July 25, 2019 Edition.
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President Trump continues to destroy all the norms of civilised behaviour with race-baiting while fanning the possibility of a war with Iran – aided by another coalition of its allies – sadly including Australia.
In the UK it seems Boris has become the UK Prime Minister. We now await events!
Sadly we also see Japan and South Korea starting a trade war. Very sad.
In OZ, with Parliament back this week we will see just what agenda will occupy the Morrison Government for the next three years. Thus far - Thursday - not much!
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Major Issues.
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https://www.afr.com/news/policy/foreign-affairs/defence-chief-sounds-climate-warning-20190712-p526sl
Defence chief sounds climate warning
Jul 15, 2019 — 12.00am
Australia’s Defence Force chief, Angus Campbell, has used a private speech to warn that China could take advantage of climate change to occupy abandoned islands in the Pacific.
In previously unreported remarks General Campbell said the changing climate could inject new tension into an already contested region, suggesting the Morrison government is under pressure to show more leadership on the issue.
"They [Pacific Island nations] are calling for the rest of the world to take more ambitious and decisive action," he told an invitation-only forum, according to one person with knowledge of the event. "They want us to do more."
The speech in mid-June by the nation’s most senior soldier could leave the government open to criticism its lukewarm approach to combatting climate change is becoming a national security issue.
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Australia now has world's highest minimum wage
Jul 12, 2019 — 4.40pm
Australia officially has the highest minimum wage in the world following a series of increases well above inflation.
The OECD updated its real minimum wage rankings this week to place Australia in the top spot for purchasing power, adjusted for inflation and translated into US dollars.
Employers say the ranking counters union claims that the minimum wage is failing low-paid workers and indicates the Fair Work Commission needs to take a more moderate approach to increases.
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Karen Andrews: building crisis slowing Australia down
- July 15, 2019
Industry Minister Karen Andrews says the building sector insurance crisis is “slowing Australia down” and she will push for a national taskforce to bring state building regulations in line with one another.
The Industry Minister has promised to make her “very strong views” on national building regulations known at a state building ministers’ forum on Thursday.
Her intervention comes as five of Australia’s largest business groups demanded urgent federal government intervention to push reform of the building industry, warning that a flawed regime of state regulations and skyrocketing insurance premiums pose a threat to the national economy.
The groups — Master Builders Australia, the Australian Industry Group, the Insurance Council of Australia, the Property Council of Australia and the Australian Construction Industry Forum — have written to Ms Andrews stressing the need to renew “public confidence’’ in the nation’s building industry.
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Defence under pressure over submarines, JSF
- 8:08AM July 15, 2019
Australia’s defence outlook is changing rapidly and new defence minister Linda Reynolds faces a daunting task.
She is being bombarded with material from defence officials defending what are increasingly obvious past mistakes or strategies in danger of becoming obsolete.
The submarine contract and the joint strike fighter (JSF) are at the top of the list with yet another defence expert warning over the weekend that technology change is endangering the $90 billion French submarine gamble.
The Australian submarine contract is vital for France and its president.
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Australia must prepare for a Chinese military base in the Pacific
The cost of keeping China out of the region is too great, we must build forces that could counter its operations instead
Mon 15 Jul 2019 10.08 AEST Last modified on Mon 15 Jul 2019 10.18 AEST
The island nations that lie to our north and north-east, stretching from Papua New Guinea and Solomon Islands to Vanuatu, Fiji and beyond, may be close to us geographically, but we have not found them especially interesting, important or profitable.
With a few honourable exceptions, and tourism aside, Australians have been indifferent to our nearest neighbours’ dramatic landscapes, their rich and diverse cultures, and their general welfare, and we have seen relatively few opportunities for trade.
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$1m each would be nice – if only it worked that way
- 12:00AM July 16, 2019
Scott Morrison lauds the quiet Australians who carried the Coalition to victory, but there were plenty of poor Australians too.
Despite booming house and share prices for a decade, the bottom third of households — about five million families — have less wealth than in 2009.
Maybe they aren’t having a go, or maybe they just aren’t getting one. Either way, it’s a sad indictment of our economy that so many have done so badly. Certainly they might have got a shock from last week’s headlines: average net wealth inched past $1 million for the first time in June last year, the Australian Bureau of Statistics revealed in its biennial survey of income and wealth, which was up 20 per cent from eight years earlier. Happy days.
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Active managers face ‘crisis of confidence’ as low rates hurt
- 12:00AM July 16, 2019
Record low interest rates are not only hurting savers: fund managers have also been caught out.
Active managers who are paid handsomely for their ability to outperform the market, are lamenting the financial distortions and drag caused by aggressive rate cuts both here and around the world.
The funds industry now faces a “crisis of confidence” amid sustained underperformance that’s driving investor outflows.
“It’s a crisis that is particularly severe in our home market of Australia,” said Forager chief investment officer Steve Johnson.
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Policy failure leads to mistrust, says ASIC deputy Karen Chester
- 12:15AM July 16, 2019
Public policy failures are putting Australia at risk of “growing mistrust in public administration”, Australian Securities & Investments Commission deputy chair Karen Chester has warned.
She said mistrust “contributed to the populist political tsunami that democratically installed a president (Donald Trump) who crowed after one primary victory: ‘I love the poorly educated.’”
Ms Chester, a former Productivity Commission deputy chair, said effective government was important to avoid a situation where “hubris enchants the elite”, risking situations such as the current trade war between the US and China.
In a speech to the Economics Society of Australia in Melbourne last night, Ms Chester praised well crafted policy as the “first line of defence” for protecting economic prosperity and delivered a broadside to weakening public institutions, noting the late-1980s reform period was marked by an environment where political leaders not only dared greatly but “officials did too”.
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When safe just doesn’t cut it any more
By Gofran Chowdhury
July 17, 2019 — 12.00am
Living off the income from your savings is hard for most Australians, as falling interest rates have eroded the money you earn. This is particularly true for retirees.
After a lifetime of managing risks to ensure sufficient funds to live comfortably through retirement, a prime aim for most is to ensure their savings are safe and earnings secured.
Typically, that entails low-risk investments, such as term deposits.
However, plunging interest rates is reducing returns to investors and could force savers to either take on additional risk or forgo lifestyle to make their funds stretch to cover living expenses. A typical term deposit in 2010 was paying about seven per cent interest a year. Today, it’s more like two per cent.
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Director selling a clear signal of tough times ahead
Chris Stott
Jul 17, 2019 — 10.19am
For equity investors seeking that illusive edge, the buying and selling of a company’s shares by directors and executives can offer a compelling indicator of a stock’s future valuation.
Because these insiders have more insight into the business and its future prospects than any other market participant, decisions to increase or decrease their personal exposure to the company can be significant. Historical analysis reveals these insider transactions to be a strong predictor of an individual business and its outlook.
Tighter rules implemented by Australian regulators have made it more difficult than ever before for insiders to trade shares. Strict trading policies exist and it is mandatory for the company to announce an insider acquisition or sale of shares on the ASX platform within five business days of the trade.
Generally, most of this trading activity occurs following market-sensitive announcements, such as semi-annual results or a trading update. Appendix 3Y notices on the ASX platform are an easy way for investors to monitor director or executive trading on a daily basis.
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Ray Dalio says gold may be key amid monetary policy shift
Nathan Crooks
Jul 18, 2019 — 6.56am
Miami | Ray Dalio thinks the current era of low interest rates and quantitative easing might be coming to an end, and his answer to a new market paradigm that could see escalating conflict between capitalists and socialists is simple -- gold.
"I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one's portfolio," the billionaire founder of investment management firm Bridgewater Associates said in a 6000-word essay posted on LinkedIn.
"It is also a good time to ask what will be the next-best currency or storehold of wealth to have when most reserve currency central bankers want to devalue their currencies in a fiat currency system." Bloomberg
For Dalio, monetary policy swings between helping debtors or creditors at each other's expense, and the next move of the pendulum could lead to a new era of debt monetisation and currency depreciation.
