September 19, 2019 Edition.
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As I type the Iranians seem to have attacked some major oil facilities in Saudi Arabia and we await the US response. I suspect Trump will not be happy! Otherwise US foreign policy is now in the hands of one man so we have to wait and see what he decides to suggest Trump does and to see what other changes now happen over all the other issues – North Korea, Middle East etc. As of Thursday we still don't know what the Trump will do in response...
The Brexit fiasco drags on…too confusing for words and now totally unpredictable. The UK Supreme Court presently is considering what was legal with closing down Parliament - and what he has done means for Boris.
In Australia the issue of the week is Chinese influence in Australian Politics – and the issue has a very long way to run. Racism and xenophobia are rearing their ugly heads in spades! ScoMo is off to have a meal with Trump - we will see too much of that I suspect on the tele on the weekend!
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Major Issues.
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Labor's existential nightmare
The revelations emerging from the ICAC hearings in Sydney suggest Australia’s oldest political party has been coarsened by a group of spivs, time servers and mendacious mediocrities.
Sep 7, 2019 — 12.00am
To understand the dimensions of the Australian Labor Party’s post-election slump, there would have been no better place to be an observer than at a quiet family gathering held in Brisbane last month.
Far from ICAC revelations of Tammany Hall-style corruption at the NSW ALP, the gathering was held to mourn the passing of Graham Freudenberg, speech writer to ALP figures like former Labor prime ministers Gough Whitlam and Bob Hawke, former federal ALP leader Arthur Calwell, and former NSW Labor premiers Neville Wran and Bob Carr.
Freudenberg was an unusual figure. A late riser, his day began and ended in a cloud of smoke, and late-in-the-evening, liquid reinforcement. But Freudenberg was also incredibly well-read, had an almost unparalleled mastery of Australian, European and American politics; was a brilliant writer and author of three books; generous and considerate to a fault; and had a rare thespian turn of phrase.
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Is it time to start considering Plan B: lower rates forever?
Katrina King
Sep 9, 2019 — 12.00am
There is no doubt that yields and returns are extremely low right now. It’s not hard to see why.
The world’s economists, commentators and central banks are debating the timing of an impending recession, there is a worsening Sino-American trade and currency war, and oil prices are falling.
Bloomberg gave the odds of a US recession before election day next year a less than a 50-50 chance. They also surveyed US economists about the likelihood of a recession within the next year – the result came in at 35 per cent.
All classic late cycle concerns.
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Morrison taunts Labor with values tests
Scott Morrison wants the return of parliament this week to put a harsh spotlight on the contrast between a troubled Labor party and a "predictable" Coalition with policies based on values and beliefs.
Sep 9, 2019 — 12.00am
A memorial day is always to be revered but a date just ahead of the return of parliament this week was always going to be a little awkward for Anthony Albanese to finesse.
The Opposition leader spent Sunday in Cessnock at an annual service held by the Construction, Forestry, Maritime, Mining and Energy Union, commemorating the deaths of miners.
And although the CFMEU mining division has little to do with a lawless, thuggish building division, the association is not only a reminder of the Labor leader’s difficulties pursuing his plan to expel John Setka, secretary of the Victorian branch, from the party.
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Labor clings to its policy vanity
The line pushed by Labor's federal president is that Labor – read Bill Shorten – simply didn't sell its big government policies well enough.
Sep 9, 2019 — 12.00am
Nuts, absolutely nuts. The Australian Financial Review doesn’t always agree with Kevin Rudd. But it is difficult to demur from his description of Labor’s election manifesto. When Anthony Albanese was elected Labor leader days after its devastating election defeat in May, he talked about the importance of aspiration, wealth creation and jobs. Yet the line now pushed by Wayne Swan, the former Treasurer foisted on Mr Rudd by the Labor factions, turned Labor federal president, is that Labor should be proud of its losing big-taxing and big-spending election manifesto. The supposed problem was that Labor – read Bill Shorten – didn’t sell it well enough. Mr Swan, who had surrendered any pretence of budget responsibility by the time he finished as Treasurer in 2013, says Labor “won’t let the conservative trickle-downers from the Coalition and elsewhere rewrite history”. That would be the broad set of economic settings that helped generate 28 years of unbroken economic growth. He also repeated the furphies – now seemingly taken as gospel in Labor -– that Australia is becoming more unequal, workers are going backwards and fewer are in secure work.
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The $3 billion opportunity that will change the Aussie BBQ forever
Jennifer Duke
Media and telecommunications journalist
September 9, 2019 — 12.00am
In the next decade the great Australian barbecue is going to get a drastic makeover. Instead of beef, pork and chicken on the menu, it's increasingly going to be plants - in the form of plant-based proteins made to look like typical meat - that make it onto your plate.
