Thursday, March 30, 2017

The Macro View – Health, Financial And Political News Relevant To E-Health And The Health Sector In General.

March 30, 2017 Edition.
The big news in the US this week was the defeat of the Republicans on their US Health Care Plans which were defeated because of internal in-fighting. It was the first major political defeat for the new administration.
In Australia the major news has been some success on some of their budget measures – and no seem to be heading to  a budget session after only 4-5 more weeks. It will be very interesting to see how the present financial instability is addressed.
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Here are a few other things I have noticed.
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National Budget Issues.

Land tax: Parliamentary Budget Office costs plan to kill off stamp duty

Eryk Bagshaw
Published: March 19, 2017 - 3:14PM
The Parliamentary Budget Office has costed a proposal that would kill stamp duty and replace it with land tax, saving home buyers up to $40,000 in Sydney and $55,000 in Melbourne, while delivering billions of dollars to fund schools and hospitals.
The costing will put land tax back up for debate when Parliament returns next week as the government looks to mark its authority on the housing affordability crisis less than two months out from the federal budget.
Both the NSW and Victorian governments have thrown their weight behind broader stamp duty tax reform and Treasurer Scott Morrison has indicated his support for a transition to taxing land.
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After the boom, pay packets are ona flatline for all

  • The Australian
  • 12:00AM March 18, 2017

Adam Creighton

One Nation may have flopped in Western Australia’s election but our wage growth, the third weakest in the developed world, is fuelling simmering political discon­tent about everything from house prices to inequality and energy prices. This will have profound political consequences.
The living conditions of Australians are rising at the slowest pace in more than a generation. Wage growth fell off a cliff in 2012 as the resources boom petered out, and it hasn’t recovered. The torrent of foreign cash washing over the economy has receded, leaving a high-wage, heavily regulated economy struggling to compete.
Whether voters maintain the rage will depend on whether the slump is a hiatus between bursts of innovation or a reversion to the mean. It wasn’t until Australia was being settled in the late 18th century that wages, adjusted for cost of living, showed any sign of improvement anywhere.
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Underemployment skyrockets to 1.1 million Australians

Anna Patty Workplace Editor
Published: March 20, 2017 - 12:00AM
Kate Zizys, 46, has been underemployed her entire working life.
Earning less than $20,000 a year from casual work, she is one of 1.1 million Australians who want more hours of work than they are getting.
New figures from the Australian Bureau of Statistics show the official unemployment rate has increased from 5.7 to 5.9 per cent.
"I'm tertiary educated and have been in a casualised system my entire working life," Ms Zizys said.
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Someone has to give if we're to fix the budget

Ross Gittins
Published: March 19, 2017 - 10:18PM
The nation's budget problem still won't be solved when, one day in the distant future, we get the federal budget back into surplus. Only a change in strategy is likely to produce a sustained solution.
As successive intergenerational reports demonstrate, on present policies government spending will just grow and grow, requiring ever-higher taxes.
If we don't like that idea – or politicians regard it as an impossible sell – we need to think a lot harder about what we're spending on, why it's growing so fast, what things we should stop spending on, and how we can make our spending more effective, in the process slowing the rate at which it's growing.
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Treasurer to launch fresh attack on multinational tax avoidance as Parliament resumes

Eryk Bagshaw
Published: March 20, 2017 - 12:15AM
Treasurer Scott Morrison will launch a fresh attack on tax avoidance this week in Parliament in a bid to get the so-called "Google Tax" pushed through and shift public attention towards the Coalition's record on multinational tax crackdowns. 
The Diverted Profits Tax is due to be debated this week, almost a year after it was first introduced in the 2016 budget and less than two months before Mr Morrison hands down his second in May. 
Mr Morrison told Fairfax Media the Diverted Profits Tax would close major loopholes in the system.
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Energy crisis: The 9 questions you were too embarrassed to ask

Jessica Irvine
Published: March 20, 2017 - 12:00AM
When crisis strikes, the natural human response is to shut one's eyes, cover one's ears and wait for it to pass.
But sorry folks, this one's not going away. The energy crisis – with all its mind-boggling complexity, jargon and science-y stuff – is something you'll need to understand. Let's get straight into it.
1. Is there really an energy "crisis"?
Yes, in the dictionary sense of reaching a "decisive moment" or "a time of danger or great difficulty". No, in the sense of widespread disease and destruction. Not yet.
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Paul Keating: Only a reckless government would raid super for housing

