February 25 Edition
Clearly the big news in the last few weeks has been macroeconomic.
The crisis in the energy industry seems to be moving to the banking sector which is a very worrying trend and still needs to be closely watched over the next few weeks. The European Banks are apparently in some considerable trouble according to the Economist - so there are clearly some issues.
Also, out of the blue, in Australia, we now see a continuing bun-fight on health insurance costs as well as negative gearing and superannuation. Will be fun to watch. Mr Morrison seems to have disappointed with the lack of a clear plan.
In the last week we have seen some market rises - but no real conviction just yet. Will need a few more weeks to be
Parliament was back on 22nd February.
Thursday Market Update: Our market and global markets are all going sideways to down. There is increasing anxiety the the oil price drops are going to damage global banks. Credit costs are rising a little and this is no time to be totally relaxed. The market thinks there is something serious wrong. Time will tell.
Thursday Market Update: Our market and global markets are all going sideways to down. There is increasing anxiety the the oil price drops are going to damage global banks. Credit costs are rising a little and this is no time to be totally relaxed. The market thinks there is something serious wrong. Time will tell.
Here is a summary of interesting things up until the end of last week:
-----
General Budget Issues.
Morrison hints millions of Australians could get tax cuts paid for by simpler tax returns
Date February 14, 2016 - 1:21AM
James Massola
Political correspondent
Labor's tax reform will 'boost' new housing supply
The federal opposition has defended proposed changes to its negative gearing rules, saying they will put first homebuyers on a more level playing field. (Video Courtesy ABC News 24)
Tax cuts funded by simpler tax returns could put more money back in the pockets of millions of Australians under a plan being closely considered by the Turnbull government.
Following the release of modelling that showed a GST rise to 15 per cent would raise $35 billion to pay for income tax cuts – but do little to boost economic growth after compensation – Treasurer Scott Morrison declared work on tax reform was "never done" and vowed to press ahead in an exclusive interview with Fairfax Media.
-----
http://www.abc.net.au/news/2016-02-14/scott-morrison-criticises-labors-negative-gearing-plan/7166670
Scott Morrison says Labor's plan to scrap negative gearing will raise 'very little' revenue
By political reporter Matthew Doran
Federal Treasurer Scott Morrison has criticised the efficacy of the Opposition's plan to scrap negative gearing on established houses, arguing it will not help the budget bottom line as much as Labor is claiming it will.
Key points:
- Scott Morrison says scrapping negative gearing will not raise as much revenue as Labor claims
- The Treasurer said the plan was "like their famous mining tax"
- Parliamentary Budget Office said measures could save $32 billion over 10 years
Opposition Leader Bill Shorten's announcement on Saturday proposed scrapping negative gearing for established properties from July next year.
-----
- Feb 14 2016 at 11:15 AM
- Updated Feb 14 2016 at 11:57 AM
Chris Bowen says negative gearing plan won't create new 'bubble
by Fiona Buffini and AAP
Shadow treasurer Chris Bowen says Labor's plan to limit negative gearing to new homes won't create a new property bubble, as buyers rush to buy established properties before the ban starts in mid 2017.
Opposition Leader Bill Shorten used a speech to the NSW ALP conference on Saturday to reveal Labor's plan in government to make negative gearing only available on newly constructed homes from July 2017.
Capital gains tax concessions would be cut from 50 per cent to 25 per cent, also with no change to the rules applying to existing assets, and the family home, along with personal superannuation, would be 100 per cent capital gains tax free.
-----
15 Feb 2016 - 7:22pm
Shorten defends negative gearing plan
Opposition Leader Bill Shorten says the present tax system distorts the housing market and is why he wants to rein back negative gearing.
Source: AAP
15 Feb 2016 - 7:48 AM UPDATED YESTERDAY 7:22 PM
Opposition Leader Bill Shorten has hit back at detractors to Labor's negative gearing plans, saying distortions in the housing market already exist under the taxation system.
Prime Minister Malcolm Turnbull, while touring Townsville, slammed the opposition's plan to limit negative gearing to new properties, saying it is badly designed, risks distorting the market and doesn't address the big budget deficit problem that Labor created.