This might seem hard to believe five months after animal rights protesters were criticised by Prime Minister Scott Morrison as "green-collared criminals" after bringing Melbourne's CBD to a standstill protesting against farms and abattoirs, or when considering fines were recently increased to up to $400,000 for activist groups trespassing farming properties.
Vegan products are becoming increasingly available in mainstream supermarkets.
However, there are signs the plant-based movement might be a sector of the economy ready to surge at a time when long-term opportunities to create jobs and boost productivity are sorely needed.
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Why fixing Australia's embarrassing energy market is so hard
Sep 9, 2019 — 12.05pm
Never say Australia doesn't punch above its weight.
Among the major economic failures of our time, including the recent US Great Recession, ongoing Japanese stagnation and the Dutch disease of the 1970s, Australia is working on its own contribution: a small-population continent with abundant gas, coal, oil, sunshine, wind and uranium has gone from producing cheap electricity to some of the world's most expensive.
The problem is man made. With political parties looking for differentiation from their opponents, energy policy has become a useful vehicle to leaden up with cultural baggage. The loss is Austalia's reputation for good governance.
The fight over wind and solar power has been a culture war touchstone for over a decade. Now, a nascent attempt to break through the policy inertia is being blocked by politics, once again.
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How low inflation explains everything
If your frame of reference for valuations is the last, say, 40 years, you’re comparing a time of radically different inflation rates and bond yields – and therefore valuation metrics.
James Weir
Sep 9, 2019 — 10.51am
Low inflation is a global phenomenon that has central bankers tearing their hair out – nobody can tell you exactly what’s causing it and, so far, nothing seems to be able to stop it.
Its effects on financial markets – and every investor’s portfolio – are profound. In fact, this very low inflation environment can explain an awful lot of what seems to be peculiar in markets at the moment.
Just how low is inflation? Australia’s "core CPI", which excludes the more volatile prices like food and energy, has averaged 3.7 per cent since 1983, compared with the June reading of 1.6 per cent. That’s not far off one-third of the average.
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Why we're set for global rally, not recession
Recessions hit when people aren’t talking about them, they’ve never struck when pundits call them ahead of time.
Sep 9, 2019 — 9.48am
While wisdom can be found in crowds, the consensus is not always correct. That's certainly the case with the current consensus that the global economy, led by the US, is about to dip into recession.
Not only is a global or US recession unlikely, the inverse is probable, which will cause US and leading global equity bourses to rip higher – in other words, a sharemarket rally.
Quantitatively difficult to demonstrate but empirically easy to evidence, no recession or subsequent markets retracement has ever begun when the consensus has rung recessionary alarm bells. Recessions hit when people aren’t talking about them - they’ve never struck when pundits call them early.
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$200 trillion in global debt at risk if trust falters: OECD
By Shane Wright
September 9, 2019 — 7.00pm
The Organisation for Economic Co-operation and Development (OECD) has warned almost $200 trillion in public and private debt could be the catalyst for another global economic crisis if trust in government and financial institutions deteriorates.
In a report overseen by former Australian Securities and Investments Commission chief Greg Medcraft, the OECD also said the destruction of trust following the global financial crisis (GFC) had contributed to the rise of crypto-currencies, which themselves were exacerbating the globe's economic risks.
The week ahead in global markets will be about the ECB, Brexit developments, as well as a major meeting by OPEC. (This video was produced in commercial partnership between SMH, The Age and IG Markets)
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Don’t be so gloomy: bond market signals are far from being reliable
Most investors and commentators are taking a gloomy view on the global economic outlook.
Since mid-year, the majority sentiment in bond markets has anticipated an early worldwide recession. As a result, bond yields are now at (or close to) all-time lows and the market prices of bonds, which move inversely with yields, have soared. Share investors are highly anxious about the economic outlook; so far, though, average prices haven’t collapsed.
Has sentiment turned too negative? Could the modestly paced upswing in the US economy, now 10 years old, continue for another year or two?
In my view, investors are putting too much emphasis on the much-discussed “inversion” of the US yield curve and on the likelihood both the US (and Australia) will make early and big cuts in their cash rates. The bigger risks to the world economy come from the trade and technology wars, which are creating cyclical and structural problems easier monetary policies can’t offset.
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Scott Morrison will be asked to make an impossible choice
The price of a rare White House dinner invitation will be commitment to Washington's side against China. This is what the PM should tell the Americans.
Hugh White
Sep 11, 2019 — 12.00am
For years our leaders have told us that we do not have to choose between the United States and China. But what if that’s wrong? What should Australia do if we are forced to make a choice between our main ally and our leading economic partner?
Unfortunately the question is far from hypothetical. Last month US Secretary of State Mike Pompeo came pretty close to demanding that Australia should get off the fence and start supporting America wholeheartedly against China’s strategic challenge. He said we faced a stark choice between our security as a close US ally and our prosperity as China’s economic partner. “You can sell your soul for a pile of soybeans, or you can protect your people,” he said (mistakenly assuming that soybeans are what we sell to China).
