August 20 Edition
Budget Night was May 12, 2015. We now await economic and activity data reporting to see how successful it was. Interestingly there are some early indications the small-business stimuli might be working. Certainly JB HiFi and Harvey Norman seem to have been doing well recently.
Parliament has come back on 10th August - so we can expect things to warm up at from now! Sadly the economy has not been a hot topic - Same Sex Marriage and The Union Royal Commission dominated all last week!
Well at least Spring is just around the corner - you can tell as the birds are waking up earlier each day and the daily top temps seem to be slowly rising!
This article gives the background:
Good government needn't be a punchline, Tony Abbott
Date August 14, 2015 - 9:29PM
Sydney Morning Herald political and international editor
The leadership of the most successful conservative government in the Western world had a close-up look at the Abbott government a year and a half ago.
The Prime Minister of New Zealand, John Key, and half a dozen of his ministers came to Sydney for a joint cabinet meeting with his Australian counterparts. It was a friendly exercise, full of shared interests and personal warmth.
The Australian prime minister’s office is a crucible of crisis, waging a full-time operation just to keep Abbott in his job for even a single term.
Abbott greeted Key publicly "not just as a brother, but as soul mate. I do welcome him as someone, not just as a friend, but in very significant ways already a political mentor".
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Since this article was published we seem to be having an astonishing amount of leaking against the Government by its own Cabinet. To the uninformed eye, right now, there is a sense of policy chaos which makes the mess in e-Health seem relatively trivial!
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Here is some other of the recent other news and analysis.
General Budget Issues.
Australia is suffering an “unsustainable risk” from high personal taxes that must be brought down to encourage growth and boost jobs, Joe Hockey will declare today in a move to set a reform agenda for the next election.
Putting tax relief on the table if the Coalition holds power, the Treasurer will warn that personal income taxes are so high they threaten to discourage workers and weaken the economy. Mr Hockey will also sharpen the debate on the GST by insisting state revenue be “aligned” to the spending needed on government services, an argument that underpins calls for a rise in the consumption tax from 10 per cent to 15 per cent.
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Date August 11, 2015 - 12:00AM
Peter Martin
It appears that capital gains and negative gearing tax concessions are on the nose with everyone except the Prime Minister.
How on earth did we come to be lumbered with a tax rule so bad it is disliked by the Treasury, the Reserve Bank, the Business Council, the Council of Social Service, the Organisation for Economic Co-operation and Development, and both of Tony Abbott's most trusted business advisers?
And why on earth is Abbott still clinging to it?
The story of how we came to be saddled with a system that taxes wages at twice the rate of profits made from trading real estate is an epic tale of revenge, incompetence, bloody-mindedness and gullibility. Along the way it has forced Treasurer Joe Hockey to set income tax rates higher than he should and fed an explosion in house prices by supercharging negative gearing.
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11:00pm, Aug 13, 2015
Rob Burgess Economics commentator
ANALYSIS: This question is increasingly being asked – will the government dare hand down a third budget before going to the polls?
While other big stories have tended to squeeze out economic debate in recent weeks – the demise of speaker Bronwyn Bishop, the marriage equality debate and on Thursday more stories of terror and counter-terror relating to Islamic State – the data has been telling an alarming story.
The slump in wages growth is the big one. From fairly consistent growth of around four per cent, private sector wage growth has fallen to 2.2 per cent in the latest ABS data.
When public sector wage increases (2.5 per cent) are factored in, the overall pay increase is 2.3 per cent, which is just a whisker ahead of the latest annual trimmed-mean inflation reading of 2.2 per cent. The ‘trimmed mean’ smooths out sudden spikes or slumps in prices that are expected to be short term, with petrol prices being the best recent example.
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Joe Hockey has good reason to be pleased with the performance of the economy since his second budget was delivered three months ago. Retail sales are going well, consumers are happy and businesses say trading conditions are the best they’ve been since the brief bounceback after the global financial crisis.
The buoyant economic performance, particularly in NSW and Victoria, is being achieved despite tumbling prices for Australia’s exports and evidence that large swaths of the Chinese economy are in a recession that its government is battling to contain.
