December 8 Edition.
Well we are rid of the politicians in Canberra until next year after a mad rush to the finishing line with backpackers and so called ‘budget repair’ causing much heat but not much in the way of progress and light. We are also seeing what feels like worsening paralysis of Government decision making combined with apparent incapacity to get anything done.
Worse that that we also seem to have a steadily worsening economy with risks that growth has slowed to a snail’s pace.
In the rest of the world we are also seeing populist political parties and movements making all sorts of inroads into stability, global trade and it is becoming increasingly clear things may not end all that well
One can hope for a better 2017 – but it is not seeming to be all that likely.
This brilliant article rather sets the scene:
https://www.ft.com/content/18faf0a6-b251-11e6-a37c-f4a01f1b0fa1
Goodbye to Barack Obama’s world
It is the failing of liberal technocrats to think reason governs how people act
It was tempting to believe history had turned a page. Alas, posterity may see Barack Obama’s 2008 election as a detour from the path an angry America took after 9/11. Mr Obama called for an open dialogue with the Muslim world. Donald Trump and his team have all but declared war on Islam. Mr Obama believed there was no problem that could not be salved by reason. Mr Trump has opposite instincts. Whatever precise form Mr Trump’s administration takes, we know this: Mr Obama’s legacy will be purged. In many cases all it will take is the stroke of Mr Trump’s pen.
The Obama erasure will go far deeper than undoing domestic laws, or foreign deals. Mr Trump will repeal Obamacare, or alter it beyond recognition. He will “keep an open mind” about whether to pull the US out of the Paris agreement on climate change and quite probably blow up the US-Iran nuclear deal. These acts would undo Mr Obama’s most visible achievements. Less obvious ones, such as the ban on Arctic drilling and enhanced interrogation techniques and the intention of closing Guantánamo Bay (never completed) will also be consigned to the dustbin. It will be as if Mr Obama was never here.
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As they say ‘Dorothy, I don’t think we are in Kansas anymore’.
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Here are a few other things I have noticed.
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National Budget Issues.
Smarter thinking on the budget deficit is long overdue
Ross Gittins
Published: November 28, 2016 - 12:15AM
Published: November 28, 2016 - 12:15AM
I've been writing about the federal budget for 43 years, for 28 of which it's been in deficit.
So almost two-thirds of my career has been spent backing up Treasury in its recurring campaigns to pressure the government of the day to get the budget back to surplus. Sorry, not any more.
I've resigned from the budget-hectoring brigade because it finally dawned on me there has to be a better way.
You can put the blame for our eternally recurring budget crisis on the voters, whose demand for increased government spending is limitless, but whose willingness to countenance either spending cuts or tax increases is tiny.
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This is why middle class white men are so angry
Jessica Irvine
Published: November 28, 2016 - 12:05AM
Published: November 28, 2016 - 12:05AM
It is the basic yardstick of progress that every generation should live better than the last.
For women, there has clearly never been a better time to be alive. We vote, we work, we have control of our bodies and fertility. While there's much progress still to be had, the progression of women in society has generally been an upward trajectory.
Daughters today enjoy greater income earning capacity and status in the workforce than their mothers.
In every decade since the 1970s, the share of women working in the lowest fifth of skilled jobs has shrunk, according to a recent analysis by economists Michael Coelli and Jeff Borland titled Job Polarisation and Earnings Inequality in Australia.
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New Reserve Bank research says election wins make us spend up on cars
Peter Martin
Published: November 28, 2016 - 4:10PM
Published: November 28, 2016 - 4:10PM
Before the election that swept Tony Abbott to power in 2013, his incoming treasurer, Joe Hockey, forecast an explosion of spending as consumers opened up their wallets in celebration of a Coalition win.
As unlikely as it sounded, that's exactly what happened for some voters, even though the official figures didn't show it at the time.
The Reserve Bank has gone back and examined spending by postcode and used it to calculate what happened to spending by the supporters of each side of politics.
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Stand by for a Reserve Bank rate hike, says OECD
Peter Martin
Published: November 29, 2016 - 8:18AM
Published: November 29, 2016 - 8:18AM
The OECD believes the next move in Reserve Bank interest rates will be up, sometime before the end of 2017.
