July 12, 2018 Edition.
Well the Trump Tariffs have started and China has responded and it still seems the world is on its axis. What happens next who knows but Trump may be distracted by a huge blimp flying over London when he visits portraying him naked except for a nappy. Otherwise he just stirs bigotry and hate of the rest of the world as far as I can tell – listened to his Montana Speech a day or so ago – and found it deeply depressing. He is a master spinner and liar but is great at stirring up his alienated base. His behaviour on his overseas visit has been bullying and boorish to say the least. He is plain rude!
The UK seems to have found a Brexit compromise which might last a week.
In OZ we seem to have political and domestic violence being seen in excessive ways and really being pretty sad and tragic – especially for those killed.
Politics in OZ is as divided as ever and we are all awaiting some cooling of this situation and some common sense prevailing. We wish…..
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Here are a few other things I have noticed.
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Major Issues.
- Jul 1 2018 at 12:53 PM
'Fundamentally softer', Sydney market to finish down 5pc
House prices in the country's biggest property market will end the fiscal year down close to 5 per cent with auction clearance rates in Sydney over the weekend tracking close to 50 per cent, reflecting the "fundamentally softer" market conditions.
In Melbourne house prices will end the financial year almost flat, according to CoreLogic's Daily Index.
Official monthly CoreLogic figures, due out on Monday, will show an almost 2 per cent fall in capital city dwelling values over the past financial year with auction clearance rates over 1000 basis points lower this weekend than the same time last year.
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- Updated Jul 1 2018 at 10:54 AM
Federal Reserve and dollar hold sway over febrile market landscape
by Michael Mackenzie
With the football world cup in full swing and already producing a fair number of shock results, investors are left wondering whether the second half of 2018 can deliver a dazzling performance.
Returns in general have been poor since the optimism of January propelled a number of equity markets to peaks that many have subsequently not revisited.
Currently, many global equity markets and total returns for credit loiter in the red zone for 2018. Cracks in emerging markets are widening and even on Wall Street, once you strip out tech and small-cap shares, the picture looks far less optimal.
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Wayne Swan floats dramatic inequality measures as Labor battles in key byelections
By David Wroe
1 July 2018 — 5:39pm
Labor’s new president Wayne Swan has dug in on combating inequality through dramatic measures such as higher taxes on companies that overpay executives as the party wrestles with its tentative relations with the business community ahead of key byelections.
The former treasurer, who was elected a fortnight ago to the party’s top executive position, said on Sunday that inequality measures such as grossly disparate salaries were “ripping our society apart”.
His comments came after a tumultuous week in which Labor leader Bill Shorten was forced to change his position on repealing tax cuts for small and medium-sized companies after an outcry from business and pressure from his own colleagues.
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https://www.smh.com.au/politics/federal/secret-b-team-saves-money-for-taxpayers-20180701-p4zoui.html
Secret B-team saves money for taxpayers
By Jessica Irvine
2 July 2018 — 12:31am
How about some good news to start the week? We all know bad things happen. It’s the job of journalists to expose corruption and ineptitude across all levels of society, from government to business, all the way up to the church door.
When policies or people fail to produce good outcomes for society, journalists help bring the issues to light and create the space for failures to be corrected. Royal commissions, like those into the banks or institutional child abuse, are bringing about real change and real improvements for those most vulnerable in society.
But what we see is only the tip of the iceberg. So wouldn’t it be nice to know that institutions are working hard, behind the scenes, to correct issues before things go catastrophically wrong? Economists call it “nudging”. It’s the art of small wins.
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Big-name companies leave investors nursing financial bruises in 2018
By Elizabeth Knight
29 June 2018 — 5:04pm
This past weekend should have been party time for Australia’s sharemarket investors. In the 2018 financial year, the S&P/ASX 200 index rewarded investors with a booming total return of around 16 per cent. But you had to invest smart.
For those who stuck with the big-name companies like the banks, AMP and Telstra - traditional favourites for retail investors - the year will have left them nursing their financial bruises. The fact that these large companies, which partly dominate the sharemarket index, went backwards is testament to the strength of the rest of the market.
Luckily for investors, there were some other big names that recorded strong offsetting share price gains. Investors who loaded up on CSL, Macquarie Group, BHP and Rio Tinto for example would be feeling pretty happy with 2018.
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The 130 per cent power price surge that reveals a 'broken' market
By Cole Latimer
2 July 2018 — 12:01am
High wholesale electricity prices will be the new normal and while government actions to drive down power bills can reduce costs for households, the Grattan Institute warned that intervention to stop electricity retailers ‘gaming’ the system may make prices worse.
A report by the Grattan Institute found the wholesale electricity market is broken, with prices increasing on average by 130 per cent between 2015 and 2017 across the east coast, and there are very few solutions.
“Current prices are unprecedented but they may become the new normal. There is no silver bullet that will drastically reduce the cost – and price – of generating and delivering electricity,” the Grattan Institute report said.
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Global economy: party over as warning signs flash red
By Anna Isaac & Tom Rees
2 July 2018 — 10:52am
Pour yourself a stiff one, the party's nearly over. That was the message issued by the International Monetary Fund last week.
The global economic momentum enjoyed in recent times is set to fade. The deadline? Probably the end of 2019.
However, even that timeline has been called into question by the global lender of last resort. Risks termed by the fund as "clouds" on the horizon amid "sunshine" are now "closer than we had anticipated", according to deputy director Mitsuhiro Furusawa.
The UK has cracks showing in its economic health. The housing market is starting to lose pace, particularly in its most expensive area, London. Overall, the market lost a billion pounds of value in 2017. Construction is still hovering close to recession territory, and new starts - the number of new builds being kicked off - have fallen by 8 per cent in the past quarter, compared to a year ago. They remain 14 per cent below their 2007 peak. UK factories are losing steam and exports have fallen.
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Power prices aren’t coming down
- The Australian
- 8:27AM July 2, 2018
Alan Kohler
Tony Abbott was ridiculed, including by me, for urging the Government to nationalise the Liddell power station to keep it going, but the idea wasn’t entirely ridiculous.