Although China’s problems are rippling through Asia, they have not yet disturbed the buoyant climate in Sydney and Melbourne. There are echoes of the Asian financial crisis of the late 1990s when Australia was expected to be sucked into the regional vortex of recession, but instead lifted its growth rate above 4 per cent.
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Joe Hockey believes the economy has developed a “prosperity momentum” that will deliver the government’s budget targets and maintain growth through to the next election and beyond.
In an exclusive interview with The Weekend Australian, the Treasurer said he was confident the economy would not be blown off-course by events in China, saying his talks with Beijing’s leading economic officials had convinced him they would do “whatever it takes” to keep growth going.
Mr Hockey said the house price boom, government spending on infrastructure, small-business tax cuts and the fall in the Australian exchange rate were all helping to deliver economic growth.
“I’m still confident about our forecasts from the May budget and I remain more bullish about the region and the global economy than others,” he said.
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Date August 15, 2015 - 7:56AM
The Sydney Morning Herald's Economics Editor
Under its newish secretary, John Fraser, Treasury has a new slogan. It is proud to be "fiscally conservative, market-oriented and reform-driven". So just what reform does Treasury advocate?
Well, in a speech last week Fraser spelt it out. But first he noted that the key element of market-oriented reform is that it almost always involves heightening competition. He illustrated the point by summarising what happened during the golden age of micro-economic reform in the 1980s and '90s.
Competitive pressures drive innovation and investment.
John Fraser, Treasury Secretary
When business speaks of the need for Australian firms to be more competitive, it usually means the government should do something that makes it easier for firms to compete with their foreign rivals.
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Health Budget Issues.
The commonwealth contribution to the cost of running public hospitals hit a “historical low point” in the last year of the federal Labor government but the incoming Coalition jeopardised an agreed plan to help share the states’ financial burden.
While federation talks are considering a number of long-term structural reforms to the health system, an analysis prepared for the states warns that the Abbott government’s funding changes will impact on patients in the short term.
The states will use the analysis at a meeting of health ministers in Darwin today to urge federal Health Minister Sussan Ley to back a more immediate examination of funding issues and not rely on federation talks to solve the problem.
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Date August 10, 2015 - 9:00PM
Michael Thorn
Public health activists despair of the prospects of an adequate strategy to tackle chronic disease, described as "Australia's greatest health challenge" by the government's Reform of the Federation White Paper. And it is probably our own fault.
That's not to say the odds aren't stacked against us, the Abbott government having almost entirely dismantled Australia's national preventive health system.
It terminated the $370 million National Partnership Agreement on Preventive Health which funded various programs, including the successful public health campaign behind Ararat's transformation from being one of Australia's fattest towns. (The exposure of the Assistant Minister for Health's chief of staff's conflicts of interest saved front-of-pack food labelling from a similar fate.)
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Policy experts, health insurers, academics, professional colleges and consumer groups have called for urgent health funding reforms to better support people with chronic illness and ensure best use of limited budgets.
Amid ongoing federation talks and the Abbott government’s consideration of further Medicare reforms, the George Institute for Global Health Australia has used a roundtable meeting of more than 30 key stakeholders to reach consensus on the areas with most pressing need.
The stakeholders want funding reforms to aim for “high-quality, effective and efficient healthcare” — not simply pumping more money into an often criticised system — with an immediate focus on those with chronic and complex conditions, along with people who are disadvantaged.
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Date August 11, 2015 - 9:00PM
Ross Gittins tries to dispel some of the common myths surrounding mental illness with help from the OECD report, Sick on the Job.
Don't take this as implying that I condone the misuse of taxpayers' money, but the almighty to-do over politicians' "entitlements" reminds me that small things annoy small minds.
If you think the odd unnecessary $5000 helicopter ride constitutes the worst of the wastage of our money – or that it makes much difference to the $430 billion the federal government spends each year – you haven't done enough thinking.
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A revamp of the Practice Incentives Program that would see practices handed lump sum payments to manage chronic disease patients is being touted by Australia's largest health groups.
In a paper released on Wednesday, the George Institute for Global Health says there is an urgent need for new funding models.
While the paper — Investing in Healthier Lives — floats the idea of pay for performance depending on patient outcomes, its main focus is the rollout of so-called capitation payments.
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Medical Research Fund Issues.
