May 26 Edition
With the Budget on May 3 now fading in the memory we are now off and rolling in the election campaign. We are seeing a lot of promises with Health from Labor with Medicare well and truly in focus.
As we move further into the campaign I am sure it will become more interesting - with the polls as tight as they are at present.
I note concern on economic growth, the changes to superannuation as well as continuing cuts in other areas.
General Budget Impacts.
Hard-working Aussies help pay for company tax cut
Date May 16, 2016 - 7:07AM
Ross Gittins
The Sydney Morning Herald's Economics Editor
I often think Scott Morrison does a remarkably good Joe Hockey impression, but in this budget he's performed a Wayne Swan sleight-of-hand that's better than Swanny ever did.
Consider this. Big business has been desperate for a higher goods and services tax. Why? Because this was the only way the government could afford to grant them their longed for cut in company tax.
So when Malcolm Turnbull balked at increasing the GST, it seemed he wouldn't be cutting company tax either.
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The truth about Malcolm Turnbull's Google tax
Date May 18, 2016 - 12:00AM
Ross Gittins
The Sydney Morning Herald's Economics Editor
Australia is considering imposing a levy on big companies who funnel money into offshore bank accounts to avoid paying tax.
So, Malcolm Turnbull and Scott Morrison are introducing a "Google tax" to ensure multinational companies "pay their fair share of tax in Australia". Really? You could be forgiven for being sceptical.
Does the Coalition really want to crack down on their generous mates at the big end of town? And, even if they do, how do we know a Google tax will work?
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- May 20 2016 at 1:46 PM
- Updated 37 mins ago
Coalition, Labor told to cut budget spending harder by Treasury and Finance bosses
by Jacob Greber
Australians have a stark choice; cut spending or face the highest level of taxation in more than three decades, say Treasury and the Department of Finance.
In a blunt warning to all sides of politics, the heads of the government's top economic bureaucracies, have also thrown into doubt the Coalition's recent promises to deliver strong surpluses next decade without a sharp surge in taxation.
"The medium-term projections show that, without considerable effort to reduce spending growth, it will not be possible to run underlying cash surpluses, saying the order of 1 per cent of GDP, without tax receipts rising above 23.9 per cent of GDP," the departments said in the Pre-election Economic and Fiscal Outlook.
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Election 2016: Budget update says big spending cuts, or tax rises, needed to reach surplus
Date May 20, 2016 - 5:45PM
James Massola, Peter Martin
Treasury and finance have warned both sides of politics that big spending cuts, or higher taxes, will be essential if the budget is to be returned to surplus.
And in a blunt message to their political masters, departmental secretaries John Fraser and Jane Halton say it is "crucial for Australia to maintain its top credit rating".
The warnings are contained in the Pre-Election Economic and Fiscal Outlook, which is prepared by the two top financial authorities without input from ministers and released shortly after the start of the campaign.
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Budget balancing plan implausible: RBA’s Edwards
- James Glynn
- The Australian
- May 20, 2016 12:57PM
Plans to balance Australia’s federal budget by around 2021 are implausible, says Reserve Bank policymaker and economist John Edwards, adding that the nation risks losing its prized AAA credit-rating status.
Mr Edwards said the plan outlined by Treasurer Scott Morrison in the government’s 2016-17 budget to bring the budget back into balance by 2021 was too slow as it relies on rising income tax collections to be achieved.
“I don’t think we can disregard the possibility that the ratings agencies will lose patience with a fiscal trajectory which is simply not plausible, relying as it does on increased personal tax collections,” Mr Edwards, a Reserve Bank of Australia board member, said in an interview with The Wall Street Journal.
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Low pay growth, price rises and the new normal
Date May 21, 2016
Ross Gittins
The Sydney Morning Herald's Economics Editor
Are we waiting with ever-growing impatience for the economy to get back to normal, or has the economy shifted to a "new normal"?
I think that's the central question in macro-economics today – not just in Oz but throughout the developed world.
To put that question in econospeak, are the changes we see before us "cyclical" – just part of the normal ups and downs of the business cycle – or are they "structural", a lasting change in the way the economy works.