"Why is it that Mr Turnbull will fight so hard for a system where it's a battle, an expensive battle to get your first house, where Malcolm Turnbull will give you a tax deduction for your fourth house," Mr Shorten told reporters in Melbourne on Monday.
-----
Tax breaks on rentals and super unfair to young
Date February 16, 2016 - 7:35AM
Mark Kenny
Chief political correspondent
Winners and losers of tax breaks
Tax changes will cost the Government money and only benefit the wealthy, according to new research.
Tax breaks on investment properties and superannuation are costing the budget nearly $40 billion a year with almost none of the benefits going to the under 30s, who remain locked out of the game, according to new research.
The result has been described as a "double hit" on younger Australians, who are being sold a myth that the budget-busting concession regime is in place to help them get ahead. Instead, it is overwhelmingly older, wealthier people who access the breaks to buy and sell properties and to park income at discounted tax rates.
-----
Ministers told to stop spending ahead of budget
- The Australian
- February 17, 2016 12:00AM
Dennis Shanahan
Turnbull government ministers are being told “just stop spending” as Scott Morrison and Malcolm Turnbull prepare for an unusual low-spending pre-election budget.
The Treasurer’s economic and political message to Coalition MPs is that all the political pain from the dire Abbott-Hockey budget in 2014 has barely “held the line” on cutting government expenditure, which is vital to reducing the deficit and easing the burden on taxpayers.
Mr Morrison’s assessment of the state of the budget, the outlook for the economy, global uncertainty and the need to learn from Joe Hockey’s first budget will be revealed today at the National Press Club.
-----
- Feb 16 2016 at 11:00 PM
- Updated Feb 16 2016 at 11:24 PM
Scott Morrison targets spending as Turnbull hints he may not touch negative gearing
Treasurer Scott Morrison will use a pre-budget speech on Wednesday to target spending, conceding that the government has spent most of the savings it had made since coming to office in 2013.
In what will be a stern warning to expect very little in the May budget other than small tax cuts, Mr Morrison is expected to outline how many of the politically painful budget savings made by his predecessor, Joe Hockey, were subsequently spent. In some instances, savings were still blocked in the Senate but the money was being spent.
"We are holding the line on expenditure but spending remains the problem," his speech notes say.
-----
- Feb 17 2016 at 1:52 PM
- Updated Feb 17 2016 at 4:04 PM
Scott Morrison says no new spending in the budget
'Back in' earners, arrest spending
Treasurer Scott Morrison has conceded the Coalition government spent most of the $80 billion it has saved since coming into office as he warned the May budget would have to contain further restraint to help pay for tax reform.
In a speech setting the scene for the May 10 budget, Mr Morrison told the National Press Club that the Coalition had clocked up more than $70 billion in new spending since winning office in 2013 and he was now basically starting from scratch in trying to find further revenue to cut taxes.
"We are basically in the same position that we were two years ago,' he said.
-----
Malcolm Turnbull cannot afford to upset millions in the middle
- The Australian
- February 18, 2016 12:00AM
Niki Savva
Angry white male conservative commentators wetting themselves with excitement because they think Malcolm Turnbull is on the skids need to calm down. Or book in for some scans.
Sure, Turnbull has come down in the polls. That was inevitable. And probably desirable as a wake-up call for anyone who thought he could coast to victory on Bernie, sorry, Bill Shorten’s inadequacies.
True, Shorten has tried to make Turnbull’s task easier by boldly opting to model himself on two old socialists, Bernie Sanders and Jeremy Corbyn (rather than on Paul Keating), by advocating ever higher taxes and ever higher spending.
-----
Treasurer Scott Morrison says he won’t ‘sell the public a unicorn’ with quick budget fixes
February 18, 2016 8:00pm
Herald Sun
SCOTT Morrison has vowed not to “sell the public a unicorn” by promising a quick budget repair amid criticism of his performance as Treasurer yesterday.
Mr Morrison hit back at the Opposition labelling his pre-budget speech to the National Press Club “slogans and waffle” yesterday in a series of combative interviews.
He denied that GST reform would have been a “litmus test of tax testosterone”.
It came as the official unemployment rate jumped back to 6 per cent last month with the job market shrinking by about 8000.