In its review of the Australian economy prepared as part of its Global Economic Outlook, it says the hike will be "appropriate, given likely monetary-policy developments elsewhere, the cyclical development of the domestic economy and the need to unwind tensions from the low-interest environment, notably in the housing market".
The Paris-based organisation consults closely with the Australian Treasury and the Reserve Bank in the preparation of its reports and the Treasury has a permanent representative stationed at its headquarters to provide input to its reports.
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- Updated Nov 28 2016 at 4:20 PM
Coalition caves on 15pc backpacker tax at a cost of $120m
Treasurer Scott Morrison now has to find $120 million in savings over four years after pragmatism prevailed and the government agreed to back One Nation's 15 per cent compromise on the backpacker tax.
"Unfortunately the actions of the Labor Party meant we were in a position to work with the crossbench to get an outcome. It was pretty much close to 80 per cent of something rather than 100 per cent of nothing and this is a government involved in getting outcomes at the end of the day," Mr Morrison said.
Labor, the Greens and One Nation had been supporting Jacqui Lambie's proposal of a 10.5 per cent backpacker tax but The Australian Financial Review revealed last week that One Nation switched to push for a compromise position of a 15 per cent tax after the government's 19 per cent offering was effectively rejected by the Senate last Thursday.
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Iron ore price means short-term budget relief, not repair
- The Australian
- 12:00AM November 29, 2016
Sarah Martin
David Rogers
A bounce in the iron ore price to near two-year highs may deliver a short-term boost to the federal budget, but economists warn the benefit could be short-lived and only offset slower-than-expected wages and employment growth.
As Scott Morrison prepares the mid-year budget update for December 19, iron ore yesterday traded at $US79.20 a tonne, nudging $US80 for only the second time since October 2014.
The May budget forecast an iron ore price of $US55 a tonne, up from a previous estimate of $US39, which Labor had said was an “heroic” assumption.
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The budget deficits that won't go away
November 24, 201611:31am
Whatever successes the Turnbull government enjoys during the final parliamentary sitting week of the year, signs are it will head into Christmas with bigger budget deficits.
Despite a spectacular rise in commodity prices over the past few months and the potential boost to national income, it isn't going to be enough to offset the drag on tax revenue from the slowest wage growth on record and an underperforming jobs market.
Treasurer Scott Morrison will hand down his mid-year budget review on December 19.
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Is this as low as interest rates go?
Clancy Yeates
Published: November 29, 2016 - 6:48PM
Published: November 29, 2016 - 6:48PM
An obscure corner of the financial markets has recently been sending out signals that may point to millions of people eventually paying more on their home loans.
For the first time in two years, investors have started to place (cautious) bets that the next move in official interest rates will be an increase, rather than the cuts we've become accustomed to over the last five years.
It's been quite a backflip. A few months ago these markets were of the view Reserve Bank governor Philip Lowe would probably cut the cash rate this month to just 1.25 per cent. After that didn't happen, there are now narrow odds of an increase next year.
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CITI: Australian budget policy is going out of style
Nov 29, 2016, 8:51 AM
Fiscal splurge is all the rage.
The expected government spending under a Trump-led administration – to fund a huge infrastructure package – sent US stocks to all-time highs last week.
Commodities are rallying everywhere, including one of Australia’s key exports, iron ore, which has hit a 26-month high.
The likely arrival of fiscal easing in many economies has been a course of action seen as sensible by an increasing number of economists and analysts in a low-interest-rate world, where it appears loose monetary policy is failing to generate the growth and levels of inflation it was expected to bear.
Bring on the government spending, they say.
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Malcolm Turnbull's big chance to be the new Menzies and help first home buyers
Peter Martin
Published: December 1, 2016 - 6:50AM
Published: December 1, 2016 - 6:50AM
Malcolm Turnbull made the wrong call defending negative gearing in order to get re-elected. He needs to crawl back slowly. There's no shortage of people on his own side telling him to.
The latest is Jeff Kennett, who was Victorian premier just as negative gearing began to take off at the end of the 1990s. On Wednesday he tweeted: "It is inevitable that the rules affecting negative gearing will change – have a responsible bipartisan discussion in 2017." Victoria's present Treasurer, Tim Pallas, will echo Kennett at a round table of treasurers on Friday.