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Fewer home owners than 20 years ago: ABS
Jul 17, 2019 — 5.46pm
Fewer households own their own home than they did 20 years ago as housing costs in real terms surged 40 per cent for home owners with a mortgage.
Figures released by the Australian Bureau of Statistics on Wednesday showed the proportion of households that owned their own home fell to 66 per cent in the 2018 financial year, down from 70 per cent in 1997-98, while the proportion of households that owned their home without a mortgage decreased to 30 per cent, down from 40 per cent.
Over the same period of time housing costs, adjusted for inflation, have increased 51 per cent for home owners without a mortgage, 40 per cent for home owners with a mortgage and 51 per cent for private renters.
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States and federal government agree to national building standards
By Alexandra Smith
July 18, 2019 — 11.12am
The states have struck an agreement with the federal government to pursue national building standards at an emergency meeting in Sydney.
Federal Industry Minister Karen Andrews said federal and state governments would jointly fund an implementation team to carry out recommendations from the recent Building Confidence report.
"We have brokered an agreement that there will be a nationally consistent approach to recommendations of the report," Ms Andrews said on Thursday ahead of the meeting.
"Our intention this morning is to meet with industry, key stakeholders, to discuss the implementation of the report.
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Super funds end financial year with surprisingly good returns
By John Collett
July 17, 2019 — 5.29pm
The top 10 best performing super funds this financial year were in the not-for-profit sector with the typical balanced option returning 6.9 per cent, despite a rollercoaster year for markets.
The result was just shy of the average return going back to 1993, of 7.3 per cent, according to figures from SuperRatings.
The top 10-performing balanced investment option achieved an annual average return of 8.5 per cent for the financial year.
UniSuper was the highest-returning balanced option over the year to June 30, with a return of 9.9 per cent, followed by QSuper and Media Super, which returned 9.7 per cent and 8.8 per cent, respectively, figures from SuperRatings show.
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Cars, TVs cheaper, but living costs higher
The things Australians want to buy are cheaper, but the cost of essential services like healthcare and education have tripled over the past 20 years.
Angus Livingston
Australian Associated Press July 18, 201910:49am
Cars, TVs and computer games are all cheaper than they were 20 years ago, but the cost of things Australians actually need have spiked to double and triple what they were.
The cost of medical treatment and secondary school education is about triple what it was in the year 2000, while child care and housing are almost double.
Unfortunately for Australians, wages have only gone up 78 per cent in those two decades.
Anthony Doyle from Fidelity International analysed Australian Bureau of Statistics data to show the true cost of living in Australia is higher than the official consumer price index figure.
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Why value investing is still in the dog house
None of the known value managers in Mercer's performance survey cracked the top quartile over the year to June 30.
Jul 18, 2019 — 3.19pm
If there’s one thing we all know about the active funds management industry right now, it’s that value investing is in the dog house. Mercer's fund performance survey, released Thursday, tells this story pretty clearly.
There are a dozen Aussie equity “long-only” funds (that is, which can only bet on share prices going higher) that either have the word “value” in their name or are known investors of this type.
Of these, none cracked into the top quartile based on performance over the year to June 30.
The performance figures ranged from a dreadful -19 per cent from Forager’s Australian Value Fund – the worst of the 85 funds – to 10.4 per cent from the Schroder Aussie equity fund. And those numbers are before fees, so you can lop off at least another 1 percentage point.
For the record, the ASX 200 did 12 per cent, including dividends, over the year.
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Jobs, ads and business conditions soften after election and rate cuts
By Shane Wright
July 18, 2019 — 5.30pm
Talking points
- A net 500 jobs were created in June, with 21,100 full-time jobs almost totally offset by a 20,600 drop in the number of people in part-time work.
- The unemployment rate, on the trend measure, inched up for its fifth consecutive month.
- Of the 248,300 jobs created over the past year, 84 per cent have been in Victoria and NSW.
- Meanwhile, SEEK's measure of job advertisements is pointing to a further slowdown in employment.
- And NAB's quarterly business survey showed actual trading conditions were now below average and at their weakest since 2014.
A slowdown in job creation and advertisements plus more signs business conditions are deteriorating is increasing pressure on the Reserve Bank of Australia and the Morrison government to move quickly to safeguard the national economy.
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PM vies with Labor to say nothing
Both parties know the public is sick and tired of the lot of them. It wants them to go away and for the government to focus on running the place well.
Jul 18, 2019 — 6.00pm
Over a six-day period toward the end of June, there were 29 separate appearances by government ministers and MPs on Sky News, the channel which, more than most, drives the 24/7 political news cycle.
None of them had anything particularly interesting to say. It was more about filling space by being asked to comment on whatever issues were running.
That is pretty much how day-to-day politics has evolved since Kevin Rudd rose to power in late 2007 and made a habit out of trying to feed a news cycle being turbocharged by 24/7 television, newspapers transforming to online reporting, the proliferation of news websites more generally and, of course, social media.
Every prime minister since Rudd - Julia Gillard, Rudd in his brief and second incarnation, Tony Abbott, Malcolm Turnbull and Scott Morrison - have all avowed to not become a slave to the cycle which has made politics significantly more difficult than it was a generation before.
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Investors pushed into risky listed funds
The share price collapse of Dixon Advisory’s US property fund and the L1 Long Short Fund have triggered calls for regulators to crack down on advisers selling listed investment companies.
Jul 20, 2019 — 12.00am
Financial advisers are warning a regulatory “loophole” is being exploited by other advisers who are being paid lucrative commissions to sell risky listed investment companies to retail investors and self-managed superannuation funds.
The share price collapses of Dixon Advisory’s US property fund and Melbourne hedge fund L1 Capital’s LIC, both listed on the Australian Securities Exchange, have triggered calls for regulators to crack down on advisers and brokers selling LICs and listed investment trusts (LITs).
The LIC market has rapidly doubled to $45 billion since 2014, when the Coalition government watered down Labor’s Future of Financial Advice (FOFA) laws to allow advisers and brokers to resume receiving commissions for selling listed securities.
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Lessons for investors from the Dixon property fiasco
If investors are going to agree to have their money in a locked box, they cannot simply vote with their feet without incurring large potential costs.
Jul 20, 2019 — 12.00am
If ever there was a case study to demonstrate the hidden risk of listed funds, then Dixon Advisory's US Masters Residential Fund is it.
While the performance of the underlying assets – houses and apartments in metropolitan New York and New Jersey – has been lacklustre at best, investors have unwittingly also accepted other hidden risks for which they are paying dearly.
Since late 2012, the US Masters fund has raised $640 million of equity capital mainly from clients of Dixon Advisory who were recommended to invest in the fund.
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Who’s watching your superannuation?
John Kehoe Senior Writer
Jul 19, 2019 — 9.05pm
Once more, Australia's $2.8 trillion superannuation system has been found to be flawed, this time by Graeme Samuel's capability review of the prudential regulator.
The government compels every working Australian to set aside almost 10 per cent of their salary into a superannuation fund to build a nest egg for retirement.
This week the Samuel review concluded the Australian Prudential Regulation Authority has failed to adequately supervise super funds. The result? Some super fund members are being ripped off by poor investment returns and high fees.
The review found APRA's chairman Wayne Byres has generally done a sound job protecting $6.5 trillion in assets for bank depositors, insurance policy holders and superannuation fund members – at least from being wiped out from an institutional collapse.
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Mail theft leads to $4.8m share swindle
Jul 20, 2019 — 12.00am
The corporate regulator is investigating a group of people it suspects is involved in the identity theft of 33 victims and setting up fake trading and bank accounts to steal $2.44 million in shares. It is suspected the money was spread around the syndicate using cryptocurrencies and sent to a gold dealer offshore.
The scam may have started with mail theft, according to the affidavit of an investigator at the Australian Securities and Investments Commission.
The alleged victims had shares in Commonwealth Bank, Woolworths, Fortescue, Bendigo Bank, Westpac and Lendlease, according to the affidavit from May 6.