-----
Independent modelling backs Labor's negative gearing policy
Date February 19, 2016 - 8:00PM
Gareth Hutchens and James Massola
EXCLUSIVE
Turnbull: 'Be afraid of Bill Shorten'
The price of every home will be devalued under Labor's negative gearing policy, says Malcolm Turnbull. Courtesy: ABC News 24
Independent modelling has dented the Turnbull government's attack on Labor's negative gearing policy, finding it will generate billions for the Commonwealth with the vast bulk of revenue coming from just the top 10 per cent of households who negatively gear their properties.
The report's author says the policy would likely slow the pace of house-price growth and boost new housing construction, making it "potentially the biggest housing affordability policy the country has seen."
Prime Minister Malcolm Turnbull launched a scathing attack on Labor's negative gearing policy on Friday, saying home owners across the country would see the value of the family home "smashed" by the "very blunt, very crude" idea.
-----
Health Budget Issues.
Medibank slammed by AMA for medical complications expert panel
February 14, 20167:44pm
EXCLUSIVE: A COURT of medical experts will have to decide whether Australia’s largest health fund should have to pay for a member’s treatment when medical complications occur.
Doctors have branded Medibank’s move the latest stage of the Americanisation of private health care.
Australian Society of Orthopaedic Surgeons president Dr Kelly Macgroarty has warned the panel of experts can’t be independent because the doctors on it will be paid by the health fund.
-----
States split on hospital spending
- The Australian
- February 15, 2016 12:00AM
Sean Parnell
A public hospital emergency ramp in Perth. West Australian Health Minister Kim Hames says the state needs more-sustainable funding.
The states are split over the challenge of sustaining public hospitals and whether efficiency measures can avoid the need for services to be cut when budgets are tight.
As federal political leaders debate tax policies, the states have lost hope of a GST rise to help fill a $50 billion gap in funding promised by the former federal Labor government and taken away by the Coalition in its first budget.
South Australian Premier Jay Weatherill suggested some public hospitals would shut without an increase in goods and services tax distributions and is among several leaders to demand the commonwealth raise more tax to distribute.
-----
Pathology cuts to hurt GPs and patients
15 February 2016
THE AMA is considering a campaign to stop the slashing of pathology bulk-billing incentives announced without warning in December.
AMA president Professor Brian Owler says the government has failed to understand the impact of the proposed cuts to pathology and diagnostic-imaging bulk-billing incentives, a cost-saving included in the mid-year economic and fiscal outlook (MYEFO).
Patients will be hit with substantially increased costs for diagnostic tests, and pathology collection centres will be forced to close, he says.
“Well, I believe that [the government] didn’t factor in any increase, that their factoring is wrong.
-----
Rating at risk if spending not cut: ACCI
February 15, 2016 3:20pm
AAP
Australian Chamber of Commerce boss Kate Carnell warns government spending must be reined in.
Rating at risk if spending not cut: ACCI
Treasurer Scott Morrison says his first May budget must continue to get spending under control, as a leading business lobby group warned that doing nothing will eventually put the nation's triple-A at risk.
Mr Morrison will get the chance to layout his budget framework and his progress on forming his tax reform package when he addresses the National Press Club on Wednesday.
-----
Medicare changes set for election battleground, as ACTU pledges campaign
Date February 16, 2016 - 1:18AM
Mark Kenny
Chief political correspondent
The ACTU has revealed it will run a serious marginal seat campaign beginning immediately, involving doorknocking and a targeted advertising and social media blitz with the twin aims of defeating government moves to privatise Medicare payments and of retaining bulk billing incentives for diagnostic services.
The campaign is a sign of the ACTU's intention to play a strong grassroots role in the forthcoming federal election, with unions hoping to use their still extensive membership reach to "warn" voters about the Coalition's plans for trimming Medicare.
Supporters will be sent out to doornock voters in a series of marginal seats in the major swing areas of Melbourne and Sydney.
-----
Victorian Health Minister stands firm on hospital funds
- The Australian
- February 16, 2016 12:00AM
Sean Parnell
An agency established to administer public hospital funding is at the centre of a political row over claims Victoria has been receiving $36.6 million more each year than it is entitled to.
Victorian Health Minister Jill Hennessy last week took aim at the acting administrator of the National Health Funding Pool, former WA health chief Kim Snowball, over his plan to recoup $73.2m paid to the state.
