October 27 Edition.
Parliament is due back on the 7th of November. I wonder what mess we will have emerged by the time we all get to be reading this.
Both here and overseas one gets the feeling we might be heading into a soft patch. Time will tell if I am right. Certainly the looming US election is beginning to cause some issues for the world!
In Australia we do seem to be a bit demoralised:
- Opinion
- Updated Oct 17 2016 at 3:18 AM
by Hugh Mackay
From 1949 to 2007, Australian federal governments were defeated at the polls on only five occasions. Voters' reluctance to rock the political boat over those six decades was not necessarily a reflection of great satisfaction with politics. Rather it was a symptom of their desire for, at least, stability.
A one-term government was unthinkable then. Governments were generally regarded as committed to nation-building and governing in accordance with a set of transparent political values. Leaders were not embarrassed to talk about their sense of vision and purpose; political idealism was expected.
But since 2007 no prime minister has survived his or her government's full term. The Liberal-National coalition government was returned to office in 2016 with the slimmest possible majority - one seat - in the House of Representatives, surviving only through the strong showing of the minor coalition partner. The Liberal Party itself lost 13 seats and now holds just 45 in its own right, compared with Labor's 69.
But there's a deeper truth to be discerned in the 2016 election result: the days of political stability are over, at least for the time being. The power of incumbency has waned. The recent defeat of first-term governments in Victoria, Queensland and the Northern Territory is a sign of scepticism, disillusionment and increasing alienation emerging in the Australian electorate.
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Thursday Update: Since initially writing this we have had some real issues on the Australian Sharemarket which has dropped 2.5% in 2 days.
In the US the election fever is building and so it seems is the uncertainty.
A close read of this will help focus:
https://www.livewiremarkets.com/wires/33548
Roger Montgomery
Montgomery Investment Management
The warnings of an impending financial crisis are starting to come
in from all corners. So, maybe they’re worth listening to. If the
warnings materialise, Australia looks to be lining up for something much
worse than anyone is anticipating, and we may not escape quite as
easily as we did during the GFC. According to Carmen Reinhart and
Kenneth Rogoff – who studied eight centuries of financial crises in
their New York Times bestseller, ‘This time is different’ – there are
four leading indicators of a crisis. The first is a rapid inflation of
asset prices, particularly residential housing. The second is excessive
debt accumulation, either by the government, banks, businesses or
consumers. The accumulation of debt almost always poses greater
systemic risks than it seems during the boom, and the injection of cash
makes the growth that results look more sustainable than it really is.
The third is outsized borrowing from abroad and reflected in a sequence of gaping current account and trade balance deficits.
Finally, the occurrence of slowing economic output.
Reinhardt and Rogoff studied eight centuries of financial crises, and
the above four factors are a strong signal of an impending financial
and or banking problem. Of course, nobody is talking about the
possibility of a crisis in Australia right now, but three of the above
four factors are in place. And if you believe the oversupply of
apartments will be followed by a decline in residential construction
activity, then deteriorating levels of economic activity are almost
certain.
That would make four from four.
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You can decide how you feel about all this!
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Budget Issues.
- The Australian
- 12:00AM October 17, 2016
Michael Roddan
Kerr Neilson has seen it all — it’s one of the reasons why fund managers the world over take note of his views on the state of the market.
It’s why many will pay attention when he says there’s a huge change afoot in financial markets.
“There’s been this hiding uncertainty and there’s clear evidence it’s starting to break,” Mr Neilson, the founder of Platinum Asset Management, told The Australian.
Mr Neilson, who ranked as one of the country’s wealthiest men in this year’s BRW Rich List with a personal wealth of nearly $2 billion, believes the financial aberration that caused his $23bn fund such pain over the last year is now close to its nadir.
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Opinion
It is never easy being Treasurer.
Key points:
- Central bankers in Europe, Japan urge spurring economy into action through fiscal stimulus
- IMF says global debt levels have reached $199 trillion, notes Australian households
- UBS says housing supply is unlikely to peak until 2018
Portrayed as a killjoy in good times, the second in command is readily denounced as incompetent when things turn sour, or for taking appropriate action to avert a disaster that has been caused by forces well beyond his or her control.
