April 14 Edition
The macroeconomic stresses seem to have eased a little more with markets rising or stable around the world.
With Budget Night now May 3 we won’t have long to wait to see what is happening. The Budget now seems to now be very minimalist with any major reform seemingly off the table.
Given it is only 3-4 weeks away I guess we just wait and watch.
Here is a summary of interesting things up until the end of last week:
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General Budget Issues.
COAG: Turnbull warns states — don’t come to government for money
- The Australian
- April 3, 2016 3:03PM
Rachel Baxendale
The states must stop asking the commonwealth for more money and live within their means after rejecting the opportunity to take responsibility for raising the taxes to fund health and education, Malcolm Turnbull says.
The Prime Minister told Sky News the premiers’ “quick and clear ‘no’” to his proposal at last week’s Council of Australian Governments meeting that they levy their own income tax revealed that they have no credibility in demanding funding increases from his government.
“When they were offered the opportunity to be able to levy a portion of income tax themselves, and have the ability in due course to raise it or indeed lower it, they had no appetite for it,” Mr Turnbull said.
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Defining budget leaves Malcolm Turnbull with a deficit of time
- The Australian
- April 4, 2016 12:00AM
Phillip Hudson
At the weekend, Malcolm Turnbull reached 200 days as Prime Minister, but it is the next 100 days that will define his leadership.
There are just 29 days until Scott Morrison hands down the fast-tracked budget. It will be his first as Treasurer but must create the springboard for Turnbull to immediately contest his first election as leader. They will rise and fall together.
This week, the pressure will be intense as the expenditure review committee meets to make some of the big decisions about the May 3 budget.
Turnbull will attend and chair some of these sessions.
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3 Apr 2016 - 3:46pm
Key to surplus not higher taxes: Turnbull
Prime Minister Malcolm Turnbull insists that eliminating unjustified spending and growing the economy faster is the best way to return to a budget surplus.
Source: AAP 3 Apr 2016 - 3:46 PM
Prime Minister Malcolm Turnbull insists returning the budget to surplus is a long-term project that will be achieved through growing the economy faster rather than raising taxes.
He says the government's approach is to eliminate unjustified spending, live within its means and maintain strong economic growth that boosts tax receipts.
"It's been very effective in other times and in other places, and is exactly how (New Zealand Prime Minister) John Key got back into balance," Mr Turnbull told Sky News on Sunday.
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Malcolm Turnbull and the Liberals are channelling the Tea Party
Date April 4, 2016 - 5:35AM
Jessica Irvine
Senior Writer
Malcolm Turnbull says the states' rejection of his income tax plan shows a weak commitment to reform. Vision courtesy ABC News 24.
It's a curious sort of person who joins an organisation with the sole purpose of diminishing it.
Most people are drawn to certain employers or professions through a core belief in what that profession seeks to do. Their desire is to participate in the purpose of that organisation and expand upon it, if possible.
Spending, is, in fact, the entire project of government.
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Morrison signals frugal election budget
April 4, 20161:50pm
Morrison aims to lift business tax burden
Morrison signals frugal election budget
The Turnbull government has dusted off an old slogan a month out from the federal budget.
While "living-within-our-means" signals a frugal affair, Treasurer Scott Morrison is still leaning towards cutting business taxes as he prepares for his first and only budget ahead of an election.
"We want to see the tax burden moderated for Australians and particularly for businesses that are out there employing people and driving the growth that we need to drive jobs," Mr Morrison said on Monday.
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Tax changes will be in 2016 federal budget, Assistant Treasurer Kelly O'Dwyer says
By political reporter Stephanie Anderson and Louise Yaxley
Updated
Assistant Treasurer Kelly O'Dwyer has insisted there will be tax changes in the federal budget, less than a week after the Prime Minister was forced to withdraw his proposed changes to income tax arrangements.