Trouble is, neither I nor anyone else can say with confidence what the answer is.
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Health Budget Issues.
http://www.abc.net.au/news/2016-05-15/ama-urges-government-rethink-on-medicare-rebate-freeze/7415860
AMA joins fight against Federal Government's Medicare rebate freeze
The Federal Government has rejected calls from the Australian Medical Association (AMA) to overturn its decision to extend the Medicare rebates freeze until 2020.
Key points:
- AMA says doctors will be forced to pass costs on to patients
- Josh Frydenberg said Government is doing the right thing by keeping the policy in place
- Other medical organisations threaten to join the AMA
Under the policy, which was introduced by the Abbott government in 2014, Medicare payments made to doctors would not increase with inflation.
The Royal Australian College of General Practitioners criticised the move on day one of the election campaign, calling on its 30,000 members to put up posters in waiting rooms and speak to patients about lobbying their MPs.
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Doctors warn patients will pay more for GPs
Updated: 11:45 am, Sunday, 15 May 2016
The Turnbull government's decision to extend the Medicare rebate freeze is akin to putting a sneaky new tax on health care, doctors say.
And it's estimated patients will pay an extra $10 per visit as GPs try to keep up with the rising costs of running a medical practice.
The Australian Medical Association is ramping up its fight against the Medicare rebate freeze as the federal election campaign kicks into its second week.
AMA president Brian Owler says the group has been flooded with feedback from concerned doctors after the May budget confirmed the hold on patient rebates would be extended to 2020.
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Election 2016: Rent control, but for pathologists, not for you
Date May 15, 2016 - 8:43PM
Peter Martin
Economics Editor, The Age
Comment
Why on earth is the Coalition controlling rents?
Not for renters of houses or apartments mind you, but for the two big corporations who control three quarters of Australia's pathology industry.
They extracted the concession minutes before the leaders debate on Friday in the same way as they extracted signatures from nearly 600,000 of their customers, many of whom were presented with scary scenarios and asked to sign a petition while giving blood and at their most vulnerable.
The cost of testing has plummeted in recent decades. Former health department head Stephen Duckett says the bulk of tests are no longer done by individuals with test tubes.
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Federal election 2016: doctors lobby on Medicare rebate
- The Australian
- May 16, 2016 12:00AM
Sean Parnell
The doctors lobby yesterday ramped up its campaign against the Coalition’s extended freeze of Medicare rebates, a day after pathologists agreed to end their bulk-billing campaign in exchange for regulated rents.
On Saturday, Pathology Australia withdrew its ‘Don’t Kill Bulk-Bill’ petition — which already had about 600,000 signatures — after Malcolm Turnbull announced a deal he said would allow them to keep bulk billing.
Under a $650 million budget cut announced six months ago, pathology and diagnostic imaging clinics were set to lose bulk-billing incentive payments from July. A re-elected Coalition government would hold off removing the incentives for the pathology sector for about three months while it legislated to stop clinics being overcharged rent.
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AMA leads groups flexing poll muscles
Doctors say patients will pay more, motoring groups want more money for roads and public transport while universities are asking all voters to care about higher education.
A string of interest groups are launching campaigns for the Federal election today with the Australian Medical Association’s hardline position the biggest worry for the Turnbull Government.
Posters declaring “Your Health Will Cost More” will appear in surgeries across the nation as the AMA fights for an end to the freeze on the Medicare patient rebate.
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Election 2016: UBS warning on Sussan Ley’s deal with pathology sector
- The Australian
- May 17, 2016 2:39PM
Sarah-Jane Tasker
Prime Minister Malcolm Turnbull and Health minister Sussan Ley have done a deal with the pathology sector.
The Turnbull government’s deal with the pathology sector to halt its push to slash bulk-billing incentives could drive down GPs’ income.
Prime Minister Malcolm Turnbull revealed on Friday night during the first live leaders’ debate of the election campaign that health minister Sussan Ley had done a deal with the pathology industry that would allow them to keep bulk billing.