Greens senators are likely to support the Abbott government’s Medical Research Future Fund in parliament today, following last-minute haggling between the government and party leader Richard Di Natale.
However, a senior Greens source said, Senator Di Natale had held “productive conversations” with the government and was “reasonably happy” with the outcome.
“There are still a couple of issues they’re dicing back and forwards but on balance we’re likely to support it,” the source said.
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The successful passage of the Government’s legislation to establish the Medical Research Future Fund will significantly strengthen Australia’s standing as one of the global leaders in the field of medical research.
Page last updated: 12 August 2015
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Twenty amendments made to legislation – including rules over how money would be spent – means House of Representatives must now reconsider it
Australian Associated Press
Wednesday 12 August 2015 17.46 AEST
The Abbott government’s $20bn medical research future fund has cleared the Senate despite concerns about the potential for its funding decisions to be politicised.
The government says the fund will be the largest of its kind in the world, firming Australia’s position as a leader on medical research.
It made 20 amendments to its legislation, including stronger controls over how the money would be distributed, meaning it must go back to the House of Representatives for approval.
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The Medical Research Future Fund — a signature initiative of the Coalition’s first budget that Treasurer Joe Hockey hoped would help find cures for cancer and dementia — has finally passed the Senate, despite the government’s dumping the GP co-payment that had been designed to bankroll it.
The MRFF now will be funded through reduced health spending and about $1 billion left over from the Health and Hospitals Fund designed by the Rudd government to upgrade health infrastructure, until its balance reaches $20bn in 2020.
It will be managed by the Future Fund and any interest it generates will be distributed to medical research, beginning with $10 million this year and a further $390m in the next three years.
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MICHAEL BRISSENDEN: Doctors are welcoming the establishment of Australia's medical research fund but concerns persist about how the grants will be allocated.
The Government says the multi-billion-dollar-program will strengthen Australia's standing as a global leader in research.
The fund is the largest of its type in the world.
Labor is concerned, though, that the grants process will be open to political interference.
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AAP
The federal government has been accused of stuffing-up draft laws for its much-vaunted Medical Research Future Fund.
Parliament's lower house on Thursday rejected a government amendment passed in the Senate on how research funding would be dispersed, because constitutional rules mean the upper house can't make laws appropriating revenue.
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Legislation establishing the Medical Research Future Fund has passed the Senate, with most financial backing to come from hospital funds in the wake of the abandoned GP co-payment.
The fund will initially receive $1 billion from the uncommitted balance of the Health and Hospitals Fund, while future contributions will come from 2014/15 budget cuts to the health portfolio until the balance reaches $20 billion.
Following the Medical Research Future Fund Bill's successful passage through the Senate on Wednesday, Federal Health Minister Sussan Ley said the fund would support research that enabled game-changing medical innovations and improve the health of Australians.
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Pharmacy Issues.
An investigation into PBS dispensing by non-approved pharmacies will only have remit to investigate breaches that have occurred since December 2014.
A Department of Health spokesperson has confirmed to Pharmacy News that the planned investigation would only cover cases since a legislative loophole was closed late last year.
The Department is also encouraging pharmacists to report colleagues that may be breaching regulations.
“From 1 December 2014, the Minister for Health introduced a new condition of approval in the National Health (Pharmaceutical Benefits) (Conditions of approval for approved pharmacists) Determination 2007 (Conditions of Approval),” the spokesperson said.
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Pharmacies will increasingly be consolidated into large retail groups as the profession adapts to changing professional structures, former Pharmacy Guild of Australia (Qld) president Terry White believes.
Mr White (pictured), founder of the Terry White Chemists group, says it is clear the industry was experiencing the start of significant consolidation.
“The future of pharmacy lies in what we as an industry can do for the health of the
nation,” Mr White said. “A national solution requires a national approach and as we move towards that point it has become clear that more and more pharmacies will need the support of a national retail brand with the right retail infrastructure to move forward.”
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It is going to be very interesting to see what happens to the polls and consumer confidence over the next 2-3 months. With the pollies back will be interesting to see what makes the big news economically. We are seeing reasonable consumer confidence now so I hope the pollies coming back does not kill it! There has to be a risk after last week.
There is some policy reform work that has been being discussed in the last few days but I fear it will all disappear without trace!
Enjoy.
David.