Australia Post, superannuation funds, trading platforms, stockbrokers and banks were unwitting conduits to the fraud, according to the affidavit.
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Change is inevitable. If we embrace it we win; resist it, we lose
Ross Gittins
Economics Editor
July 20, 2019 — 12.00am
Will Australia’s future over the next 40 years be bright or pretty ordinary? It could go either way, depending on how we respond to the challenges facing us. So what do we have to do to rise to the occasion?
The challenges, choices and likely consequence we face are spelt out in the report, Australian National Outlook 2019, produced by the CSIRO in consultation with 50 leaders from companies, universities and non-profits. The group was chaired by Dr Ken Henry, former Treasury secretary, and David Thodey, former boss of Telstra.
The report identifies six main challenges we face between now and 2060. First is the rise of Asia and the way it is shifting the geopolitical and economic landscape.
Asia’s middle class is growing rapidly, but unless we improve our ability to compete and also diversify our exports, we risk missing out on this opportunity and will be vulnerable to external shocks.
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America’s uncivil war on democracy
- 12:00AM July 20, 2019
Making his first visit to Australia, American social psychologist and professor of ethical leadership Jonathan Haidt warns that the liberal, multicultural, secular model of Western politics is not a natural phenomenon for human beings and believes there is a “very good chance” that US democracy will fail in the next 30 years.
“In my two public lectures in Melbourne and Sydney I will talk about the problems that have hit us in the United States and how Australia can avoid winding up like us,” Haidt tells The Weekend Australian at the start of his brief tour to this country.
“I think I will use the metaphor of Charles Dickens’s A Christmas Carol and come to Australia as the ghost of liberal democracy’s future warning that ‘this is what you could end up like’.”
Haidt’s 2018 book, The Coddling of the American Mind, co-authored with lawyer Greg Lukianoff, dissects the crisis in the American higher education system with its central theme being that “good intentions and bad ideas are setting up a generation for failure”.
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How to get a 6pc yield without losing your shirt
Tony Featherstone Finance writer
Jul 20, 2019 — 12.00am
The Reserve Bank of Australia's two rate cuts this year have put income investors in a vice and created a “yield frenzy” that could set up portfolios for devastating losses.
Record-low interest rates and expectations of further rate cuts this year are pressuring investors to take higher risks to maintain yield. That includes buying into resource and small-cap stocks, junk bonds and other speculative assets for income.
At the same time, investors are paying higher prices – across equities, bonds and interest rate sensitive stocks – for declining yield. Many assets with attractive income have been bid up, some unsustainably so, because of yield demand.
“Investors who are moving up the risk curve to get higher yield will get hit by an avalanche,” Morningstar’s head of research, Peter Warnes, says. “The next global sharemarket correction, when it arrives, will be a doozy. This is the worst possible time to speculate on assets that promise a high yield.”
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Royal Commissions And The Like.
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APRA too coy on TLAC motives
Sam Wylie
Jul 14, 2019 — 1.58pm
APRA imposed a new and large funding cost on Australia’s four big banks last week, without fully or properly explaining its actions.
It increased the total loss-absorbing capital (TLAC) of Australia’s most systemically important banks to ensure that "resolution" of failed banks is not chaotic, and that the cost of bank failures is not largely born by taxpayers.
Bank regulators around the world have done the same, as part of a co-ordinated action to thoroughly plan for the handling of the failure of systemically important banks before failure occurs. They are determined to put into practice a painful lesson from the GFC – that the absence of careful forethought on how to resolve the bankruptcy of large banks can have catastrophic effects.
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APRA's capability review will shake up culture
Jul 14, 2019 — 11.00pm
The release of Graeme Samuel’s capability review into the Australian Prudential Regulation Authority (APRA) is imminent, with many expecting its public release as early as this week - or not too far after.
The report, delivered to the government and APRA last month, is anticipated to be meaty, lengthy and highly critical of the prudential regulator, which was hammered in the banking royal commission over its poor enforcement track record and a collaborative, opaque approach when dealing with institutional misconduct.
The capability review will recommend a big cultural change at APRA and all its recommendations are expected to be fully supported by the government and APRA’s chairman Wayne Byres, who was reappointed to the role of chairman in November 2018.
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ANZ hopes banking has hit rock bottom
Jul 15, 2019 — 2.26pm
ANZ CEO Shayne Elliott said he didn’t think the reputation of Australian bankers can get much worse as the bank dug in over its decision to keep a comprehensive review of its failures secret.
Mr Elliott said the bank was working hard to address the poor standing of the industry which has been perceived as unfair, opaque and bureaucratic by the wider community following a royal commission which exposed the banks for a range of misdeeds including charging the dead.
“Look, we were battered and we are trying to get back on top of things” Mr Elliott said.
“I don’t think its improving yet, I think we’ve got a long way to go. I think it’s bottomed, I hope it’s bottomed. I think we are working as hard as we can to make sure it has,” Mr Elliott said.
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Death knell of private banking in Australia
Jul 16, 2019 — 12.00am
Australia has baffled foreign investment communities for quite a while, increasingly so after 1992 when compulsory superannuation helped grow what was 0.4 per cent of the world's adult population’s savings into the worlds single largest pot of wealth ever –more than US$3 trillion ($A4.33 trillion) at last count.
This single pot is larger than China’s reserves of US Treasuries, larger than any sovereign wealth fund’s collective wealth (including Russia or Saudi Arabia’s) and even larger than any savings pool the US Federal Government or Reserve Banks have ever mustered.
Private banks globally began to salivate when they also realised that the composition of household wealth in Australia is heavily skewed toward non-financial assets, constituting about two-thirds of gross assets per capita, which for private banks translated into leveraging liquidity.
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APRA drops the ball on super
Jul 16, 2019 — 10.30pm
The Australian Prudential Regulation Authority’s policing of the $2.8 trillion pool of superannuation faces a major overhaul after a review found member returns were taking a "back seat" to issues the regulator was more comfortable with.
The APRA chairman faces the trickiest questions since he appeared before the banking royal commission last November.
The APRA Capability Review led by Graeme Samuel found the regulator was slow and reluctant to properly scrutinise the super sector and has recommended new approaches to leadership, analysis and resourcing to protect the growing pool of retirement savings.
“APRA has not sufficiently acknowledged that differences in the superannuation industry require a different approach to supervision. APRA’s prudential approach may have led it to under-resource its oversight,” the report says.
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APRA staff unload on bosses
Jul 17, 2019 — 10.33am
The prudential regulator is under pressure to restore the authority of its leadership team and win back the hearts and minds of employees after a review found management was resistant to change and sensitive to criticism.
The review sketches a picture of frontline staff who harbour a deep distrust of management on account of being under resourced and over ruled by supervisors who were lobbied by the institutions they were supposed to regulate.
“When institutions are consistently able to get a different result by appealing to GM levels and above, line supervisors become demoralised and institutions become emboldened to push the limits,” one employee said.
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Graeme Samuel's 24 recommendations for APRA
Jul 16, 2019 — 10.30pm
Treasurer Josh Frydenberg has released the review of the Australian Prudential Regulation Authority, which was undertaken by Graeme Samuel (chairman), Diane Smith-Gander and Grant Spencer over the four months to June 30.
The review found problems with the regulator's "conformist" culture, detected little understanding of cyber risks or fintechs and called out a failure to stand up for superannuation fund members.
"The main conclusion of this review is that APRA’s internal culture and regulatory approach need to
change," the report's executive summary says.
change," the report's executive summary says.
The government and the regulator have accepted all 24 recommendations:
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Traditional aged care is 'sad and morbid'
The final day of the aged care royal commission's Cairns hearing is focusing on quality of life issues.
Megan Neil
Australian Associated Press July 17, 201911:10am
Working in a traditional aged care is both sad and morbid, a carer says.
Lisa Jones now works at a "microtown" for the elderly, which resident Elsie Scott describes as light years ahead of traditional aged care facilities.
Ms Jones said she was ready to give up on aged care before becoming a house companion at NewDirection Care at Bellmere, north of Brisbane.
