March 3 Edition
The macroeconomic stresses seem to have eased ever so slightly - but are probably resting rather having been resolved.
This article provides a few hints:
Budget 2016: as jobs go, global economy falters, says G20 report
- The Australian
- February 26, 2016 12:00AM
David Uren
Scott Morrison will come under pressure at his first G20 meeting in Shanghai this weekend to use the budget to launch a new round of stimulus spending — the first since the global financial crisis — as the IMF warns finance ministers that the world is at risk of a new downturn.
In a bleak report prepared for the meeting — and against the backdrop of thousands of new job losses in Australia after the closure of the Dick Smith retail chain — the International Monetary Fund says the global economy is faltering and governments have done too little to boost demand.
“The global economy needs bold multilateral actions to boost growth and contain risk,” it says. “The G20 must plan now for co-ordinated demand support using available fiscal space to boost public investment and complement structural reform.”
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Also, in Australia, we are now see a continuing bun-fight on pathology funding, health insurance costs as well as negative gearing and superannuation. Will be fun to watch. Mr Morrison seems to have disappointed with the lack of a clear plan.
Last week we heard there would be a before the Budget announcement of tax proposals so that will happen soon. Stay tuned!
Thursday Update: Markets have perked up more than somewhat - will it be sustained? Who knows...
Thursday Update: Markets have perked up more than somewhat - will it be sustained? Who knows...
Here is a summary of interesting things up until the end of last week:
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General Budget Issues.
Iron ore recovery offers budget boon hopes
Date February 22, 2016 - 9:48AM
Mark Mulligan
Senior markets and economy writer
Treasurer Scott Morrison is facing a potential multibillion-dollar revenue windfall as he prepares his first budget, with a surprising rally in the price of iron ore coming at just the right time for the government.
The commodity has surged to its highest level in three months – putting it back to about $US48 a tonne –as Chinese steelmakers ramp up production after their Lunar New Year break, a sign that global demand for iron ore could increase significantly in coming months.
Share prices have soared for iron ore miners, with BHP Billiton jumping 17 per cent in the last four weeks to $16.61 a share, and Rio Tinto climbing11 per cent, to $42.62 a share.
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Turnbull government ponders radical move to bring forward the federal budget
Date February 22, 2016 - 1:40PM
James Massola
Political correspondent
EXCLUSIVE
Senate reform goes to parliament
The government is legislating to change senate elections. Malcolm Turnbull says the current system has been 'gamed' by 'preference whisperers'.
A radical idea to bring forward the federal budget from May 10 has been floated among senior members of the Turnbull government.
Although such a radical move is considered unlikely by Turnbull government insiders – and it has not been formally considered in forums such as cabinet – Fairfax Media has confirmed the idea has been discussed.
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- Feb 24 2016 at 12:43 PM
- Updated Feb 24 2016 at 3:01 PM
It's official: Treasury gets budget revenue forecasts wrong by $682b, PBO says
by Jacob Greber
It's official - the size of the nation's budget forecasting blunder across the boom and bust years since 2002 is $682 billion.
That's the staggering combined amount of revenue that successive Coalition and Labor governments both under-estimated during the upswing in the years leading up to the global financial crisis, as well as the even greater shortfalls in revenue posted since the end of the commodity price surge in 2011.
The bad news is that the downgrades during the near seven years of budget famine forecast out to 2018-19 are $124 billion greater than windfalls received during the years of relative budget plenty between 2002-03 and 2008-09.
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http://www.afr.com/news/economy/turnbull-moves-to-defuse-state-funding-election-bomb-20160224-gn2gky
- Feb 24 2016 at 6:25 PM
- Updated Feb 24 2016 at 6:25 PM
Turnbull moves to defuse state funding election bomb
by Jacob Greber
Malcolm Turnbull is moving to defuse a bruising election-year clash with state premiers over health and education funding cuts with a deal that would result in a further deterioration in the federal budget bottom line.
While Treasurer Scott Morrison has been maintaining pressure on states to fix their own budget shortfalls, the Prime Minister is signalling to state leaders that he is open to an interim funding fix.
The stop-gap measure would still leave open the longer-term question of the division of funding and service responsibilities between states, territory and federal governments – something that would need to be addressed in years to come.