It is a demand that Scott Morrison is bound to hear again when he turns up for his state dinner at the White House in Washington next week. In fact that is why he’s been offered this rare honour. It has nothing to do with his easy-going charm. It is all about telling him that Australia must now at last choose which side it is on between the US and China.
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Scott Morrison understands normal people want a boring government
Chris Uhlmann
Nine News Political Editor
September 11, 2019 — 12.00am
Let’s raise two cheers for boring government. For the first time in nearly a decade we are heading towards the end of the year without speculating whether the Prime Minister will survive until Christmas.
And that is a good thing.
One of the perversions of reporting is that any good day for journalism is usually a bad one for many other people. Catastrophic floods, fires, massacres, corruption, bastardry, ineptitude and high political farce or drama fill news bulletins and column inches but they aren’t something any half-sensible citizen actually desires.
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WTO on brink of crisis due to inaction over dispute-settlement reforms, Birmingham warns
By Eryk Bagshaw
September 11, 2019 — 12.00am
Trade Minister Simon Birmingham has warned inaction over reform of the World Trade Organisation's dispute-settlement system has taken the body to the brink of crisis.
But he said the $US300 billion US-China trade war was drawing other countries closer together in defence of the rules-based trading system.
Speaking after flying back from an ASEAN trade ministers' meeting in Bangkok, Thailand, Senator Birmingham said talks with Singapore, Vietnam and Indonesia had created momentum for reform of dispute handling by the WTO, which oversees the rules of international trade.
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RBA issues interest rates slapdown to rich boomers
The Reserve Bank has slapped down rich boomers complaining about the impact of low interest rates on their incomes, suggesting only a “single digit” percentage of over 60s rely significantly on interest income, and many of them were well off.
“A very small share of households earn more than 20 per cent of household income as interest,” the RBA said, pointing out that households have “around twice as much” in debt as deposits, in aggregate.
In a defence of its decision to cut the official interest rates twice in June and July – to a record low of 1 per cent – the RBA said the majority of households who depended on interest income “were in the most wealthy and second most wealthy quintiles”.
The statement, released on Wednesday, emerged as part of a series of answers to questions from MPs about the effect of lower interest rates on households, business, and the likelihood the RBA would follow central banks overseas in pursuing ‘quantitative easing’ — the creation of new money electronically to buy existing assets.
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https://www.afr.com/policy/foreign-affairs/sinophobia-creeps-through-canberra-cracks-20190911-p52q8d
Sinophobia creeps through Canberra cracks
Voters are increasingly worried about the extent of Chinese influence and activity in Australian politics. That provides plenty of gotcha moments as part of the political frenzy.
Sep 11, 2019 — 6.00pm
Politics can quickly turn into a bloody, brutal assault – now more than ever. And don’t just blame Donald Trump.
So Labor rushed to connect new Victorian Liberal MP Gladys Liu with the treatment of its own disgraced former senator, Sam Dastyari, in a fresh political frenzy over the extent of any personal links or potential loyalties to China.
Foreign affairs spokesman Penny Wong immediately compared the Prime Minister (actually Malcolm Turnbull at the time, remember him?) making Dastyari a test of Labor’s leadership to suggest Liu should be a similar test for Scott Morrison.
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Reserve Bank warns against households' 'reduced appetite for debt'
By Shane Wright
September 12, 2019 — 10.06am
The Reserve Bank has conceded its efforts to boost the economy with interest rate cuts may be undone by cautious home owners afraid to reduce their monthly repayments as it also revealed the business sector is resisting the benefits of cheap cash.
In answer to a series of questions from Liberal MP Tim Wilson at a recent House of Representatives committee hearing, the bank said it expects its recent rate cuts to eventually boost the economy by up to three quarters of a percentage point over the next two years.
Much of that depends on the cuts flowing through businesses and households into the broader economy.
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Your honeymoon is over, PM: it's time to fill the policy vacuum
John Hewson
Columnist and former Liberal opposition leader
September 12, 2019 — 12.00am
When is serious government going to start in this country? I understand that Morrison was afforded a reasonable holiday period, with minimal scrutiny, to celebrate his "miracle" win. This has included several overseas trips to press the flesh with other leaders, even though these have made little headway on major global and regional challenges.
But it is now more than six years since the Coalition came to power, during which time Australians have had to endure the disruption and distraction of three Liberal prime ministers. Scott Morrison has been Prime Minister for more than a year. By any objective assessment, you could hardly claim it has been a period of genuine, evidence-based, policy development or implementation.
Far too much has been accredited to Morrison’s miracle, in his terms, that he was able to tap the values of the so-called “quiet Australians”. From my US experience, this language has unfortunate echoes of the “silent majority” that Richard Nixon claimed swung behind him after the Kennedy/Johnson years.