The only way electricity prices will be lowered is by direct government intervention, either subsidies or ownership, and, in any case, the mess is mainly Abbott’s and the Coalition’s, so maybe the Coalition should own it.
Seriously though, compulsory acquisition of Liddell, and even the plan to build Snowy 2.0, or any other direct government intervention, are the last things the electricity market needs — the market needs to work, and that means higher prices than we became used to.
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- Jul 3 2018 at 10:30 AM
SMSF report shows how 600,000 self-managed superannuation funds really invest
by Robin Bowerman
"Two hundred thousand dollars is a lot of money," said Clint Eastwood as Blondie in The Good, the Bad and the Ugly, on the work a gang of three were going to have to do to find a hidden fortune. "We're gonna have to earn it."
The recently released 2018 Vanguard/Investment Trends SMSF report offers insights into the hard work the nearly 600,000 Australian self-managed superannuation funds (SMSFs) are putting into growing their retirement savings.
The sector has grown rapidly over the past 10 years and while growth in the number of new SMSFs each year has slowed, it remains the largest sector of the superannuation asset pool – just over 30 per cent of overall superannuation assets in Australia.
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Former trade minister takes swipe at Washington's China policy
By David Wroe & Eryk Bagshaw
2 July 2018 — 6:29pm
Former trade minister Andrew Robb has attacked United States policy towards China, saying both sides of politics in Washington were obsessed with a “futile and counterproductive” effort to contain the rising Asian power.
Mr Robb, who has received a large salary as a consultant to Chinese firm Landbridge, launched the broadside against Australia’s major ally during a speech to the mining industry on Monday night.
The former minister, who secured several free trade agreements during his time in government, including that with Beijing, said both China and India were re-emerging as major players in Asia and would “share” power with the US over the course of this century.
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Witness K case shows need for bill of rights
3 July 2018 — 12:00am
The comments of former justice Stephen Charles and former NSW DPP Nicholas Cowdery (‘‘Top lawyers jump to defence of ex-spy’’, June 30, p. 25) about the charging of Witness K and Canberra solicitor Bernard Colleary reflect the shock of many citizens, especially in Canberra.
We are shocked that such charges are laid so long after the relevant events but more especially in view of the moral and political questions around the alleged actions of the Australian government, through its agency ASIS, in eavesdropping on the East Timor cabinet for commercial advantage.
On the face of it this was an episode that reflected little credit on the government of the day.
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Sharemarkets are as volatile as ever, and there is no end in sight
By Tom Stevenson
3 July 2018 — 11:44am
Hindsight is a wonderful thing, but sadly unavailable to investors. Had your crystal ball been operating at the beginning of 2018 you could have done no better than to bet against the Shanghai A-share market and put the proceeds into America's tech-heavy Nasdaq index. The former has fallen by about 15 per cent in the first six months of the year while the latter rose by 20 per cent.
Investors and analysts alike don’t really know where markets are going in the second half of the year.
It is unlikely that many people came close to this divergent strategy. A momentum investor would six months ago have looked at both the US and Chinese markets and stuck with them after 2017's strong rally. A contrarian, meanwhile, might have looked at the valuation of Wall Street and the stellar performance of the A-shares and bet against both. Rationalising what markets actually do is a great deal easier in the rear-view mirror than looking straight ahead.
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ACCC chief issues caution on digital media, urges government scrutiny
- 03 July 2018
- Written by Peter Dinham
The head of Australia’s competition watchdog says all governments should examine the role digital platforms are playing in society to determine if polices are needed to curb their “pursuit of profit”.
Australian Competition and Consumer Commission chair Rod Sims says how Australia approaches the proliferation of digital platforms, and how they collect and manage data, is one of the defining questions of our age.
“It is important that governments examine the role digital platforms are playing in society and, as with other companies, determine if polices are needed to curb their pursuit of profit given the problems such pursuit will cause.”
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Why are we now talking our way to war?
By Nicholas Stuart
3 July 2018 — 10:00pm
Start Monday, one week ago, at the ANU’s Crawford Leadership Forum. It’s packed with 200 specially invited guests, nominated as our best and brightest thinkers and practitioners, discussing the regional order in Asia. Sitting in the front row, an emeritus professor becoming more and more distressed and agitated. His expertise was trade, but any discussion about Asia quickly turns to China and conflict.
“Why”, he asked?
Two days later, at the Press Club. Huawei (Australia) Chairman John Lord. A former Rear Admiral, Chair of Huntingdale Golf Club (Victoria), hardly subversive, asking the same question, “why?”
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A milestone for victims of church child sex abuse
4 July 2018 — 12:05am
The sentencing of the Catholic archbishop of Adelaide, Philip Wilson, is a global landmark in the search for justice by victims of child sexual abuse.
Wilson is the most senior member of the Catholic clergy in the world to be convicted on a charge of covering up child sexual abuse in the church and the verdict will influence similar cases which turn on an accused's memory of events decades after they occurred. Cardinal George Pell is facing prosecution for historical child sexual offences in the County Court of Victoria.
Wilson was given 12 months in jail for the crime of failing to tell police that, when he was a junior priest in 1976 in East Maitland, a young altar boy had asked him for help after being sexually abused by his parish priest. It remains unclear whether he will serve his sentence in home detention or jail but the magistrate has sent a message about the seriousness of the crime.
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We owe $45 billion on our credit cards and it's not getting better
By John Collett & James Hearnes
3 July 2018 — 9:39pm
One in six consumers is struggling under a mountain of credit card debt that might never be repaid, according to alarming research by the corporate regulator.
As the nation's credit card balance heads towards $50 billion, the corporate regulator has warned that tighter rules are needed over who can get one with almost one-in-five card holders already struggling to cope with their debt.
The Australian Securities and Investments Commission (ASIC) will release a major review of the credit card market on Wednesday which finds almost 2 million people - or 18.5 per cent of card holders - exhibit at least one "problematic debt indicator" such as being in arrears on their repayments or never being able to clear the debt.