"I've worked in traditional aged care for many years and it took a toll on me as a person because it was really sad and quite morbid to go there," she told the aged care royal commission on Wednesday.
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What’s wrong with banks obeying the law?
- 9:15AM July 17, 2019
The APRA capability review wants the regulator to use more Commonwealth Bank-style governance reviews as an enforcement tool to keep bank standards up to the mark.
The CBA review took six months and cost $10 million, which was paid for by the bank.
With the regulators hanging over their heads, the banks are already starting to question the costs involved.
Decision-making is grinding to a halt for fear the wrong move will result in punishment.
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APRA review a day late and a dollar short
It was meant to apply the blowtorch to the belly of APRA. But leading financiers think the criticism are wrong and that super oversight has skated over.
Jul 18, 2019 — 12.00am
It should have been a relatively straightforward, uncomplicated task.
In the wake of the Hayne royal commission's scathing attack on indulgent and indolent regulators, Treasurer Josh Frydenberg commissioned a capability review of the Australian Prudential Regulation Authority (APRA) to be led by Graeme Samuel.
But the 146-page APRA capability report, released on Tuesday, has led to a torrent of criticism from senior members of the financial services sector.
It's tempting to see this as yet another instance of egocentric self-interest on the part of the country's hugely profitable financial sector, which can hardly be enthusiastic about the prospect of a more hostile financial watchdog poking its nose into their inner business workings.
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APRA chairman sticks with closed-door option
Wayne Bryes' response raises doubts about his willingness to fix all the weaknesses in the management and strategic priorities identified by the capability review.
Jul 18, 2019 — 12.00am
APRA chairman Wayne Byres clung to the behind-closed-doors approach to managing difficult issues when he gave his formal response to the highly critical review of the prudential regulator’s capabilities.
He avoided the full-blown press conference with lights, TV cameras and a room full of journalists as happened in 2016 when ASIC chairman Greg Medcraft responded to a hard-hitting review of ASIC’s capabilities.
Instead, Byres kept it low key with a telephone conference call and questions, which was in keeping with the organisation’s reluctance for full-scale media engagement. APRA refused requests for photographers and camera crew to attend the press conference.
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APRA’s same-same approach undercuts reform zeal
- 12:00AM July 18, 2019
In most lines of work, if you do a poor job you don’t get a pay rise. You might even be laid off. Not in financial regulation La La Land, where poor performance comes with a five-year contract and a $17,000-a-year pay increase.
You might have thought a royal commission, a series of damning inquiries into the quality of the financial sector (it’s difficult to keep track) and now a highly critical capability review would have been enough for a round of applications late last year for the position of chairman of the Australian Prudential Regulation Authority.
Instead, Wayne Byres, in the job since 2014, was appointed in November for a further five years and, thanks to the Remuneration Tribunal, scored a pay bump to $886,770 a few weeks ago.
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ASIC moves to ban telephones sales of life insurance
Jul 18, 2019 — 11.09am
The corporate watchdog has proposed a total ban on direct telephone sales of life insurance and consumer credit insurance, in a move that preempts a Hayne royal commission recommendation.
The Australian Securities and Investments Commission's proposal, which specifically targets unsolicited telephone sales of the products, comes a week after it released a scathing assessment of the "junk" insurance industry.
The ban is a limited version of the Hayne royal commission's anti-hawking" recommendation, which would outlaw unsolicited telephone sales of all superannuation and insurance products. ASIC's recommendation is limited to life and consumer credit insurance.
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APRA’s culture team had toxic culture
Jul 19, 2019 — 12.00am
Working conditions in a division of the Australian Prudential Regulation Authority that was advising the banks on culture became so toxic that most of the team have quit in frustration over the last 18 months.
Many of those who threw in the towel have gone on to open thriving consultancies, including ASIC's boardroom shrink of choice Elizabeth Arzadon, who resigned from APRA in May 2018 only to be scooped up by the corporate cop months later.
Former members of APRA’s governance, culture and remuneration team who spoke to The Australian Financial Review said they were regularly undermined by senior executives who did not believe in their mission.
A review of the prudential regulator’s capabilities by Graeme Samuel found the division – also known as the GCA team – wasn't adequately staffed and was overseen by executives who refused to buy into the work being performed.
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We need to talk about APRA and ending the super lottery
- 12:00AM July 20, 2019
There are two problems with this week’s Capability Review of APRA by Graeme Samuel and his panel: first, superannuation should have its own regulator, not just be a division of APRA, and second, having more transparency in bank regulation is not necessarily always a good idea.
On the first of those, there seems to have been general surprise, and some sheepishness at APRA, about the absence of a superannuation division. It really is astounding that they have been lumping super together with banking, under the same line management.
Banking regulation involves the delicate supervision of firms with extreme gearing, that make promises to repay money that only work as long as those promises are not called in, which means regulation of it is all about the quantity of capital and public confidence.
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AustralianSuper pledges to improve oversight after review exposes risks
By Sarah Danckert and Paul Sakkal
July 19, 2019 — 5.39pm
The nation's biggest super fund has been asked to provide more detail to the peak regulator after a self-assessment of its governance, culture and risk oversight fell short of expectations.
AustralianSuper, which manages $160 billion in retirement savings, pledged to beef up its oversight and controls after the review found various shortcomings, including a failure to appoint a chief risk officer - a senior role that is common in most large financial instititions.
The self assessment found that while AustralianSuper was a very strong fund in terms of culture and governance it had deficiencies at board level and in its executive leadership team and had work to do in fostering a "speak up culture" across the organisation.
The industry fund behemoth was one of 36 major financial institutions to be ordered by the Australian Prudential Regulatory Authority last year to review its governance, culture and compliance systems following a damning review of the Commonwealth Bank found significant issues that were likely to be evident in other companies.
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National Budget Issues.
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'Heaps of stimulus' to rev the economy
Jul 15, 2019 — 12.00am
Pessimistic views on the economy are misguided because there was "heaps of stimulus" in the pipeline from the Morrison government's income tax cuts and the Reserve Bank's two interest rate cuts.
Deloitte Access Economics partner Chris Richardson said in its latest business outlook report that people had misinterpreted the RBA's interest rate cuts in June and July and the central bank could have done a better job at communicating the reasoning.
Rather than being worried about a sharp economic downturn, the RBA wanted to create more jobs and boost wage growth because the economy's speed limit was higher than previously thought, the Canberra-based senior economist said in
"The Reserve Bank could have made this decision any time in recent years, but because it has decided to do it now, at a time when the economy is slower, everybody assumes that the economy must be going to hell in a hand basket. It really isn’t," Mr Richardson said.
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China customs holds up $1bn worth of Australian thermal coal
- July 15, 2019
Some 15 million tonnes of Australian thermal coal worth more than $1 billion is waiting to clear customs in China, according to industry analyst Platts, with no sign of an easing in processing delays imposed since February.
“Thermal coal market participants say they are yet to see any changes to Beijing’s import policy for seaborne traded coal, including Australian origin, which has endured long holdups at Chinese ports for the past several months,” Platts’ Asian thermal coal editor, Michael Cooper, told The Australian.
Mr Cooper said the amount of Australian coal being held up in customs in ports in China was now the equivalent of 100 Capesize bulk carrier cargoes of 150,000 million tonnes each. Currently thermal coal from Newcastle is trading at around $US75 a tonne.
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Why the superannuation rise may stop at 10pc
For a government and Reserve Bank of Australia trying to stimulate wages and spending, higher super contributions are a barrier.
Jul 15, 2019 — 11.11am
Ten per cent superannuation contributions. It's a nice round number and a concept that workers and contributing employers can easily understand.
Higher compulsory superannuation contributions would take more money out of the hands of spenders.
Debate has again erupted on the costs and benefits of incrementally increasing the superannuation guarantee (SG) from 9.5 per cent to 12 per cent of wages between 2021 and 2025.
Now some members of the government are privately whispering about a 10 per cent compromise option.