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RBA eyes six QE options
Sep 12, 2019 — 9.56am
The Reserve Bank of Australia says not all types of unconventional monetary stimulus tools used overseas – such as extending cheap funding to commercial banks – would be called on in Australia because there is no "severe financial market dislocation".
The RBA told a parliamentary committee that resorting to so-called "quantitative easing" remained unlikely at this stage, even as pessimistic economists at National Australia Bank predict QE will be deployed later next year unless the Morrison government injects a fiscal stimulus to support the soft economy.
The record-low 1 per cent cash rate is forecast by financial markets to drop near the RBA's estimated "zero lower bound" of 0.25-0.50 per cent by mid-2020, meaning QE could be plausible beyond that point if the economy is weak.
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ECB chief's warning will resonate Down Under
Sep 13, 2019 — 7.48am
Paris | European Central Bank president Mario Draghi isn't leaving office quietly. The question is whether any politicians are listening.
At his second-last monetary policy meeting, after eight hard-scrabble years at the helm, he fired off every monetary policy weapon in his arsenal, riding roughshod over the naysayers on his governing council. He's desperate to kick start the 19-member eurozone's sputtering economies and to punt the pallid inflation rate somewhere even close to the 2 per cent ballpark.
But he didn't leave it there. He also took the fight to the governments of Germany, the Netherlands and other fiscal disciplinarians, with a few simple words that should reverberate in Australia.
"Now it is high time for the fiscal policy to take charge,” he declared. "Fiscal policy should become the main policy instrument."
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ECB pushes RBA one step closer to QE
Martin Place would like to see the Aussie dollar lower, and governor Phil Lowe appears increasingly comfortable with the idea that the RBA may have to launch its own QE initiative.
Sep 13, 2019 — 10.00am
Our central case has been that both the European Central Bank (ECB) and the US Federal Reserve would cut rates in September, which was a consensus view, and, more controversially, that ECB president Mario Draghi would re-start quantitative easing (QE), or buying bonds.
It was clear that a lot of smart money did not agree with our September QE thesis with repeated reports that a QE package had been canvassed and rejected by key ECB governors.
Following Draghi’s announcement on Thursday of a package of stimulatory measures – including a cash rate cut, extended direct loans to banks and a new €20 billion ($31.8 billion) per month bond-buying program that surprised with no terminal date (it is completely open-ended) – Bloomberg claimed there was an “unprecedented revolt” during the meeting with representatives from France, Germany and the Netherlands pushing back against Draghi’s desire to re-start QE.
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'Motivating the crooks': researchers vulnerable to criminals, warns chief scientist
By Jordan Baker
September 12, 2019 — 5.58pm
Rewarding scientists for pumping out research papers encourages them to cut corners and creates a market for criminals to exploit scholars by creating fake journals, Australia's chief scientist Alan Finkel has warned.
While most research was of high quality, "there are a significant number of papers that are poor quality and should never have made it through to publication", Dr Finkel told an annual research day event in Melbourne on Thursday.
As publications were the principal criteria for career advancement, scientists were driven to divide findings into different journals, selectively publish their results, or "[torture] the data until it screams", Dr Finkel said.
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Which crisis of trust?
18 July 2019
Are concerns about Australians’ faith in politics and democracy being exaggerated by poorly presented research?
We have lost faith in our leaders… Members of Parliament and Civil Servants… live like Lords — while we have to cadge for food — to Hell with you all.
— Anonymous, Collingwood
— Anonymous, Collingwood
Australian politics is in the midst of a crisis of trust. Australians are rapidly losing faith in politicians; young voters are increasingly disillusioned with politics; older voters are sick and tired of the endless cycle of new prime ministers. This has been the growing consensus since academics began routinely conducting public attitude surveys in the 1980s.
And the situation seems to be getting worse. Surveys by the Scanlon Foundation and the Democracy 2025 project — a collaboration between the University of Canberra’s Institute for Governance and Policy Analysis and the Museum of Australian Democracy — show steep falls in political trust. So does the longest-running, best-known and most influential large-scale survey, the Australian Election Study, or AES, which began in 1987.
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Plating up: Why Trump is going all out for Morrison
A state dinner at the White House speaks volumes about the robust health of the US-Australia relationship.
Sep 14, 2019 — 12.00am
Washington | Ever since Billy Hughes travelled to the United States in May 1918 to meet Woodrow Wilson, becoming the first Australian prime minister to visit an American president, leaders from both countries have indulged in the pleasures of a hefty meal, a la grande bouffe.
All in the service of mutual national interest. Naturally.
Scott Morrison, in what will be one of the highlights of his young prime ministership, is headed to Washington next week to continue a century-old tradition.