“To put this into human terms, the impact of this reduction is equivalent to 180,000 emergency department presentations, 72,000 chemotherapy patients or almost 12,000 elective surgery cases,” Ms Hennessy wrote in a letter to federal Health Minister Sussan Ley.
-----
Primary to trial co-payments
17 February 2016
PRIMARY Health Care plans to introduce co-payments for some medical services in response to the government’s squeeze on health funding.
Announcing its half-yearly results on Wednesday, the country’s largest corporate healthcare provider outlined positive progress in its campaign to beef up GP recruitment and revealed steps to drive expansion.
“The difficult trading conditions have, in part, come about due to the government’s desire to reduce spending on frontline healthcare, as evidenced by the MYEFO cuts, ongoing pathology and other MBS cuts,” managing director Peter Gregg said.
-----
Sonic Healthcare warns of ‘vigorous’ campaign against bulk billing cuts
- The Australian
- February 17, 2016 11:21AM
Sarah-Jane Tasker
Sonic Healthcare’s boss Colin Goldschmidt has backed a pathology sector campaign, aimed at up to two million patients each month, to fight planned federal government bulk billing cuts.
Mr Goldschmidt warned the campaign was about to be launched as the company reported an eight per cent increase on its half-year net profit to $188m.
Shares in the company (SHL) were up 3.69 per cent at $18.80 on the back of the result, which showed that revenue increased 21 .8 per cent to $2.4bn, with a solid performance in Germany, Switzerland and Belgium.
Sonic, Primary Health Care CEOs vow to fight pathology cuts, which already sting
Date February 17, 2016 - 5:05PM
Tim Binsted
Reporter
Healthcare chief executives Peter Gregg and Colin Goldschmidt, whose businesses have been stung by pathology funding cuts, have criticised the government's health policy and warned that Australia was taking its first step toward a two-tiered system of care.
Mr Gregg – the chief executive of Primary Health Care, which has 71 medical centres, 100 pathology labs, and 168 diagnostic imaging sites – said the shock proposal from the Turnbull government to cut bulk-billing incentive payments for providers was "a slap in the face" for medical professionals.
-----
Bulk billing cuts ludicrous: Primary Health Care’s Peter Gregg
- The Australian
- February 18, 2016 12:00AM
Sarah-Jane Tasker
The head of imaging and diagnostic giant Primary Health Care, Peter Gregg, has warned the government is pushing patients into expensive chronic care services with its cuts to bulk billing incentives, labelling the move “ludicrous”.
Mr Gregg said diagnostic and imaging services, which will have bulk billing incentives cut in July if the government gets its plan through the Senate, were a key tool for doctors trying to prevent patients from falling into chronic care.
He said pathology services could not absorb any more cuts without changing their financial models as he hit out at Health Minister Sussan Ley, saying she did not understand business.
-----
Bulk-billing on the rise despite mooted cuts
- The Australian
- February 19, 2016 12:00AM
Sean Parnell
Bulk-billing rates have continued to rise despite health groups warning patients will be left out of pocket because of a federal Government freeze on Medicare rebates.
Newly released Medicare figures show that in the last quarter of last year, the overall bulk-billing rate hit 78.3 per cent, compared to 77.5 per cent for the same period a year ago, with $5.3 billion paid for 95.2 million services.
For unreferred GP consultations, the rate was 83.9 per cent, compared to 82.9 per cent a year earlier, while other primary care services were stable. The government’s decision to freeze rebate indexation, instead of impose an unpopular co-payment, has sparked months of warnings from the Australian Medical Association that patients will end up paying.
-----
Health Minister Sussan Ley makes the right noises for reforms
- The Australian
- February 20, 2016 12:00AM
John Durie
Health Minister Sussan Ley has done an extraordinary job raising expectations for reform in the $150 billion health sector with six different reviews, but with private health the next sector in the spotlight the question remains: just what will be the final output?
The states account for about 60 per cent of the health spend so must be brought along for the ride or the whole game grinds to a halt.
Yesterday Medibank’s George Savvides handed down his last profit report after 15 years at the helm and in March will step aside.