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Credit card reward schemes are now much less rewarding
By Clancy Yeates
3 July 2018 — 12:04pm
Banks' credit card loyalty schemes have always offered dubious value for many consumers, but the generosity of these programs is hitting new lows.
That's the finding of new analysis that highlights how rule changes have slashed the ability of consumers to rack up loyalty points with the major banks over the last couple of years, a period in which banks have also jacked up their annual fees.
Until a couple of years ago, a surefire way to earn lots of credit card loyalty points was to have what's known as a "companion card".
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Fresh grounds to drink coffee
- AP
- 12:00AM July 4, 2018
Go ahead and have that cup of coffee, maybe even several more.
New research shows it may boost your chances of a longer life, even for those who down at least eight cups daily.
In a study of nearly 500,000 British adults, coffee drinkers had a slightly lower risk of death across 10 years than abstainers.
The apparent longevity boost was seen with instant, ground and decaffeinated, results that echo US research.
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- Updated Jul 4 2018 at 11:00 PM
Book review: Richard Denniss sees evil in conventional economics
About two thirds of the way through Richard Denniss' assault on economics and policy making in the latest Quarterly Essay, Dead Right, the think tanker makes an unexpected claim.
After expending thousands and thousands of words explaining the harm wreaked upon Australian society by "neo-liberalism", the chief economist of the Australia Institute slips in a qualification.
Neo-liberalism, his pejorative word for conventional economic theory, is an affront to mateship, the Anzac spirit and basic human decency, Denniss writes. It damages the environment, exploits the sick, the poor, the elderly and the powerless, takes away our weekends, and our love of sport and outdoor life. It literally kills children, according to Denniss.
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'Financial panic likely': China calls for calm as clouds turn darker
By Ambrose Evans-Pritchard
4 July 2018 — 4:58pm
Beijing has vowed to defend the Chinese currency after the steepest drop since the early Nineties, and is bracing for the double shock of a US trade war and a global credit squeeze.
The authorities issued a plea for calm after another day of dramatic moves on foreign exchange markets and the Shanghai bourse.
World stocks have slipped again over heightened anxieties about Sino-US trade tensions ahead Washington's end-of-week deadline to impose tariffs on Chinese imports.
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'Bleak future': Canberra needs to keep its finger on gas trigger, says industry
By Cole Latimer
5 July 2018 — 12:01am
Gas users face a "bleak future" unless the government extends its intervention powers to ensure more domestic gas supply, says a leading industrial body.
The Australian government had previously used the threat of enacting the Australian Domestic Gas Security Mechanism, which places restrictions on the levels of gas that can be exported, to avert the major gas shortfall predicted by the Australian Competition and Consumer Commission.
But Australian Industry Group chief executive Innes Willox said unless these powers are expanded, major manufacturers may leave Australia.
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- Jul 6 2018 at 9:00 AM
'The number one risk for 2018 is a brutal correction of stock prices'
by Ambrose Evans-Pritchard
France's market watchdog is bracing for a surge in global bond yields and a Wall Street crash as soon as this year, fearing that contagion will spread to Europe and snuff out the fragile recovery.
"The world has never been so indebted - even more than before the 2007 crisis - and this debt has never been so risky," said the Autorité des Marchés Financiers (AMF) in its annual report.
"The number one risk for 2018 is a brutal correction of stock prices. The current valuation levels look high both by historical standards, and in fundamental terms across a whole range of indicators, starting with American equities. Any correction there would most likely spread to other stock markets," it said. The market capitalisation of world bourses rose 18 per cent last year to $US82.5 trillion ($112 trillion).
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- Updated Jul 5 2018 at 11:00 PM
UBS warns risk of Australian 'credit crunch' rising
by Vesna Poljak
The borrowing capacity of Australian property investors has contracted 20 per cent over the past three years, leading UBS to forecast that major banks' housing credit growth will fall to zero by 2019-20, in line with the further rationing of credit to come.
Borrowing capacity could shrink by 30 per cent if the royal commission recommends a "more strict" responsible lending regime where banks actually have to verify living expenses using applicants' transaction records.
"We estimate that we are [one-third] of the way through the credit-tightening process for owner-occupiers and most of the way through for investors," UBS lead banks analyst Jonathan Mott writes in new research. For many investors with multiple investment properties, limits on "very high debt-to-income" not just serviceability will be the most significant constraint.
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Chaney SES review finds non-government schools funding flawed
- The Australian
- 10:10AM July 6, 2018
John Ferguson
The Turnbull government has admitted its funding model for non-government schools is flawed but will not address the core issues until 2020.
The long-awaited review of the government’s socioeconomic status funding model has confirmed Catholic criticism of a system that was biased against low-fee-paying non-government schools.
But the government will not deal fully with the issue until well after the next election, opening up another front for Labor on the issue.
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- Updated Jul 6 2018 at 11:00 PM
China axes 45 Australian university partnerships as part of global cull
China is axing 45 Australian university partnerships as part of a global cull of its tertiary alliances, which it says is aimed at weeding out under-resourced programs that failed to attract enough students to make them financially viable.
China's Ministry of Education said this week it was terminating a total of 229 partnerships between Chinese and overseas institutions – more than a fifth of its total 2342 programs of which around half are for bachelor degrees. Australia had the second-largest number of partnerships on the list with 45, after the United Kingdom which had 60. About 25 universities in the United States were affected
China is also shutting down five jointly run schools, although this did not affect any Australian institutions.
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Cash and kind: How governments shift income from rich to poor
By Ross Gittins
7 July 2018 — 12:05am
Everyone knows the gap between high and low incomes has grown. But much of what we think we know about why it’s happened, and what the government has been doing about it, is probably wrong.
For instance, many people imagine that the main thing governments do to reduce the gap between rich and poor is to raise much of their revenue via the most “progressive” tax in their arsenal, income tax. (A progressive tax takes a progressively higher proportion of tax from people’s income as incomes get higher.)
Sorry, that impression’s wrong.