But it’s in the small details of this long series of tête-à-têtes – whether they were classified by the White House as lunches, private dinners, “working” dinners, or the top-tier state dinners – that the rest of us can glean a sense of the waxing and waning of the relationship and its key players.
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Stop bashing business
Chief executives of top-100 Australian companies head to Canberra next week to press the flesh with politicians from both sides of parliament. So why did the Prime Minister's attack dog bash business just days before the meeting?
Sep 13, 2019 — 6.07pm
Prime Minister Scott Morrison picked an unusual time to send out one of his strongest supporters in the Liberal party to attack business in a speech that had echoes of former opposition leader Bill Shorten’s losing election strategy.
Four months after winning office on the back of Shorten’s damaging and ultimately futile attacks on the big end of town, Ben Morton, assistant minister to the Prime Minister and Cabinet, had a red-hot go at business.
His timing was appalling. He smacked business around the head just days before the biggest gathering of top-100 chief executives in Canberra since the federal budget in April.
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PM plays the race card ... into China's hands
Peter Hartcher
Political and international editor for The Sydney Morning Herald
September 14, 2019 — 12.00am
With an apparent truce in America's trade war with China in the last couple of days, hopes rose. Markets ticked up. Are the two big gladiators of the world economy sheathing their swords?
Few thought the hostilities would ever progress this far. Donald Trump's former campaign strategist, Steve Bannon, has been consistently correct in predicting Trump's ever-rising aggression over the last couple of years, however.
So I asked him whether we're at the beginning, middle or end of the trade war? He answered in two parts. "We are at the beginning of the beginning," was the first. This may be a tactical pause, but it is not the precursor to peace in our time.
And the second: "It's not a trade war. It's an economic war that has a trade part, a technology part, a currency part, etc."
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Moving into black swan territory
The great Chicago economist Frank Knight carved the world of the unknown into risk and uncertainty a century ago. Risks, such as losing at poker or becoming ill, had measurable probabilities attached to them, based on experience.
Uncertainties, war, economic crises, breakouts of disease, didn’t. Modern computing power has made calculation of risks easy, but uncertainties loom larger than ever as the world becomes more integrated.
A century ago, world leaders couldn’t get out of the wrong side of the bed and escalate a trade war. They can now. There are no probability tables to consult to see whether the Sino-US trade war will resolve itself peacefully, or the global experiment with money creation to boost growth will end well.
“Black swans”, events unknowable in advance, abound. The price of gold, long a barometer of economic fear, is back at the highest level in a decade (and highest ever in Australian dollars).
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Fraught times for our relationship with China
Australia’s exporters must be watching with some alarm what’s going on in Canberra on the subject of China, much like America’s corporate sector had been viewing what the Trump administration was up to before they became glumly resigned to it and started shifting their supply chains.
The difference is that Australian companies sell to China, whereas American companies buy from it.
There are other suppliers of cheap labour for US firms, but there are no markets like China for Australian iron ore and milk powder or full-fee-paying students.
So the cost to Australia of decoupling from China is far greater than it is for the US. And it’s beginning to feel like Australia’s relationship with its largest export market is reaching some kind of crescendo, where something has to give.
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Royal Commissions And The Like.
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Court looms for funeral insurer flamed at royal commission
By Sarah Danckert
September 9, 2019 — 5.37pm
An insurance company which offered its staff trips to Las Vegas for flogging funeral insurance policies to vulnerable customers, including people in remote Indigenous communities, faces a lawsuit from the corporate regulator over its coercive sales tactics.
The Australian Securities and Investments Commission (ASIC) on Monday commenced civil action against funeral and accident insurance company Select AFSL and its director Russell Howden.
Managing director of Select AFSL and Let's Insure branded funeral insurance Russell Howden agrees that the company's risk compliance manual was not reiterated to its sales staff when they were offered incentives.
Select AFSL's owner BlueInc and related entity Insurance Marketing Services have also been named in the civil action filed in the federal court.
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Graeme Samuel takes shots at Gonski, Byres
Sep 11, 2019 — 1.05pm
Graeme Samuel has called on financial institutions including ANZ to publish prudential reviews ordered by the Australian Prudential Regulation Association or face a snap inquiry.
Appearing at a parliamentary hearing on Wednesday, Mr Samuel also criticised the regulator's co-operative approach and said he was disappointed APRA tried to push back against some of the key recommendations from his comprehensive review.
The chairman of APRA's capability review and panel member of the landmark CBA prudential inquiry said it was to time to give institutions that refused to release the self-assessments a "reality check".
The decision by ANZ chairman David Gonski to release a short summary of the self-assessment was "strange", Mr Samuel said, adding that the reviews "really ought to be made public".
