April 7 Edition
The macroeconomic stresses seem to have eased a little more with markets rising around the world. Indeed the major stock market indices in the US are flat to up for the calendar year. However we are not really out of the wood just yet.
posted on 02 April 2016
From the Dallas Fed
This post authored by Arthur Hinojosa
The global outlook has rebounded from a low point in January but remains weak due to volatile financial markets and low commodity prices. In a speech to the National Association for Business Economics, International Monetary Fund (IMF) First Deputy Director David Lipsky said, "The IMF's latest reading of the global economy shows once again a weakening baseline ... . Moreover, risks have increased further, with volatile financial markets and low commodity prices creating fresh concerns about the health of the global economy."
-----
In Australia, things are also looking up for the present, although the recent long weekend has slowed improvement down.
With Budget Night now May 3 we won’t have long to wait to see what is happening. COAG seems to have been a fiasco. Tax cuts of some sort and superannuation changes seem to be the favoured outcomes.
Here is a summary of interesting things up until the end of last week:
-----
General Budget Issues.
Shane Wright - The West Australian on March 28, 2016, 12:50 am
A surge in the number of Australians earning at least a million dollars a year and paying record tax is underpinning the revenue system as more people on low wages find themselves paying almost nothing.
A breakdown of Australian Tax Office figures highlights the growing gap between those with ultra-high incomes and those on the tax-free threshold.
After falling in response to the global financial crisis, the number of people who earned more than $1 million while paying tax climbed to a record 11,082 in the 2013-14 financial year. It was an increase of more than 31 per cent over the past two years.
-----
Date March 28, 2016 - 11:45PM
Chief political correspondent
Cutting the company tax rate will neither create the jobs nor produce the economic growth that the government and the business lobby claim it would, according to a historical examination of Australia's business tax reductions and that of comparable OECD economies.
An analysis by the progressively inclined think-tank, The Australia Institute, has looked at the data and found the drop from a company tax rate that was nearly 50¢ in the dollar when it began falling in 1988 toward its current 30¢ rate in the early 2000s failed to produce the much vaunted "growth dividend" that proponents assert is the automatic result of such a move.
And the experience of other countries tends to support the finding, showing that GDP growth rates in low company tax jurisdictions are no different from higher ones.
-----
Date March 29, 2016 - 11:07AM
Marc Moncrief
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.
April 1 is the day those of us who buy private health insurance are hit with our annual premium increase, but what may seem like a cruel Fools' Day joke is one of the main things that make our healthcare system work.
This year's premium increase will vary from between nearly 9 per cent and just under 4 per cent, depending on the carrier, but it will average out at 5.59 per cent. That's a four-year low, but it is receiving extra attention because:
-----
- The Australian
- March 29, 2016 11:01AM
“We will be presenting to the Premiers and the Chief Ministers a proposal that’s obviously under discussion at the moment,” Malcolm Turnbull told reporters at Sydney’s Holsworthy army barracks.
Malcolm Turnbull has indicated his government will ditch Tony Abbott’s cuts to state hospital funding, but declined to comment on reports the move will put a $5 billion hole in the budget.
-----
Date March 30, 2016 - 12:51AM
Peter Martin, Jessica Irvine
A high-powered independent commission has backed Labor's approach to capital gains tax and negative gearing, undercutting Prime Minister Malcolm Turnbull and Treasurer Scott Morrison who say it will "smash" housing prices.
The Balanced Budget Commission, established by the Committee for the Economic Development of Australia, includes two former heads of the Department of Prime Minister and Cabinet and one former Cabinet Secretary. Between them, Paul McClintock, Terry Moran and Ian Watt have served prime ministers Howard, Gillard, Abbott and Turnbull. "No economic problem which is in our power to resolve is graver or more urgent in Australia than the persistence of large budget deficits," the Commission chair Mr McClintock said, launching the report at the National Press Club on Tuesday.
-----
Date March 30, 2016 - 10:41AM
States and territories would collect their own income tax for the first time since World War II under a radical proposal to be considered at a meeting of state and federal leaders this week.
Declaring himself a "pragmatist" on the issue of fixing the vertical fiscal imbalance between the Commonwealth and the states, Scott Morrison left the door open to becoming the first Australian treasurer in 75 years to allow states to control a portion of income tax.
If agreed, the proposal would adopt an idea put forward in the 2014 National Commission of Audit that was dismissed by former prime minister Tony Abbott.
-----
Updated: 12:41 pm, Wednesday, 30 March 2016
Treasurer Scott Morrison has dismissed research from a think tank that would bring the budget back to surplus within two years.
The Committee for Economic Development of Australia report released on Tuesday recommends several options to raise revenue by $15 billion and cut expenditure by $2 billion that would return the budget to balance in 2018/19.
That would be two years earlier than what Mr Morrison predicted in his mid-year budget released in December.
But the treasurer said you don't tax your way back to a surplus.
-----
The federal budget could be returned to a surplus as soon as 2018, according to five plans released by the Committee for Economic Development of Australia (CEDA).
The plans, which anticipate that Australia’s eight-year-long deficit will continue for another four years if things don’t change, call for varying combinations of tax reform and reduced spending.
CEDA chairman Paul McClintock said that “Australia’s deficit problem is particularly alarming” due to the country’s current period of sustained economic expansion lasting a quarter of a century.
-----
Date March 30, 2016 - 8:40PM
Economics Editor, The Age
State governments will need to fill a hospital funding gap if the Prime Minister's tax plan is implemented. Fairfax's Peter Martin gives his analysis.
Suddenly the election is about something else: how our states have had it too good for too long. And about how we've had it even better.
