June 07, 2018 Edition.
On the international front it seems Italy now has a government, Spain has managed a transition and Trump says (for now ) he is going to Singapore while applying tariffs on all his friends. The man is a bloody menace I reckon.
In OZ One Nation appears to be imploding, the ACCC is bringing criminal charges against the ANZ and two international investment banks and Barnaby appears to have also imploded and gone on extended leave.
The Productivity Commission Report on Superannuation is an amazing document which needs a major response to fix the issues raised.
The Financial Services Royal Commission again made on feel sorry for some bank customers who were not smart enough to get out of the way of some pretty difficult steamrollers. They are now having a rest for a few weeks before going to Brissie and Darwin.
-----
Here are a few other things I have noticed.
-----
Major Issues.
Australia’s shadow banking Ponzi scheme
- The Australian
- 12:00AM May 26, 2018
Alan Kohler
Non-bank lending in Australia is really big. How big? No one knows, although moves are afoot to find out — next year.
Australia’s version of shadow banking is based on four things that are special to this country — first, the fact that virtually all residential development is “build to sell”, as opposed to “build to rent”, as it is in the United States; negative gearing; the retreat of the banks from financing property development; and finally, immigration — lots of it.
In the absence of the banks, a huge industry has developed to funnel yield-hungry high-net-worth individuals’ and family office money into property development outside the banking system.
-----
- Updated May 27 2018 at 1:57 PM
Lack of 'Powell put' tightens financial conditions
by John Authers
Are financial conditions really tightening? And if they are, will they be allowed to tighten enough to make a difference?
The impression had been of late that at last financing was growing a little harder to come by, and that speculators and investors were at last finding it more difficult to fund their activities after years of exceptionally easy money after the crisis.
After all, the Federal Reserve, the world's most powerful central bank, has now raised rates six times, in a process of steady tightening that started back in 2015. Money is fungible, and other central banks are as yet only talking about tightening. In the case of the Bank of England, an alarming slowdown as a hard Brexit approaches has even prompted the abandonment of a rate hike that had been clearly signalled. So the effect of the Fed's activities is limited by continuing liquidity elsewhere.
-----
Turnbull government told to fix $474 billion superannuation sector
By David Crowe
27 May 2018 — 11:47pm
The Turnbull government will be urged to fix a chronic problem in the superannuation industry by setting up a new body to allocate some of the $474 billion in retirement savings for workers who never nominate their preferred fund.
The government's peak economic adviser has prepared a damning report on the industry woes and recommends sweeping new measures to help choose the best funds for millions of workers to boost their retirement nest eggs.
The report, to be released on Tuesday, will dash the hopes of the major banks in their quest to break open the existing system where unions and employers choose the default funds for workers.
-----
ABC radio is world class. ABC TV? Not so much
By Tony Walker
27 May 2018 — 11:21pm
Melbourne lawyer and property investor Joe Gersh is the latest addition to an otherwise ineffectual ABC board presiding over a decline of the national broadcaster.
Whether Gersh, whose experience is in backroom deal-making on behalf of wealthy clients, will add value to a lacklustre board remains to be seen.
However, it is not overstating things to say the ABC finds itself in one of its most perilous moments in a political environment that could hardly be more hostile.
-----
EU law reflects belated public interest in privacy
- The Economist
- The Australian
- 12:00AM May 25, 2018
Today marks the deadline for companies to comply with the General Data Protection Regulation. The law, passed two years ago by the EU, requires firms to take better care of their customers’ data.
Meeting its requirements is a tall order. To pass muster, businesses have to appoint a data protection officer, conduct impact assessments, ensure that customers provide explicit consent to use their information, and give them the ability to inspect, correct or delete their records. The regulations apply even to companies outside the EU that deal with European consumers.
In the past, companies with sloppy approaches to data have been able to count on their customers’ lack of interest in cyber security which, perhaps surprisingly, has dwindled through the years despite a succession of hacking scandals. The share of people around the world asking Google about faulty passwords, email spam and computer viruses has plummeted since 2004, when the first data is available.
-----
Chinese downturn would not hurt Australia much: IMF
- The Australian
- 12:00AM May 28, 2018
David Uren
A sharp downturn in the Chinese economy would have only a modest effect on Australia, provided it did not turn into a broader financial crisis, an International Monetary Fund modelling exercise has found.
Australia’s other trading partners in Asia and the US would pick up much of the slack left by a collapse of exports to China, helped by a depreciation of the Australian dollar.
The IMF’s new study of the links between the Chinese and Australian economies comes amid a fresh bout of concern about China’s ability to manage its high level of corporate and local government debt as the economy slows.
-----
- May 28 2018 at 5:00 PM
Why Australia and Julie Bishop are in Beijing's cross-hairs
by John Kehoe
China's latest efforts to embarrass the Turnbull government serve at least two purposes, according to seasoned Sino watchers in Canberra and Washington.
Foreign Affairs Minister Julie Bishop has been perhaps the toughest critic of China's militarisation of contested islands in the South China Sea.
Beijing is annoyed by her principled stand backing an international rules-based system to determine competing sovereignty claims between Asian nations and to ensure freedom of navigation through the strategically positioned trade corridor.
-----
- Updated May 29 2018 at 12:15 AM
Productivity Commission blows up default super system
Employers and unions would have no influence over the $600 billion default superannuation system under a Productivity Commission proposal that would cleave super from the workplace relations system entirely.