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This Is What A Global Trade War Could Look Like
by Tyler Durden
Sat, 06/23/2018 - 19:00
President Trump opened a new front in the global trade war on Friday when he threatened a 20% tariff on cars imported from the European Union unless Europe removes import duties and other barriers to U.S. goods, potentially endangering as much as $300 billion in commerce. Trump's comments sent the European Autos Stocks Index sliding on Friday while shares of Ford Motor and General Motors also dropped.
“Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump tweeted on Friday.
Based on the Tariffs and Trade Barriers long placed on the U.S. & its great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!
— Donald J. Trump (@realDonaldTrump) June 23, 2018
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Chinese hackers breach ANU, putting national security at risk
By Nick McKenzie & David Wroe
6 July 2018 — 5:25pm
China-based hackers have successfully infiltrated the IT systems at the Australian National University, potentially compromising the home of Australia's leading national security college and key defence research projects.
Federal government cyber security officials have been working with the university since detecting the cyber attack, assessing the scale of any information theft and who in China could be responsible for it.
The ANU conducts research that has defence, strategic, scientific, technological and commercial applications.
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The anonymous public servants who divvy up GST revenue
By Jessica Irvine
7 July 2018 — 12:00am
On the second floor of an unassuming office block on Canberra’s main central avenue works a small group of about 30 largely anonymous public servants.
Together, they form the Commonwealth Grants Commission, an entity that has largely escaped the public gaze since it was created in 1933 to stop a threat by Western Australia to secede unless it received greater assistance from the federal government.
The whole outfit runs on a tight annual budget of just $5 million, making it one of the smaller commissions of government.
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Think tanks: when too much policy analysis is barely enough
By Mark Kenny
7 July 2018 — 12:00am
When Treasurer Scott Morrison was on his feet at the National Press Club in Canberra spruiking a budget filled with income tax cuts, he was hit with a question on an inevitable topic: fairness.
“We’re already seeing some early analysis from the Australia Institute that says about 60-”
Morrison quickly interrupted the question.
Outlining the ways in which tax cuts will affect Australians on different incomes, Treasurer Scott Morrison delivers his 2018 budget speech.
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UBS raises alarm over ‘shadow banks’ as lending clamps tighten on big four
- The Australian
- 10:07AM July 6, 2018
Cliona O’Dowd
The regulatory crackdown on lending standards has been heavily skewed toward the major banks, resulting in a “concerning” trend that has pushed credit down into the ‘shadows’ of the smaller banks and the non-banks, UBS has warned.
Unless all lenders receive similar scrutiny this regulatory mismatch may lead to “sub-optimal economic outcomes”, UBS banking analyst Jonathan Mott said in a research note.
Housing credit for the big banks over the three months to May grew at the lowest relative rate since the financial crisis, UBS said. While the majors’ growth slowed to 3.7 per cent annualised in the quarter, shadow banks took advantage of the shackles imposed on the big lenders and swelled their books by 12 per cent.
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Millionaire migrants pouring into Australia
By Eryk Bagshaw
8 July 2018 — 12:00am
The number of millionaires streaming into Australia has surged to 7260 in the past year, new figures show, delivering a multibillion-dollar investment boost as Australia becomes the destination of choice for thousands of the world's wealthiest individuals.
The Department of Home Affairs data challenges claims that Australia's high-income tax rate is discouraging international investors as an Asian-led millionaire boom drives investment in Sydney and Melbourne.
Visa applications in the Business Innovation and Investment Programme, which includes investors with more than $1 million in business assets, jumped by 74 per cent in 2016-17 up from 5781 to 9051. Of those 7260 were approved, compared to 6484 in 2014-15.
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Financial Royal Commission Issues.
Call for shareholder action to prevent more banking 'horror stories'
By Ruth Williams
2 July 2018 — 4:39pm
Shareholders must use their powers to pressure boards on issues like corporate culture if the financial services sector is to regain the trust of the Australian public, a governance group has urged.
The Governance Institute of Australia says that in the wake of the "horror stories" emerging from the banking royal commission, investors should step up more often and more firmly on culture and governance issues - the sorts of so-called non-financial matters that have left some of Australia's oldest and biggest financial institutions reeling.
With another round of damaging royal commission hearings underway this week, the Institute - which represents company secretaries and other governance professionals - says shareholders' scrutiny of remuneration structures, business models and culture would be "pivotal" in rebuilding the integrity of Australia's financial services sector.
"We are suggesting they should be a bit more active in this space and to give greater focus, where appropriate, on some of these issues," said the Institute's chief executive Steven Burrell.
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- Updated Jul 4 2018 at 9:38 AM
ASIC warns banks on credit card debt
by James Eyers
One in five credit card holders are struggling to make repayments, while honeymoon rates to lure customers to new cards can create a "debt trap".
The corporate regulator has delivered a broadside to banks to take steps to ensure customers aren't lumbered with prolonged, high-interest credit card debt.
After the banking royal commission lashed credit card lending at the big banks, the Australian Securities and Investments Commission said in a scathing report on the $45 billion credit card industry that "responsible lending assessments for credit cards can be improved" and many customers have cards that don't suit their behaviours.
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Funeral insurers may have broken law, commission hears
By Clancy Yeates
6 July 2018 — 6:12pm
Talking points
- Two funeral insurers may have engaged in criminal breaches.
- Aboriginal Community Benefit Fund, which claims its plan is "dedicated to the Aboriginal community", may have misled potential customers.
- Royal commission's counsel assisting, Rowena Orr, questioned if tighter rules were needed on the sale of funeral insurance.
Two funeral insurance businesses may have broken the law, the royal commission into misconduct in banking and financial services has been told.
After a week of hearings focused on financial conduct towards Aboriginal people, senior counsel assisting Rowena Orr, QC, said it was open for commissioner Kenneth Hayne to find the Aboriginal Community Benefit Fund (ABCF) and Select AFSL, which trades under the name Let's Insure, breached the law in several ways.
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National Budget Issues.
- Updated Jul 1 2018 at 11:00 PM
RBA on hold for another year: AFR quarterly economist survey
Market economists have sharply pushed out the expected timing of the next Reserve Bank interest rate rise, amid warnings that Australia's central bank is running out of "policy space" to deal with the next economic downturn.
