower commodity prices.
Figures on Wednesday are expected to show annual economic growth remaining above a solid three per cent pace, even though over the June quarter expansion is expected to be much slower than in the first three months of the year.
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COMMENT
- September 8 2016 - 5:34AM
It's kind of a miracle: 25 years of economic growth
Ross Gittins
One way to be a loser is not to have the wit to realise when you are winning. Being a winner but not knowing it isn't all that gratifying.
That's why it's worth making a fuss about the news that, with the economy's growth of 0.5 per cent during the three months to June, we have now completed 25 years of continuous economic growth.
It's official: 25 years of economic growth
The National Accounts are out and economic growth continues, despite the deficit plaguing the federal budget.
This is the first time we have been able to say that since regular measurement of gross domestic product began at the end of the 1950s.
No other developed country can make the same claim over the past 25 years. Indeed, few if any have experienced such a protracted period of continuous growth at any time.
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- September 9 2016 - 3:34AM
Public must accept 'tough choices' say top economic stewards John Fraser and Glenn Stevens
Latika Bourke
London: Two of the top stewards of Australia's economy have issued an unusually blunt warning to Parliament and voters, saying they must accept the need for "tough policy decisions" to start repairing the budget now.
In a speech in London, Treasury Secretary John Fraser said government spending must be cut, while in an interview to mark his looming retirement from the Reserve Bank, Governor Glenn Stevens urged Australians to take part in helping the political system craft a way forward to fix the budget.
Mr Fraser said Australia's debt was growing rapidly and had to be curbed, but stressed to business leaders that the economy was fundamentally strong with this week's GDP figures confirming 26 years of uninterrupted growth.
He conceded Australia's strong economic performance and relatively smooth transfer from the mining investment boom to a services-based economy had made it more difficult to convince voters of the need to pay down the debt.
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- September 10 2016 - 9:41AM
Deutsche Bank sees world economy, investment reversing for the next 35 years
Global economic growth will be so slow over the next 35 years that policymakers will struggle to meet the significant economic, social and political challenges that results, Deutsche Bank said on Friday.
And unlike the past 35 years, inflation and bond yields will rise over the next three decades, said the report, which was cited by bond traders on Friday as a reason for a sell-off in fixed income markets that pushed bond yields up to levels not seen for months. Stock markets around the world also fell.
The detailed annual study from one of the world's biggest banks argued that all the conditions underlying the previous 35 years of rising global growth and prosperity are fading.
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COMMENT
- September 10 2016
The economic numbers game - it's not as bad as you might think
Ross Gittins
Just
about everyone who doesn't look at the numbers - which is most people -
is convinced the economy is "slowing", suggesting disaster may be just
around the corner.
How
do they know it's slowing? Because almost all the economic news is bad.
They don't notice that most of the bad news comes from somewhere else -
Britain, Europe, Japan, China, even the US.
And
people who warn that the economy is slowing always sound wiser and more
knowing than people who say it seems to be going OK and will probably
stay OK.
Of
course, if you do look at the figures you find little sign the economy
is slowing. Indeed, the national accounts we got from the Bureau of
Statistics this week show that real gross domestic product grew by 3.3
per cent over the year to June.
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Health Budget Issues.
- September 5 2016 - 12:15AM
Too many doctors juggling public and private hospital work, researcher says
Julia Medew
Too many Australian doctors are splitting their time between public and private hospitals, undermining efficiency and potentially contributing to delays for patients, a health system expert says.
A study of eight groups of specialists found most of them worked in both the public and private systems each week, and most spent the majority of their time with private patients.
Eye surgeons spent 87 per cent of their time in the private system, followed by orthopaedic surgeons, ear nose and throat specialists and rheumatologists (joint specialists), who all spent more than 70 per cent of their week with private patients.
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Routine GP tasks blow out Medicare benefits
The Turnbull government has been told health professionals question the value of largely routine or administrative consultations.
- The Australian
- 12:00AM September 6, 2016
Sean Parnell
Doctors having to write sick certificates and repeat scripts, as well as provide patients with routine test results, have emerged as priority areas for reform of the $21 billion Medicare Benefits Schedule.
The Turnbull government has been told health professionals question the value of largely routine or administrative consultations, raising the potential for funding and workforce changes to make better use of limited resources.
An interim report from a government-commissioned MBS review has also highlighted unnecessary diagnostic imaging as a concern, with a quarter of all patients consulted claiming to have been sent off for tests and scans they felt they didn’t need. The increase in referrals has caused Medicare expenditure to surge in recent years.