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AFCA hit by 40 per cent more finance complaints than expected
By Clancy Yeates
September 12, 2019 — 2.16am
The government's financial dispute authority is pushing banks to go beyond merely complying with the law and consider "fairness" when dealing with customer disagreements after it was swamped by complaints in its first 10 months.
The Australian Financial Complaints Authority (AFCA), which launched late last year following a merger of several ombudsman schemes, has signalled it will be asking firms to explicitly consider whether they had done "the right thing" by customers when assessing disputes.
AFCA deputy chief ombudsman June Smith expects a change in banks' behaviour when handling complaints.
As the authority launches a roadshow offering "financial fairness checks" to consumers later this month, AFCA deputy chief ombudsman June Smith said that in its first 10 months, the authority had received more than 60,687 complaints from consumers.
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ASIC says banks to blame for credit squeeze
Sep 14, 2019 — 12.00am
The corporate regulator has defended its responsible lending approach in the wake of a disastrous court case and speculation it is to blame for a tightening of credit.
ASIC chairman James Shipton said there was absolutely no proof the regulator’s approach was behind delays in credit approvals, and in some cases the banks had created the problem themselves.
“There has not been any evidence, put to me at least, recently or over the 10 years this particular law has been in effect, that there has been any impediment to the provision of credit,” Mr Shipton said.
“What has been proffered to me is that [bank] processes have needed to be changed and have been changed, and that systems have needed to be updated and integrated.”
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Govt must not delay aged reforms: industry
Industry groups and Labor say the federal government must not delay aged care reforms, after it agreed to give the royal commission a six-month extension.
Australian Associated Press September 14, 201910:15am
The extension of the aged care royal commission must not delay action to improve the system, industry groups say.
The federal government has given the inquiry an extra six months to complete its work, as well as appointing former Federal Court judge Tony Pagone QC as the third royal commissioner.
Provider association Leading Age Care Services CEO Sean Rooney said the extra time would allow for a deeper investigation of the many complex issues in aged care and their solutions, but critical issues facing the sector must be addressed now.
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‘No leadership’ on young people in aged care, royal commission hears
The Morrison government’s “Claytons action plan” for younger people in residential aged care was symptomatic of a “distinct lack of leadership” on the issue, the Aged Care Royal Commission has heard.
Counsel assisting the Commission Richard Knowles on Friday delivered a scathing assessment of efforts to address what he said was a “fundamental issue of human rights”.
“There has been a distinct lack of leadership on this issue despite the Commonwealth having clear ownership of the policy and the funding mechanisms that underpin it,” he told the Commission.
Wrapping up a week long hearing in Melbourne into how to improve the lives of people under the age of 65 currently living in residential aged care, Mr Knowles tore into the government’s action plan.
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APRA warns bank stability should not be taken for granted
The banking regulator has warned that ultra-low interest rates are hurting industry profit and making it tougher for smaller lenders to compete in the mortgage market.
With the central bank tipped to push cash rates below 1 per cent later this year to spur the economy, Australian Prudential Regulation Authority chairman Wayne Byres also cautioned about speculative activity returning to the housing market, which would put further stress on the banking system.
Mr Byres said now was not the time for complacency about financial stability, with both big and small banks grappling with the low rate environment. Indeed, smaller lenders were likely to be hit harder than the big four given their different funding profiles and lower credit ratings.
“To be clear, neither group will welcome further rate reductions,” Mr Byres told a European Australian Business Council lunch in Melbourne on Friday. The APRA chief’s appeal for an “unwavering focus on financial stability” comes at a time of intensifying macroeconomic challenges and vulnerabilities, rapid technological change and political tensions.
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National Budget Issues.
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RBA's Philip Lowe calls for increase in infrastructure spending
By Peter Hartcher
September 7, 2019 — 5.00am
Reserve Bank governor Philip Lowe is calling for a major spending program on infrastructure including rail, bridges and roads across Australia in direct opposition to the views of Prime Minister Scott Morrison.
Mr Morrison said this week that the federal government was "starting to hit our head on the ceiling in terms of how much infrastructure work you can get under way at any one time".
But Dr Lowe said, "I think we can do more" in an interview with The Sydney Morning Herald and The Age.
The economy this week was revealed to be at its weakest in a decade. Amid calls to stimulate growth by stepping up infrastructure investment, Mr Morrison said the government was doing everything it could. That included asking the states to bring projects forward, he said.
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Low interest rates to be with us for some time
The existence of $25 trillion worth of bonds that are priced to yield less than zero is the big hairy economic fact of our time that no one wants to talk about – the classic elephant in the room.
The headlines are full of US-China trade war, Brexit, and the arguments about recession - will we or won’t we have one - but the presence of negative interest rates is a bit like Uncle Bob’s flies being undone: everyone is averting their eyes.
It’s because nobody quite knows what to make of it, why it’s happening or what it means. The notion that money has a time value, and even that capital has a cost and must make a return - two foundations of capitalism - are being up-ended.