A slightly dovish shift in governor Philip Lowe's latest commentary and spike in funding costs to a two-year high has caused market rate rise expectations to fall away sharply despite annual growth exceeding 3 per cent.
The median economist surveyed by The Australian Financial Review now sees interest rates on hold through to June 2019, compared to March's survey, which indicated the Reserve Bank would hike twice by this time next year.
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Reserve Bank keeps rates on hold at 1.5pc for record 23rd month
- The Australian
- 2:58PM July 3, 2018
Adam Creighton
The Reserve Bank Board has left the official interest rate unchanged at 1.5 per cent for the 23rd month in a row today, staring down calls to return rates to higher levels.
The 11-member board, as expected, left the cash rate unchanged, citing an uncertain global outlook. The chance of an official increase in interest rates has steadily fallen this year, as house prices in Sydney and Melbourne start to decline and jobs growth slowed.
“One uncertainty regarding the global outlook stems from the direction of international
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The taxes we pay come back to us - now or later
By ROSS GITTINS
3 July 2018 — 8:09pm
As we roll on to the federal election, there’s a surprising number of economic problems we should be discussing, but probably won’t.
For the longer term, the most important problem is the likelihood we’re not doing enough to meet our Paris commitment to reduce greenhouse gas emissions - which is, in any case, inadequate.
Linked with this is the appalling mess we’ve made of privatising electricity. Despite (and partly because of) Tony Abbott’s wrong-headed abolition of the carbon tax, this has left us paying power prices far higher than they need to be.
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Treasurer Scott Morrison rejects $126 billion GST reform
By Eryk Bagshaw
4 July 2018 — 6:20pm
NSW and Victoria will pay billions of dollars to fund services in other states under the first redesign of the GST in almost two decades, as the Turnbull government sets state premiers a deadline to settle tax disputes months before a federal election.
Casting aside the key recommendation of a highly anticipated inquiry he initiated into the GST, Treasurer Scott Morrison on Thursday will announce a $7.2 billion fund in a bid to silence voter anger in key electorates and ensure no state is worse off.
A new GST carve up is designed to prevent the smaller states from falling behind with no states being worse off, says Treasurer Scott Morrison.
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Morrison’s GST fix to end war with states over funding
- The Australian
- 12:00AM July 6, 2018
Ben Packham
Malcolm Turnbull is set to receive the agreement of the states for his GST fix despite anger in NSW, which has the least to gain from the overhaul, that it rewards states that have failed to reform their budgets and find new revenue sources.
Scott Morrison yesterday confirmed taxpayers would fund a $1 billion-a-year top-up to the smaller states in perpetuity to deliver the long-awaited GST reform, which relies on stronger economic conditions to meet the cost of ensuring that no state will be worse off.
Western Australia, which will receive the lion’s share of the top-up payments, rejoiced yesterday at the GST overhaul, which will lift its take from 34 cents in the dollar to at least 75 cents. NSW, which has the least to gain under the blueprint, expressed its support, despite concerns the plan rewarded Queensland for failing to recycle state assets or cut back its bloated public service.
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Scott Morrison pledges no tax increase to pay for GST
- The Australian
- 12:08PM July 5, 2018
Rachel Baxendale
Labor says the government could and should have introduced a GST floor two years ago, rather than waiting for a Productivity Commission review and rejecting one of the key recommendations.
Opposition treasury spokesman Chris Bowen said that if action had been taken earlier, Western Australia would now be better off.
“In fact, if Malcolm Turnbull first raised the prospect of a GST floor two years ago, and he’s been talking since then,” Mr Bowen said.
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Health Budget Issues.
'There are dangers': GPs issue warning over walk-in pharmacy health checks
By Esther Han
2 July 2018 — 12:00am
Doctors have issued a warning to the tens of thousands of Australians who use pharmacy-run health checks, saying they present long-term dangers to their health.
The walk-in tests at chemist chains such as Priceline, Amcal and TerryWhite are billed as quick, free and simple, and can include a heart health check, diabetes risk assessment, cholesterol test and anaemia screening.
The Royal Australian College of General Practitioners is urging the public to stay away, saying pharmacies are "motivated by money".
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In major study, cannabis shows no benefit for chronic pain
By Liam Mannix
3 July 2018 — 7:59am
Cannabis' medical benefits have suffered a serious blow, with a major study finding it does almost nothing to help people with chronic pain.
The study, one of the largest and most in depth ever done on the drug’s medical use, found cannabis does not cut pain, nor does it help sufferers replace opioids. And users seem to suffer higher levels of anxiety overall.
Cannabis has proven medical benefits in treating drug-resistant epilepsy in children, chemotherapy-induced nausea and multiple sclerosis.
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Call for GPs to give fee info with referrals
- The Australian
- 12:00AM July 3, 2018
Sean Parnell
A potential solution to community concerns over out-of-pocket costs may see GPs suggest several specialists for patients, who would be able to compare their fees before making a final referral.
The long-awaited reform is considered crucial to restoring faith in the private sector and averting a shift to the public system, where waiting lists may be longer but costs are certain.
Chief medical officer Brendan Murphy told The Australian that while there was widespread support for enhanced transparency in private billing, it was still unclear how this would be delivered.
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Doubts emerge over health reform benefits
- The Australian
- 12:00AM July 4, 2018
Sean Parnell
Doubts have emerged within the federal bureaucracy over the Coalition’s health insurance reforms and whether the likely impact has been overstated — like much-vaunted reforms under a previous Labor government.
The Weekend Australian revealed last Saturday that internal government documents had warned that Health Minister Greg Hunt’s reforms were needed to prevent a decade-long decline in the sector, partly because people who grew up with Medicare did not want to pay more for healthcare.
There will be discounts for younger members, new categories to help people shop around, a different approach to mental health care and rehabilitation, and cuts to the cost of prostheses.
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Bulk-billing clinics 'turning away' complex patients
By Aisha Dow
4 July 2018 — 11:00pm
Doctor's surgeries are reportedly turning away mental health patients and children because stagnating Medicare rebates do not cover the cost of complex consultations.