Health Minister Sussan Ley commissioned the review after the Coalition ditched the concept of a Medicare co-payment. The review, headed by former Sydney Medical School dean Bruce Robinson, is examining the evidence base and usage of about 5700 MBS items.
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Aged-care funding cuts could slug taxpayers
- The Australian
- 12:00AM September 7, 2016
Sarah-Jane Tasker
Kylar Loussikian
Taxpayers would be forced to foot the bill to return residents’ aged-care deposits if a provider fell into financial distress — an increasing concern as funding cuts hit the sector.
Australia’s aged-care operators have been forced to update funding models after a series of changes to how the federal government funds the sector.
The three listed Australian aged-care companies lost almost $400 million of their value earlier this week, with their shares savaged when details about the fees they can charge were released into a market already jittery around cuts to aged-care funding.
It isn’t just listed providers concerned about the cuts, with one industry insider suggesting about a third of operators were not making a profit, meaning funding pressure could lead to casualties.
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Revamped body to review medical devices list
- The Australian
- 12:00AM September 8, 2016
Sarah-Jane Tasker
Federal Health Minister Sussan Ley is set to announce today a new committee to review the cost of medical devices, a move that could lead to lower health insurance premiums next year.
Health insurers have argued that about $800 million could be saved by reforming the Prostheses List, which the government uses to regulate how much health funds pay for prosthetics, human tissues and device implants.
Ms Ley said the decision to revamp the Prostheses List Advisory Committee was a necessary first step of the broader private-health reform agenda, designed to ensure consumers received better value and choice from their policies.
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Aged-care stocks Estia, Japara, Regis fall
- The Australian
- 12:00AM September 10, 2016
Sarah-Jane Tasker
Hundreds of millions of dollars were wiped from the value of listed aged-care stocks this week as investors started to question whether these companies — which generate profits from taxpayer funds — really have a place on the stockmarket.
The three listed aged-care vehicles, Estia Health, Japara Healthcare and Regis Healthcare, were once the favourite among investors as standout growth stocks as they aggressively expanded on the back of taxpayer funding and a growing pool of deposits lodged by aged-care residents.
But Canberra, which funds around 70 per cent of aged-care operators’ revenue, has moved to reduce what it pays providers as the Turnbull government looks to shift the balance between the level of government and resident payments. The shake-up, prompted by the desire to rein in a recent surge in spending across the sector, has seen almost $2 billion cut from future funding.
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- September 10 2016 - 2:17PM
Dentists in last-ditch bid to save child subsidy from Malcolm Turnbull's cuts
Adam Gartrell
Gerard Grenville heard about the Child Dental Benefits Schedule through – no pun intended – word of mouth.
As a father of five children aged 8 to 16 – Max, Henry, Eve, Leo and Archie – he saves thousands of dollars a year through the federal government voucher scheme that focuses on prevention and early intervention.
But his family is in the minority: only a third of eligible children have accessed the scheme since it started in early 2014.
That's part of the reason the Turnbull government wants to scrap it: Health Minister Sussan Ley calls it "under-utilised".
But Grenville reckons it is under-utilised because it is under-promoted.
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Health Insurance Issues.
- Chanticleer
- Updated Sep 7 2016 at 12:58 AM
Can insurers heal Australia's sick healthcare system?
The $20 billion private health insurance industry is overdue for a check-up.
Anyone who has taken a look at their private health cover lately will be shocked at the creeping cost of premiums, which are well outpacing inflation.
Hundreds of thousands of households are now opting out or downgrading their private health insurance plans, partly because they cannot see any value for the hundreds of dollars they shell out a month. For many households, they simply cannot afford it.
This trend has alarmed the private health industry which, contrary to public perception, does not always benefit if premiums become so high that they start losing customers.
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Superannuation Issues.
- September 4 2016 - 9:00PM
Super will be Malcolm Turnbull's key test: Grattan Institute
Peter Martin
The Grattan Institute has identified superannuation as the most important test of Malcolm Turnbull's leadership, saying if he can't get the changes he took to the election through Parliament, it will mean Australia's system of government is "irredeemably flawed".
It says super should be the Prime Minister's most important political test, "not because our major political parties are at loggerheads, but because they largely agree".
"If we cannot get reform in this situation, then there is little hope for either budget repair or wider economic reform," it says in a paper on the super reforms released on Monday.