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Home lending surges in July
Sep 9, 2019 — 12.26pm
Home lending jumped 5.1 per cent in July, marking its biggest monthly gain in four years, as owner occupiers and investors roared back into action as sentiment changed and credit curbs eased.
The monthly increase picked up on June's 3.2 per cent gain and lifted the total of monthly new loan commitments to $17.9 billion in seasonally adjusted terms, Australian Bureau of Statistics figures on Monday showed.
Investor lending gained 4.7 per cent - the biggest monthly increase since the 9.9 per cent chalked up in September 2016 at the peak of the boom - to $4.6 billion, while owner-occupier loans rose 5.3 per cent, the fastest gain in almost four years, to $13.3 billion.
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Tax cuts to almost double economic growth in September: UBS
Sep 9, 2019 — 12.58pm
A strong rebound in consumption due to faster roll out of the government's $7.8 billion in tax relief will almost double economic growth in the September quarter, according to global bank UBS.
UBS analysts George Tharenou and Carlos Cacho said they expect the tax cuts will boost retail and other consumption and this will help GDP jump to 0.8 per cent in the September quarter and 0.6 per cent in December quarter - up from 0.5 per cent in the June quarter, and deliver overall economic growth of 2.4 per cent for the 2019 calendar year.
The tax cuts alone will boost retail sales in the 2020 financial year by about 1 per cent, with a temporary spike in September and October to 5 per cent growth in annual terms.
The analysts expect the tax cuts to lift overall real consumption growth in the first half of financial year 2020 to above 2 per cent after having slumped to 1.4 per cent.
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Australia's weak economy has been 'deliberately engineered'
When as Treasurer Scott Morrison handed down the budget in May 2016, he was projecting GDP growth to be 3 per cent in 2018-19, having risen 3 per cent in 2017-18; inflation was expected to lift to 2.5 per cent in 2018-19 from 2.25 per cent the year before and wages growth was set to reach a healthy 3.25 per cent having picked up from a reasonable 2.75 per cent the year before.
In 2016, Mr Morrison was also of the view that the budget in 2019-20 would be in deficit to the tune of $6 billion, from $15.4 billion in 2018-19.
Too optimistic
Fast forward to today and you can see how wrong Mr Morrison has been, how misguided his policy settings are and how it is absurd it is he keeps pretending the economy is doing well.
With his policies, the budget balance has been fast tracked towards lower deficits and then surplus at the expense of the economy sliding into the doldrums.
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NAB forecasts 0.25pc cash rate unless there is ‘meaningful stimulus’
The Reserve Bank will be forced to cut rates to ultra-low levels of 0.25 per cent “unless the government delivers a meaningful fiscal stimulus”, after official figures revealed the slowest economic growth since the global financial crisis, according to a National Australia Bank chief economist Alan Oster.
Mr Oster, a former Treasury veteran of 15 years who specialises in monetary policy, has revised his previous rate forecasts in which the RBA was expected to bottom out at 0.75 per cent, down from the current record-low cash rate of 1 per cent.
Last week, the Australian Bureau of Statistics said the economy grew at 1.4 per cent over the year through June – the worst growth since the GFC.
However, Treasurer Josh Frydenberg said the government would be introducing no further stimulus until at next year’s May budget, and that the raft of tax cuts which passed parliament this year and Scott Morrison’s increased infrastructure spend would help boost growth.
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Health Issues.
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Opioid crisis is not just an American problem
Health experts worry that without urgent action, Australia is on track for an even steeper spike in deaths like those seen in America, where the epidemic has left 400,000 dead.
Kristen Gelineau
Sep 7, 2019 — 12.33am
The coroner's sense of futility was clear, as he investigated the death of yet another Australian killed by prescription opioids. "For what it is worth, I add my voice to the chorus pleading for urgency," Western Australia coroner Barry King wrote in his report, delivered in May.
Coroners nationwide have long urged officials to address Australia's ballooning opioid addiction and to create a tracking system to stop people from collecting multiple prescriptions from multiple doctors. Yet even as thousands died, the coroners' pleas were met largely with silence.
Australia has failed to heed the lessons of the United States, and is now facing skyrocketing rates of opioid prescriptions and related deaths. Drug companies facing scrutiny for their aggressive marketing of opioids in America have turned their focus abroad, working around marketing regulations to push the painkillers in other countries. And as with the US, Australia's government has also been slow to respond to years of warnings from worried health experts.
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“Please do not give me CPR”: ‘Do Not Resuscitate’ requests in retirement living
Retirement village operators are receiving an increasing number of ‘Do Not Resuscitate’ (‘DNR’) requests from their residents. This introduces the uncomfortable prospect of counter-intuitively withholding CPR (cardio-pulmonary resuscitation) in the event a resident is found unresponsive.