"It's all very well the feds telling us we need to boost supply, but whenever we do, their negative gearing and capital gains tax rules direct much of it away from first home buyers towards investors," he says he will tell the meeting.
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Big Oil, little tax: Why the fossil fuel giants didn't complain about the resource tax
Elizabeth Knight
Published: December 1, 2016 - 12:15AM
Published: December 1, 2016 - 12:15AM
How can the government know the Petroleum Resource Rent Tax is being rorted by companies? Easy: The petroleum industry isn't complaining about it. Oil and gas companies are not lobbying to have it changed or removed.
Even if you know nothing about taxation, this is usually a fool-proof measure that can be employed to determine if a tax is raising the appropriate amount of revenue.
Remember the Minerals Resource Rent Tax introduced by former Labor prime minister Julia Gillard? No-one in the minerals industry complained about that one either. It was effectively devised by the industry as a replacement to the mining industry Resource Super Profits Tax.
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Finally, our politicians notice the potential multi-billion budget fix sitting off our coast
Heath Aston
Published: November 30, 2016 - 8:18PM
Published: November 30, 2016 - 8:18PM
For all the biffo and bluster over backpackers, you'd think Australia's future hinged on a flip flop-led, campervan-powered economic recovery.
Raiding the purses of people who wear them on a string around their neck is never going to plug the hole in the budget.
The difference to Scott Morrison between a backpacker tax of 15 per cent or 10.5 per cent is $80 million - about 0.02 per cent of the budget.
Chicken feed.
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Forecasters fear weak investment will mean weak or negative GDP growth
Peter Martin
Published: December 2, 2016 - 6:37AM
Published: December 2, 2016 - 6:37AM
A further slide in business investment has economic forecasters pondering the unthinkable: that the Australian economy shrank in the September quarter, and that next week's GDP growth figure will have a minus sign in front of it.
If so, it'll mark an end to eight years of near-continuous growth since the economy shrank 0.7 per cent during the global economic crisis in the last quarter of 2008.
"Combining the weak capital expenditure data with soft September quarter retail sales and weak net export volumes, our current forecasts show a GDP number of 0.2 per cent quarter on quarter, or 2.5 per cent over the year," said AMP chief economist Shane Oliver.
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- Updated Dec 2 2016 at 7:06 AM
Greens deliver government win on backpacker tax
The Greens have delivered the government a face-saving deal on backpacker tax by agreeing to help them pass a 15 per cent rate, but it included measures that made their compromise cost $100 million more than had they done a deal with Labor.
On Thursday afternoon, hours before parliament wound up for the year, Greens leader Richard Di Natale announced the Coalition and his party had agreed to a deal to finally pass the laws that would involve a 15 per cent rate, a lower 65 per cent superannuation rate and an extra $100 million over four years into the Landcare program.
Both sides of politics and the crossbench have been accused of playing politics over the issue - which could impact severely on the labour supply for the horticultural industry - and stretching out a solution by proposing alternate rates that appear to be plucked out the air.
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GDP building up to be a let down
- on December 1, 2016, 3:17 pm
Just months after the Turnbull government was re-elected on a slogan of 'jobs and growth', the scorecard suggests it must try harder to fulfil its pledge heading into 2017.
Recent figures show jobs growth is flat at best, while next week's national accounts are building up to reveal disappointing economic growth.
"The economy has been experiencing a soft patch," was how Macquarie Research economist James McIntyre summed it up.
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Health Budget Issues.
Government accused of cooking books over bulk billing figures
Samantha Maiden, The Daily Telegraph
November 27, 2016 4:57pm
BULK billing figures tracking “free’’ visits to GPs are being inflated by up to 3.3 million visits every year, prompting claims the Turnbull government is cooking the books.
Despite the Government’s claim that 85 per cent of GP visits are bulk billed, new figures reveal the number of actual patients routinely bulk-billed is substantially lower with pensioners and children also inflating the figures.
For the first time, the Parliamentary Budget Office has revised the figure by stripping out non-standard doctors’ visits, such as where a GP prepares a mental health plan or chronic disease management plan.