In the May budget the government lowered the annual cap on employer-sponsored superannuation contributions to $25,000, introduced a $500,000 lifetime cap on the personal post-tax contributions mainly made by high-income earners, and imposed a $1.6 million cap on the super funds whose earnings would be tax-free in retirement.
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Tony Abbott does wealthy’s bidding on super
at 12:18 am on September 5, 2016
The Abbotalypse came back with a bang late last week, with The Australian revealing that former Prime Minister Tony Abbott stormed the party room on Thursday demanding that superannuation reform lay-off the wealthy, whilst demanding that the low-income superannuation offset be abandoned:
In a “tetchy” private meeting with a group of Liberal and Nationals MPs in Parliament House on Thursday, Mr Abbott confronted Mr Morrison and Minister for Revenue Kelly O’Dwyer about their proposed $6 billion super package. He argued the government was wrong to offer super concessions to low-income earners.
He also argued for the government to abandon its proposed cap on post-tax contributions…
MPs at the meeting said they were “aghast” that Mr Abbott had proposed hitting low-income earners — particularly working mothers — to benefit the wealthy, whom the former leader accused Mr Morrison and Ms O’Dwyer of abandoning.
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- September 6 2016 - 12:15AM
'High income tax minimisers': Treasurer Scott Morrison takes on his own side over super
Peter Martin
Treasurer Scott Morrison has ramped up the war on dissidents in his own party over superannuation, distributing a briefing paper portraying those hurt by his budget measures as high-income tax minimisers.
The briefing paper sent to Coalition MPs says the proposed $1.6 million cap on the amount of super savings whose earnings would be untaxed in retirement is roughly twice the pension assets test, meaning those affected didn't need a tax break to get them off welfare.
At $430,000, the average super balance of retirees 65 years and older was only a quarter of the $1.6 million threshold. Even among the top 10 per cent of retirees, the average was $1.36 billion, comfortably below the threshold which would climb each year with inflation. Only the richest 1 per cent of fund members would be above it.
The planned $500,000 lifetime cap on personal post-tax contributions would limit the use of super for "estate planning and tax minimisation". Rather than being retrospective, it imposed "no penalty for past actions". Limiting it to new contributions in order to avoid charges of retrospectivity would have discriminated against future savers.
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Pass super laws to give savers certainty, says BT group chief
- The Australian
- 12:00AM September 6, 2016
Glenda Korporaal
The head of Westpac’s BT wealth management arm, Brad Cooper, has urged the federal parliament to get on with passing the proposed super legislation to allow people to have certainty about saving for their retirement.
Mr Cooper, chief executive of the BT Financial Group, confirmed the recent comments of other industry leaders that people were holding off putting extra money into super because of uncertainty about proposed changes, even when they were within the new lower contribution caps.
“There are people who have stopped putting in extra voluntary contributions into super because they don’t have confidence in the rules,” he told The Australian.
“Many are frustrated about the uncertainty that there is now.
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- Sep 5 2016 at 5:50 PM
Scott Morrison charts a course for super changes
Treasurer Scott Morrison has been conducting an internal sales blitz to convince Coalition colleagues to get behind the government's superannuation changes.
Mr Morrison is understood to have given at least eight briefings around the country during the past month, using a series of detailed charts to prove that only the wealthiest superannuants will be affected.
Paring back super tax concessions is at the forefront of the government's budget repair agenda and Mr Morrison's capability as chief economic manager will be damaged if the changes do not make it through parliament.
He has been hammering home the idea that even after the changes, the super system remains very generous.
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Scott Morrison ‘to launch super law in stages’
- The Australian
- 12:00AM September 7, 2016
Phillip Hudson
Scott Morrison has warned controversial superannuation changes are vital to the “budget repair job” and vowed to press ahead because it is crucial to wind back tax concessions becoming “unaffordable over time”.
But the Treasurer insists the changes will target only people who have already made “a very handy use of existing concessions” to build a solid nest egg. The $6 billion superannuation changes will boost the budget bottom line by $2.9bn over the forward estimates.
Mr Morrison said talks were continuing with backbenchers about contentious issues such as a proposed $1.6 million transfer balance cap, $500,000 lifetime non-concessional cap and $25,000 concessional caps, which he said would affect only 4 per cent of superannuants. While that discussion continues, he will release draft legislation today for other aspects of the super plan for discussion.
This includes moves to boost the savings of 3.1 million low-income earners, including 1.9 million women, ensuring the tax on their super contributions is not higher than that on their take-home pay.