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- May 18 2016 at 11:45 PM
- Updated May 18 2016 at 11:45 PM
Election 2016: Labor promises $2.4 billion to end "GP co-payment by stealth"
Labor will use money the Turnbull government has earmarked for business tax cuts to help fund a $2.4 billion promise to lift the freeze on payments to doctors to stop them passing on higher costs to patients.
In the first big salvo of the federal election campaign Opposition Leader Bill Shorten will announce on Thursday that the freeze on the Medicare Benefits Schedule, which has been successively applied by the Abbott and Turnbull governments, and is supposed to run until 2020, will be lifted on January 1, 2017, and the indexation of the payment restored.
The promise will cost $2.4 billion over four years and $12.2 billion over a decade. Mr Shorten said the policy would be paid for by not proceeding with all the government's promised tax cuts for business, scrapping the government's plans to introduce a $1000 welfare bonus for single income couples with a child aged under one, and placing an $8000 cap on vocational education loans.
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19 May 2016 - 3:35am
Health to take centre-stage in campaign
Opposition Leader Bill Shorten is set to announce Labor will put an end to the Medicare indexation freeze doctors warn will force patients to pay more.
Source:
AAP 19 May 2016 - 3:34 AM UPDATED 4 HOURS AGO
Health will take centre stage in the election campaign with Labor set to announce it will lift the Medicare indexation freeze.
Opposition Leader Bill Shorten and shadow health minister Catherine King will make the announcement on the NSW Central Coast on Thursday, committing to lifting the freeze from January 1.
It will apply to all services provided by GPs, allied health and medical specialists.
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Federal election 2016: aged care cuts ‘could hit investments’
- The Australian
- May 19, 2016 12:00AM
Sarah-Jane Tasker
The budget measures mean funding levels for services such as physiotherapy and pain management will be reduced.
Private aged-care providers have warned the $1.2 billion cut to the sector announced in the budget is fuelling uncertainty in the industry and could force a rethink on future investment plans.
The Aged Care Guild, the representative body for large private sector residential aged-care providers, has commissioned Deloitte Access Economics to review the impact of cuts, arguing that the budget measures were more severe than anticipated.
The budget measures mean funding levels for services such as physiotherapy and pain management will be reduced and the indexation increase in 2016-17 will be halved.
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- May 20 2016 at 12:00 AM
- Updated May 20 2016 at 12:00 AM
Labor's Medicare plan is for the Australian Medical Association
by Terry Barnes
In election campaigns, there are two types of opposition policies. The first are populist, "we feel your pain" policies, reflexively promising the opposite of the government. The other identifies real problems and sets out, with an eye to the politics, sensible but not always painless solutions to sustain and improve on what's there.
Unfortunately, Labor's "positive policy for a stronger Medicare" is the former. It is a plan that's good for doctors, not patients.
Labor's proposed $2.4 billion spend on ending the indexation freeze on Medicare rebates is nothing more than a cynical bribe to win the endorsement of the Australian Medical Association, and the Royal Australian College of GPs.
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Australia's spending on healthcare unsustainable, CSIRO futurist says
Date May 19, 2016 - 7:09PM
David Ellery
Reporter for The Canberra Times.
Healthcare spending will soak up all of Australia's tax take well before the end of the century if it continues to grow at its current rate, a leading futurist has said.
The CSIRO's senior principal scientist for strategy and foresight, Stefan Hajkowicz, told Thursday's National Medicines Symposium in Canberra healthcare had accounted for less than seven per cent of gross domestic product in the 1980s and early 1990s.
It is now running at more than nine per cent of GDP and rising every year.
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Federal election 2016: AMA welcomes Labor Medicare vow
- The Australian
- May 20, 2016 12:00AM
Sean Parnell
Bill Shorten’s long-awaited commitment to lift the freeze on Medicare rebates — set to cost the commonwealth an extra $12.2 billion over 10 years — has been welcomed by the medical profession, but questions remain over Labor’s ability to manage the health budget.
It is also unclear what impact the move would have on the Medical Research Future Fund, which the Coalition intended to build with $20bn saved through health cuts as part of innovation policies that Health Minister Sussan Ley will add to today.