An expert panel would be empowered to select the 10 best performing no-frills superannuation products to act as defaults after the commission found the super savings of millions are languishing in underperforming funds, dragging down retirement balances by as much as $635,000, or the equivalent of 13 years' pay.
In more bad news for the battered banks, the commission found a clear "performance divide", with union-aligned "industry" funds delivering average returns of 6.8 per cent compared to 4.9 per cent for bank-owned "retail" funds.
-----
Revealed: Why the sale of Ausgrid to Chinese buyers was vetoed
By Peter Hartcher
28 May 2018 — 11:51pm
A number of countries around the world, from Canada and the US to Malaysia, are starting to take a more sceptical view of foreign investments from China, especially when they're from state-controlled firms.
But an Australian mystery remains - why did the federal government veto the $10 billion sale of Ausgrid to a Chinese-dominated partnership two years ago?
The NSW government was furious at the disruption of its planned part-privatisation of its electricity distributor. And why did the Turnbull government intrude into the sale process just 10 days before the deal's deadline?
-----
The fix for Australia's multibillion-dollar superannuation 'mess'
By Peter Martin
28 May 2018 — 7:07pm
The biggest shakeup in the history of Australia’s $2.6 trillion superannuation system would see new workers able to choose an approved high-performing fund for life, saving as much as $407,000 by avoiding underperforming funds and multiple accounts.
Recommendations from the Productivity Commission will boost your super and simplify the system. Economics editor Peter Martin explains.
A landmark Productivity Commission review has found that almost one third of default super accounts are chronic underperformers, actually costing members more than if they had invested in the underlying assets themselves and paid management fees. Another third, some 10 million, are unintended multiple accounts whose extra fees and duplicate insurance policies cost members $2.6 billion per year despite decades of government programs aimed at encouraging members to consolidate accounts.
-----
We no longer have need for Manus and Nauru as deterrents
By Tony Ward
28 May 2018 — 11:43pm
“An almost insoluble mess”; “a Pacific purgatory”; “a weeping sore on Australia’s collective psyche”. It is hard to dispute Roman Quaedvlieg’s descriptions of the situations in Nauru and Manus Island in Friday’s paper.
Quaedvlieg argues that the issue is creating major tensions between “the ideologues and the pragmatists” of the Labor Party. He warns that “any softness” in Labor policy, “will be undoubtedly be used as a people smuggler’s marketing ploy to inveigle clients onto boats headed for our shores”.
But do we still need Nauru and Manus as deterrents?
-----
Young adults living at home are costing Aussie parents $12.2b a year
By Nicole Pedersen-McKinnon
Updated29 May 2018 — 10:59amfirst published 28 May 2018 — 4:32pm
It’s time I apologised to all fellow parents … and confess that I tell every graduating class I address that their best wealth-building opportunity is to stay living at home and save, save, save.
“But pay board – it’s great practice managing money and you might even be able to convince your mum and dad, if they can afford it, to stash your cash and return it to you later,” I disloyally divulge.
Because, for parents, the “afford it” bit is the rub. And you can’t have missed last week the rather entertaining story of a US couple who turned to the courts to evict their 30-year old s(p)on(ge).
-----
Great superannuation rip-off exposed
- The Australian
- 12:15AM May 29, 2018
Michael Roddan
The biggest shake-up of the $2.6 trillion superannuation sector for three decades would unshackle the retirement system from workplace bargaining agreements, end the proliferation of multiple accounts and rip $1 billion a year in contributions out of underperforming funds, under the proposals of a draft Productivity Commission report.
The proposals, if adopted, could give some Australians an extra $400,000 in their nest eggs over the course of their working lives.
After a two-year review, the Productivity Commission has spurned the wishes of the wealth management industry, which wanted the $500 billion default super market to be open slather for all competitors.
-----
- May 29 2018 at 3:34 PM
Navy to embark on Pacific Island deployment amid fears over China's rising influence
The Australian navy will soon be deployed to the south-west Pacific in a goodwill mission with neighbouring countries amid criticism the Turnbull government has neglected the region and allowed China to fill the strategic vacuum.
Outgoing Chief of the Defence Force Mark Binskin said four ships and 1000 personnel would take part in this year's iteration of its annual Indo-Pacific Endeavour exercise.
"The 13 week deployment wll focus on the south-west Pacific, with an emphasis on planning for disaster assistance, multinational naval manoeuvres and training activities with partner nations."
-----
- Updated May 30 2018 at 12:00 AM
Flashpoints emerge across the world economy
by The AFR View
As Donald Trump's tax cuts power up the American economy, rising US interest rates are driving the greenback higher and sucking liquidity from the global economy. That's hitting emerging market economies, such as Argentina, Turkey and, to a lesser extent, Indonesia on our northern doorstep. At the same time, Italians are trying to cobble together a bizarre coalition government that wants to both increase public spending and cut taxes. The Mediterranean refugee crisis has devastated support for the European Union among Italian voters who once saw Brussels as a safeguard against their own unstable governments. The result is a re-emerging euro crisis.