Scott Morrison may have just made his task even more difficult.
Last week, the Treasurer let rip during a speech that he did not think the Reserve Bank (RBA) should cut rates further, primarily because monetary policy was no longer working.
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· Christopher Condon
Federal Reserve vice chairman Stanley Fischer sees limits to how far the US central bank can pursue a strategy to push unemployment ever lower, an approach characterised as seeking a high-pressure economy by his boss, Janet Yellen, in a speech last week.
"If you go below the full employment rate, or peoples' estimates of full employment, by a couple of tenths of percentage points, I don't think there's any danger in that," Fischer said on Monday in response to questions after he gave a speech at the Economic Club of New York. "But saying we should keep going until the inflation rate shows us we're wrong, then you're going to change too late."
Past examples, where central bankers have tried to reduce unemployment below its lowest sustainable level, had not ended well. "Those attempts at overshooting have not been that successful, and frequently resulted in subsequent inflation," he said.
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Peter Martin
Australia's biggest business organisation has distanced itself from claims the proposed Trans Pacific Partnership will create hundreds of thousands of jobs and be a "gigantic foundation stone" for Australia's future.
The claims, made by Prime Minister Malcolm Turnbull in Washington and in Canberra in an attempt to win support for the 12-nation deal, were dismissed by the Australian Chamber of Commerce and Industry (ACCI) in evidence to a Parliamentary inquiry on Monday.
ACCI argued the agreement did not mandate free trade and had not been assessed by an independent authority such as the Productivity Commission.
ACCI's director of trade Bryan Clark told the hearing the deal with Australia, the United States and 10 other nations was a "preferential" rather than a "free" trade agreement, and would add to rather than remove the complex web of rules that distorted international trade.
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October 18, 2016
Australian Associated Press
Labor senators are frustrated Finance Minister Mathias Cormann is unable to give an up-to-date figure on the cost of policy decisions yet to be legislated.
During a Senate estimates hearing on Tuesday Labor senator Jenny McAllister wanted an update on the $18 billion figure cited in May's pre-election economic and fiscal outlook.
Senator Cormann took the question on notice, saying it changes all the time and he wanted to provide a proper, up-to-date list.
However, since PEFO, and with the support of "Her Majesty's loyal opposition", the $6 billion omnibus bill of budget savings and the tobacco excise measures had been legislated.
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COMMENT
Matt Wade
When our buttoned-down economic guardians start using words like "disruptive adjustment" it's a sign something's amiss.
Over the past few weeks both the Reserve Bank and the International Monetary Fund have used that same ominous phrase with reference to Australia's biggest trading partner, China.
In essence, the problem is a corporate debt binge. Credit growth in China has accelerated and is growing at twice the pace of its economic growth rate. Debt levels have ballooned to 250 per cent of gross domestic product and alarm bells are ringing.
So how worried should we be here in Australia?
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Oct 19, 2016, 6:15 AM
Across asset classes, investors are worried the most about a bond-market crash, according to a survey of fund managers around the world conducted by Bank of America Merrill Lynch.
They think that bond prices are frothy, showing signs of being in a bubble — meaning that prices are much higher than what bonds are actually worth.
Bond prices rose and pushed yields lower as investor demand grew and central banks, in Europe for example, bought bonds to lift inflation and fire up their economies.
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- Oct 18 2016 at 11:45 PM
- Updated Oct 18 2016 at 11:45 PM
The Turnbull government's plan to deliver a 25 per cent company tax rate within a decade appears doomed, with South Australian Senator Nick Xenophon confirming his team will not be supporting a reduction for any firm with an annual turnover of more than $10 million.
The government needs nine of the 11 Senate crossbenchers to pass its 10-year enterprise tax plan but with the Nick Xenophon Team comprising three of those votes, there can be no deal.
The Greens oppose the cuts outright and Labor will support a tax reduction for a company with a turnover capped at only $2 million.
While Treasurer Scott Morrison is still negotiating with the crossbenchers, Senator Xenophon told The Australian Financial Review his mind was made up and the party would not budge.