With an ageing population and continued growth of retirement living, it is important that retirement village operators understand their obligations and potential liabilities in relation to DNR requests when considering how to manage them.
What is a DNR Request or Advance Directive?
A specific request not to have CPR, otherwise known as a ‘DNR request’, is a form of advance directive. As its name suggests, an advance directive is a decision made in advance, at a time when a person is still competent to decide. Advance directives specifically refer to anticipatory decisions pertaining to future healthcare, and in particular refusal of treatment. They aim to convey a person’s wishes in the event they lose the ability to decide, or to communicate their decision. Since, unlike non-emergency medical treatment, a person is unable to refuse consent to CPR at the time it is needed, an advance directive in the form of a DNR request enables a competent adult to refuse it in advance.
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Death by sugar-free soft drink?
By Andrew Jacobs
September 10, 2019 — 7.06am
New York: Does guzzling diet soda lead to an early demise?
There was a collective gasp among Coke Zero and Diet Pepsi drinkers this week after media reports highlighted a new study that found prodigious consumers of artificially sweetened drinks were 26 per cent more likely to die prematurely than those who rarely drank sugar-free beverages.
The study, published in the journal JAMA Internal Medicine, followed 450,000 Europeans over 16 years and tracked mortality among soft-drink consumers of all persuasions — both those with a fondness for sugary beverages and those who favoured sugar-free drinks.
Given the well-documented health effects of consuming too much sugar, it was little surprise the authors found that people who drank two or more glasses of sugar-sweetened beverages a day were 8 per cent more likely to die young compared to those who consumed less than one glass a month.
But what grabbed headlines, and prompted widespread angst, was the suggestion that drinking Diet Coke could be even more deadly than drinking Coca-Cola Classic.
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Drinking decline stalls as Aussies hit the hard stuff
Australians are drinking more spirits and premixed beverages amid signs the long-running decline in alcohol consumption may have plateaued.
The Australian Bureau of Statistics has released alcohol consumption figures for 2017-18 which equate to 9.51 litres for everyone 15 and over, close to the 9.48 litres the previous year.
“In average daily consumption, this equates to 2.08 standard drinks per person and is unchanged from 2016-17,” ABS acting director of health statistics Robert Long said. “What is interesting is we are seeing a rise in spirit consumption, which was on a downward trend.”
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Greg Hunt's medical deals come back to bite him
Chanticleer is Australia's pre-eminent business column.
Sep 11, 2019 — 12.00am
Health minister Greg Hunt’s efforts to rein in growth in private health insurance premiums looks like collapsing in a heap after a surge in the volume of medical devices sold in Australia in 2019 wiped out a promised $250 million in cost savings for insurers.
Insurers will be pushing for a higher percentage growth in insurance premiums for 2020 in negotiations with Hunt over the next few months. This carries some significance for investors in Medibank Private and NIB Holdings.
Both stocks have been sold off in the past few months because of concerns about the squeeze on profit margins from lower premium rate rises and only incremental benefits from prostheses reform.
The insurers are angry that Hunt has not delivered his side of a compact which led to the lowest increase in premiums in 17 years in 2019 of 3.25 per cent.
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OxyContin maker Purdue Pharma faces bankruptcy as $17.5b settlement nears
By Jef Feeley
September 12, 2019 — 5.15am
Purdue Pharma won the backing of about half of US states and territories for a proposed settlement of claims it illegally marketed opioid painkillers, in a deal that could provide about $US12 billion ($17.5 billion) to help communities deal with the public-health crisis tied to the medicines, according to people familiar with the negotiations.
Twenty-three states and three territories told a judge Wednesday they'd support a plan under which the billionaire Sackler family - which owns Purdue - would file for bankruptcy, hand itself over to a trust controlled by the states, cities and counties that have sued, and sell its UK-based drugmaker Mundipharma, the people said. They spoke on the condition of anonymity since they weren't authorized to speak publicly about the talks.
Under the current proposal, the Sacklers would guarantee to pay $US3 billion as part of the settlement, with most of that generated by the Mundipharma sale, the people said. The family has rejected calls by some state attorneys general to hike their guarantee to $US4.5 billion, they added.
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Government backs radical plan for prostate cancer
Sep 14, 2019 — 12.34am
The power behind prostate cancer was revealed in Canberra this week. Prime Minister Scott Morrison talked about being tested and how his father had survived more than a decade since his diagnosis.
Federal health minister Greg Hunt disclosed he had a family history of the disease, too, and Opposition Leader Anthony Albanese said because he’d had a high reading on a test he was now being tested every three months.
All were talking before the annual Parliamentary Big Aussie Barbie, run by the Prostate Cancer Foundation of Australia (PCFA).
Given that one in seven Australian men will be diagnosed with this cancer, many more politicians could have joined them.
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