Australia's national complacency is now being fed by a commodity price rebound for our energy and iron exports, and by assumptions of an improving global economy. That's feeding the conceit that an capital-importing economy, such as ours, can costlessly maintain a tax penalty on imported capital while the nation squabbles about the "fair" spoils of a stagnating pie. At some stage, this national drift will run aground, perhaps magnifying the next external shock. Australia sailed through the 1997 East Asian economic crisis, the early 2000s US tech-wreck and the 2008-09 global financial crisis. But did anyone mention the alarming build-up in debt in China, which now takes nearly 30 per cent of our exports, compared to only 5 per cent in the early 2000s? Hey, Reserve Bank governor Philip Lowe did, just last week.
-----
'We make mistakes': ATO agrees to trial independent tax reviews for small businesses, individuals
By Nassim Khadem
30 May 2018 — 10:29am
Tax Commissioner Chris Jordan says the Australian Taxation Office has agreed to trial independent reviews when small businesses and individuals are in dispute with the agency over a tax matter, following a joint Fairfax-Four Corners investigation into the agency.
Appearing before Senate estimates on Wednesday morning, Mr Jordan took issue with the joint investigation's revelations of small business taxpayers being harassed intimidated and bullied by the agency, and then having insufficient avenues to appeal the decisions and get adequate compensation.
Mr Jordan acknowledged that the ATO "are not perfect and we make mistakes" but said that the investigation gave a "distorted" picture about the extent of tax disputes.
-----
'Major financial crisis' could be on horizon, warns billionaire
By Nikos Chrysoloras & Helene Fouquet
30 May 2018 — 5:51am
A surging US dollar and a capital flight from emerging markets may lead to another "major" financial crisis, investor George Soros said, warning the European Union that it's facing an imminent existential threat.
The "termination" of the nuclear deal with Iran and the "destruction" of the transatlantic alliance between the EU and the US are "bound to have a negative effect on the European economy and cause other dislocations," including a devaluing of emerging-market currencies, Soros said in a speech in Paris on Tuesday.
"We may be heading for another major financial crisis."
-----
OECD says Australia and the globe are doing well, with risks down the track
By Peter Martin
Updated30 May 2018 — 6:38pmfirst published at 6:30pm
The Organisation for Economic Cooperation and Development expects world economic growth to roar back to 4 per cent this year, a peak not seen since the global financial crisis, but it warns that the jump will be fuelled by tax cuts and looser government spending, meaning it may not last.
For Australia, the 2018 Economic Outlook predicts a pick-up in wages and prices towards the end of the year that will allow the Reserve Bank to start “gradually tightening” interest rates.
It nominates housing prices and high household debt as the two biggest risks facing the Australian economy although it notes that house prices have begun to ease.
-----
Superannuation report lays out flaws in system
- The Australian
- 12:00AM May 30, 2018
Paul Kelly
The great super rip-off is exposed and documented. Millions of working people, the young, the low-paid, those who change jobs, are the victims. If you have any concern for justice, inequality, transparency and fairness, then you will be alarmed.
Yet what do we find? The great rip-off is being denied, the millions being exploited and hurt financially are being treated with contempt, dismissed as mugs who can be endlessly sacrificed as the defenders of a flawed system promote their collective interests generated by our compulsory superannuation model.
Yesterday morning, before most people had even absorbed the scale of the financial atrocity, the self-interested champions of the system trundled out their contemptible defences — witness the ACTU, the Institute of Superannuation Trustees and, sadly, Industry Super Australia, representing the industry funds.
-----
Tougher foreign interference laws can't come soon enough
By David Crowe
31 May 2018 — 4:05pm
Imagine the scenario at the next federal election when a foreign power seeks to wield its influence to help a friend or punish an enemy in the Australian parliament.
An Australian politician could easily collect donations from a wealthy patron close to a foreign government in exchange for influence over policy. A foreign government could use its muscle with ethnic media to wage a vendetta against an elected MP. A donor to a political party could shape its policy while hiding his or her link to a foreign agency.
What would have sounded alarmist a few years ago is now a humdrum prediction. The spectre of Chinese and Russian influence is everywhere. The Russian meddling in the last United States election is a sign of things to come, while the Russian cyber attacks on Britain in April showed just how blatant the tactics are getting.
-----
Melbourne house prices book worst quarter in six years
- The Australian
- 10:00AM June 1, 2018
Turi Condon
Melbourne’s housing market has recorded its worst quarterly result in more than six years with prices falling 1.2 per cent for the three months to the end of May, helping to drag national housing values down 0.3 per cent for the period, according to researcher CoreLogic.
Melbourne’s housing prices dropped 0.5 per cent for the month outstripping Sydney’s 0.2 per cent fall in May.
Hobart and a number of regional areas led by Geelong and southeast Tasmania helped arrest the national decline, turning in healthy price growth.
CoreLogic labelled the housing market downturn as “more entrenched”.
-----
Home borrowing contracts sharply, new figures confirm
- The Australian
- 1:24PM May 31, 2018
Michael Roddan
Lending in Australia is starting to display signs of a potential credit crunch as official statistics show borrowing for the housing market fell to its slowest rate in five years, giving more fodder to doomsayer analysts.
Official data from the prudential regulator today showed total lending for mortgages rose 0.2 per cent in April, leaving annual growth at just 2.3 per cent — a sharp contraction on the rate in recent months of an annual 5 per cent growth.
Separate data from the Reserve Bank of Australia showed housing credit rising 0.4 per cent in the month of April. CoreLogic researcher Cameron Kusher said it was the slowest monthly expansion in housing credit since June 2013.