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COMMENT
Peter Martin
Anyone would have thought Philip Lowe had it made. The new Reserve Bank governor has taken the helm at a time when the Bank's traditional enemy, high inflation, is dead. He says he is the first to have done so. Yet he is worried by the fruits of that success.
If you're wondering what could possibly be worse than high inflation, the answer is "very low inflation". It may not destroy savings or spiral upwards, as inflation did when it soared to 18 per cent in the middle of the 1970s, but it can do things that are worse.
It can leave sellers – be they workers, manufacturers, retailers, importers or whoever – without power. And without power, without the hope of extracting higher prices, businesses have little reason to invest. Japan has been lumbered with extremely low inflation for most of the past two decades. They are called the "lost decades" because businesses and consumers have kept their wallets shut.
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Anna Patty
More than one in four Australian workers feel financially stressed and find it difficult to make ends meet, a national study has found.
The new research shows fewer than half (48 per cent) of Australians feel confident about their finances – a decrease from 54 per cent just two years ago.
The study of more than 2000 Australian employees by Kantar TNS for AMP also shows financial stress is costing Australian businesses $47 billion in revenue in a year. On average, financially stressed employees take an extra four sick days each year. They also lose an average of 6.9 hours a week of productive time at work as a result of stress-related "presenteeism".
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Peter Martin
Australia's top financial regulator has dismissed as self-serving arguments by the big four banks that they can't afford to offer so-called "tracker mortgages" whose rates would automatically rise and fall in line with the Reserve Bank cash rate.
Westpac, the Commonwealth, ANZ and National Australia banks each argued in parliamentary hearings earlier this month that there would be little demand for tracker mortgages of the kind that are offered in the United States and Britain because they would have would have to charge too much for them.
The corporate watchdog disputes big bank claims that mortgages that track Reserve Bank interest rates would be too expensive.
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20 Oct 2016 - 10:26am
Treasurer Scott Morrison insists there has been no change to the view global credit agencies have of Australia's AAA credit rating.
Source:
AAP 20 Oct 2016 - 10:26 AM UPDATED 22 MINS AGO
Treasurer Scott Morrison has played down reports the government fears the mid-year budget update could be the catalyst for Australia losing its AAA credit rating.
"There's no real change here," he told ABC radio on Thursday, as he responded to suggestions Standard & Poor's Global Ratings could downgrade the country's rating.
"I stress all three (agencies) have actually confirmed Australia's triple A credit rating since the election," Mr Morrison said.
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EXCLUSIVE
- October 20 2016 - 11:49AM
James Massola
Scott Morrison must raise tax revenue and dump the government's $50 billion, 10-year company tax cut plan to save Australia's AAA credit rating, Labor's treasury spokesman Chris Bowen says.
Amid growing fears that ratings agency Standard & Poor's could downgrade Australia's credit rating from AAA to AA+, which would raise the cost of borrowing in Australia, and following the agency's move in July to revise Australia's credit outlook from stable to negative, Mr Bowen said it was time for the federal government to dump its "$50 billion ram raid on the budget".
Mr Morrison, meanwhile, on Thursday indicated the government could be willing to negotiate down its company tax cut plan – which is supposed to cut taxes to 25 per cent for all companies by 2025-26 – and limit the tax cut to companies with a revenue of less than $50 million.
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Oct 20, 2016, 1:00 PM
There is an astonishing qualifier in today’s employment data from the Australian Bureau of Statistics.
The incoming rotation group in Queensland for September 2016 was considerably different to the rest of the Queensland sample and its influence has been temporarily reduced as part of the estimation process. The data will be further reviewed when October data are available. For more information, please refer to Insights from the original data.
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COMMENT
John Hewson
Rudd, Gillard, Abbott and Turnbull have at least one distinguishing feature in common – they have all found the transition to government, and the processes of government, very difficult. Indeed, they haven't seemed to know the levers to pull, or how to pull them, to deliver effective government.
This is not just a question of handling a negative opposition, a hostile Senate, or even a difficult rump on the backbench – although all are important. It is more about issues management, about policy formulation and implementation. It's about how to take control, how to work the bureaucracy and the electorate, to get things done, to deliver appropriate policy outcomes.