Key points:
- Government is examining country's tax mix, rates and concessions, Kelly O'Dwyer says
- Treasurer says he will not make "unfunded, fantasy promises"
- Labor accuses the Government of trying to get states to put up income taxes
Premiers and chief ministers rejected Malcolm Turnbull's plan for states and territories to levy a percentage of income tax independently.
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Financial and political future of country all comes down to Super Tuesday
April 5, 2016 10:00pm
Herald Sun
TUESDAY May 3 has become the day on which the entire financial and governing future of the country — Budget, interest rates and both politics and policies — will now pivot.
For the first time in the quarter century or so since the governor of the Reserve Bank ‘escaped’, so to speak, from then-treasurer Paul Keating’s pocket and took sole ownership — and so total responsibility — for interest rates, we will have an RBA rate meeting and the federal Budget on the same day.
Just to make it that much more ‘interesting’, both the RBA meeting and the Budget will be ‘live’, so to speak again. And the Budget will effectively ‘ring the bell’ to start the federal election campaign.
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https://au.news.yahoo.com/thewest/wa/a/31269464/morrison-tax-plan-bluff-seen-as-spin-to-cover-error/
Tax plan ‘bluff’ seen as spin to cover error
Treasurer Scott Morrison says Malcolm Turnbull was calling premiers’ “bluff” with his proposal to reinstate State income taxing rights.
There are also signs Labor will retreat from Julia Gillard’s $80 billion pledge for hospitals and schools.
Mr Morrison said the Prime Minister had exposed the States’ resistance to taking responsibility for their own budgets.
“What the Prime Minister did last Friday is call their bluff,” he told Sydney radio yesterday.
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Labor to appeal to women voters in stoush over superannuation
Date April 5, 2016 - 12:08PM
Sally Rose
Reporter
Labor superannuation spokesman Jim Chalmers has said gender equity will loom large in the election battle over super policies. Photo: Glenn Hunt
Labor has slammed the government's failure to reveal its plans for superannuation taxes and indicated it will seek to appeal to women in the the tussle over any changes announced in the May budget and in the lead-up to a federal election.
It comes as the latest Newpoll survey shows Labor ahead of the Coalition government for the first time since Malcolm Turnbull became Prime Minister.
By not announcing its plans for super taxes the government has left the opposition flat-footed in its ability to critique them.
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The budget deficit is at its lowest in two years
Chris PashApr 6, 2016, 3:48 PM
The underlying budget deficit has dropped to $36.1 billion, its lowest in almost two years, according to Department of Finance numbers.
The figures for February put the Federal Budget on track to meet forecasts, according to analysis by CommSec.
They are a result of lower spending more than making up a shortfall in revenue.
Total revenue was $1.22 billion weaker than the mid-year forecast mainly because tax collection didn’t meet expectations.
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Coalition has hard sell convincing voters of need for restraint
- The Australian
- April 7, 2016 12:00AM
David Uren
Scott Morrison’s strategy for repairing the budget deficit is to keep government spending growing more slowly than the economy overall and wait for economic growth to increase tax payments to a level that delivers a surplus.
It is, the Treasurer acknowledges, a slow and hard slog, with uncertain deadlines. There is the constant need to resist fresh government spending and find fresh savings when those efforts fail.
His goal is to get federal government spending down from 26 per cent of gross domestic product to 25 per cent, arguing that Australia has never achieved surpluses when spending is greater than that level.
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- Apr 7 2016 at 11:45 PM
Government scraps plans to trade away tax deductions
The federal government has scrapped plans to trade away annual work-related deductions to find revenue to fund other tax cuts after concluding it would not stack up either economically or politically.
The decision to leave tax deductions unchanged, which is related to the earlier decision to leave the rate and base of the GST unchanged, has further limited options for what is a politically critical May 3 budget for the government which will contain tweaks to superannuation tax concessions and limited measures targeting small and medium business.
The Australian Financial Review understands that while it remains the government's intention to offer a company tax cut, the beginning of any phase down in the 30 per cent rate may be delayed.