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Turnbull walks away from tax reform: only caps on super, negative gearing left
Date February 25, 2016 - 7:27AM
Peter Martin
Economics Editor, The Age
Tax reform eludes government
The government all but abandons serious tax reform - at least for now. Peter Martin explains what's in and what's out.
The Turnbull government is preparing to abandon serious tax reform.
It has ruled out major change in favour of a pair of savings measures seen as politically safe: curbing the excessive use of negative gearing by wealthy investors, and reducing extensive parking of pre-tax income in superannuation accounts.
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Terrified on tax: why Malcolm Turnbull will squib it
Date February 25, 2016 - 12:15AM
Peter Martin
Economics Editor, The Age
So much for big reforms. Don’t expect Malcolm Turnbull to present a bold tax plan. He’s too scared of putting voters offside.
Tax reform eludes government
The government all but abandons serious tax reform - at least for now. Peter Martin explains what's in and what's out.
A decade ago in a speech titled The Way Ahead, Malcolm Turnbull labelled negative gearing "tax avoidance". Tellingly, he observed that "every tax deduction, once created, develops a constituency which will fight to defend it".
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Defence white paper: big spending means other portfolios hit
- The Australian
- February 26, 2016 12:00AM
David Uren
Defence will become one of the fastest growing budget programs, with spending rising by an average of 6.8 per cent a year across the next decade, demanding big savings from other portfolios.
The rapid growth in defence outlays, which will raise its share of government spending from 7 per cent to 8 per cent, comes as Treasury has been downgrading its estimates of economic growth.
Although the slower growth has made it easier to get defence spending to 2 per cent of gross domestic product, a commitment made by Tony Abbott in the 2013 election campaign, it has made Scott Morrison’s budget challenge more difficult.
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- Feb 26 2016 at 1:23 PM
- Updated Feb 26 2016 at 3:45 PM
The path to reforming our economic leader Malcolm Turnbull
Where does Malcolm Turnbull, economic leader, go from here?
It's a depressing moment. Having given up the battle to expand the role of the GST, the government appears to have scaled back its cuts in personal income and company tax. The economic gains from the change in the national tax mix now will depend in part on how cleverly the premiers fill the gap left by Turnbull's GST decision.
At the same time, the prime minister has used the opposition's proposed policy on negative gearing to launch a scare campaign rather than seize the opportunity to embrace the Henry tax review's proposed tax discount for all income from personal savings, including capital gains on highly geared rental properties.
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Malcolm Turnbull hasn't been the messiah and doesn't seem to have a gospel
Date February 26, 2016 - 11:30PM
Jack Waterford
Canberra Times columnist
Over the next month Malcolm Turnbull will make – must make – the decisions which will determine the period of his prime ministership. He's still an odds-on favourite to be prime minister at the end of the year, but, in the past month, he has looked beatable.
Some decisions before him involve the budget that his Treasurer presents in early May, and others the policies that he puts to the public at the next election. Another involves the timing of the election itself, and whether he has much to gain from double dissolution.
Much more important, however, are decisions by which he shows voters a sense of purpose and direction, laying out a path Australians will want to follow. Only by that can he demonstrate that he is still in charge of his, and Australia's, fate. His decisions will show if he has become, as Tony Abbott, Kevin Rudd and Julia Gillard did before him, a prisoner of his past, increasingly unable to control his future.
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Health Budget Issues.
Government could save $175m a year by ending pathology companies' ‘free ride’
Pathology industry has massive efficiency savings that are not shared with taxpayers and the government, leading health economist, Stephen Duckett, says
Sunday 21 February 2016 21.00 AEDT Last modified on Sunday 21 February 2016 21.02 AEDT
The federal government could save $175m each year by ending the “free ride” it has given to pathology companies, a leading health economist, Stephen Duckett, says.
Duckett has called for reform to the way pathology is paid for so the massive efficiency savings the industry enjoys are shared with taxpayers and the government
The federal government announced in its budget update in December that it would scrap the bulk-billing incentive it pays to health professionals for pathology services, representing savings of $101m per year.
As a result, the pathology industry has threatened to pass the costs onto patients by introducing a $30 co-payment for common tests, including pap smears.
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Sonic Healthcare, Primary Health Care hogging profit from automation, says report
Date February 21, 2016 - 9:00PM
Simon Evans
Federal Health Minister Sussan Ley has stepped up the fight against big pathology companies opposing cuts to bulk-billing incentive payments for blood tests, X-rays and MRIs, saying a report by the Grattan Institute is further proof they are embarking on a scare campaign to protect profit.