There are many examples, and many reasons for this.
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Health Budget Issues.
- The Australian
- 12:00AM October 17, 2016
Sean Parnell
The billion-dollar trend of public hospitals billing health insurers for the cost of treating members — who as taxpayers would otherwise not be charged — is under review.
State governments have been encouraging public hospitals to identify patients with insurance and convince them to bill their health fund, to the point where hospitals now cover the excess and, in some cases, offer free meals and parking to family members.
The Australian revealed last month that Health Minister Sussan Ley was under increasing pressure to intervene in the $1 billion cost-shifting dispute, which Private Healthcare Australia and the Australian Private Hospitals Association argue pushes up premiums.
Now, the Turnbull government’s new Private Health Ministerial Advisory Committee has unexpectedly made public hospital billing a priority issue for reform, one of only four issues set a February deadline.
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Authored by Cate Swannell
A LEADING Australian psychiatrist says the National Health and Medical Research Council (NHMRC) has “buried its head in the sand” when it comes to the funding of mental health research, and risks a “brain drain” of young researchers to the European Union and the US.
Professor Ian Hickie, co-director for Health and Policy of the Brain and Mind Centre at the University of Sydney, and an NHMRC senior principal research fellow, told MJA InSight that the Council was “not serving the community” when it came to mental health.
“Worldwide, particularly in Europe and the US, there are big government initiatives being undertaken in brain science and mental health, but frankly, here in Australia we talk the talk, but we don’t walk the walk,” he said.
“Despite the rhetoric, and despite the desperate need, [adequate funding] never really happens.”
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Latest list of low value medical tests released
Genetic testing for coeliac disease, repeat colonoscopies, whole breast radiation therapy, management of low risk prostate cancer and bone metastases, brain radiation therapy, locoregional therapy, and the inappropriate use of anti-fungal drugs are among a raft of tests, treatments and procedures recently highlighted in the latest recommendations released under the Choosing Wisely Australia program. The Human Genetics Society of Australasia (HGSA), the Gastroenterological Society of Australia (GESA), the Royal Australian and New Zealand College of Radiologists’ (RANZCR) Faculty of Radiation Oncology, and the Australasian Chapter of Sexual Health Medicine (AChSHM) released new recommendations last week, as additions to existing recommendations from other medical societies and colleges under the Choosing Wisely program.
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18 October, 2016
The cost of recovering funds from dodgy Medicare claims by health practitioners appears to be trending higher than the money retrieved.
The Department of Health wrapped up 3,912 audits and reviews of practitioners in the year to June 2016, including 190 fraud investigations which it said were in the “most serious” category and did not reflect honest mistakes.
It sent 35 cases to the Commonwealth Director of Public Prosecutions and 80 to the in-house Professional Services Review (PSR).
The Medicare provider compliance program newly identified recoverable debts of $16.3 million in the year, after seeing a bulge of more than $60 million in 2014-15, according to the department’s annual report tabled this week.
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- The Australian
- 12:00AM October 18, 2016
Sean Parnell
Market forces may be used to bring down the cost of prostheses in the private sector, with Health Minister Sussan Ley seeking fresh advice on a new regulatory pricing model.
Health insurers have long called for reforms to the Prostheses List, arguing up to $800 million a year could be saved — helping take pressure off premiums — if prices reflected those in the public system and overseas.
Although cabinet reportedly decided against price cuts this year, Ms Ley has sought to reinvigorate the Prostheses Listing Advisory Committee.
The committee is headed by professor Terry Campbell and along with medical specialists has three private-hospital representatives, two health-insurance representatives, two health economists, two technology representatives and a consumer representative.
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Health ministers will review the way the national health watchdog operates in a bid to stamp out “dangerous and dodgy” practitioners.
Victoria’s Health Minister, Jill Hennessy, urged her federal and interstate counterparts at last week’s Council of Australian Governments (COAG) health council meeting to review the way the Australian Health Practitioner Regulation Agency (AHPRA) operates.
Her calls for reform follow the national agency coming under fire last year for taking more than two years to respond to complaints about doctors at the Bacchus Marsh and Melton Regional Hospital.