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'Just say no': Australian Medical Association rejects Greens' new drug legalisation push
Stephanie Peatling
Published: November 27, 2016 - 4:26PM
Published: November 27, 2016 - 4:26PM
The Australian Medical Association has distanced itself from a new relaxed drugs approach being pushed by the Greens, saying it underestimates the harm illicit drugs do to the community.
Association president Michael Gannon told Fairfax Media he welcomed any initiative that shifted the public conversation about illicit drugs towards rehabilitation and treatment instead of policing and the justice system.
But he said he was "wary" of any push towards decriminalising illicit drugs, including cannabis.
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Prescription for a healthy Australia: Cut salt levels, save thousands of lives
Rania Spooner
Published: November 28, 2016 - 10:57PM
Published: November 28, 2016 - 10:57PM
Dramatically cutting salt levels in processed foods sold in Australia could save an estimated 3500 lives each year by reducing cardiovascular disease, stroke and kidney disease, according to a new report.
Reducing the population's salt intake by 30 per cent was among ten policies proposed by the Australian Health Policy Collaboration to reduce the burden of preventable chronic conditions like heart disease, cancer and mental illness, which affect one in two Australians.
Under its prescription for a healthier nation, the group also recommends a volume tax on alcohol, a 20 per cent levy on sugary drinks, bans on junk food ads, bolstering anti-smoking media campaigns and more programs to help people living with mental illness return to the workforce.
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Will you be a loser under new funding model for GP care?
November 29, 20164:15pm
Bulk-billing levels fall under GP freeze
DOCTORS are in revolt over the government’s revolution in GP care, demanding a delay in the scheme that will see cancer and other chronically ill patients given a maximum $1795 worth of GP care a year.
Every major GP group in the country has joined a united front to warn the Health Care Home scheme is not properly funded and that doctors are being asked to sign up before the rules are developed.
The Health Care Homes policy is a signature government policy designed to provide comprehensive care for one in five Australians who have a chronic illness, keep them out of hospital and save the health system money.
Patients will be asked to voluntarily enrol with a single GP practice to get a new form of wrap around health care under the model and doctors will get an annual budget of between $591 and $1795 a year to care for them.
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http://www.australiandoctor.com.au/news/latest-news/call-for-govt-to-delay-health-care-homes-rollout
Call for Govt to delay Health Care Homes rollout
Paul Smith | 29 November, 2016
GP lobby groups are calling for the government's Health Care Homes initiative to be delayed by six months, warning the policy is being rushed.
From July next year, around 200 practices are expected to register 65,000 patients to the scheme, with the Federal Government paying them up to $1800 to manage each patient’s chronic disease care.
However, United General Practice Australia (UGPA) called on the government to delay the rollout to “allow sufficient time to get this important opportunity to transform the nation’s healthcare system right”.
The group — which is the collective voice of the AMA, RACGP, ACRRM, GPRA and General Practice Supervisors Australia — said the development of the funding model for the scheme, as well as the tools to support practices, had been “rushed”.
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Coalition regional MPs in revolt over nursing care funding cuts
- The Australian
- 12:00AM December 3, 2016
Rick Morton
Funding cuts to the aged care sector worth $1.2 billion will be “rearranged” by the federal government after an uprising among Coalition regional MPs fearing the changes were putting pressure on regional nursing homes.
The massive saving, unveiled in May’s budget, is in addition to $472 million to be eked out of the Aged Care Funding Instrument in December’s midyear economic and fiscal outlook; both target the dramatically escalating cost of complex nursing care in the sector.
After addressing the issue in parliament on Tuesday, Liberal National Party MP for Wide Bay Llew O’Brien told The Weekend Australian “imposing budget measures that lower the quality of care is morally wrong. We have to revisit the amount of money that we are pulling out of aged care.”
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3 Dec 2016 - 6:02am
Research grants worth $483m announced
The federal government will announce the winners of a pool of $483 million in health and medical research grants.
Source: AAP
3 Dec 2016 - 6:02 AM UPDATED 1 HOUR AGO
Can a low dose of aspirin every day prevent diseases for seniors?