Big ASX-listed pathology companies such as Sonic Healthcare and Primary Health Care are at the forefront of vigorous lobbying and a consumer campaign running in 5000 pathology collection centres. They are attempting to stop $650 million in cuts to bulk-billing incentive payments for providers identified by the federal government in December 2015 in a budget update.
A new report by the Grattan Institute released on Sunday revealed that taxpayers had got "minimal benefit" from the automation of processes across the industry, which had led to "ever-cheaper ways of delivering services".
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Think tank needles pathology funding
- The Australian
- February 22, 2016 12:00AM
Sarah-Jane Tasker
Australia’s pathology services funding system needs urgent reform as top companies in the sector have fattened their bottom line on increased volumes subsidised by taxpayers, a new report has found.
Stephen Duckett, health program director at the Grattan Institute, has produced a report — to be released today — that outlines reforms to pathology payments could save the government at least $175 million a year.
The government, through Medicare, spent $2.5bn on pathology services in 2014-2015 and Mr Duckett argued it was the large corporate companies that were benefiting most from that spend.
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12:17pm February 22, 2016
Pathologists condemn Grattan report
AAP
Pathologists say a scathing report into their industry is grossly inaccurate and at best a flawed opinion piece.
The Grattan Institute report accuses the industry of using patients as pawns to keep shareholders happy, saying proposed Federal funding cuts to its services don't go far enough.
But the Royal College of Pathologists of Australasia says the report contains many errors and misinterpretations, while the data used to support its conclusions is inconsistent.
The report rejects claims women may be forced to fork out $30 for pap smears and calls for a major shake-up of the industry to protect patients from co-payments and rein-in pathology costs.
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Healthscope boss urges federal spending fix on $96m profit
- The Australian
- February 24, 2016 12:00AM
Sarah-Jane Tasker
The head of Australia’s second largest private hospital group, Robert Cooke, says a reform of the federation is the “holy grail” of healthcare, adding a change to state funding would be a “game changer” for his business.
The Healthscope chief executive officer, delivering a 64 per cent jump in half-year profit to $95.9 million, said yesterday the federal government should roll out a national price for healthcare funding.
“They can give the states 40 per cent of that price for each patient in a public or private setting and then we would negotiate with a health fund on the other 60 per cent,” he said. “That would be a game changer for our business. We would be building more beds than what we are proposing at the moment.”
Despite his support for federation reform, Mr Cooke said it was unlikely to occur because of political reasons.
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Half of patients may face pathology gap fees
One in two patients may be asked to pay a standard pathology gap fee of around $30 if impending cuts to bulk-billing incentives are enforced, say pathologists.
The warning has been issued in response to Federal Government cuts to bulk-billing pathology incentives, due to come into force on 1 July, which the industry says it is unable to absorb.
The incentive cuts - worth $1.40-$3.40 per service - would translate into out-of-pocket costs for all non-concession card holders, said Dr Michael Harrison, president of the Royal College of Pathologists of Australasia (RCPA).
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Health Insurance Issues.
Costing private patients an arm and a leg: Health Minister Sussan Ley demands quick price fix on prostheses
Date February 25, 2016 - 5:23PM
Heath Aston, Jane Lee
EXCLUSIVE
The price of hip replacements, heart valves and pacemakers is set to tumble for private hospital patients as the Turnbull Government seeks election-year relief from steep rises in health insurance premiums for consumers.
Fairfax Media has learned that the medical devices industry has been given less than a fortnight to identify more than $500 million in savings or face a blanket price cut in what health insurers have to pay for prostheses like new hips and knees.
Prosthetics procedures in private hospitals cost almost $2 billion a year and it is understood that Health Minister Sussan Ley wants that bill cut by about $600 million, with some reports suggesting the target is up to $900 million.
The federal government controls the cost of 10,000 medical devices, including human tissue, screws and plates, through the Prostheses List - similar to the pharmaceutical benefits scheme.
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nib profit jumps 5pc to $43m
Date February 22, 2016 - 4:19PM
Tim Binsted
Reporter
Private health insurer nib said it is alert for acquisition opportunities as smaller health funds question their future following the $5.7 billion privatisation of Medibank Private.
Group managing director Mark Fitzgibbon said that the renewed assertiveness of Medibank, which recently announced a $100 million profit upgrade and is planning an advertising spree, has changed the local industry.