Ms Hennessy accused AHPRA of failing to do its job after an investigation into stillborn deaths at Bacchus Marsh Hospital found there were 11 preventable baby deaths between 2003 and 2014.
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Advances in DNA sequencing have paved the way for personalised medicine – a new era in disease management that allows doctors to tailor treatment to individual patients.
Here are four reasons why personalised medicine, also known as pharmacogenomics, matters to you:
1. It allows tailoring of treatment types to genomes to determine the best drug dose for individual patients who have undergone screening for genetic diseases.
2. It explains why two patients might have the same diagnosis, the same disease and the same treatment, but one will respond to the treatment while the other one won't.
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Sue Dunlevy, News Corp Australia Network
October 19, 2016 1:00am
DOCTORS will raise their fees to $78 from November 1 and more patients will be slugged with the charge as GPs abandon bulk billing.
The AMA will today recommend a $2 increase in GP fees from the current recommended $76 for a standard doctor’s visit of under 20 minutes.
The move means patients will pay even more because the Federal Government has frozen the rebate at the 2014 level of $37.05.
The combined effect of the $2 fee rise and the Medicare freeze will leave patients with a $41 out-of-pocket bill per visit.
COMMENT
- October 19 2016 - 12:00AM
· Raina MacIntyre
When people think of vaccinations, many would picture an infant on the lap of a parent at their GP or perhaps an adult attending a travel clinic to get a jab before going on an overseas holiday.
And we are all familiar with the harrowing stories of babies with whooping cough. Yet we don't often hear about the hospitalisations and deaths of older Australians from vaccine preventable diseases such as herpes, influenza, shingles and even whooping cough.
Between 2008 and 2011, there were more than 700 deaths in older Australians due to vaccine-preventable diseases. A disease such as shingles, flu or pneumonia can be the trigger that pushes someone who lives independently into permanent disability. Vaccination is low hanging fruit for preventing disease in older people.
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19 Oct 2016 - 12:10pm
The federal government says it's not responsible for an increase in GP consultation fees but the opposition says doctors are being squeezed to breaking point.
Source:
AAP 19 Oct 2016 - 12:10 PM UPDATED 2 HOURS AGO
The cost of seeing a doctor is about to go up but the federal government insists it has nothing to do with its extended freeze on Medicare rebates.
The Australian Medical Association has blamed the freeze on its recommendation that GPs lift fees for a standard consultation by $2 to $78 from November.
Medicare rebates will be frozen at $37 until 2020, saving the government nearly $1 billion.
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· Harriet Alexander
Patients will be forced to pay more for their medical consultations from next month after the peak doctors group recommended its members to raise their fees by 2 per cent.
The Australian Medical Association released a new list of recommended fees on Wednesday, including an increase in the cost of standard GP consultation from $76 to $78 that would leave patients $41 out of pocket after a $37 Medicare rebate.
AMA vice-president Tony Bartone said the price hike was necessary to offset the federal government's decision to freeze Medicare rebates at the 2014 level.
"General practices have absorbed the freeze, but their ability to continue to absorb it year on year becomes questionable," Dr Bartone said.
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- The Australian
- 12:00AM October 22, 2016
Sean Parnell
The federal government has ramped up its investigations into potential Medicare fraud by doctors, other health professionals and companies amid a debate over the financial impact of its rebate freeze.
The Health Department conducted 3912 compliance audits in the sector in 2015-16, which is understood to be the biggest number on record and well above the target of 2500. This is separate to any probe of patient or third-party fraud.
Most of the audits, 3399, were in relation to professional use of the Medicare Benefits Schedule, but use of the Pharmaceutical Benefits Scheme, the Child Dental Benefits Schedule and health support programs also came into question.
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Health Insurance Issues.
Esther Han
For thousands of Australians, health insurance is causing anger, distress and frustration instead of providing the peace of mind the providers have long promised, with complaints hitting a record high.
The Private Health Insurance Ombudsman received 4416 complaints in 2015-16, nearly double the number a decade ago, according to the Commonwealth Ombudsman's latest annual report.
Medibank accused of secret policy changes: ACCC
ACCC chairman Rod Sims says Medibank may have affected many customers by allegedly failing to inform them of a 2014 policy change.