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Confidence surges on tax cuts, property prices
Jul 16, 2019 — 12.00am
Business conditions have recovered strongly in response to the Morrison government's $158 billion tax cut package and stability in the housing market, a poll of 251 chief executives finds.
The Executive Connection's quarterly confidence index rallied 16 points to 113 points, signifying a return to positive territory and countering the run of downbeat economic data.
Expectations for the economy over the year ahead jumped 27 points to 107 points. "The worst is behind us," said economist Warren Hogan, who is an adviser to TEC.
"The two things that have had the biggest impact on sentiment are the passing of the income tax legislation through Parliament, and the other one which I think is underplayed is the importance of the housing market." This was especially true for mid-market businesses, he said.
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Business confidence moves up but wages are unlikely to follow
By Shane Wright
July 16, 2019 — 5.01am
Business leaders' confidence in the economy is on the rise, boosted by the prospect of tax cuts and lower interest rates, but it is unlikely to translate into higher wages for their workforces.
The Executive Connection CEO quarterly survey, released on Tuesday, found confidence at its highest level since the middle of 2018, with business leaders tipping an economic rebound on the back of better sales and profits.
The survey, which took in reports from small and mid-sized business operators until late last week, had shown confidence falling in the run-up to the May federal election, with major concerns about the economy for the year ahead.
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RBA leaves door open to more interest rate cuts
By Shane Wright and Eryk Bagshaw
July 16, 2019 — 12.17pm
The Reserve Bank has left the door open to even more interest rate cuts, with the minutes of its latest meeting showing ongoing concern about the state of the jobs market and the lack of wages growth experienced by Australian workers.
The RBA cut the official cash rate to 1 per cent - a new all-time low - at the July meeting, following a quarter percentage point reduction in June.
New minutes show the bank's concern about softeness in the jobs market continued in the board's July discussion with a heavy focus on the state of employment across the country.
Interest rates have dropped to an historic low, potentially leaving those with a mortgage better off.
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Generational tax divide is real, but will take years to fix
David Crowe
Chief political correspondent
July 18, 2019 — 11.22pm
The political argument of the next three years was summed up in two questions this week that turn on the fairness of the rules that decide the incomes of many older Australians.
The first revealed a parsimonious government that was clearly reluctant to give almost one million Australians a lasting fix to the way federal ministers decide their pension rates.
The second was the startling admission from millionaire Dick Smith that he receives as much as $500,000 a year in tax refunds on his share dividends – a statement that renewed the contest over the burden on the budget from franking credits.
The question about the pension was simple. Could the government not afford a better increase than $600 million over four years? In a world with very low interest rates on savings, the government had been incredibly slow to adjust the deeming rate it uses to calculate how much a pensioner loses to make up for his or her private income.
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Soft jobs growth pressures RBA on interest rates
- 12:00AM July 19, 2019
Worsening job losses in major eastern states and a slowdown in employment growth will maintain pressure on the Reserve Bank of Australia to keep slashing interest rates to a record low, as economists doubt the government’s tax cuts will be enough to boost growth.
Australia’s jobless rate remained stuck at 5.2 per cent last month, according to data from the Australian Bureau of Statistics that revealed a fall in job numbers in the key states of Queensland, NSW and Victoria.
Although there was a solid bounce in employment in Western Australia, there continued to be a worrying deterioration in NSW figures, where the “trend” jobless rate has increased each month since February.
While there was a welcome slide in the rate of underemployed people — where workers want more hours or are engaged in work ill-suited to their skills — from 8.6 per cent to 8.2 per cent on a seasonally adjusted basis, economists were worried by the slowing rate of growth in job creation.
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Trapped like Houdini: the shackles facing the Reserve Bank
By Shane Wright
July 19, 2019 — 6.00pm
Harry Houdini thrilled crowds during the Roaring Twenties with his ability to escape from the most dangerous of situations.
It was the same decade that low interest rates were parlayed by the top end of society into conspicuous consumption and large debts that all came crashing down in 1929.
Ninety years on, and with interest rates at levels much lower than those set during the Great Depression, there are suggestions that the world's central banks are in a trap from which even Houdini would fail to escape.
Late last year, the RBA thought the future was clear. The economy would strengthen, easing property prices would have only a limited impact, while wages would rise on the back of a tightening jobs market. Interest rates would rise after being stuck at a record-low 1.5 per cent for more than two years.
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Health Issues.
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When hospitals make us sicker: One in 10 patients pick up infections from care
By Kate Aubusson
July 15, 2019 — 10.05am
Hospitals are where we usually go to get better but new Australian research suggests one in 10 patients contract infections in hospital, including surgical wounds, urinary tract infections (UTIs), and pneumonia.
The largely preventable hospital-acquired infections can be fatal, or risk making sick patients even sicker, and chew up hospital resources.
But Australia does not have a national surveillance system that tracks all types of hospital-acquired infections, and many hospitals do not routinely monitor rates of some of the most common infections such as UTIs and pneumonia, the researchers warned.
Their study took a snapshot of the rates of all infections across 19 large Australian hospitals in major cities and regional hubs on a given day, surveying 2767 adult acute patients between August and November 2018.
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Bev takes 14 pills a day. She's far from alone
By Liam Mannix
July 15, 2019 — 12.01am
Every morning, Bev White counts out 10 pills, of various shape, size and hue. They are swallowed with breakfast.
At night come four more, each needing to be taken at a different stroke of the clock. Then, there is the insulin jab. And the Panadol, if her head hurts.
“You would think, looking at that, taking pills is something I really enjoy,” says Ms White, 80. “But I promise you, that’s not the case.”
She is among the more than one-in-three Australians aged over 70 who take five or more different medicines a day.
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'It’s a muddle': Leading health economist calls for inquiry into private health insurance
By Rachel Clun
July 15, 2019 — 9.00pm
A leading health economist has called for an inquiry into the private health insurance sector as premiums continue to rise faster than wages amid falling membership rates.
Stephen Duckett, director of the health program at The Grattan Institute, has urged the Morrison government to investigate the industry he said is decades overdue for an overhaul.
Health Minister Greg Hunt tells the ABC's 7.30 that the fact that many lower income earners take out private health insurance indicates it is still a value for money proposition in the eyes of many Australians.
"The government needs to have some form of independent review," he said.
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The history and purposes of private health insurance
16 Jul 2019
Australia’s private health insurance industry fears it is in a death spiral, and politicians need to rethink whether or to what extent taxpayers should continue to subsidise the industry.
Australians are increasingly dissatisfied with private health insurance, and policy reform is urgent.
Premiums are rising much faster than wages or inflation. People are dropping their cover, especially the young and the healthy. Those who are left are more likely to get sick and go to hospital, driving insurance costs up further.
Meanwhile, taxpayers subside the industry to the tune of about $9 billion every year: $6 billion for the private health insurance rebate, and $3 billion on private medical services for inpatients.
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'We've just had enough': Healthcare workers threaten strike over patient assaults
By Dana McCauley
July 16, 2019 — 12.00am
Hospital staff are preparing to hit the NSW government with a state-wide strike, demanding action to make their workplaces safer after an increase in assaults by patients.
Health Service Union NSW president Gerard Hayes will move a motion at the union's state conference on Tuesday for the four-hour strike.
Healthcare workers are planning a strike over violent incidents at NSW hospitals.
"We've all had a gutful of people being injured in hospitals," Mr Hayes said, citing the case of a man who was shot by police after brandishing a knife outside Nepean Hospital's emergency room last year.
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Anorexia has genetic links, world-first research finding shows
By Stuart Layt
July 16, 2019 — 1.00am
Australian researchers have discovered genetic links to the eating disorder anorexia, in a world-first international study linking the condition with physical causes.
Anorexia nervosa is a serious eating disorder characterised by an extreme aversion to food, resulting in massive weight loss, combined with an inability or unwillingness to recognise the seriousness of the low body weight.
Researchers from QIMR Berghofer medical research institute analysed the DNA of nearly 17,000 people who suffered from anorexia, including nearly 3000 from Australia and New Zealand.