Paul Keating
Published: March 20, 2017 - 8:48AM
Countries get one chance in history of putting into place a savings retirement scheme on the scale of the Australian superannuation system.
The right conditions had to be there: a government which saw the need, a policy-induced surge of productivity to pay for it and an organised workforce prepared to defer some current consumption to provide better living in retirement.
The system is the envy of the developed economies.
Only the most reckless and wilful government would abort the policy settings to put the system at risk.
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Scott Morrison's Monty Python moment

Michael Pascoe
Published: March 20, 2017 - 10:59AM
It's a dangerous thing to talk a big game before taking the field. Treasurer Scott Morrison did that pre-departure for the weekend G20 finance ministers meeting in Germany. He's been left trying to claim a big loss was actually a win. Monty Python's dismembered Black Knight comes to mind.
Last week Morrison told Fairfax Media he would take no part in any weakening of the G20's pro-trade stance – but that's just what happened. The G20 was right royally Trumped, its public free-trade commitment blown out of the water.
The mealy-mouthed platitudes of the final communique mean nothing. That's why the US was prepared to go along with it. Instead of the previous pledge to resist protectionism, members only say they'll be "working to strengthen the contribution of trade to our economies" – which could mean anything at all – and that they would "strive to reduce excessive global imbalances, promote greater inclusiveness and fairness and reduce inequality in our pursuit of economic growth".
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  • Mar 20 2017 at 10:23 AM

Scott Morrison greenlights fresh crackdown on property investor loans

Treasurer Scott Morrison has signalled that renewed surge in investor property buying - particularly with interest only loans - is likely to trigger a fresh regulatory crackdown on banks as part of the government's efforts to boost affordability for actual home buyers.
With the May budget due to unveil a series of measures that would "reduce the burden" on those looking to buy or rent a house, Mr Morrison indicated that so-called macroprudential restraints on lenders introduced in 2015 were no longer working as effectively as they were in 2016.
"There remain pressures that have built up again over the last few months," Mr Morrison said in Canberra on Monday.
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Housing market is in an environment of 'heightened risk', but it's not 'the B-word'

Sarah Danckert
Published: March 20, 2017 - 4:07PM
Australia's banking regulator says the country's housing market is in an environment of "heightened risk", but he won't say there's a housing bubble.
Australian Prudential Regulatory Authority chairman Wayne Byres told a Sydney conference that he wouldn't use "the B-word" to describe the housing market.
"I don't use the B-word. I refuse to use the B-word. It implies a binary, that's too simplistic," Mr Byres said speaking at the Australian Securities and Investments Commission annual forum.
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  • Updated Mar 20 2017 at 6:34 PM

Bank regulators backed by Morrison to unleash new crackdown on lenders

Regulators are preparing to impose a fresh wave of constraints on the banks to slow investor lending growth, crack down on interest-only loans, and force buyers to stump up more equity on purchases as they scramble to manage a rampant property boom.
Warning that financial and economic risks have grown in recent months, particularly across east coast property markets, the nation's top financial regulators and Treasurer Scott Morrison unleashed co-ordinated calls for fresh restraint from banks.
"Watch this space," declared Australian Prudential Regulation Authority chairman Wayne Byres on Monday, speaking just hours after Mr Morrison urged APRA and the Australian Securities and Investments commission to use "the levers that they have".
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Treasurer Scott Morrison says there’s no proposal to allow super raid to buy homes

Treasurer Scott Morrison insists the federal government has no proposal to allow first-home buyers to tap their superannuation for a deposit.
Former Labor prime minister Paul Keating has slammed the idea of allowing young people to raid their superannuation, warning it would “pull the backside” out of the system.
Liberal MP John Alexander, who chaired a parliamentary committee into housing affordability, let slip the government was considering the proposal before the May budget.
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We will lose jobs in the future, but it's not all doom and gloom