Over the year, the RBA data, which includes lending from unregulated shadow lenders outside of the prudential statistics, showed housing data had risen 6 per cent — still three times as fast as wages growth. However, that was below the prior year’s 6.5 per cent growth in housing credit.
-----
Global business alarm over US steel, aluminium tariffs
- Patrick Mcgroarty
- The Wall Street Journal
- 12:19PM June 1, 2018
Many businesses around the globe have expressed alarm over new US tariffs on steel and aluminium, saying they will disrupt long-established supply chains, drive up consumer costs and harm US exporters hit with retaliatory duties.
The Trump administration’s tariffs could raise prices on consumer products from beer cans to car parts, executives said, and inject new unpredictability into manufacturing, agriculture and consumer businesses.
The head of the US Chamber of Commerce, in a memo to the organisation’s board of directors, said the administration’s overall trade policies, including the possibility of pulling out of the North American Free Trade Agreement, will hamstring the US’s robust economic growth and threaten as many as 2.6 million US jobs.
-----
- Jun 1 2018 at 2:53 PM
Trade wars, shadow banking, Euro crisis: How to tip the next big crisis
Wherever you look there are economic dangers that could escalate. Australia needs to get our house in order.
by Jacob Greber
While much of the federal political focus is on the latest kindergarten-grade dysfunction of a minor party, the rest of the world has delivered a masterclass in how things can really go off the rails.
In Italy, the on-again, off-again spectre of a populist Greece-on-steroids euro crisis sent markets whipsawing.
Almost simultaneously China's massive shadow banking risks were again in the news, with the Organisation for Economic Cooperation and Development becoming the latest to warn that Australia wouldn't be immune to a debt disaster in its biggest trade partner.
-----
The Labor Party's China problem
By Nick O'Malley
2 June 2018 — 12:00am
When Australia’s chief spy, ASIO boss Duncan Lewis, told a Senate estimates hearing last week that Australia faced a greater threat from espionage today than at any time since the Cold War he was careful not to specify which countries might be targeting us.
No one doubts that he was talking about China. The senators who were questioning him were undoubtedly talking about China.
As evidence of Chinese efforts to influence Australian institutions mounts, both major parties have reason for self-reflection.
-----
Portrait of a sick system gives us a chance to put things right
By Peter Martin
1 June 2018 — 10:22pm
We’re apathetic about super, until we’re not.
On Tuesday phone lines to Australia’s biggest bank-run super funds buckled under a deluge of calls from customers wanting to close multiple accounts. Traffic to the Australian Securities and Investments Commission’s website for consolidating your super jumped 500 per cent.
Recommendations from the Productivity Commission will boost your super and simplify the system. Economics editor Peter Martin explains.
And in at least one school, Year 12 students were shown two videos; one produced by the Productivity Commission depicting super funds as pigs, and the other prepared by this newspaper, making the point that multiple and poorly chosen accounts can cost members in excess of $400,000 over their working lives.
-----
We have debts to pay before we give ourselves tax cuts
By ROSS GITTINS
2 June 2018 — 12:15am
How much should we worry about leaving government debt to our children and grandchildren? A fair bit, though not as much as some people imagine.
The central claim of this year’s budget is that we can have our cake and eat it.
We can award ourselves personal income tax cuts worth $144 billion over 10 years, but still halt the growth in the federal government’s net debt at $350 billion by the end of June next year, and then have it fall away as the proceeds from successive, ever-growing annual budget surpluses are used to pay off the debt.
-----
- Updated Jun 1 2018 at 11:00 PM
Could the GFC happen again? These guys should know
by Su-Lin Tan
Conservative bank lending, low interest rates, and tighter access to credit have carved a very different debt landscape to that of the global financial crisis 10 years ago, but there is a risk of complacency around the rise in interest rates, former key Babcock & Brown executives say.
Speaking 10 years after the collapse of the company, former Babcock & Brown chief executive Phil Green says all three factors should work together to prevent a major crash, although he says that there are pockets of the Brisbane and Melbourne CBD residential markets that are already experiencing housing settlement defaults.
Importantly, there are fewer dubious loans such as "low-doc" loans that raged a decade ago, Mr Green says.
"The Australian debt market is not that leveraged," Mr Green said.
"In 2007 when we bought Alinta, there was all that bridge finance, and the purchase was almost 100 per cent geared.
-----
The alleged bank criminal cartel that will send industry shockwaves
By Elizabeth Knight
2 June 2018 — 12:05am
The bombshell criminal cartel action involving the ANZ and two investment banks is set to cause an industry explosion. After a protracted investigation by the Australian Competition and Consumer Commission, charges will be laid soon that will send shockwaves around the financial securities industry.
It breaks new ground for the ACCC which has alleged criminal cartel behaviour only three times - none of which have involved trading in securities.
The move will undoubtedly open a can of worms around the legality of aspects of share placements, underwriting agreements and share trading practices.
-----
'Transformative': the Turnbull reform that should happen but never will
By Peter Hartcher
2 June 2018 — 12:03am
Australia's system of compulsory super is a tremendous national asset, a Keating creation that's proved so successful that the Coalition has given up trying to surreptitiously strangle it or wish it away.
But that doesn't mean that the subterranean struggle for political control and advantage has ended. Oh no. The prize is too big and the pickings too rich. The parties are talking reform for the benefit of the ordinary Australian, but they also are thinking reward for their cronies.
