This blog is totally independent, unpaid and has only three major objectives.
The first is to inform readers of news and happenings in the e-Health domain, both here in Australia and world-wide.
The second is to provide commentary on e-Health in Australia and to foster improvement where I can.
The third is to encourage discussion of the matters raised in the blog so hopefully readers can get a balanced view of what is really happening and what successes are being achieved.
Quote Of The Year
Timeless Quotes - Sadly The Late Paul Shetler - "Its not Your Health Record it's a Government Record Of Your Health Information"
or
H. L. Mencken - "For every complex problem there is an answer that is clear, simple, and wrong."
Thursday, February 27, 2020
The Macro View – Health, Economics, and Politics and the Big Picture. What I Am Watching Here And Abroad.
What a mess we are seeing with the selection of a presidential candidate by the Democrats in the USA. They are either too old, to left or just useless politically. The sooner a viable candidate emerges who can make some sort of contest out of the November election with Trump the better for all of us I believe.
CORVID-19 seems still to be spreading and where it will all end is not clear at the present. I suspect a further month of watching and observation will be needed.
In the UK things are quiet as we wait to see just what sort of trade deal and other arrangement can be agreed. It won’t be quick!
In Australia we are seeing a combination of climate wars and rort repercussions occupy the parliament while most of us fret about the economy and the virus. Strange times we are in!
Like all the advanced economies, ours has stopped working the way we’re used to. Our obsession with home ownership is a fair part of the problem.
Let’s be clear: I’m a believer in the Great Australian Dream of owning your own home.
But right now, it’s adding to the economic troubles of many countries. I doubt if the preference for home ownership is causing those countries bigger problems than it’s causing us. We have one of the highest rates of household debt to household disposable income (although ours is made to look worse than the others because of our unusual tax breaks for negatively geared property investments).
January saw a rise in home values across every capital city with Sydney and Melbourne leading the charge.
Two former federal treasury secretaries have united in a fresh call to abolish stamp duty in favour of a land tax from which most farming land and all existing home owners would be exempt.
Ken Henry and Martin Parkinson will appear at a conference on Monday at NSW Parliament to discuss federal and state finances, as part of a review being conducted by former Telstra CEO, David Thodey.
Dr Henry says the stamp duties levied by state governments on property purchases create an unfair hurdle for young aspiring homeowners.
Nearly 50,000 people who have had their claims for asylum rejected after arriving by plane are still in Australia awaiting deportation, raising questions over the efficiency of our border controls.
A government backlog is being blamed for the slow progress in tackling the problem, with Labor warning that people smugglers are using the system to exploit illegal workers.
The number of people who have had their claims rejected after arriving by air increased to 46,391 at the end of January, according to government figures that show almost all of them remain in the country.
The long appeals process also means 37,913 of the "plane people" are still waiting for their refugee status to be determined, an increase of more than 1000 over the past month.
Rate cuts tend to make the wealthy wealthier, Reserve Bank research shows.
RBA economists Calvin He and Gianni La Cava studied property markets at a local level to find how monetary policy affected prices. They found areas with higher house prices tended to be more sensitive to changes in monetary policy than those with cheaper ones.
They found that a one-percentage-point cut in rates tended to lift the average-priced property market by 2.3 per cent after two years. But for the cheapest property markets (bottom quarter by price) the impact was only 0.9 per cent, versus an outsized 3.5 per cent change to values in markets in the top quartile.
The result is that “changes in the cash rate alter housing wealth inequality”, the economists concluded. “Lower interest rates increase housing wealth inequality, while higher rates do the opposite. This occurs because expensive areas, which typically have tighter housing supply, are more sensitive to changes in interest rates.”
I was reading yet more about the troubles besetting the rich economies when it struck me: we’d do a lot better if our politicians and their advisers just managed the economy in ways that gave first priority to benefiting the ordinary people who constitute it.
The bleeding obvious, you say? Well, of late, not so you’d notice. Just what we’ve always been doing, the pollies and economists say? Again, not so you’d notice. Too simple? Not if you do it right.
Economics is the study of “the daily business of life” – going to work to earn money, then spending that money. If so, the economy is nothing more than all those who work (paid or unpaid) and consume, which is all of us.