Ross Gittins
Published: March 21, 2017 - 10:38PM
I can't remember when there's been so much speculation about what the future holds for working life. Or when those who imagine they know what the future holds have worked so hard to scare the dickens out of our kids.
Getting on for 100 years ago – 1930, to be precise – the father of macro-economics, John Maynard Keynes, wrote an essay, Economic Possibilities for our Grandchildren, in which he calculated that if technological progress produced real economic growth per person averaging 2 per cent a year for 100 years, by then people would enjoy a comfortable standard of living while needing to work only 15 hours a week.
He was writing during the Great Depression, so I doubt if many people believed him. He was right, however, to predict the Depression would end and growth would resume, powered by continuing advances in technology.
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Australians not so happy about economy

- on March 21, 2017, 5:56 pm
Australia is one of the happiest nations in the world, but ask people what they think about the economy and their smiles will quickly turn to a grimace.
A United Nations report has found Australia to be the joint-ninth happiest country on Earth with New Zealand.
However, new figures show confidence in the Australian economy has dropped to its lowest level in almost a year, weighed down by rising unemployment and the continued weak pace of wages growth.
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  • Updated Mar 22 2017 at 7:53 PM

Childcare deal leaves $4b in budget cuts in limbo

The federal government has secured Senate support for its childcare reforms in a deal that has left the fate of a net $4 billion in budget savings in limbo, and at risk of being dumped altogether.
The long-stalled childcare package rolls the existing childcare rebate and childcare supplement into a single means-tested payment that will significantly benefit families on lower incomes by skewing the benefits towards them.
Families on combined incomes over $350,000 may miss out altogether due to demands made by crossbencher senators David Leyonhjelm and Derryn Hinch that in return for their support, these people receive nothing.
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Politics ensures Reserve Bank's housing pushback already failing

Michael Pascoe
Published: March 23, 2017 - 12:15AM
The bad news about the regulators' new attempts to hose down housing investment enthusiasm is that they are, at best, second rate. The Law of Unintended Consequences is always at work, ensuring damage elsewhere in the economy, while the most effective tools for the present circumstances remain locked in Treasury's cupboard.
The first punch of this new round of whack-an-investor is NAB and Westpac increasing investors' rates by more than owner-occupiers'. The impact? NAB's 25 point rise will cost investors a little more to service existing loans, so they'll be spending a little less elsewhere in the economy. And it shaves investors' borrowing power for new purchases, so they are more likely to go after cheaper properties – which is where first home buyers tend to concentrate.
Does it do anything to increase housing supply? No. Does it reduce demand? A little bit but it's marginal and not where you'd like it to. And, like the 2015 macro-prudential squeeze, the impact tends to wear off. Thanks to negative gearing the taxpayer will pick up half the tab for investors in the top tax bracket anyway.
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How Turnbull can kill stamp duty and produce a budget to remember

Peter Martin
Published: March 22, 2017 - 11:45PM
The myth about budgets is that they can achieve much at all.
In decades to come few will be remembered for anything other than the introduction of Medicare, the national disability insurance scheme and the goods and services tax.
But in six weeks' time the government will have an opportunity to actually do something that will last; something far more important, and more transformative, than the apparently doomed plan to cut the rate of company tax.
It's an idea from the Greens, but that's a plus. It gives it a good chance of getting through the Senate.
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  • Mar 23 2017 at 10:03 AM

Reserve Bank trapped by housing, says PIMCO

PIMCO's Australian head Rob Mead says indebted Australian households have caught the Reserve Bank in a trap. 
While the US Federal Reserve may have put its foot firmly on the brake if it needs to slow its economy a slight tap by the RBA may prove too jarring. 
The reason the central bank is trapped, he says, is because Australians have taken on more debt at low interest rates, making households "highly sensitive to even small upward changes in the cash rate."
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WA GST return hits 34 cents, blows hole in budget, leaves Treasurer Ben Wyatt 'horrified and furious'

March 24, 2017
The new West Australian Government has been handed a major budget blow, with the state set to be hundreds of millions of dollars worse off due to a lower than expected GST allocation.
Treasurer Ben Wyatt admitted it would be virtually impossible to meet Labor's pre-election commitment of bringing the state budget back to surplus by 2019-20, following the revised figures from the Commonwealth Grants Commission.
WA had been expecting to get 38 cents out of every GST dollar raised in the state in 2017-18, but that has now been revised down to 34 cents.
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Treasurer Scott Morrison pushes crackdown on investor loans