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A wealth of unfulfilled budget reform opportunities
- The Australian
- April 9, 2016 12:00AM
Judith Sloan
I am one of a small number of people who found some merit in the 2014 budget. It did aim to restrict the growth of government spending and rein in the deficit. But, from a political point of view, it was a turning point. Seemingly unable to secure passage through the Senate of most of the key savings measures, the government quickly descended into chaos and mixed messaging.
Last year’s budget was a classic case of offending no one, although the previous budget’s $80 billion of savings in payments to the states for hospitals and schools were kept on the books.
In point of fact, the Abbott government had got off to a good start. The line was held on extending corporate welfare to the car industry and SPC Ardmona. A bunch of pointless and expensive agencies was abolished, with more to come. Arthur Sinodinos, then assistant treasurer, got on with the job of wading through the close to 100 tax measures left over from the Labor government that had never been legislated.
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Federal budget 2016: Scott Morrison signals tough approach focused on spending cuts
Date April 8, 2016 - 10:01AM
James Massola
There'll be no fantasy funding according to Scott Morrison who says we have to live within our means. Courtesy ABC News 24.
Treasurer Scott Morrison has given the clearest signal yet his election year budget will place spending restraint front and centre, with the prospect of "big bang" tax reform rapidly receding.
The Turnbull government is whittling down the number of tax changes that could be adopted in the May 3 budget, with a rise in the GST already off the table and a plan to offer simplified tax returns - which would have raised as much as $6 billion in revenue to pay for tax cuts - now apparently off the table.
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PM says looming budget won’t be about ‘a fist full of dollars’
- AAP
- April 9, 2016 5:58PM
The Turnbull government’s first federal budget will be prudent and responsible and won’t hand out a “fist full of dollars”.
The prime minister on Saturday began the task of managing public expectations ahead of the May budget, warning it would focus on living “within our means”.
However, he confirmed his first budget would contain “changes to our tax system” designed to promote investment, innovation and enterprise.
“This budget will not be about a fist full of dollars, it will be about prudence, fairness and responsibility to our future generations,” he told the Victorian Liberal Party conference in Melbourne on Saturday.
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Health Budget Issues.
Budget 2016: UBS analysts don’t expect health cuts in election year
- The Australian
- April 6, 2016 11:23AM
Sarah-Jane Tasker
UBS analyst Andrew Goodsall says despite his view that healthcare cuts are less likely in an election budget, the growing budget deficit remains a constraint on largesse.
The Turnbull government’s May budget could “showcase” new policies it plans to take to the election on innovation and research, according to healthcare analysts.
UBS analyst Andrew Goodsall also outlined that despite his view that healthcare cuts were less likely in an election budget, equally the growing budget deficit remained a constraint on largesse.
“Given major reform processes (in healthcare) underway, we generally expect a more subdued approach to further healthcare reform in budget 2016,” he said.
The respected healthcare analyst pointed out that federal funding represented more than 70 per cent of income for some of the major Australian-listed healthcare stocks.
The budget, he said, was likely to provide updated projections on recent policies, such as bulk-billing incentive cuts, updated forecast for pharmaceutical benefits scheme spending after existing pricing savings, along with the Medicare Benefits Schedule freeze.
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Claims health tests are in danger
April 7, 2016 9:55am
Mercury
Hobart Pathology chief executive Lawrie Bott says a cut to bulk-billing incentives will force his company, which does the majority of pathology testing in Tasmania outside of the public hospitals, to introduce out-of-pocket charges.
TASMANIA’S largest pathology services provider has warned life-threatening diseases may not be detected after Federal Government cuts take effect on July 1.
Hobart Pathology chief executive Lawrie Bott says a cut to bulk-billing incentives will force his company, which does the majority of pathology testing in Tasmania outside of the public hospitals, to introduce out-of-pocket charges.
The Government wants to scrap bulk-billing incentive payments for pathology services (worth $1.40 to $3.40) which, along with changes to bulk-billing incentives for diagnostic imaging, would save $650 million over four years.