The good news is that Australians do tend to trust each other more than citizens of most other countries. But that is not reflected in Australians’ trust in most public and social institutions.
Everyone in any position of authority wants to talk earnestly about the importance of building trust these days – but with apparently little persuasive effect. Instead it’s become the missing ingredient globally among the key institutions of government, business, media and charities.
That’s primarily because those the survey calls the “informed public” – tertiary educated, top quartile income, 25-64 years old and relatively high consumers of news – increasingly now share the negative sentiments of the mass public in Australia given the handling of the crisis.
The gap between these two groups in Australia narrowed dramatically over three months to February 2020 from a record 23 points to 14, with trust in institutions by the informed public falling from 68 near the end of last year to 59 now. That level is still considerably higher than scepticism evident in the rest of the Australian community, where overall trust languishes at 45 per cent.
The year is 1985. Bob Hawke has stormed into the Lodge with a landslide victory in the 1984 election. On the radio, the British band Dire Straits dominates with its Brothers in Arms album and its hit song Money for Nothing extolling the benefits of being a lead guitarist: That ain't workin' that's the way you do it:/Money for nothin' and your chicks for free. The average Australian home price is somewhere between twice and three times the national average salary.
Sure, interest rates are about to hit the roof and recession is on its way, but for now, at least, the pathway to home ownership for young Aussies (a cohort who will one day face the disparaging epithet of “OK Boomer”) is relatively clear.
Fast-forward three decades. What seemed like an innocent enough and catchy radio tune has turned prophetic. Real wages have risen by about a half, but home values have tripled. It’s Australia 2020, and that’s the way you do it: money for nothing and it’s capital gains tax free.
Today, Australian home values are worth about seven times the average salary. In Melbourne, it’s eight times. In Sydney, it’s more than nine times. And that’s before the latest resurgence in home values.
Prime Minister Scott Morrison has responded to a new poll out today that shows a huge drop in confidence in his government since unprecedented bushfires swept across Australia.
The Australian National University poll of 3000 people found confidence in the PM had also fallen substantially and there was “quite strong disapproval” of the Government’s handling of the bushfires.
“In particular, we found there was disapproval with Prime Minister Scott Morrison,” lead researcher Professor Nicolas Biddle said.
Prof Biddle said confidence with Mr Morrison’s leadership had fallen to 3.92 out of 10 from 5.25 when the same question was asked in June 2019.
“This is a net negative review of the Prime Minister and substantial decline in his popularity,” he said.
Accounting technology giant Xero will head the Australian Securities Exchange's new technology index to be unveiled today, giving investors the chance to invest in the fastest-growing segment of the market in one trade.
The ASX will launch the S&P/ASX All Technology Index or the S&P/ASX All Tech for short, at a ceremony at the exchange in Sydney, with technology minister Karen Andrews and executives from each of the WAAAX stocks (Wisetech, Afterpay, Altium, Appen and Xero) there for the ribbon cutting.
The index will go live from Monday morning and will be a smaller, localised version of the US's Nasdaq composite index.
The executive general manager of listings and issuer services at the ASX, Max Cunningham, said returns from investing in tech have exceeded the benchmark S&P/ASX 200 Index in recent years, and this new index would be seen as highly investable.
Australia will step up its strategic push in the Indo-Pacific with a $1.1bn upgrade to RAAF Base Tindal in the Top End, to fast-track the F-35 Joint Strike Fighter rollout and provide a forward operating base for US aircraft, including strategic bombers.
The announcement, signed off by the national security committee of cabinet last week, marks a significant expansion in the reach of air force capability into the region and signals a more assertive Australia-US posture as China continues to expand its strategic footprint into the region.
The Australian understands that major runway extensions, fuel stockpiles and engineering will be designed to support “Code E” large aircraft, such as US Air Force B-52 strategic bombers and RAAF KC-30 air-to-air refuellers to operate out of one of the country’s most strategically significant airbases, located at Katherine in the Northern Territory.
It will also considerably boost the ability of RAAF and USAF aircraft — including fifth-generation strike fighters — to conduct joint operations and training exercises in the Indo-Pacific.