Eryk Bagshaw and James Massola
25 Mar 2017, 6:14 a.m.
Treasurer Scott Morrison has urged financial regulators to crack down harder on loans to real estate investors amid revelations that foreign buyers are spending $8 billion per year on new homes in NSW and Victoria, locking out owner-occupiers.
The call came as the Treasurer and his state counterparts met on Friday to find solutions to problems of housing affordability exacerbated by a return to the market of investors after earlier attempts to contain them had "worn off".
"I have been concerned, over the last couple of months, that the measures that were put in place a few years [ago] have worn off and it is now for the council of financial regulators to determine what the next step is," Mr Morrison said on Friday.
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  • Updated Mar 24 2017 at 11:00 PM

Malcolm Turnbull vows no surrender on company tax plan

The federal government will not give up trying to implement its full package of company tax cuts after the Senate votes next week to allow only the first phase of the 10-year plan – a tax cut for small business.
Ending a week of uncertainty during which the government has declined repeatedly to say what it would do after next week's Senate vote, Mr Turnbull said companies would start leaving Australia if the nation allowed its company tax rate to become increasingly uncompetitive against global rivals.
It is understood Mr Turnbull has reaffirmed to colleagues that the government has no intention of walking away from the tax plan which was the centrepiece of its economic strategy going into the last election. 
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Don't buy into the 'money illusion': Here's what's happening to real wages

Ross Gittins
Published: March 25, 2017 - 12:15AM
Economists may not be much chop at forecasting how fast the economy will grow in the next year or two, but that doesn't mean they haven't learnt a few things about how economies work that the rest of us could benefit from knowing.
It helps us get a better handle on the future if we remember the macro-economists' rule that economies move in cycles, not straight lines.
So something that's been going down will, one of these days, start going back up, and vice versa.
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Turnbull government shifts focus to school funding after childcare reforms pass Parliament

Matthew Knott
Published: March 24, 2017 - 3:04PM
The Turnbull government is aiming to use the successful passage of its childcare reforms, which redistribute subsidies from wealthy to low-income families, as a springboard to overhaul the way schools are funded. 
The government is examining trimming funding to "over-funded" private schools and redistributing money to needy public and non-government schools as part of the new funding model.
Education Minister Simon Birmingham will shift his attention to schools after the Senate passed the government's $1.6 billion childcare package on Thursday night. 
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Health Budget Issues.

Medicare rebate freeze may go in May budget

  • The Australian
  • 2:40PM March 19, 2017

Rachel Baxendale

Health Minister Greg Hunt has given strong indications the Turnbull government will unfreeze the Medicare rebate as part of the May budget.
In the wake of Labor’s damaging “Mediscare” campaign in the lead-up to last year’s federal election, Mr Hunt reiterated the government’s “rock solid” commitment to strengthening the scheme.
Mr Hunt said there were four pillars to the government’s national health plan, namely Medicare, hospitals, mental health, and medical research.
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Home doctor services save taxpayers millions. It's foolhardy to scrap them

Chris Hazzard
Published: March 22, 2017 - 5:27PM
I'm a home doctor. This year it will have been 50 years since I graduated so I actually predate Medicare and its predecessor Medibank. I remember the days when if a patient did not have the money to pay for a consultation, they had to either rely on the charity of their general practitioner or the honorary system in the public hospitals.
We don't want to get back to that. Our health care system is something we take pride in and cuts to the existing service will have a great social impact on millions of families. 
When thinking about the important decisions the federal government has made over the years, the decision to introduce Medibank (now Medicare) is considered by 63 per cent of Australians as a positive decision, with 79 per cent seeing home visits as an important part of the Medicare system. With budget talks now well under way, we find ourselves at the cusp of policy changes that could have serious repercussions on how home visits are accessed, impacting up to two million Australian families.
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Mental health taskforce announced in major review of services