The system started as a way of giving ordinary workers a painless way of saving for retirement by requiring bosses to pay a fixed percentage of wages into a tax-advantaged super fund, but it's become much more.
-----
Government fund would put a stop to the gravy train
- The Australian
- 12:00AM June 2, 2018
Adam Creighton
Machiavelli wrote “nothing is more difficult than to initiate a new order of things, for the reformer has enemies in all those who profit from the old order and only lukewarm defenders in those who would benefit from the new”.
Forget lukewarm, try clueless. Whatever the impediments to 16th-century reform in Florence, they were nothing compared with what Financial Services Minister Kelly O’Dwyer faces if she tries to improve the efficiency and competitiveness of superannuation. Abysmal standards of financial literacy are endemic. Almost a third of Australians would rather be given $200 in cash than receive $2000 in superannuation, according to a 2014 Westpac survey. O’Dwyer will have the two most powerful vested interests in the country — finance and unions — arrayed against her.
-----
Revealed: Live exports review recommended an immediate ban
By Latika Bourke
3 June 2018 — 12:15am
It was the only recommendation of the live exports review that the government did not agree to implement immediately. Now Fairfax Media can reveal why.
Hidden behind confusing jargon and acronyms, recommendation four of Michael McCarthy's snap review into the live export trade called for what would have constituted an effective ban on the summer live trade effective July 1 this year. It required such drastic changes to animal welfare standards that exporters would have been left with no other choice than to close down.
The review was commissioned after footage filmed by a whistleblower onboard the Awassi Express, operated by the Perth-based Emanuel Exports, showed sheep boiling to death during a heatwave on their way to the Middle East in August last year. A total of 2400 sheep died.
-----
Financial Royal Commission Issues.
Royal commission spreads housing fears
As the royal commission ground through another day of worthy but unspectacular revelations about small business lending, the broader impacts of the commission's work are setting off some rather shrill – and perhaps overly pessimistic – alarms in federal politics, the property industry and the consumer sector.
In Canberra, Treasury secretary John Fraser amplified a warning from ratings agency Moody's, which argued that the royal commission could threaten economic growth if tighter lending standards start to hit the availability of credit.
"There is also the risk that there is an unanticipated tightening in financial conditions through reactions to the royal commission into the financial services industry," Mr Fraser told a Senate estimates hearing on Tuesday.
-----
Credit crunch risk rising: UBS
- The Australian
- 12:54PM May 30, 2018
Michael Roddan
The risk of a sharp credit crunch is rising, according to analysts at investment bank UBS, which is warning of a “disorderly” housing correction.
It comes on top of dire cautions from Treasury secretary John Fraser, who yesterday told a Senate committee that a dramatic tightening in lending standards by the nation’s banks could result in a surprise shortage of credit in the economy.
In his opening remarks to the Senate economics committee, Mr Fraser, himself a former UBS banker, said it was “early days yet to make an informed judgment”, but added: “There is a risk that there is an unanticipated tightening in financial conditions through reactions to the royal commission.”
In a note today, UBS analyst Jonathan Mott said the housing market was already slowing, with house prices falling and credit conditions tightening.
-----
‘Why not just say 'Do it!'?’ ASIC under fire for its inaction on banks
By Cara Waters
1 June 2018 — 11:48am
Commissioner Kenneth Hayne lost patience with the corporate regulator for its lack of action on unfair contracts for small business.
“Why work with the lender? Why not just say ‘Do it!’?”, he asked after the banking royal commission heard on Friday morning the Australian Securities and Investment Commission (ASIC) had not taken any enforcement action against the banks.
All banks failed to comply with unfair contracts legislation protecting small business when the legislation came into effect in November 2016 and some banks are still not compliant.
-----
National Budget Issues.
Fortunately, Turnbull’s tax cap is just political window-dressing
By ROSS GITTINS
28 May 2018 — 12:00am
The Turnbull government’s solemn pledge to cap the growth in tax receipts at 23.9 per cent of gross domestic product is a political gimmick to which no government committed to economic responsibility would bind itself.
So it’s good we can be confident that, should the Coalition remain in power in the years to come, it will ditch its solemn pledge the moment it becomes politically inconvenient.
Why can we be confident? Because this very budget ditches two earlier solemn pledges to “bank” any unexpected improvements in tax collections or government spending and to get the budget balance back to a surplus of at least 1 per cent of GDP “as soon as possible”.
-----
- Updated Jun 1 2018 at 1:45 PM
Scott Morrison on track to deliver shock surplus
Australia's shrinking professional media appears to have once again completely missed the fact that the government reported a huge $9 billion budget surplus in April, which means it is theoretically possible Treasurer Scott Morrison will deliver voters a shock surplus in the current 2017-18 financial year (on either the net operating balance or fiscal balance measure).
The cumulative net operating deficit this financial year peaked at $18.8 billion in October 2017 and has since shrunk to just $8.6 billion. This is because Morrison has managed to run a budget surplus over the last seven published months to April 2018.
Since the government updated its budget projections at the December mid-year mark, the actual results have been almost $12 billion better than expected care of superior export revenues and reduced welfare payments.
-----
Health Budget Issues.
Victorian GP Tony Bartone is AMA’s new president
DR Tony Bartone, who has flagged allowing health funds to pay for GP care for the first time ever, is the new president of the powerful Australian Medical Association.