-----
Healthcare reforms a better response to soaring costs than tax hikes
Date February 20, 2016 - 12:15AM
Mikayla Novak
Institute of Public Affairs researcher
The federal government's GST agenda has failed. More voters came to realise that tax increases can't reform an expensive and increasingly dysfunctional health system. Prime Minister Malcolm Turnbull's decision to rule out lifting the GST rate to 15 per cent is surely a welcome relief to Australians potentially confronting, in Paul Keating's words, a more intense "bang‑you‑over‑the‑head" tax.
Critics recited the regressive, distributional effects of raising the GST to powerful political effect, but there was also some recognition that tax reform shouldn't be divorced from questions about how governments might use the revenue they collect. As the tax debate went on, there was growing unease that loosening constraints upon the power to tax would merely validate inefficient spending ventures of the past, and enable extra spending that's probably unjustified given today's budgetary circumstances.
-----
Health Insurance Issues.
- Feb 15 2016 at 12:00 AM
- Updated Feb 15 2016 at 12:00 AM
Nib puts the heat on surgeons by exposing varied surgery fees
by Tim Binsted
Surgeons should brace for increased scrutiny after nib said it would be the second player in the $21 billion private health insurance sector to expose the wide variation in price charged for surgeries, leading to shock extra costs for patients.
The listed health fund will pressure doctors to reduce excessive fees and help prevent shock out-of-pocket costs for its policyholders, by publishing a range of information on its website. Alongside the amount Medicare covers for surgeries, such as a knee replacement or removal of the prostate, nib will publish its standard "no gap" rate, as well as the rate the doctors lobby recommends its members charge for those procedures.
The move follows a similar initiative by Bupa, expected to start in late March, to expose fee-gouging surgeons.
-----
Medibank presses for healthcare reforms
- The Australian
- February 16, 2016 12:05PM
Sarah-Jane Tasker
Private health insurance giant Medibank has renewed calls for an end to private patients paying for services they are entitled to get for free in public hospitals.
Chief executive George Savvides made the call today as he reiterated his push for wider reforms he says can save the healthcare system up to $3 billion each year.
He said a key challenge for the government, which is conducting a list of reviews into the healthcare system, was to clearly define the role of private health insurance in the wider health system and urgently deliver the policy settings that support it.
-----
Medibank Private makes pitch for health fee hike
- The Australian
- February 17, 2016 12:00AM
Sean Parnell
Australia’s largest health fund, Medibank Private, has sought to highlight the rising cost of providing hospital cover to members as the federal government considers another round of premium increases.
Ahead of releasing its half-yearly results on Friday, Medibank has pointed to a 4.3 per cent increase in benefits paid out last financial year, when successful claims totalled $5.1 billion.
The rising cost of care has prompted Medibank to take a hardline approach to negotiations with private hospitals, however, its analysis suggests members are also utilising more services more often, a trend the government has also noted with regard to Medicare.
-----
Medibank Private profit soars
- By Lilly Vitorovich
- AAP
- February 19, 2016 1:58PM
Medibank Private has lifted first half profit 58.3 per cent to $227.6 million.
Medibank Private profit soars
Profit has soared at Australia's biggest private health insurer Medibank Private, thanks to premium rises and a crackdown on improper health insurance claims.
Medibank, which has around 3.9 million members, booked a 58 per jump in net profit to $227.6 million for the six months ended December 31, thanks to a government approved premium rate rise of 6.59 per cent.
The result was also boosted by a $23.2 million one-off tax benefit from the Australian Tax Office.
That compares with a net profit of $143.8 million in the same period a year earlier.
-----
Medibank’s George Savvides seeks savings in parting shot
- The Australian
- February 20, 2016 12:00AM
Sarah-Jane Tasker
Outgoing Medibank Private chief George Savvides has put medical procedures that have no clinical benefit firmly in his sights, after leading the debate on overhauling the Prostheses List.
Mr Savvides, who delivered a 58 per cent half-year profit jump to $227.6 million yesterday, is confident there are more levers to pull to address affordability concerns, which he says will lead to lower premium rises.
With six government reviews under way into the healthcare system, including one into the private health insurance sector, he said there was momentum to improve transparency and remove waste. “A constructive reform agenda can support improved quality and affordability and take pressure off future rate changes,” Mr Savvides said.
-----
Superannuation Issues.