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Grattan Institute questions value of health insurer subsidies
- 12:00AM July 16, 2019
The Grattan Institute has called on the Morrison government to clarify what it expects of private health insurance before embarking on another round of reforms to support the ailing sector.
After the federal election, and with Labor not in a position to introduce its proposed cap on premium increases and Productivity Commission inquiry into the sector, returning Health Minister Greg Hunt vowed to work with insurers to reduce costs.
Mr Hunt said the higher premiums they passed on to members — which averaged 3.25 per cent this year — “must go lower”. Labor’s cap, he argued, would have led to higher out-of-pocket costs while the inquiry was “just an excuse (for) two years of inaction”.
But with some in healthcare believing a broader inquiry would still be useful, the institute last night released a working paper that questioned the purpose of government-subsidised insurance.
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Superannuation raids to pay for fat surgery
- 12:00AM July 17, 2019
Australians are tapping their superannuation to pay for healthcare at an unprecedented rate, with more than 30,000 requests approved last financial year — twice as many as two years ago — mostly for weight-loss surgery and IVF.
This emerging funding source for private healthcare will soon be paying out $400 million a year as patients grapple with out-of-pocket expenses and public waiting lists. It is fuelled by rising rates of obesity and couples choosing to have children later in life.
Even as federal Treasury was reviewing the rules on early access to superannuation, the surge in demand from people wanting to use their retirement savings continued at a phenomenal rate. In 2016-17, the Department of Human Services approved 15,132 applications to use superannuation to pay for healthcare. The following year, a further 19,060 applications were approved, representing annual growth of almost 26 per cent.
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Mental health data now 12 years out of date
- 12:00AM July 17, 2019
Governments are embarking on mental health inquiries, and promising to respond to rising suicide rates, despite not having the data to show the full extent of the problem.
The first National Survey of Mental Health and Wellbeing was undertaken in 1997, and followed up in 2007, however the third survey has still not been done. Even if the government gives the go-ahead, the new data would be at least five years late.
A technical advisory group assembled by the Department of Health to prepare for any third survey has emphasised, in documents obtained under Freedom of Information laws, that it would provide unprecedented data to evaluate and inform policy responses.
“No other surveys have sufficient detail to understand the mental health needs of the population, nor would additions to any other survey be sufficient to determine this,” the group advised last year.
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'Damaging patients': push back on proposed breast implant ban
By Kate Aubusson
July 18, 2019 — 12.00am
The crackdown on textured breast implants risks triggering anxiety, unnecessary surgeries and seriously disadvantages cancer patients needing breast reconstructions, plastic surgeons warn.
The Therapeutic Goods Adminstration (TGA) last week recommended banning, suspending and restricting 31 models of breast implants and breast tissue expanders after an exhaustive review into their links to anaplastic large cell lymphoma (ALCL).
But its proposals extend beyond the regulatory action of international counterparts.
While countries including France and Canada have banned the most highly textured breast implants (grade 4 and grade 3), the TGA recommended suspending a number of grade 2 implant models, despite Australian research suggesting lesser textured implants carried a significantly lower risk of ALCL.
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Early payouts for healthcare super silly, Treasury told
- 12:00AM July 18, 2019
The superannuation sector has warned Treasury that letting people use retirement savings to pay for private healthcare is not an appropriate response to the problem of those services being unavailable in the public system.
The Australian revealed yesterday that more than 30,000 requests for early access to superannuation to pay for healthcare were approved last financial year, twice as many as two years ago. The average amount released was almost $15,000, often spent on weight-loss surgery or IVF.
The superannuation sector, financial advisers and some health groups had previously called on Treasury to tighten the rules in order to protect the nest eggs but Treasury proposed only minor changes last year, saying “early access to superannuation could be beneficial in a world of finite government resources”.
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Health insurance rebate still a pain in the budget
Henry Cutler
- 12:00AM July 18, 2019
The private health insurance sector wants increased rebates to stop the recent decline inmembership. It argues that reduced membership increases pressure on the public hospital system and waiting lists, because people will stop using private hospitals.
Membership has risen significantly since the rebate was introduced to around 45 per cent today. And public hospital patients are waiting longer than ever. The median waiting time for total knee replacement performed in public hospitals was 198 days in 2017-18, the longest it has ever been.
But the rebate has been bad policy from the start. It has cost Australian taxpayers billions of dollars each year with little benefit except to private health insurers and some with private health insurance.
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Healthcare playing catch-up on transparency: Medibank
- 1:27PM July 18, 2019
Medibank boss Craig Drummond has argued the healthcare sector is playing “catch-up” in an age of transparency, when customers demand detailed information on healthcare costs.
The chief executive of Australia’s largest private health insurer said everyone in the sector wanted private healthcare to be more affordable, easier to use, and provide greater patient value.
“There is much more to do and we must continue to come together to tackle some of these challenges,” Mr Drummond said.
Concerns about the cost of insurance and questions about its value are fuelling a fall in health insurance participation amid political debate about reforms needed to support the sector.
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More women suffering ‘deaths of despair’ but wealthiest are shielded, study shows
By Kate Aubusson
July 19, 2019 — 12.00am
Women are increasingly suffering “deaths of despair”, a new study shows, with only the wealthiest shielded from the rise in suicides, overdoses, and deaths from potentially preventable causes.
The alarming findings confirmed women’s health was “utterly determined by their social circumstances”, said the Australian study’s senior author Professor Stephen Robson.
Mortality rates are stalling and even rising for women in the prime of their lives.Credit:Alamy
And the gap in mortality rates between the rich and the poor was widening, he warned.
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Private health insurance in a death spiral? Good. Let's shut it down
Jenna Price
Columnist and academic at the University of Technology Sydney
July 19, 2019 — 12.00am
My health insurance may well be "free" but it is still utterly terrible value. That free health insurance is something I have in common with the Grattan Institute’s director of health programs, Stephen Duckett, whose report on private health insurance was released this week.
Private health insurance under the microscope. Credit:Michele Mossop
As Duckett puts it, “If I don’t take out health insurance I pay more in tax than the cost of my premium. I have a 100 per cent subsidy for my health insurance when a person on half my income has a much lower rate of subsidy.”
He’s smart and does it for financial reasons. For me, it's a lucky charm, paid for only because I’m superstitious. For example: “What if I get hit by a bus?” Health insurance only survives because we all have the secret “what if” anxiety.
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Doctors in stand-off over plans to shake up specialist billing
By Dana McCauley
July 21, 2019 — 12.00am
A proposal to extend time-based billing beyond GPs to specialists has divided the medical community, with the Australian Medical Association (AMA) warning the move would threaten quality of patient care.
The Morrison government's Medicare Benefits Schedule (MBS) review committee examining specialist consultations has recommended that rebates be allocated based on the amount of time doctors spend with patients. But the peak body says the model is flawed.
AMA president Tony Bartone said the lack of modelling or research backing up the proposal, and the fact that time-based billing was already problematic for GPs, compelled him to reject it.
"It doesn't reward complexity, it doesn't reward quality. For all those reasons, we just couldn't support it," he said.
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International Issues.
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How Epstein tried to rebuild his reputation – cheaply
Powerful female friends, recycled donation and Harvard connections were all part of Jeffrey Epstein's post-prison PR strategy.
Jodi Kantor and Mike McIntire and Vanessa Friedman
Jul 15, 2019 — 12.00am
New York | A strange thing happened when Jeffrey Epstein came back to New York City after being branded a sex offender: his reputation appeared to rise.
In 2010, the year after he got out of a Florida prison, Katie Couric and George Stephanopoulos dined at his Manhattan mansion with a British royal. The next year, Epstein was photographed at a "billionaire's dinner" attended by tech titans such as Jeff Bezos and Elon Musk. A page popped up on Harvard University's website lauding his accomplishments, and superlative-filled news releases described his lofty ambitions as he dedicated $US10 million to charitable causes.