Sue Dunlevy
News Corp Australia Network May 27, 20181:28pm
VICTORIAN GP Dr Tony Bartone, who has flagged allowing health funds to pay for GP care for the first time ever, is the new president of the powerful Australian Medical Association.
The doctors union is so powerful it’s previous president Dr Michael Gannon revealed Prime Minister Malcolm Turnbull rang him to ask him who he should appoint as health minister.
-----
'Our health system is ailing': New AMA boss speaks out
27 May 2018 — 2:45pm
Dr Tony Bartone has been elected the new president of the Australian Medical Association as the peak doctors' group prepares to wield its political influence ahead of a federal election and shore up its waning membership.
The Victorian GP and outgoing AMA vice president beat two other candidates: former AMA NSW branch president and Sydney immunologist Dr Brad Frankum, and former AMA Queensland president, obstetrician Dr Gino Pecoraro.
“I am ready to lead the AMA at this critical time,” Dr Bartone told delegates at their national conference in Canberra on Sunday.
-----
New AMA chief takes shot at Greg Hunt
AAP May 27, 2018 5:19PM
The newly elected Australian Medical Association president says the country's health system is ailing and doctors' patience with Health Minister Greg Hunt is "wearing thin".
Melbourne GP Tony Bartone was elected AMA president on Sunday, replacing Dr Michael Gannon who has served in the role for two years.
In a speech to the AMA National Conference in Canberra, Dr Bartone painted a bleak picture of the health system and said it was up to the association to improve it.
-----
Flu vaccine rationed as national shortage hits over 65s hardest
By Kate Aubusson
25 May 2018 — 12:00pm
Talking points
- Flu vaccines are being rationed to prioritise most at risk group
- The Australian government has supplied more than 5.1 million doses of the 2018 seasonal vaccine through the National Immunisation Program
- The TGA has released an additional 4.5 million to state programs and the private market
- Every state and territory reported a 25-30 per cent increase in demand for the vaccine.
- National supply has only increased by 10 per cent so far.
Influenza vaccine rationing is set to continue into early winter as health authorities restrict supplies to GP clinics amid a national shortage.
-----
Aged care in crisis: who will look after you when you're old?
By Debby Blakey
27 May 2018 — 11:43pm
It’s confronting to think that Australia may find itself in a position where it won’t have enough aged care employees to adequately look after our ageing population.
Government forecasts show we’ll need almost a million aged care employees by 2050.
Research by health industry super fund HESTA reveals the challenge of addressing this future shortfall is greater than we thought, with up to 23 per cent of the workforce planning to leave aged care in the next five years. That’s about 84,000 people who, if they leave, will take their valuable skills and experience with them.
Urgent action is needed to keep these employees and attract new ones.
-----
AMA chief pain for Greg Hunt
- The Australian
- 12:00AM May 28, 2018
Sean Parnell
A general practitioner has again taken charge at the Australian Medical Association, ensuring primary care will be on the agenda ahead of the federal election.
Melbourne GP Tony Bartone was yesterday elected president of the AMA, succeeding specialist Michael Gannon, to whom he was vice-president for two years.
Dr Gannon had lamented not being able to do more for GPs, despite the Medicare freeze starting to thaw, and Dr Barton made it clear he would take up the fight.
-----
Coalition, Labor in brawl over aged-care funding
- The Australian
- 12:00AM May 29, 2018
Rick Morton
The Coalition’s $5 billion aged-care budget, described as a hoax by the opposition, used the same method of reallocating residential care places to home care as Labor did when it was in government, with one crucial difference.
While both redistributed funding from the more expensive residential care sector due to lack of demand, Labor used the difference in value between that and home care to book $220 million as a saving in two budgets.
An analysis of budget papers under the Gillard government in 2010, 2011 and 2012 shows Labor used the same methodology to save money, starting with $9m in 2010 and booking $211m the next year. In 2012, it allocated $955.4m to its aged-care reforms but almost half of this — $454m — was found by swapping funding from residential aged care to home care, the high-demand support program which helps keep elderly Australians at home for longer.
-----
Pharmacist pollie slams budget in Parliament
Patients are avoiding or delaying filling a prescription because of cost, says MP Emma McBride
Labor has slammed the government’s health budget, with Central Coast MP Emma McBride (Dobell, New South Wales) criticising healthcare costs for patients in a recent House of Representatives sitting.
Ms McBride works as Deputy Director of Pharmacy for Central Coast Local Health District, and prior to this role was Chief Pharmacist at Wyong Hospital from 2008-16.
“As a hospital pharmacist who worked at my local hospital in Wyong for 10 years before I was elected and who worked in mental health units for most of my life Labor has a strong tradition in health and hospitals,” said Ms McBride in her speech.
-----
Warning over 'heroic', 'futile' surgery when the patient has no hope
By Aisha Dow
29 May 2018 — 5:48pm
People are suffering after being subjected to “futile” or “heroic” procedures that are unnecessary because they're likely to die anyway, the Royal Australasian College of Surgeons warns.
According to the latest Victorian Audit of Surgical Mortality, about 0.3 per cent of the more than 632,000 surgeries in the state’s public and private system last financial year resulted in a death.
Most of those who died were elderly patients with underlying health problems, admitted as emergency patients.