That's what the largest clinical trial ever undertaken in the country wants to uncover - and now it's got federal government funding for the final stage of its research.
The trial by Monash University's Professor John McNeil has been granted almost $5 million as part of a $483 million funding round for health and medical research.
It involves 16,700 Australians aged 70 and over and 2000 GPs, with the money helping the trial complete data collection to discover the benefits and risks of aspirin.
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Health Insurance Issues.
- Nov 30 2016 at 11:34 AM
Medibank warns of tough start to new financial year
Medibank Private chief executive Craig Drummond has warned revenue in the first four months of the financial year is below expectations.
He promised to cut waiting times, customer complaints and offer new products and services to turn around a collapse in the private health insurer's market share amid a declining market.
Mr Drummond admitted to analysts at a briefing in Melbourne on Wednesday that the "Medibank brand has been in decline for about eight years" and his key objective was to "put the customer first" to stabilise the business within the next two to three years.
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Medibank CEO Drummond to heal bottom line with customer focus
- The Australian
- 12:00AM December 3, 2016
Sarah-Jane Tasker
Craig Drummond didn’t mince his words this week when he owned up to the fact Medibank had let down its customers, and he has staked his CEO legacy on putting a stop to its eight-year market share decline, despite a climate of increasing headwinds for health insurers.
The straight-shooting health insurance boss took on the top role more than four months ago at a low point for the company — customer complaints had skyrocketed because of issues bedding down a new IT system and the competition regulator hit Medibank with charges of misleading customers.
Mr Drummond said this week, at his first investor day as chief executive, that the culture of the company had to change, from the top down, as he set three-year targets to turn Medibank’s customer service around. He said there had been a disconnect between management and the customer, and to win back customer loyalty that had to change.
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Pharmacy Issues.
Govt owes pharmacies $15,000 each, says Guild
2 December, 2016
The Pharmacy Guild is lobbying the Health Ministry to honour its commitment to reimburse pharmacists for a shortfall in dispensing volumes for the 2015/16 financial year.
This is in terms of a risk-share agreement in the 6th Community Pharmacy Agreement (6CPA).
Here are six things you should know:
- The average pharmacy dispensing 55,000 scripts per year has suffered a shortfall of $15,000 in the 2015-16 financial year, says the Guild;
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Superannuation Issues.
Morrison signals no more super tax tinkering
The superannuation industry may finally get its wish on no more tinkering with the superannuation tax settings, if the Federal Treasurer, Scott Morrison, sticks to his word following this week's passage through Parliament of the Government's Budget changes.
The Association of Superannuation Funds of Australia (ASFA) welcomed the passage of the changes and called for no further tinkering, while Morrison signalled that the package would remain unchanged for at least the life of the current Parliament.
Discussing the passage of the legislation at a media conference, the Treasurer said the reason the Government had adopted a holistic approach was that it did not intend to pursue further change.
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What will the government’s superannuation reforms mean for you? A SmartCompany Q&A
Thursday, November 24 2016
After months of confusion, fiery election commentary and multiple pieces of legislation, Treasurer Scott Morrison has said the federal government has secured “fairer, more sustainable” legislation with the passing of the Coalition’s superannuation reforms.
So what now? Here are six key things you need to know.
How did we get here?
The Coalition’s superannuation reforms, first proposed in the May budget, stopped experts and high-net worth individuals in their tracks due to the scope and timeline of the overhaul. The original package, unveiled by Treasurer Scott Morrison, included a proposed tax-free pension fund cap of $1.6 million, and a $500,000 lifetime cap on non-concessional super contributions.
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- Updated Dec 2 2016 at 11:00 PM
Retirees may be forced to withdraw money from super system
by Sally Patten
Retirees will be forced to take money out of the superannuation system if a spouse dies with more than $1.6 million in super.
The warning from lawyers comes as financial advisers caution that thousands more Australians than first thought are likely to be hit by the $1.6 million ceiling on tax-free pensions and will face penalties from the Australian Tax Office if they fail to re-arrange their finances when a spouse dies.
If retirees are forced to withdraw savings from the super system, these will need to be managed separately, potentially adding to the financial responsibilities of senior citizens and triggering higher tax bills.
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I look forward to comments on all this!
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David.
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