  • The Australian
  • 10:43AM March 23, 2017

Rosie Lewis

The government will announce a new mental health taskforce to undertake a major review of its primary health networks across the country, in a bid to better target services for all Australians.
Health Minister Greg Hunt will today establish the mental health advisory group, to be co-chaired by Mental Health Australia CEO Frank Quinlan and National Mental Health Commission CEO Peggy Brown, as 50 organisations from the sector descend on Parliament House to advocate for policy changes.
Called the Primary Health Network Advisory Panel on Mental Health, it will for the first time look at how the government’s 31 PHNs are commissioning and planning mental health services, more than two years after they were rolled out and replaced Labor’s Medicare Local system.
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Federal Government announce 1100 medicines to have prices cut including Rosuvastatin

Lanai Scarr, Senior Writer, News Corp Australia Network
March 25, 2017 12:00am
Subscriber only
EXCLUSIVE
SICK Australians will save $500 million over four years and up to $200 a year each on the cost of medicines in an announcement by Health Minister Greg Hunt today.
Drugs to treat diseases and illnesses like breast cancer, mental health, eczema, psoriasis and Parkinson’s disease will have prices slashed in a bid to ease cost of living pressures for millions of Australians.
More than 1100 medicines will have their prices cut from April 1.
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Health Insurance Issues.

Two million to quit or downgrade private health insurance cover research suggests

Sue Dunlevy, National Health Reporter, News Corp Australia Network
March 21, 2017 12:00am
EXCLUSIVE
TWO million Australians plan to dump or downgrade their health cover ahead of premium rises three times the inflation rate that take effect next month.
It will accelerate the dangerous health fund membership spiral which started last year that threatens the long term viability of the health insurance industry.
And it puts the government under even more pressure to reform the industry in the budget to put a brake on a decade of premium rises many times the inflation rate.
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New report reveals which health funds have won and lost customers

Esther Han
Published: March 24, 2017 - 6:30PM
Medibank has topped the list of health funds that have shed the greatest number of members, according to a new report.
The Private Health Insurance Ombudsman's latest State of the Health Funds Report shows that Medibank lost 45,676 customers between June 2015 and June 2016, followed by Westfund, which lost 865, and HCF, which said goodbye to 502.
The biggest winners from the exodus were HBF, which welcomed 49,949 new policyholders, Bupa, which won over 38,235, and NIB, which added 19,501.
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Superannuation Issues.

Your guide to super changes as July 1 looms

  • Will Hamilton
  • The Australian
  • 12:00AM March 21, 2017
With June 30 fast approaching there is now limited preparation time for the new superannuation regime which comes into effect on July 1 this year.
This timeframe now makes looking at the impact of the changes on your current superannuation entitlements urgent. Though there has been wide coverage and much discussion of the changes I am still amazed at how little they are yet understood. It makes a lot of sense to try and offer a ‘‘wrap’’ on the subject, so here goes:
The most significant change is the introduction of a lifetime balance capped at $1.6 million. You cannot ‘‘top up’’ this amount once you cross $1.6m.
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  • Updated Mar 23 2017 at 6:37 AM

Older mortgagees and the super squeeze

A new front is opening up in the housing affordability crisis, with unprecedented numbers of Australians set to drain their superannuation not for living expenses in retirement, but to pay off a mortgage.
Leading economist Saul Eslake will on Thursday warn that collapsing home ownership rates are causing major problems at both ends of the adult life cycle.
The former ANZ chief economist will present research at an event called the Conference of Major Super Funds highlighting the extra age pension costs likely to be associated with a wave of Australians currently aged in their 50s and 60s who will hit retirement and still have housing debt.
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Super staring at a ticking housing time bomb — the mortgaged retiree

  • The Australian
  • 12:00AM March 25, 2017

James Kirby

Most of the angst in relation to housing costs relates to first-home buyers — few, it seems, have looked at the other end of the spectrum … how will it hit retirees?
It’s time to pay attention to this issue because it’s going to have major consequences for investors depending on residential property and pension access … in other words, just about everyone.
Two very important pieces of research released in the past few days pinpoint the issue: economist Saul Eslake has shown that the number of homeowners heading into retirement that still have a mortgage has tripled since 1996 to 45 per cent. Meanwhile, Recep Peker, head of research at Investment Trends, reports the portion of Australians who believe their savings will not carry them through retirement is now the ­majority.
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I look forward to comments on all this!
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David.

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