-----
Rumours on Health Care Homes are true, health department confirms
Minister disagrees with PM's 'biggest reform since Medicare' claim
30th May 2018
Health department officials have confirmed fewer than 2000 patients have signed up to the Health Care Homes trial ─ far short of the 65,000 patients targeted.
Last week, Australian Doctor reported on rumours of the 2000 figure circulating at the AMA conference, where the Minister for Health, Greg Hunt, described the reforms as just an “interim step”.
Officials fronting Senate estimates in Canberra on Tuesday confirmed the number and admitted that although 180 practices had signed up for the initiative, uptake was “slower than expected”.
-----
Health insurance reform passes lower house
Health Minister Greg Hunt has promised more affordable and simpler private health cover under legislation which has passed the lower house.
Matt Coughlan
Australian Associated Press May 31, 201811:00am
People under 30 could be the biggest winners from the Turnbull government's push to make private health insurance more affordable.
The package, which passed parliament's lower house on Thursday, will allow insurers to offer young people a two per cent discount on their premiums every year up to a maximum of 10 per cent.
But Labor argues the measure could drive premiums higher for other policy holders, while giving young people a saving of about 70 cents a week.
-----
Stress-tests not tough enough as health insurers face challenges
- The Australian
- 12:00AM June 1, 2018
Sarah-Jane Tasker
The financial regulator has warned that emerging challenges could affect the sustainability of the health insurance industry, and signalled that stress-testing practices in the sector fall “well short” of other industries.
Peter Kohlhagen, senior manager of policy development at the Australian Prudential Regulation Authority, said the health insurance industry was under “some duress” at present.
He said the sector was emerging from a long period of relative stability, but challenges that once appeared to be some distance away were getting closer.
“We observe that some insurers have been slow to react to this changing reality,” Mr Kohlhagen told a health insurance summit in Sydney.
-----
Bill Shorten’s claim of health ‘gouge’ hits snag
- The Australian
- 12:00AM June 1, 2018
Sean Parnell
Labor’s bid to cast health insurers as villains in the battle over rising health costs has been dealt a blow by the industry regulator, which warns the sector is coming under increasing pressure.
In January, Labor leader Bill Shorten promised to cap premium increases at 2 per cent — about half the current increase — for two years and to hold a Productivity Commission inquiry. He said insurers were “treating Australians like mugs, gouging people on the basis of a con” and had massive capital reserves despite being propped up by a $6 billion government rebate.
But Peter Kohlhagen, senior manager of policy development at the Australian Prudential Regulation Authority, told a conference yesterday that it “does not think that capital levels in the industry are too high or should be reduced”.
-----
Health funds HCF and HBF scrap planned $4 billion merger
By Esther Han
Updated 2 June 2018 — 8:45amfirst published at 8:02am
In numbers
· A combined HCF-HBF entity would have billions of dollars in total assets. $4 billion
· Total number of members. 2.5 million
· Potential market share. 18.4%
Not-for-profit health funds HCF and HBF have scotched their plans to merge, saying as details were nutted out it became clear joining forces would not have been in their members' best interests.
The pair announced in February their aim to merge by August and signed a heads of agreement for the $4 billion deal, which would have seen them become Australia's third largest health insurance provider, behind Bupa and Medibank.
-----
International Issues.
China challenges US Navy ships in South China Sea
By Steven Lee Myers
28 May 2018 — 5:22am
Beijing: China's military announced on Sunday that it had dispatched warships to challenge two US Navy vessels that sailed through waters in the South China Sea that China claims as its own.
The Chinese confronted the US ships and warned them to leave, the Ministry of National Defence said in a statement posted on its website, but other details of the encounter were not immediately clear.
The US vessels — the Higgins, a destroyer, and the Antietam, a cruiser — passed within 12 nautical miles of the Paracel Islands, an archipelago in the northern part of the disputed waters of the South China Sea off the coast of Vietnam.
-----
South China Sea battle already lost: Jim Molan
- The Australian
- 12:00AM May 28, 2018
Paul Maley
The battle for control over the South China Seas has been lost, with nothing short of all-out war capable of dislodging Chinese forces from a string of heavily fortified islands, Liberal senator and former senior army officer Jim Molan says.
Speaking one week after Beijing landed a long-range strategic bomber on Woody Island in the South China Sea, a move analysts agreed extended China’s reach into Southeast Asia, Senator Molan said the West’s failure to move quickly and decisively against Chinese encroachment in the Pacific had permanently altered the balance of power in Beijing’s favour.
Senator Molan, who in 2014 was appointed as chief of coalition operations in Iraq, said there was no point debating whether or not the Australian navy should conduct freedom-of-navigation operations through the South China Sea — the issue had effectively been settled by the West’s inaction.
-----
Wine trade corked as China retaliates in spat over meddling
- Rob Taylor
- The Australian
- 7:18AM May 28, 2018
A deepening spat over allegations of Chinese meddling in Australian politics has led to cases of wine piling up at Chinese ports and nationalists calling for tougher trade retaliations.
The episode shows how China is willing to use its economic leverage to force foreign governments to reverse positions it views as antagonistic. It has deployed similar tactics in its trade fight with President Donald Trump, stepping up customs inspections of US cars and soybeans.
Treasury Wine Estates, one of the world’s biggest winemakers, says its products are being stalled because of new Chinese customs rules apparently targeting Australia-made wines.