Instead the system perversely encourages GPs to churn through 10 patients an hour, it has been claimed.
Australians can see a doctor for free at bulk-billing clinics, but the president of the Royal Australian College of General Practitioners said it is common for longer appointments to be refused because they are not financially viable.
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Fears new wonder drug could lead to STI epidemic
By Jesse Schnall & Daniel D'Hotman
4 July 2018 — 3:30pm
Hailed as a watershed moment in Australia’s 35-year fight against HIV/AIDS, the federal government’s decision to list the drug Truvada, also known as "PrEP" (pre-exposure prophylaxis), on the Pharmaceutical Benefits Scheme on April 1 was greeted with fanfare from the Australian Federation of AIDS Organisations and the wider scientific community.
PrEP is the most powerful prevention tool on offer for individuals at risk of HIV, reducing transmission risk by up to 99 per cent. Australia now joins only a handful of other countries in subsidising PrEP for its citizens, slashing the annual cost of the drug from $10,000 to just a few hundred dollars for each patient. The move is expected to benefit more than 30,000 users - primarily gay and bisexual men at high risk of HIV infection.
However, a study published in The Lancet Infectious Diseases has highlighted grave concerns over a potential epidemic of sexually transmitted infections, linked to the new drug.
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Tribunal lashes National Disability Insurance Agency managers
- The Australian
- 12:00AM July 5, 2018
Rick Morton
The managers of the $22 billion National Disability Insurance Scheme have been excoriated for being “slow”, lacking transparency and being potentially “bloody-minded” in the way they seek to quash appeals by people with disabilities.
In an extraordinary decision, Administrative Appeals Tribunal deputy president Gary Humphries has attacked the National Disability Insurance Agency for tearing through legal resources simply because it has such a “haphazard” approach to making decisions.
“It seems to the tribunal entirely inappropriate that a participant, working with finite resources and coping with the added burden of a disability, should need to be left in doubt as to the status of decisions made affecting his or her entitlement to the benefits conferred by the legislation,” the decision says.
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Pharmacists want to sell Viagra and treat UTIs without doctor's orders
By Felicity Caldwell
5 July 2018 — 9:23pm
Pharmacists are proposing a healthcare shake-up that would allow drugs such as Viagra to be bought over the counter and end the "turf war" with doctors.
A Queensland parliamentary inquiry is investigating establishing a pharmacy council and pharmacists' "scope" of practice.
The Pharmacy Guild of Australia proposed allowing pharmacists to dispense medication over the counter for uncomplicated ear or urinary tract infections, erectile dysfunction, skin conditions and migraines, so patients do not need to see a doctor for a prescription.
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Tomorrow we’ll be treated differently
- The Australian
- 12:00AM July 6, 2018
Sarah-Jane Tasker
You get sick, you see a doctor, you start the treatment. That is how consumers have approached their health for generations. But the tide is turning. The term “preventive care” is becoming a part of the health lexicon, and it’s a trend being driven by the emergence of wider access to patient data.
Melody Caramins, pathologist in charge of genetics at Primary Health Care, says the message is finally starting to filter through to clinicians on the benefits of engaging with patients before they become sick. Caramins adds that as Australians are living longer, the number of people with complex diseases is increasing and a different approach to traditional methods of care is needed.
“The more we can look at and lobby for preventive care streams, whether it is in genetics or general health, the better,” she says.
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International Issues.
Standing up to the bully: The folly of Trump's trade war is about to be exposed
By Jeremy Warner
2 July 2018 — 9:10am
'In the West you have the notion that if somebody hits you on the left cheek, you turn the other cheek," China's president Xi Jinping told a gathering of international corporate bosses in Beijing last week. "In our culture we punch back."
His increasingly belligerent response to Donald Trump's trade policy doesn't sit well with the US president's insistence that trade wars are "good and easy to win".
Far from lying down and waving the white flag, the EU too is hardening its response to the American threat. Blow for blow, both China and Europe plan to match Trump every step of the way. This war of attrition is going to be neither good nor easy to win.
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Brace for China’s perfect storm
- The Australian
- 10:27AM July 2, 2018
Robert Gottliebsen
There are few developed countries as closely linked to China as Australia. That’s why Australians need to understand why the Shanghai index fell more than 20 per cent before a minor 2 per cent recovery late last week.
Australians have always assumed that if the Chinese economy hits stormy waters then the strong administration in Beijing will pull all the required levers to cause the economy to resume its upward path. And so, in our local budget estimates, Treasury forecast a fall in China’s growth rate from the 6.8 per cent peak rate but assumed that growth would stay above 6 per cent in coming years.
That may well prove correct but the Chinese administration’s task this time around is made more complex because China is being hit with a perfect storm of forces which began to emerge well before US tariffs and other clamps were announced.
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Leftist rides populist wave of anger to be Mexican president
By Azam Ahmed and Paulina Villegas
2 July 2018 — 3:39pm
Mexico City: Riding a wave of populist anger fuelled by rampant corruption and violence, the leftist Andrés Manuel López Obrador has been elected president of Mexico in a landslide victory that upended the nation's political establishment and handed him a sweeping mandate to reshape the country.
López Obrador's win puts a leftist leader at the helm of Latin America's second largest economy for the first time in decades, a prospect that has filled millions of Mexicans with hope — and the nation's elites with trepidation.
The outcome represents a clear rejection of the status quo in the nation, which for the past quarter century has been defined by a centrist vision and an embrace of globalisation that many Mexicans feel has not served them.
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- Jul 1 2018 at 11:45 PM
Could Europe be Finlandised?
by Max Boot
Finlandisation. Noun. The process whereby a country is induced to favour, or refrain from opposing, the interests of a more powerful country, despite not being politically allied to it.
It is entirely fitting that the Trump-Putin summit will occur in Helsinki. Plucky Finland, which had fought the Red Army to a draw in 1940, thereafter accepted a quasi-vassal role. It remained a free-market democracy, but it entered into a "treaty of friendship" with the Soviet Union, compromising its principles and even its sovereignty so as not to provoke the bear next door.