Powerful female friends served as social guarantors: Peggy Siegal, a gatekeeper for A-list events, included him in movie screenings, and Dr Eva Andersson-Dubin, a champion of women's health, maintained a friendship that some felt gave him credibility. Epstein put up a website showing Stephen Hawking and other luminaries at a science gathering he had organised.
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UK offer to free Iranian tanker
- AFP
- 12:00AM July 15, 2019
British Foreign Secretary Jeremy Hunt sought to ease tensions with Iran yesterday, saying an oil tanker held by Gibraltar would be released if Tehran guaranteed it was not heading to Syria.
The call by Mr Hunt to his Iranian counterpart, Mohammad Javad Zarif, came as Gibraltar police released the four-member crew of Grace One after investigators concluded they would not be charged within the maximum detention limit of 72 hours, a person familiar with the investigation said. The crew isn’t free to travel and its travel documents are with the police, the person said.
The captain and mate were arrested on Thursday and the two other crew members on Friday after Gibraltar police and British Royal Marines seized the Grace One on July 4, alleging that it was carrying two million barrels of crude oil to Syria in violation of EU sanctions.
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China growth slows to 6.2pc in second quarter
- By Liyan Qi
- Dow Jones
- July 15, 2019
China’s gross domestic product rose 6.2 per cent in the second quarter from a year earlier, the slowest pace in at least 27 years, according to official data.
The result was the slowest since the first quarter of 1992 when the earliest quarterly data was available, according to Wind.
In the first quarter, China’s GDP grew 6.4 per cent from a year earlier.
The result was lower than 6.3 per cent median forecast from a Wall Street Journal poll of 14 economists.
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US budget deficit up 23pc from a year ago
Jul 15, 2019 — 11.23am
Washington | Even as the US economy is ticking along, President Donald Trump's tax cuts last year have led to a ballooning in the country's budget deficit. Treasury Secretary Steven Mnuchin is warning the government could run out of money in early September.
Mnuchin, in a letter to Congressional leadership on Friday (Saturday AEST), said that while "it is impossible to identify precisely" how long the Treasury's resources can last, updated predictions indicated that "there is a scenario in which we run out of cash in early September, before Congress reconvenes."
"As such," Mnuchin wrote, "I request that Congress increase the debt ceiling before Congress leaves for summer recess."
He and House Speaker Nancy Pelosi, D-Calif., have spoken by phone multiple times this week about federal spending caps and raising the debt ceiling to prevent government wide spending cuts.
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Love it or leave it: Donald Trump fans the fires of race relations
Jul 16, 2019 — 6.13am
Washington | Donald Trump is being accused of dramatically escalating racial tensions in the US after defending his attacks on four coloured congresswomen and saying he doesn't care that white supremacists agree with him.
In an extraordinary White House press conference on Monday (Tuesday AEST), Mr Trump doubled down on his weekend Tweet attack against Democrat lawmakers that he said "hate America" and should go back to where they came from.
"As far as I’m concerned, if you hate our country, if you’re not happy here, you can leave," said President Trump during a Made in America showcase event on the South Lawn of the White House. AP
By echoing language common in far-right anti-immigration circles, Mr Trump has stoked a political hornet's nest and provided a road map on how he intends to campaign against Democrats in 2020.
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Trump's trade war is biting and leaving a nasty scar on China's growth
By Stephen Bartholomeusz
July 16, 2019 — 12.00am
China’s economy is slowing markedly as the impact of the Trump administration’s trade war on its economy continues to bite. Its June quarter numbers show China is on track to produce its weakest growth in nearly 30 years.
The economy grew at "only’’ 6.2 per cent in the June quarter, slower than the 6.4 per cent recorded in the first three months of the year.
While that would, if sustained for the rest of the year, be within the authorities’ targeted range of 6 per cent to 6.5 per cent, it would continue a trend of recent years. Last year China’s GDP growth was 6.6 per cent and in 2017 it was 6.8 per cent.
The June quarter outcome was in line with expectations that were set by the overlay of the Trump tariffs on an economy that was already slowing last year as China’s authorities began tackling excessive levels of debt and the unproductive allocation of resources within its economy.
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DR Congo confirms first Ebola case in border city of Goma
- By Krista Larson and Saleh Mwanamilongo
- AP
- 12:00AM July 16, 2019
The Congolese Health Ministry confirmed an Ebola case in Goma yesterday, marking the first time the virus has reached the city of more than two million people along the border with Rwanda since the epidemic began nearly a year ago.
The Democratic Republic of Congo Health Ministry said the man who had arrived on Sunday in the regional capital had been quickly transported to an Ebola treatment centre.
Authorities said they had tracked down all the passengers on the bus the man had taken to Goma from Butembo, one of the towns hardest hit by the disease.
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Boris Johnson's 'cakeism' could meet a sticky end
Jul 16, 2019 — 9.57am
London | If Boris Johnson’s name is ever linked to a political idea, it is likely to be “cakeism” – the notion that it is possible to govern without making hard choices.
Johnson’s famous remark that, when it comes to cake, he is “pro having it and pro eating it too” has defined his approach to Brexit. Its feasibility will soon be put to the test, when (as seems inevitable), he becomes prime minister later this month after winning the Conservative party leadership election.
As a leadership candidate, Johnson has run a strongly cakeist campaign. He has promised that he can secure a better Brexit deal within months. But he has also assured the public that, if this new deal proves elusive, a no-deal Brexit would be “vanishingly inexpensive if you prepare”,
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EU averts leadership crisis in key vote
Jul 17, 2019 — 5.07am
London | The European Union wriggled out of a full-blown political crisis on Tuesday (Wednesday AEST) after its fractious Parliament narrowly confirmed outgoing German defence minister Ursula von der Leyen as the next president of its huge Brussels bureaucracy, the European Commission.
Dr von der Leyen formally takes up her job on November 1, succeeding Luxembourg's Jean-Claude Juncker. The big jobs in her in-tray are Brexit, which is scheduled for October 31, and building a relationship with US President Donald Trump to avert a looming trade war.
German Defence Minister Ursula von der Leyen garnered nine votes clear of the 374 necessary in the European Parliament to be confirmed as the new president. Geert Vanden Wijngaert
The close ally of Chancellor Angela Merkel was nominated for the job by the EU's 28 leaders during an epic three-day wrangle last month, but had to have her position confirmed by the recently elected European Parliament.
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UK braces for economic shock as no-deal Brexit nears
Jeremy Warner
Jul 17, 2019 — 9.10am
London | Get ready for a humdinger of an economic shock. That in any case is what policymakers at the Bank of England and the Treasury are doing.
The chances of a no-deal Brexit have increased markedly over the past couple of weeks. In the course of the Tory leadership race, positions have hardened; Boris Johnson, who is virtually certain to win, has left himself no ladder down which to climb. Come October 31, it's "do or die". Unequivocally, he is committed to a no-deal exit should agreement on new terms prove impossible.
Even for someone as skilled at changing his position as Boris, the sort of volte-face he would now be obliged to perform to avoid no deal would therefore be a virtual impossibility. So unless Parliament can find a way of stopping such an outcome, that's where we appear to be heading. Brussels has indicated a willingness to grant another extension, but won't alter the Withdrawal Agreement in the manner Mr Johnson demands. On both sides, it's no surrender.
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Donald Trump’s race-baiting strategy to secure second term
His interventions are incendiary, dangerous and un-American. But that is no guarantee they will fail.
Jul 18, 2019 — 10.01am
On the surface, Donald Trump’s escalated race-baiting looks self-destructive. The US economy is growing. Middle-class wages have been picking up. Mr Trump’s re-election aim should be to broaden his base to include non-white people – or at least reassure moderate white voters who are queasy about reliving the US civil war.
Yet he is steaming in the opposite direction. Telling US-born Democrats to go back to the countries they came from is a departure even by Mr Trump’s standards.
In 2016 he attacked immigrants, chiefly Muslim and Mexican, as a threat to national security. Now he is portraying opinionated non-white citizens as un-American. Their citizenship is performance-based.