The recent federal budget extended a freeze on Medicare rebate indexation, ensuring no increase in government funding for GPs and other medical practitioners for seven years, in an apparent effort to curtail bulk-billing and make patients more conscious of medical bills.
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http://www.australiandoctor.com.au/news/latest-news/general-practices-hit-for-$120-million-path-deal
Practices hit for $120m under Turnbull's 'backroom' pathology deal
General practices will lose $120 million a year under Malcolm Turnbull’s (pictured) ‘backroom deal’ to cap rents for co-located pathology collection centres, analysts warn.
The Prime Minister’s agreement with the pathology industry, hammered out last month, is aimed at ensuring pathology giants Primary Health Care and Sonic Health Care bulk-bill patients for pathology tests when the government pulls the plug on the bulk-billing incentives.
But general practice seems to be the sacrifice.
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10:59am May 21, 2016
GPs ramp up campaign against govt freeze
AAP
Every time Australians get a prescription from their doctor they'll be warned about a federal government plan to slug them more for health services.
The Australian Medical Association has given GPs a template that tells their patients "the government has cut Medicare and wants you to pay for it".
It urges patients to tell their local MPs and election candidates they are not happy and is part of a wider campaign against a freeze on Medicare rebates until 2020.
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Election 2016: Bill Shorten's $1b promise to keep medicine costs down
Date May 22, 2016 - 12:15AM
Adam Gartrell
National Political Correspondent
Labor is promising to keep the cost of prescription medicines down by officially ditching the Coalition's "medicine tax".
Opposition Leader Bill Shorten will seek to keep the election campaign focus on health policy on Sunday by pledging not to increase Pharmaceutical Benefits Scheme copayments beyond regular indexation.
The promise will cost the federal budget $971 million over the next four years and $3.6 billion over the decade, according to costings Labor has obtained from the independent Parliamentary Budget Office.
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Health Insurance Issues.
MOHF to tackle health funds nib, Bupa, Medibank
- The Australian
- May 18, 2016 12:00AM
Sarah-Jane Tasker
Australia’s not-for-profit health insurance funds are set to launch a national television campaign to tackle the “big three” companies they argue are fuelling affordability concerns while also enjoying rising profits.
Members Own Health Funds, which represents 15 not-for-profit and mutual private health insurance funds, has warned that Australia’s big for-profit funds must be called to account over their impact on affordability in the sector.
Troy Sheahan, chief executive of MOHF, highlighted that recently released data from the Australian Prudential Regulation Authority showed that the “big three” — Bupa, Medibank and nib — recorded a combined gross surplus of over $1 billion in 2015, up from $947 million in 2014.
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Value of hospital cover on the slide
- The Australian
- May 18, 2016 12:00AM
Sean Parnell
Health insurance has been dramatically devalued, with figures revealing that more than a third of hospital-cover policies are now laden with restrictions and exclusions, compared with only 5 per cent a decade ago.
The proportion of hospital policies requiring an excess or co-payment has also surged to 81.5 per cent in a decade, as members continue to downgrade their levels of cover to limit the cost and premiums rise by about 6 per cent a year.
Health insurers, the Private Health Insurance Ombudsman and consumer groups have called on the federal government to address underlying problems in the private sector to stop members being left with huge unforeseen medical bills or being forced to wait for treatment in the public sector.
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Superannuation Issues.
- May 15 2016 at 11:45 PM
- Updated May 15 2016 at 11:45 PM
Super backlash catches Coalition out
by Sally Patten
Before this year's budget there seemed to be widespread acceptance that Australia's superannuation system was generously disposed towards the nation's wealthiest savers.
The combination of being able to pump large amounts of post-tax earnings into super, pay little tax on so-called concessional contributions and receive a tax-free private pension meant that taxpayers were either supporting comfortable (potentially lavish) lifestyles of retired Australians, or helping them to pass on their wealth to future generations.
But that broad acceptance seems like a long time ago now.
All of a sudden Coalition MPs are apparently threatening to withhold donations, refuse to work on electorate campaigns or not vote for the government because of a series of proposed super changes announced in the budget.
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16 May 2016 - 12:02pm
Millions gain from super change: Morrison
Treasurer Scott Morrison says millions of low-income earners will be better off after the budget superannuation changes.