President Donald Trump, for reasons we can only guess at, seems bent on the Finlandisation of Europe – and even the United States. It is an unlikely development because, whereas Finland was much weaker than Russia, the US is much stronger. Yet Trump – who was elected with Russian help and continues to question the consensus judgment of the US intelligence community that Russia interfered in the election – appears determined to subordinate US foreign policy to the Kremlin's imperatives.
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- Updated Jul 3 2018 at 7:39 AM
Angela Merkel secures migration deal with Bavarian allies
German Chancellor Angela Merkel's conservatives settled a row over migration that threatened to topple her fragile governing coalition late on Monday evening (Tuesday AEST) after talks with her rebellious interior minister led him to drop his threat to resign.
Emerging after five hours of talks, Horst Seehofer, leader of Bavaria's Christian Social Union (CSU), told reporters he would remain in his post after a deal with Merkel's Christian Democrats (CDU) that he said would stem illegal immigration.
"After intensive discussions between the CDU and CSU we have reached an agreement on how we can in future prevent illegal immigration on the border between Germany and Austria," he told reporters on leaving the CDU's Berlin headquarters.
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China's currency plunge raises one big question
By Stephen Bartholomeusz
2 July 2018 — 1:38pm
There’s a critical question posed by last month’s plunge in the value of China’s currency. Was it an indicator of vulnerability or developing aggression?
Last month, the renminbi fell by 3.3 per cent against the US dollar, its worst single-month depreciation against the dollar since it established an interbank currency market in Shanghai almost a quarter of a century ago.
While it stabilised in the final days of the month, amid speculation that the Chinese authorities may have intervened, the willingness of those authorities to allow it to fall as quickly and steeply as it had raised the obvious question. Is China prepared to add currency to its arsenal of potential responses to Donald Trump’s trade wars?
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Dangerously unbalanced: Germany's economy, not migration, could spell the end for Merkel
By Matthew Lynn
3 July 2018 — 11:11am
They have made a tepid early exit from the World Cup. The government is split over Europe and close to collapse. The country is struggling to cope with a heatwave. It sounds like a typical English summer. Except this is Germany we are talking about, not the UK. Angela Merkel looks to have patched together a deal on immigration that will keep her fragile coalition together for a few more months. The trouble is, migration is not her real problem - it's the economy.
The numbers coming out of what is meant to be the powerhouse of the eurozone over the last few weeks have been terrible. On Friday, we learnt that retail sales are in freefall, and this week is likely to produce more bad news on industrial production. In fact, Germany is only a whisker away from an outright recession. Over the last decade, Merkel has created a dangerously unbalanced economic model based on massive trade surpluses and cheap labour. If that comes unstuck, it will be her downfall.
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- Updated Jul 4 2018 at 8:13 AM
Donald Trump proves Barack Obama was right to be worried: Ben Rhodes
by Ben Rhodes
On his final foreign trip as president, Barack Obama met allies shellshocked and uncertain about what was going to happen to the United States, and the world, with Donald Trump taking office. In Berlin, German Chancellor Angela Merkel told Obama she was likely to seek another term, in part to defend the liberal international order.
After saying a last goodbye, Obama lamented to me about his closest partner in the world: "Angela, she's all alone." In their final meeting, Canadian Prime Minister Justin Trudeau told Obama that he was prepared to extend a hand to President-elect Trump but that he was also prepared to assume a higher profile on the world stage if necessary. "You're going to have to speak out," Obama told him, "when certain values are threatened."
What went unspoken was the strange possibility that democratic values might no longer have an advocate in the White House. We have now received repeated and definitive proof that they don't.
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- Updated Jul 4 2018 at 8:38 AM
Dutch PM Mark Rutte rebuffs Donald Trump with a simple 'no'
by Rebecca Tan
Most state leaders would avoid saying "no" to President Donald Trump in a room full of reporters. But Dutch Prime Minister Mark Rutte isn't like most leaders.
Rutte, a liberal straight-shooter known for mopping up his own coffee spills and cycling to the royal palace in Amsterdam, met with Trump amid rising trade tensions between the United States and the European Union, of which the Netherlands is a member. In a five-minute news conference in the Oval Office, Rutte spoke significantly less than Trump. But when the Dutch prime minister interjected, he made himself heard.
About a minute into his remarks, Trump suggested that leaving the trade dispute unresolved could still be "positive." Rutte responded by raising his eyebrows, laughing and cutting in to say, "no". When Trump kept going, Rutte said while smiling to reporters: "It will not be positive. We will work something out."
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'Solid': Senate panel backs up intel agencies, Putin ordered meddling in US election
By Chris Megerian
4 July 2018 — 8:17am
Washington: The US Senate Intelligence Committee has backed up conclusions from American intelligence agencies that Moscow interfered in the 2016 presidential election with the aim of helping President Donald Trump win, releasing an unclassified report that called the intelligence assessment solid.
"The Committee has spent the last 16 months reviewing the sources, tradecraft and analytic work underpinning the Intelligence Community Assessment and sees no reason to dispute the conclusions," said a statement from Republican Senator Richard Burr, the panel's chairman.
The committee's statement is not a surprise - Burr and the panel's Democratic vice chairman, Senator Mark Warner - have both made previous statements supporting the intelligence community's assessment. But the strong endorsement nonetheless marks a significant milestone in the continued debate over Russia's role in the election campaign.
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- Updated Jul 5 2018 at 4:58 AM
Trade disputes pose 'serious threat' to global growth: WTO
by Timothy Moore
Protectionism's grip is tightening, according to the World Trade Organisation, and it represents "a serious threat" to growth in all countries.
A total of 39 new trade-restrictive measures were applied by G20 economies, which includes Australia, from mid-October 2017 through mid-May 2018, including tariff increases, stricter customs procedures, imposition of taxes and export duties, the WTO said in its latest monitoring report.
The number of new restrictions "equates to an average of almost six restrictive measures per month, which is significantly higher than the three measures recorded during the previous review period", the trade agency said. In comparison, the number of new trade facilitating measures averaged seven a month, from six a month previously.