Treasurer Scott Morrison turns to super as possible tax reform target
February 14, 2016 12:00am
Herald Sun
VOTERS would prefer the Federal Government to slash tax breaks on superannuation contributions for the rich over hiking the GST, a new Galaxy poll has found.
Treasurer Scott Morrison is examining the option after jettisoning the GST as his preferred tax reform plan.
One option is to end the 15 per cent “flat tax’’ on super contributions for all workers regardless of income that delivers bigger concessions to the rich.
The savings could be used to boost incentives for middle income earners to save for retirement or help fund modest income tax cuts.
-----
Make pensioners rely on home equity - Productivity Commission chief
Date February 17, 2016 - 6:53PM
Peter Martin
Economics Editor, The Age
Retirees with substantial wealth tied up in their homes might soon face face the prospect of losing their pension, the head of the Productivity Commission says.
Chairman Peter Harris will tell a breakfast in Perth on Thursday that Australia is ill-prepared for the coming flood of relatively healthy long-lived retirees.
"The original age pension recipients generally had spent near enough to 75 per cent of their life after the age of 15 in full-time work," he will say.
-----
Super tax changes will be 'targeted': Morrison
- AAP
- 18 Feb, 6:58 PM
Changes to superannuation tax incentives in the federal budget will be designed to make the system sustainable and fair, and one that offers certainty and choice, Treasurer Scott Morrison says.
Mr Morrison said the government was "close to a landing point" on proposed changes but maintained the purpose of concessions was to ensure people were more independent in their retirement.
"The primary purpose now, particularly when you're targeting tax incentives, is to target those who are mostly likely to be at risk at being more reliant on a pension payment in their retirement," he told a superannuation conference in Adelaide on Thursday.
-----
Budget 2016: Morrison confirms superannuation tax concessions among tax options
- The Australian
- February 19, 2016 11:06AM
Joe Kelly
Treasurer Scott Morrison has confirmed that overhauling superannuation tax concessions is one of a “plethora” of tax options being considered by the government.
As fellow cabinet minister Christopher Pyne talked up the prospect of a double-dissolution election, Mr Morrison told 3AW’s Neil Mitchell today there was no “silver bullet” to the economic repair task.
He said any changes to superannuation or negative gearing would be announced in the May budget or earlier, but warned the measures would not raise as much revenue as the $30 billion plus expected from an increase to the GST.
“The GST was swamped by the compensation bill and it wasn’t the right decision for the country,” he said.
-----
Government to target super tax in Budget
February 19, 2016 11:31am
The Daily Telegraph
Government to target super tax
TREASURER Scott Morrison has flagged possible changes to superannuation tax incentives ahead of the May budget.
Mr Morrison says the government wants to see more targeted incentives, insisting there’s a “strong case” for examining the size and structure of tax concessions.
“Tax incentives have got to target those people who are most likely to possibly end up on a pension or a part pension if they don’t get that tax incentive,” he told 3AW on Friday.
“We’re going to focus the tax incentives in this country on the people who need them.” Mr Morrison conceded savings from any changes to superannuation would not be as significant as the now-scrapped option to change the GST.
-----
What tax changes Treasurer Scott Morrison is likely to target
February 19, 20166:03pm
'Easy solutions are usually wrong': Morrison
SUPERANNUATION and some other tax changes are likely to be announced soon, a fact reinforced by Treasurer Scott Morrison during a brief visit to Adelaide on Thursday afternoon.
Mr Morrison did not reveal specific measures but said “current deliberations are drawing quickly to a conclusion”. Here’s the latest thinking from the financial community about what you can expect.
-----
Pharmacy.
The chemists denying you a $1 government discount on medicines
February 21, 20162:06am
EXCLUSIVE
YOU should be paying $1 less every time you get a prescription filled but Australia’s most powerful lobby group is opposed to chemists passing on the saving.
Seventy per cent of patients are missing out on the $1 prescription medicine discount that became available on January 1 because suburban pharmacies are refusing to pass it on to patients, the Health Department has revealed.
Their powerful lobby group, the Pharmacy Guild of Australia, is misleading patients into thinking they will be worse off if they pay less for scripts.
-----
Health is also clearly still under review as far as its budget is concerned with still a few reviews underway and some changes in key strategic directions. Lots to keep up with here with all the various pre-budget kites still being flown! Enjoy.
David.