-----
Britain's May refuses to relax Northern Ireland abortion rules
By Andrew MacAskill
28 May 2018 — 6:23pm
London: British Prime Minister Theresa May faces a showdown with ministers and lawmakers in her Conservative party after refusing to back reform of Northern Ireland's highly restrictive abortion rules after neighbouring Ireland's vote to liberalise its laws.
Voters in Ireland, a once deeply Catholic nation, backed the change by two-to-one, a far higher margin than any opinion poll in the run up to the vote had predicted.
The Prime Minister is facing calls from within her cabinet and from opposition parties to scrap the strict rules on abortion in Northern Ireland, bringing the law in the province in line with the rest of the United Kingdom.
Penny Mordaunt, Britain's women and equalities minister, said the victory to legalise abortion should now bring change north of the Irish border.
-----
If Italy exits the euro, it could be the end of the single currency
By Roger Bootle
29 May 2018 — 10:01am
You might think that it would be fitting if the European Union were to come to a sticky end because of Italy. After all, the agreement that established the entity that we now call the European Union was signed in Rome.
For several decades after that 1957 treaty, Italy was one of the strongest supporters of the European project.
Italy's president set the country on a path back to fresh elections on Monday, appointing a former International Monetary Fund official as interim prime minister with the task of planning for snap polls and to pass the next budget.
-----
Trump says he wishes he didn't appoint Jeff Sessions attorney general
By David Jackson
31 May 2018 — 5:16am
Washington: President Trump acknowledged again on Wednesday that he wishes he had not appointed Attorney General Jeff Sessions, though he did not address reports that his treatment of Sessions may be part of an obstruction of justice investigation in the Russia probe.
In a series of tweets, Trump quoted Representative Trey Gowdy as expressing sympathy for the president's frustration at Sessions' decision to recuse himself from the investigation into Russian efforts to influence the 2016 presidential campaign.
Citing Gowdy's comment that "there are lots of really good lawyers in the country, he could have picked somebody else!" Trump added: "And I wish I did!"
- Updated Jun 1 2018 at 6:30 AM
Italy's anti-establishment party leaders agree to terms for government
Italy's two anti-establishment parties revived their coalition plans, promising to end three months of political turmoil with a government that aims to ramp up spending, challenge European Union fiscal rules and crack down on immigration.
The coalition deal, following inconclusive elections in March, removes the risk of a repeat vote, a prospect that had sparked a big selloff in Italian financial markets this week.
The leaders of the right-wing League and the 5-Star Movement patched up their alliance after agreeing to substitute a eurosceptic they had initially proposed as economy minister, a nomination that had been rejected by the head of state.
-----
Australian government 'complicit' in Malaysia's corruption, Anwar Ibrahim says
By Fergus Hunter
1 June 2018 — 9:32am
Former Malaysian opposition leader Anwar Ibrahim, now making his political comeback after being freed from prison, has accused the Australian government of being "complicit" in the corruption of his country's recently ousted leader Najib Razak.
The reformist Anwar has been granted a royal pardon for politically-motivated sodomy charges after his unlikely alliance with former nemesis Mahathir Mohamad helped defeat Najib in Malaysia's elections last month.
Najib is accused of plundering billions of dollars from Malaysia's 1MDB state investment fund.
-----
Spain's new leader takes aim at corruption, austerity
2 June 2018 — 9:44am
Madrid: Prime Minister-elect Pedro Sanchez vowed Friday to root out the corruption that helped bring down Spain's outgoing conservative government and pledged to help people affected by years of public spending cuts under his predecessor, Mariano Rajoy.
Socialist Pedro Sanchez took over as Spain's prime minister, after outgoing leader Mariano Rajoy lost a parliamentary confidence vote triggered by a long-running corruption trial involving members of his centre-right party.
Minutes after narrowly winning a no-confidence vote in parliament, the Socialist party leader signaled a change in tone and priorities from Rajoy's unbending commitment to reducing the national debt during his more than six years as prime minister.
-----
Populist Italian parties reach deal on new government
By Stefano Pitrelli and Griff Witte
1 June 2018 — 9:27am
Rome: Italy appeared on Thursday to step back from the brink of a continent-rattling political crisis, with officials agreeing to a deal that averts the threat of fresh elections and puts two populist parties in charge of the euro zone's third-largest economy.
Italy's anti-establishment parties revived coalition plans, ending three months of political turmoil by announcing a government that promises to increase spending, challenge European Union fiscal rules and crack down on immigration.
The agreement was the latest twist in a topsy-turvy week for Italian politics, one that on Tuesday had sent global markets tumbling amid jitters that the country was careening toward a new vote and a possible euro exit. Investors feared an even greater populist surge if a new election were held.
-----
Trump's jobs tweet shatters decades of protocol, jolts markets
By Damian Paletta
2 June 2018 — 10:44am
President Trump on Friday shattered several decades of protocol — and possibly violated a federal directive — by hinting strongly that the monthly US jobs report would be a rosy one 69 minutes before its release.
In an 11-word Twitter post, Trump jolted financial markets and provided the latest example of how he is reshaping the presidency to fit his freewheeling impulses, pushing aside years of tight controls on the public release of sensitive material that were put in place by Republicans and Democrats.
The president was reacting to data that showed that US employers extended a streak of solid hiring in May, helping lower the unemployment rate to an 18-year low.
-----
I look forward to comments on all this!
-----
David.