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- Updated Jul 5 2018 at 6:50 AM
Donald Trump pressed aides about invading Venezuela, US official says
Protesters rally against Trump immigration policies
by Joshua Goodman
As a meeting last August in the Oval Office to discuss sanctions on Venezuela was concluding, President Donald Trump turned to his top aides and asked an unsettling question: With a fast unravelling Venezuela threatening regional security, why can't the US just simply invade the troubled country?
The suggestion stunned those present at the meeting, including US Secretary of State Rex Tillerson and national security adviser H.R. McMaster, both of whom have since left the administration. This account of the previously undisclosed conversation comes from a senior administration official familiar with what was said.
In an exchange that lasted around five minutes, McMaster and others took turns explaining to Trump how military action could backfire and risk losing hard-won support among Latin American governments to punish President Nicolas Maduro for taking Venezuela down the path of dictatorship, according to the official. The official spoke on the condition of anonymity because of the sensitive nature of the discussions.
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Malaysia suspends $20b Chinese Belt and Road rail project
5 July 2018 — 4:03am
Kuala Lumpur, Malaysia: A Chinese company building a key rail link in Malaysia said on Wednesday that it has been told to suspend work pending negotiations, and urged the new Malaysian government elected two months ago to honour the contract.
The BRI is a web of infrastructure that spans continents. What is China's motive?
The suspension came just a day after Finance Minister Lim Guan Eng called for a sharp price reduction in the 688 kilometre East Coast Rail Link after discovering that the project's actual cost is 81 billion ringgit ($27 billion), nearly 50 per cent higher than that estimated by the previous government.
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Outgoing Defence Chief: China has breached its neighbours' trust
By David Wroe
5 July 2018 — 6:12pm
Defence chief Mark Binskin says Beijing’s broken promise not to militarise the South China Sea means it has squandered the trust of its neighbours and undermined its aspirations to regional leadership.
In his final interview before he hands over command of the 80,000-strong Australian Defence Force, Air Chief Marshal Binskin also urged countries such as China that are moving into the South Pacific: “Don’t destabilise the region.”
The candid set of remarks by the top military commander follow a four-year stint at the helm during which Beijing has settled into a more forceful posture towards the region and strategic scholars overwhelmingly feel global stability has deteriorated.
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So much hot air in the White House
By Jonathan Bernstein
3 July 2018 — 5:04pm
It’s hard to imagine a better quick story summing up the Donald Trump administration than the one that broke recently about a bill the White House was preparing to, as expat Australian journalist Jonathan Swan at the Axios news website put it, ‘‘declare America’s abandonment of fundamental World Trade Organisation rules’’ by giving the President authority to break those rules unilaterally.
Let’s see: The policy is nuts; virtually all experts, both in trade and in foreign policy, believe global trade is very good for the US. In fact, according to Swan’s reporting, almost everyone in the White House thinks the bill ‘‘is unrealistic or unworkable’’.
Why does it exist, then? Because Trump ordered it, and sometimes the best way to mollify a President is to give him what he wants - very slowly, and without anything actually happening. Apparently this thing has been kicking around for months. The bill has virtually no chance whatsoever of being enacted into law.
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Trump's embattled EPA chief Scott Pruitt resigns amid scandals
By Evan Halper
Updated 6 July 2018 — 9:56amfirst published at 6:01am
Washington: US Environmental Protection Agency chief Scott Pruitt, one of the most scandal-plagued Cabinet officials in American history, is leaving the agency, President Donald Trump tweeted Thursday.
"I have accepted the resignation of Scott Pruitt as the administrator of the Environmental Protection Agency," Trump said in a tweet. "Within the agency Scott has done an outstanding job, and I will always be thankful to him for this."
Donald Trump announced on Twitter that Environmental Protection Agency Administrator Scott Pruitt has resigned after months of scrutiny around his spending habits and conduct.
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- Jul 7 2018 at 8:11 AM
UK's Theresa May secures cabinet approval for Brexit plan
British Prime Minister Theresa May secured a cabinet agreement for her plans to leave the European Union, overcoming rifts among her ministers to win support for "a business-friendly" proposal aimed at spurring stalled Brexit talks.
After an hours-long meeting at her Chequers country residence, May seemed to have persuaded the most vocal Brexit campaigners in the cabinet to back her plan to press for "a free trade area for goods" with the EU and maintain close trade ties.
The agreed proposal - which also says Britain's large services sector will not have the current levels of access to EU markets - will not come soon enough for Brussels, which has been pressing May to come up with a detailed vision for future ties.
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Trump eyes even higher tariffs as China trade war escalates
By Bloomberg News staff
7 July 2018 — 7:58am
US President Donald Trump threatened to impose tariffs on every single Chinese import into America as the world's two largest economies exchanged the first blows in a trade war that isn't set to end anytime soon.
After months of rhetoric, a 25 per cent levy on $US34 billion ($46 billion) of Chinese goods entering the US took effect just after midnight Washington time on Friday (2pm AEST on Friday) with farming plows and airplane parts among the products targeted. China hit back immediately via duties on US shipments including soybeans, whiskey and automobiles.
Neither side shows any signs of backing down. Trump is already eyeing another $US16 billion of Chinese goods, and he indicated to reporters on Thursday on Air Force One that the final tariff total could exceed $US500 billion, almost the same amount that the US imported in 2017.
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North Korea calls US attitude during talks with Pompeo ‘regrettable’
8 July 2018 — 12:24am
North Korea said on Saturday that high-level talks with a US delegation led by Secretary of State Mike Pompeo were "regrettable" and accused Washington of trying to unilaterally pressure the country into abandoning its nukes.
The North's statement came hours after Pompeo wrapped up two days of talks with senior North Korean officials without meeting North Korean leader Kim Jong Un but with commitments for new discussions on denuclearisation and the repatriation of the remains of American soldiers killed during the Korean War.
US Secretary of State Mike Pompeo met North Korean officials in Pyongyang on Friday, hoping to 'fill in' details on how to dismantle the North's nuclear program and recover the remains of US troops missing from the Korean War.
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I look forward to comments on all this!
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David.