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WHO declares Ebola outbreak in Congo an international emergency
Tom Miles
Jul 18, 2019 — 6.11am
Geneva | The World Health Organisation has declared the Ebola outbreak in northeastern Congo to be a "public health emergency of international concern", saying the recent risk of its spread in the city of Goma and into Uganda had increased the threat.
More than 1600 people have died since August in the second-worst outbreak of the disease in history. The declaration on Wednesday (Thursday AEST) was sparked by the outbreak's spread to a Goma, a city of 2 million people on the border with Rwanda.
WHO chief Tedros Adhanom Ghebreyesus said he had accepted the recommendations of a committee of international experts which stressed there should be no restrictions on travel or trade, and no entry screening of passengers at ports or airports outside the immediate region.
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China's economy is 'extremely dangerous'
Jul 17, 2019 — 5.32pm
Years of rapid debt accumulation have left China facing a "major financial danger", which in turn poses an economic threat to Australia's future prosperity, University of Sydney adjunct professor Adrian Blundell-Wignall warns.
Speaking at a Australian Business Economists event in Sydney on Wednesday, Dr Blundell-Wignall noted that China has made a significant contribution to the national income this century.
"Australia's happiness quotient is highly correlated," with Chinese economic performance, the former special adviser on financial markets to the OECD said.
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Trump says US warship destroyed Iranian drone in Strait of Hormuz
By Liz Sly
July 19, 2019 — 5.34am
Washington: A US naval ship destroyed an Iranian drone that flew too close and ignored multiple calls to stand down on Thursday, President Donald Trump said.
The Iranian drone came within 1000 metres of the USS Boxer in the Strait of Hormuz before the crew "took defensive action" and "immediately destroyed" it," Trump said in remarks ahead of a White House ceremony with a delegation from the Netherlands.
"This is the latest of many provocative and hostile actions by Iran against vessels operating in international waters," he said.
"The United States reserves the right to defend our personnel, our facilities and interests and calls upon all nations to condemn Iran's attempts to disrupt freedom of navigation and global commerce. I also call on other nations to protect their ships as they go through the strait and to work with us in the future."
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Turkey, kicked out of F-35 program, calls on US to reverse decision
July 19, 2019 — 10.50am
Ankara: The US decision to exclude Turkey from an American-led fighter jet program goes against the "spirit of alliance," the Turkish government said on Thursday, and called on its NATO ally to reverse the decision.
In a major break with a longtime ally, US President Donald Trump's administration on Wednesday said Turkey is being kicked out of the F-35 program because it is buying the Russian S-400 air defense system. Washington says the S-400 would compromise the F-35 program and aid Russian intelligence.
In a statement, Turkey's Foreign Ministry rejected that assertion.
"This unilateral step is incompatible with the spirit of alliance and is not based on any legitimate justification," the ministry said. "Not only is it unfair to keep Turkey out of a program of which it is a partner but the claim that the S-400 will weaken the F-35 is invalid."
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The world is heading to a 'darker place' of hatred, May says in last major speech
By Nick Miller
Updated July 18, 2019 — 1.19pmfirst published at 2.46am
London: Theresa May has used her last major speech as Prime Minister to warn the “politics of winners and losers, of absolutes and of perpetual strife” has taken hold, “and that threatens us all”.
The descent of political debate into “tribal bitterness” and vile abuse was corroding democratic values in British politics and around the world, May said.
And in what was seen as a veiled swipe at US President Donald Trump – but in terms that could also include other global players – May said this “absolutism” was seen “in the increasingly adversarial nature of international relations, which some view as a zero-sum game where one country can only gain if others lose. And where power, unconstrained by rules, is the only currency of value.”
And – again in comments taken to refer to Trump – May said “words have consequences, and ill words that go unchallenged are the first step on a continuum towards ill deeds, towards a much darker place where hatred and prejudice drive not only what people say but also what they do”.
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Iran's Revolutionary Guard seizes UK tanker as tensions soar
Nick Wadhams and Josh Wingrove
Jul 20, 2019 — 6.17am
Washington | Iran's Revolutionary Guard Corps seized a British oil tanker in the Strait of Hormuz amid soaring tensions in one of the world's critical energy chokepoints. Brent climbed more than 1.3 per cent on the news.
US President Donald Trump told reporters at the White House that he will be "working with the UK" on the incident. "This only goes to show what I'm saying about Iran: trouble, nothing but trouble."
A spokesperson for the British government said it was urgently seeking further information and assessing the situation.
A second oil tanker in the area, the Liberian-flagged Mesdar, operated by a UK company, appeared to turn toward the Iranian coast, according to ship-tracking data. It had been heading toward Saudi Arabia. Trump told reporters on Friday afternoon (Saturday AEST) the administration had been hearing conflicting reports about whether a second tanker had been taken.
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Pentagon is putting troops back in Saudi Arabia as 'deterrent'
By Robert Burns
July 20, 2019 — 6.19pm
Washington: With Iranian military threats in mind, the United States is sending American forces, including fighter aircraft, air defence missiles and likely more than 500 troops, to a Saudi air base that became a hub of American air power in the Middle East in the 1990s but was abandoned by Washington after it toppled Iraqi strongman Saddam Hussein in 2003.
The Saudi Foreign Ministry announced the basing agreement without mentioning details.
On Saturday, the Pentagon said the move would provide "an additional deterrent" in the face of "emergent, credible threats."
Senior American defence officials said some American troops and Patriot air defence missile systems have already arrived at Prince Sultan Air Base, south of Riyadh.
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China tells Marise Payne to stop interfering over writer Yang Hengjun’s detention
- 12:01AM July 21, 2019
China has told Australia to stop interfering in the case of Chinese-Australian writer, while confirming Yang Hengjun is being held on suspicion of criminal activities.
Foreign Minister Marise Payne has said she is “deeply disappointed” the writer and former diplomat has been transferred to criminal detention. “If he is being detained for his political views, then he should be released,” she says.
But a spokesman for China’s foreign ministry says Beijing is carrying out a lawful investigation.
“China’s deplores the statement made by the Australian foreign minister and urges the Australian side to stop interfering in the handling of the case by the Chinese side and stop issuing irresponsible remarks,” the spokesperson said in a statement.
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New Airbus suffers control fault like grounded Boeing
- By Charles Bremner
- The Times
- 11:22AM July 20, 2019
Airlines have been alerted to a potentially dangerous fault in the controls of the latest Airbus that has similarities to the trouble with the grounded Boeing 737 Max.
The European Aviation Safety Agency (EASA) has issued an airworthiness directive for the Airbus A321neo after the aircraft was found in certain cases to pitch its nose upwards excessively.
“This condition, if not corrected, could result in reduced control of the aeroplane,” the directive said.
As a temporary remedy airlines have been told not to load their A321neos, which carry about 185 passengers, with the weight as far to the rear of the aircraft as they were permitted until now.
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Britain pledges to hit Iran with ‘actions not words’ over seizure of oil tankers
- 6:20AM July 21, 2019
Britain has been embarrassed by the ease in which Iranian Revolutionary Guards captured two British oil tankers in the Strait of Hormuz on Friday, with Foreign Secretary Jeremy Hunt promising “actions, not words’’ against Iran to be announced in Westminster tomorrow.
Within minutes of Mr Hunt expressing “extreme disappointment’’ in the Iranian regime for escalating tensions when they had promised to de-escalate, the Iranians posted footage of machine gun-carrying commandos rappelling from a helicopter to hijack one of the ships.
Two British ships were seized by the Revolutionary Guards while in Omani and international waters on Friday afternoon local time and redirected towards Iran, but one of the ships, the Glasgow-based Mesdar was soon allowed to continue on its way.
The British warship in the area, HMS Montrose, was an hour away from getting to the aid of the British flagged tanker Stena Impero, with 23 crew of Indian, Russian, Latvian and Filipino nationalities, which has now been taken to Bandar Abbas, the main site of the Iranian Navy on the south coast of Iran. It was feared that the Iranians were poised to engage with HMS Montrose if it intervened.
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I look forward to comments on all this!
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David.
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