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The problem ingrained in our health system: patients don't come first
Date April 8, 2016 - 12:15AM
Vlado Perkovic and Leanne Wells
Over the past six months, companies such as Novartis Pharmaceuticals and Amgen Australia have spent millions sending health professionals on junkets all over the world.
Most aspects of health care have been designed with a focus on the needs of the doctor or other health care provider, rather than the consumer who uses the health services.
But health care is ripe for change.
This culture has not been deliberately created, and often frustrates doctors and other health providers as much as patients. But it is ingrained in our health care system.
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Fact check: Has the Coalition taken billions of dollars from hospitals and not put it back?
The claim
On April 1, 2016 following a Council of Australian Governments (COAG) meeting, the Governments of the Commonwealth, states and territories reached an agreement on hospital funding for the three-year period beginning July 1, 2017.
The Commonwealth is to provide up to $2.9 billion of additional funding to the states and territories over the three years, but some leaders have argued it is not enough.
"[H]undreds of millions of dollars today in extra funding for Victorian hospitals does not replace billions of dollars that have been taken away from Victorian hospitals...[M]any billions of dollars will not be flowing to hospitals in my state and hospitals right across the nation as a result of decisions made in the 2014 budget. They are not reversed today and that's a really important point for us all to acknowledge..."
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Pharmacy And Drug Issues.
Hundreds of prescription drugs will now be cheaper
April 3, 2016 8:48pm
news.com.au
HUNDREDS of lifesaving prescription drugs will be cheaper as changes to the Pharmaceutical Benefits Scheme come into effect this weekend.
More than 400 prescription drugs have dropped up to $20 in price, including expensive cancer and cardiovascular disease pills.
Prices for some drugs will drop as much as 60 per cent from this weekend as annual changes to the Pharmaceutical Benefits Scheme take effect.
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Medicines sector reforms deliver consumer benefits and a sustainable PBS
Consumers, taxpayers and the national health system will benefit from the significant savings being delivered by medicine suppliers since 1 April, say Medicines Australia, the Generic and Biosimilar Medicines Association, the Pharmacy Guild and the National Pharmaceutical Services Association.
The direct contribution the medicine supply chain is making to these savings will ensure the PBS is sustainable into the future, enabling the reinvestment savings into the funding of new, breakthrough medicines for Australian consumers, they say.
The key players in the medicines supply sector said the consumer benefits of the latest round of PBS reforms—the costs of which are being borne across the sector—are helping to ensure that the PBS remains one element of Australia’s health system that is fiscally sustainable.
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PBS cuts skyrocket
Latest PBS cuts just the beginning, Minister believes
A “skyrocketing” number of medicines experiencing a reduction in their price in the April round of PBS cuts is only the beginning, Health Minister Sussan Ley says.
Over the weekend, Ms Ley announced that the price of around 400 medicines will fall as a result of the 1 April round of PBS reforms that are being funded by the medicines supply sector, and which took effect on 1 April.
“In an Australian first, the price of a large proportion of expensive combination medicines and patent-protected drugs listed on the Pharmaceutical Benefits Scheme will drop this weekend, in addition to the annual April changes,” she said.
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Patients could miss out on leading drugs: pharmaceutical firms
- The Australian
- April 5, 2016 12:00AM
Sarah-Jane Tasker
Pharmaceutical companies have warned Australian patients risk missing out on leading new drugs after the federal government cut the price of hundreds of medicines.
The government reduced by 5 per cent the price of branded medicines that have been on the Pharmaceutical Benefits Scheme for five years or more, and pharmaceutical companies say they will be forced to wear the discount.
Carlo Montagner, the chief executive of Specialised Therapeutics Australia, said if there were further price cuts, companies might remove drugs from the PBS because it would not be viable to keep them on the list.
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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 - although narrowing it seems to be largely focussed on Super! Enjoy. Only a few weeks to the Budget.
David.