Source: AAP
16 May 2016 - 12:02 PM UPDATED YESTERDAY 12:02 PM
Treasurer Scott Morrison concedes some 600,000 rich people will be affected by the government's superannuation changes announced in the budget, but says 3.3 million low-income earners will be better off.
The proposed low income superannuation offset will ensure people earning less than $37,000 won't pay tax on their super accounts, while at the top end changes include paying tax on super balances above $1.6 million in retirement.
"There are swings and roundabouts on this," Mr Morrison told Sydney's 2GB radio on Monday.
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Superannuation tax changes erode trust in system
- Will Hamilton
- The Australian
- May 17, 2016 12:00AM
Since the budget was released on May 3, as a wealth manager I have not had one positive client discussion on superannuation as a result of the proposed changes.
Don’t get me wrong, there is still enormous value in superannuation given the tax rates that exist in a superannuation environment as opposed to outside.
Further, the proposed changes are focused on the long-term sustainability of superannuation.
Still, a key point is that while government figures are insisting the proposed changes are not “retrospective”, the way this has been explained is poor.
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Election 2016: Labor seizes on Peter Costello’s comments about Coalition’s superannuation policy
- The Australian
- May 18, 2016 10:04AM
Sam Buckingham-Jones
Former treasurer Peter Costello has questioned the Coalition’s claim that its $1.6m superannuation savings limit is enough to generate four times the age pension.
Labor has seized on comments by Howard government treasurer Peter Costello warning that the federal government’s proposed changes to superannuation transfers will not be as beneficial for retirees as promised.
Mr Costello told a lunch for Women in Banking and Finance yesterday that the changes, which would put a cap of $1.6 million on tax-free superannuation pension transfers, are not as generous as they appear.
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- May 18 2016 at 6:26 PM
- Updated May 18 2016 at 6:26 PM
Election 2016: Super doesn't add up for Peter Costello
The latest returns from super funds are further proof of how much financial reality has changed – but they also demonstrate how community and business expectations have failed to catch up.
For the business community, it translates into a stubborn view of what's acceptable as a return on investment. That's still relatively high compared to a global lowering of returns overall. It means a continued preference for sitting pat in terms of investment in expansion and instead relying on paying out generous dividends as the easiest short-term version of generating acceptable returns to shareholders.
For the community, that financial reality is reflected in the impact of a low interest rate, low wage growth environment on household incomes. That has all sorts of perverse effects as well as demands for ever more taxpayer assistance against a budget least able to afford it.
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Federal election 2016: ‘enter the new world of lower returns’
- The Australian
- May 19, 2016 12:00AM
Glenda Korporaal
Adam Creighton
Peter Costello’s warning about a new era of low super fund returns has sparked a fierce debate over assumptions behind the government’s budget superannuation changes.
“The 10-year bond rate is the lowest it has ever been and even 30-year bond rates are a bit over 3 per cent,’’ the former treasurer said yesterday. “It is a much lower-return world than most of us have lived through in our lives.”
Assistant Treasurer Kelly O’Dwyer said the government’s claim that a $1.6 million pension pot would support an income stream of about four times the age pension ($88,000 a year) was based on returns of 3 per cent above inflation, over 25 years.
“Over a lifetime it is assumed that retirees will draw down on the capital in their superannuation account — which is why there are minimum drawdown requirements,” Ms O’Dwyer said.
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- May 18 2016 at 1:53 PM
- Updated May 18 2016 at 2:34 PM
Election 2016: Roy Morgan tips budget crackdown to cost Liberals votes
by Sally Rose
Roy Morgan Research shows the government's crackdown on superannuation tax perks for the wealthy will hit its voter base.
Individuals with big retirement savings accounts are the target of the government's plans to raise revenue by restricting access to super tax concessions.
Controversially the government plans to introduce a $1.6 million cap on super savings that can be transferred to tax-free pension accounts.
New limits also include a $500,000 lifetime cap on after-tax contributions to super and a lowering of the annual cap on pre-tax contributions to $25,000.
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I look forward to comments on all this!
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David.