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Scott Morrison’s super changes welcomed by industry
- The Australian
- 12:00AM September 8, 2016
Glenda Korporaal
Scott Morrison has steered clear of the more controversial superannuation issues in the release of draft measures from the sweeping retirement savings reforms first proposed in the May budget.
Even so, the superannuation industry has welcomed details of the first tranche of the federal government’s package of superannuation changes, saying they go some way to restoring confidence in the system.
The government yesterday confirmed its intention to go ahead with a new Low Income Superannuation Tax Offset (LISTO) which will replace the current low income tax contribution, which was due to be abolished from June next year.
The scheme will allow some 3.1 million low income earners benefits of up to $500 a year to help compensate them for the fact that the superannuation contribution tax rate of 15 per cent is above their actual tax rate. The government has also confirmed it plans to go ahead with legislation to allow people to claim a tax deduction for personal superannuation concessions, regardless of their employment arrangements.
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First steps with Scott Morrison’s new superannuation rules
- The Australian
- 12:00AM September 10, 2016
Glenda Korporaal
The controversy over the proposed superannuation changes announced in the May budget, which are yet to be passed into law, has left many people uncertain about what the final outcome will be.
As the government debates the specifics internally, Scott Morrison is at least trying to get things moving by announcing draft legislation on some of the less controversial elements of the package.
The government will progressively release more details of the draft legislation over coming weeks, including some of the bigger ticket items, such as:
• The proposed $1.6 million cap on money that can go into a tax free super account.
• A cut in the caps on concessional contributions to $25,000 a year.
• A $500,000 cap on post-tax contributions dated back to July 12, 2007.
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I look forward to comments on all this!
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David.
1 comment:
David, what you have posted here relating over servicing s very important for several reasons.
1. The most important point here (although only lightly touched upon) is the role that clinicians have a significant role in the overuse, underuse and inappropriate use of health care resources. This was documented by Lucien Leape in Five Years After To Err Is Human. What Have We Learned? JAMA. 2005;293:2384-2390 when he describes the threats to the quality of care.
2. The extent to which this occurs is demonstrated in data from a similar health system, the Canadian economy. Levin in 2005 documented extent of the degree of overuse in Canada. He found that in just 5% of chronic kidney disease patients there was 25% of duplicate testing. The $ value on this 5% of patients was $4.44mCAN for 2005 with each test costing just $4.40. For the total Canadian health system the total was in excess of $1bCAN @$4.40/test.
3. Another set of Canadian data shows that prescription in community pharmacies rose from 272 million (1999) to 483 million (2009). Reviewing health care resources from 1999-2009 the number of CT scanners rose from 198 to 465 and MRI scanners rose from 19 to 266 (Federal investments). This led to a 58% increase in CT scans and a 100% in MRIs performed when compared to 2003. Source: www.healthcouncilcanada.ca [Heather Dawson Director, Analysis and Reporting, Health Council of Canada Healthcare Policy Vol.6 No.4, 2011]
4. Recent studies evaluating the use of CTPA for PE found that there is much overdiagnosis occurring with significant morbidity and mortality from unnecessary anticoagulant therapy.
5. In the UK from 1998/1999 McConnell documented the following in EDs.
87% Unnecessary out-of-hours tests
80% Diagnostic uncertainty
79% Medico-legal protection *
66% Avoid leaving work for colleagues
71% Prevent criticism from staff (especially Consultants)
76% Lessen anxiety and reduce stress levels
71% Agreed attempts should be made to reduce unnecessary testing
McConnell AA, Bowie P. Health Bull (Edinb). 2002 Jan;60(1):40-3. Unnecessary out-of-hours biochemistry investigations--a subjective view of necessity.
6. A final point is it has been known for decades that resource utilisation when “practicing under the fear of litigation or diagnostic uncertainty” the costs of health care expand and the quality of care decreases. Without individualized data, physicians assume that they are performing at tolerable rates. 2000 Project HOPE—People-to-People Health Foundation, Inc. Health Affairs, March/April 2000 Medicare Pharmacy Coverage: Ensuring Safety Before Funding by Lee N. Newcomer
N Engl J Med. 1975 Jul 31;293(5):229-34. Therapeutic decision making: a cost-benefit analysis. Pauker SG, Kassirer JP.
Johns RJ, Blum BI. The use of clinical information systems to control cost as well as to improve care. Trans Am Clin Climatol Assoc. 1979;90:140-52.
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