Despite having less than a third of the total market, the embattled Medibank accounted for 40.2 per cent of the complaints.
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- The Australian
- 12:00AM October 19, 2016
Sean Parnell
Health funds will be under pressure to rein in insurance premiums after Health Minister Sussan Ley today reveals cuts of $86 million a year to the price of medical implants such as artificial knees, hips and pacemakers.
Under long-awaited reforms to the Prostheses List, which dictates how much insurers pay for health fund members to receive a range of surgically implanted devices, the federal government will first target those areas with the most inflated prices.
Ms Ley has taken advice from an industry working group, which highlighted how the regulated prices of cardiac devices, intra-ocular lens systems, hips and knees were “significantly higher, in many cases, than market prices based on available domestic and international data”.
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- October 19 2016 - 12:38PM
Amy Remeikis
Health Minister Sussan Ley "expects" private health funds to pass on savings from the cost of medical implants to customers through lower premium increases, but can't say what those savings will be.
Ms Ley announced the $86 million cut to the Prostheses List, which sets down how much funds pay for the devices used in hip replacements, pacemakers and the like, as a "down payment" for future reform.
Health insurance premiums set to rise by 5.6 per cent
Despite the private health insurance premiums hike, Health Minister Sussan Ley says the average family with hospital and general health cover will save $166 a year, thanks to her intervention.
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Pharmacy Issues.
- The Australian
- 12:00AM October 17, 2016
Tim Boreham
Australian Pharmaceutical Industries (API) $1.93, Sigma Pharmaceutical Industries (SIP) $1.51, Ebos Group (EBO) $17.10
Make more with less. That’s the prescription for the wholesale drug distributors and chemist banner groups, which have nursed themselves back into rude health despite almost a decade of adversities and a poor prognosis indeed.
On Thursday, Australian Pharmaceutical Industries will report a 17 per cent surge in full-year profit to $51 million, with departing long-time CEO Stephen Roche leaving a tidy ship for internal successor Richard Vincent.
Last month, rival Sigma Pharmaceuticals unveiled a 14 per cent surge in half-year earnings to $31.7m, culminating a painstaking five-year efficiency drive.
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Pharmacies across the country will screen customers for type 2 diabetes from November under a government-funded trial.
In the trial, 363 pharmacies will test three models of screening in asymptomatic people.
The trial, announced on Tuesday by Health Minister Sussan Ley, will include point-of-care tests and a validated questionnaire (AUDSRISK) to assess risk.
It is the first cab off the rank for the $50 million Pharmacy Trial Program funded in the Sixth Community Pharmacy Agreement.
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A review of pharmacy funding and practice is timely, says SHPA CEO Kristin Michaels
Federal Health Minister Sussan Ley has stated on a number of occasions that one of the Federal Government’s primary goals is to ensure that ‘every dollar spent on health lands as close to the patient as possible’.
The aim is admirable: the effectiveness and cost of health care must be seriously reviewed from time to time and, within that context, opportunities to explore new approaches to medicines management must be evaluated. It is only through the implementation of new paradigms of pharmacy that we can improve the quality use of medicines, and make inroads into the 230,000 medicines related hospital admissions each year.
The Review of Pharmacy Remuneration and Regulation (the King review) is a legitimate and well-considered undertaking to deliver efficient purchasing of key services. It is the largest and most wide‑ranging review any government has attempted in the 26‑year history of the bilateral Community Pharmacy Agreements between the Federal Government and the Pharmacy Guild of Australia. As such, is deserving of widespread engagement and support.
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Superannuation Matters.
Monday, 17 October 2016 12:03pm
Treasurer Scott Morrison is adamant the government's wave of superannuation reforms will be introduced to parliament by the end of 2016.
Morrison released the third tranche of reforms on Friday and said the legislative amendments better target superannuation tax concessions.
The latest tranche includes proposals to reduce the annual non-concessional contributions cap to $100,000 and restrict access to individuals with super balances below $1.6 million.
Morrison said the reforms include amendments to make super administrative arrangements simpler and more consistent for individuals and superannuation providers.
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I look forward to comments on all this!
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David.