"There is much more awareness of the competitive threat with the two behemoths, Medibank Private and Bupa. Smaller health insurers are worried about what the future looks likes and consolidation might be something worth revisiting," he said.
Mr Fitzgibbon said he had no particular takeover targets in sight, but he is alert to the possibility of a deal.
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Out-of-pocket costs a growing pain for health fund members
- The Australian
- February 24, 2016 12:00AM
Sean Parnell
Health fund members have copped the biggest increase in out-of-pocket expenses for hospital treatment in five years as insurers seek to share the burden of rising costs.
According to the latest industry data, reported by the Australian Prudential Regulation Authority yesterday, out-of-pocket expenses for the December quarter rose 4.4 per cent compared to the same period in 2014. The dollar difference was about $12.50 to an average bill for members of $291.51, and followed several years of declining out-of-pocket expenses.
Over that period the industry enjoyed a 6.9 per cent increase in premium revenue, against a 6 per cent increase in benefits paid. Health funds are awaiting a decision on their applications to increase premiums again in April.
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Private health insurance providers’ profits soar as premiums rise faster than payouts
February 24, 2016 12:30am
News Corp Australia Network
HEALTH insurers are getting more and more profitable, pocketing an extra $106 million in the past year — an increase of 10 per cent.
As policyholders brace for yet another budget-breaking premium increase of five per cent-plus, new official figures from the prudential regulator show funds’ collective net earnings rose to $1.19 billion in 2015 from $1.08 billion the year before.
The rate at which their profits are expanding sped up by 50 per cent, because the 2014 result was an increase of only $70 million.
This is due to a widening in their “gross margin” as premium revenue growth ($1.38 billion to $21.4 billion) outpaces the increase in payments to customers receiving treatments ($1.037 billion to $18.5 billion).
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7:41pm February 25, 2016
Private health fund members complain of financial pain despite insurance due to growing gap and out-of-pocket expenses
AAP
Australians with private health insurance are making gap payments more than ever before and are unhappy about the out-of-pocket expenses, a 9NEWS investigation has revealed.
Out-of-pocket expenses for Australian patients have increased in the past year, with the number of operations that have a gap rising by 311,112.
Dissatisfaction is also rising, with a survey of 40,000 people commissioned by the Health Minister and obtained by 9NEWS revealing that 71 per cent of respondents believed they would be out of pocket if they required treatment.
Superannuation Issues.
Super opt-out ‘despicable’: Labor
Allowing low-income earners to opt out of compulsory superannuation would be a “despicable attack” on people’s future retirement, Labor says.
The Turnbull government is reportedly being urged to consider the “opt out” idea in pre-budget submissions by industry groups.
The move could give thousands of part-time and casual workers earning less than $37,000 a 9.5 per cent pay rise — the amount paid by employers into superannuation — or up to $63 a week, News Corp reports.
“This is a despicable attack on the very foundations of a decent retirement for working Australians,” Labor’s superannuation spokesman Jim Chalmers told reporters in Brisbane on Sunday.
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Super reforms ‘discriminatory, unfair and dumb’
ANALYSIS: Superannuation changes could hurt women and young workers.
The suggestion that low-income earners should be able to “opt out” of the compulsory superannuation system is unfair, discriminatory and just plain dumb.
It would be particularly bad for women and young workers, who have enough trouble building a superannuation nest egg.
It’s unclear which employer group or groups proposed it, in the submissions being made to the Turnbull government ahead of the next federal budget in May.
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Pharmacy.
Give us control: Guild
Guild wants pharmacy to play a key role in chronic health management, despite resistance
Community pharmacy should be empowered to play a vital role in the management and prevention of chronic disease, the Pharmacy Guild of Australia believes.
Guild national executive director David Quilty and Victorian branch president Anthony Tassone have appeared before the House of Representatives inquiry on chronic disease prevention and management in primary health care to emphasise the key role they believe pharmacy can play in this area.
In its submission to the inquiry, held by the House Standing Committee on Health, the Guild coordinating the health system in an affordable way to manage chronic health “will only be facilitated by better alignment and coordination within the Federal Government though the Community Pharmacy Agreement”.
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Health is also clearly still under review as far as its budget is concerned with still a few reviews underway and some changes in key strategic directions. Lots to keep up with here with all the various pre-budget kites still being flown! Enjoy.
David.