A record was set this week for the lowest ever recorded yields on US corporate bonds, which means it has never been cheaper for firms to borrow money. This reflects super-tight credit spreads coupled with ultra-low, risk-free rates.
The flipside is that lenders (and investors) have never received worse compensation for the risk of companies (not banks) defaulting on their debts at a time when US corporate (not bank) leverage has climbed to levels that are higher than those observed before the crisis.
As this column has repeatedly warned, credit spreads on high-yield, or sub-investment grade (aka "junk") corporate bonds, and more robustly rated “investment-grade” corporate debt in the US have slumped to below the absurdly low levels last evidenced in the heady days of 2007.
Columnist and academic at the University of Technology Sydney
February 21, 2020 — 12.00am
In the wake of the murders of Hannah Clarke and her three children, we must do more than wring our hands. There is no better time than amid this despair to consider how we can prevent this from happening to one more woman, one more child. It needs a commitment to research, and a wholehearted guarantee from governments at all levels.
Of everyone I’ve spoken to, trying to make sense of the horror, Heather Nancarrow, the chief executive of the Australian National Research Organisation for Women’s Safety, proposed the most radical intervention. We’ve known each other for a long time and she’s not given to drama. When any man is transitioning out of a relationship, she says, he should be monitored.
What she means is that during the period of separation, every man must be put on a program with mental health checks and scrutinised for signs of violence to ensure he is making the transition safely and not a risk to women, children or themselves.
Political and international editor for The Sydney Morning Herald
February 21, 2020 — 7.12pm
Scott Morrison ignored the reality of the national bushfire emergency until it became a political problem for him. If he has learned anything, he won't repeat his mistake now with the gathering dangers to the economy.
As we saw during the fires, the people want to be reassured that there is someone in charge, a power greater than themselves. Things may be tough today but it's going to be alright.
Morrison did the exact opposite as the megafires raged. He made excuses for his inaction then snuck out of Australia to take a holiday in Hawaii. He now has a chance to learn from that shocking misjudgment. As economic anxiety rises, he and Josh Frydenberg need to demonstrate that there is someone in charge.
The world's corporate sector borrowed a record $US2.1 trillion ($3.2 trillion) through 2019 as central banks slashed interest rates, prompting warnings much of the debt is of low quality and at growing risk of default especially if the global economy falters.
As ratings agency S&P Global said governments around the world were likely to tap markets for $US8.1 trillion in debt this year, the OECD said the corporate debt sector was expanding dramatically in a development that posed a global financial risk.
The Paris-based think tank said global non-financial corporate debt reached a record $US13.5 trillion at the end of 2019 as last year's fall in global interest rates encouraged businesses to ramp up their borrowing.
But the quality of the corporate bonds issued is falling.
Fifty-one percent of all new investment grade bonds were rated BBB, the lowest investment grade rating.
AC Grayling has been banging on about the crisis in democracy for some time now but insists he’s an optimist when it comes to rescuing a system he warns is easy prey for populists.
“I don’t think that it would take all that much to get the major democracies of the world — like the UK, the US, Australia, India — I don’t think it would take much to get them right,” the British philosopher and commentator says in a phone interview from London.
“(It needs) a relatively modest adjustment, a recalibration of how we operate our democracy to make it genuinely representative.
“We need reform to the electoral system, especially to understanding how important it is that people should feel that their voices are heard, that government doesn’t exist to carry out the wishes of one party, that it’s under a constitutional constraint to act in the interests of everybody.”
Nobody wants to believe it’s true but it’s becoming obvious that investment property as a source of income is fast becoming a mug’s game.
And the more you pay for the apartment or house in the city, the more of a mug’s game it is.
It’s the flip side of a mind-bending acceleration of residential property prices over the past two decades that has now left us with yields (or income from the property expressed as percentage of the property price) that are at unprecedented lows. Yields are better as you move to the city fringe and regional areas, but the majority of investors have their money sunk into buildings in big-city districts.
We already know that cash as an income proposition is hopeless, but the miserably inadequate income to be expected from property is a comparatively new development.
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