In every previous election we've been able to vote for better hospitals, schools and roads at the state level (which of course we want) and for lower taxes or lower budget deficits at the Commonwealth level (which of course we also want).
-----
Date April 2, 2016 - 12:15AM
Senior Writer
Individual tax cuts scrapped
Treasurer Scott Morrison indicates that individual tax cuts - which he has previously flagged - will not be possible until the budget is in better shape.
There has been no official recession in Australia for a quarter of a century, but the federal budget has been in deficit for eight years in a row.
Does that bother you? It should.
Simply passing on the tab to future generations because the current generation of taxpayers is unwilling to pay enough taxes to fund the public services they currently enjoy is deeply unfair.
-----
Date April 1, 2016 - 8:03PM
The Prime Minister's 'full-blooded' income-tax sharing proposal to fund hospitals has been rejected by state and territory leaders, but short-term funding has been secured.
State and territory leaders have flatly rejected Malcolm Turnbull's radical plan to have them assume a portion of income taxing powers, unceremoniously consigning the idea to the political dustbin.
And they notched up another win also on short-term health and hospital funding signing a heads of agreement document with the Commonwealth for an extra $2.9 billion from July 2017, to 30 June 2020, along with a lift in the 6 per cent cap in the growth of Commonwealth funding to 6.5 per cent.
-----
Date April 2, 2016 - 5:55PM
Urban Affairs Reporter
The Prime Minister says the states cannot any longer credibly ask the federal government to raise taxes for them if they are not prepared to raise taxes themselves.
The Prime Minister has hit back at the rejection of his income tax plan, painting its defeat as a "moment of clarity" that revealed the states lacked the stomach for reform and must live within their means.
Malcolm Turnbull on Saturday brushed off suggestions that the failure of what he hailed as only days ago as "the most fundamental reform to the federation in generations" marked a major humiliation for his government.
-----
Health Budget Issues.
Date March 27, 2016 - 4:47PM
Communications and Education Correspondent
The doctors' peak body has hailed the prospect of a $7 billion emergency hospitals funding deal between Canberra and the states as a welcome break from the policies of the previous Abbott government.
Prime Minister Malcolm Turnbull will meet premiers and chief ministers on Friday for a much-anticipated Council of Australian Governments (COAG) meeting, with health and education funding at the top of the agenda.
-----
Labor MPs have warned that Sunbury and Macedon Ranges residents being treated for serious illnesses, including cancer, could face large bills for MRIs, X-rays and mammograms under changes to the Medicare benefits schedule (MBS).
McEwen MP Rob Mitchell and Opposition health spokeswoman Catherine King discussed federal cuts during a visit to Sunbury’s new Lake Imaging clinic last week.
The two Labor MPs said many clinics would be forced to charge patients for scans and tests that were previously bulk-billed.
Figures released by the Australian Diagnostic Imaging Association show upfront fees could range from $93 for an X-ray to $396 for a CAT scan, and up to $1000 for a positron emission tomograph (PET) scan.
-----
- Mar 28 2016 at 11:45 PM
- Updated Mar 28 2016 at 11:45 PM
Private health insurance will cost even more and the public health system will be pushed past breaking point unless some of the $57 billion in cuts to public hospitals inflicted on the states in the 2014 federal budget are reversed, South Australia has warned.
With federal and state leaders and Treasurers to meet on Thursday night and Friday this week in what could be the last such gathering before a federal election, the SA government will release on Tuesday a study by EY modelling the impact of the cuts if they go ahead over the next decade without redress.
Prime Minister Malcolm Turnbull, who spent Monday at home in Sydney discussing the health funding issue and other budget matters with Treasurer Scott Morrisons, has been willing to negotiate extra money for hospitals if only to neutralise it as an election issue.
-----
Date March 29, 2016 - 4:45PM
Bad brushing habits, more access to sugary snacks and bottled water has caused a gradual rise in the number of children's teeth affected by decay.
A federal government program that has provided free dental care to one million children and which Health Minister Ley indicated could be dramatically overhauled, has been judged a success in a review by Ms Ley's own department.
Headed by the country's top medical officer, the review team's report said it was "pleased" that the two-year old scheme, the Child Dental Benefits Schedule, had provided free dental care to children "at an age when preventive measures can be most effective."
-----
- Business Spectator
- March 30, 2016 12:00AM
Malcolm Turnbull is proposing only a short-term fix to the states’ hospital funding crisis with a four-year deal to 2020.
States are divided on a radical tax plan to levy their own income taxes to secure hospital funding as premiers warn they want the federal government to foot the bill for their long-term health needs.
Malcolm Turnbull is proposing only a short-term fix to the states’ hospital funding crisis with a four-year deal to 2020, but has suggested states would be allowed to levy their own income tax surcharge beyond that to cover health and education costs.
-----
Date March 30, 2016 - 12:15AM
EDITORIAL
The archive of statements issued after meetings of the Council of Australian Governments (COAG) reads like an endless trail of disappointments. Many worthy and urgent issues are discussed at these regular meetings of state and federal leaders, topics are duly noted and scheduled to be raised again, but too often the most earnest of plans are deferred to the never-never.
Another COAG meeting looms for later this week. The context and timing of this one is important. Budget preparations are under way and, depending on how the Senate votes on bills designed to reinstate a watchdog for the construction sector, a double-dissolution election might be held in little more than three months.
This COAG meeting is especially important, though, for the health sector. Two years ago, in its poorly conceived, slash-and-burn budget, the Abbott government removed funding guarantees for hospitals and changed the indexation on funding increases for hospitals.
-----
- The Australian
- March 30, 2016 12:00AM
Senior health adviser John Maddison says health costs are growing faster than income in South Australia and the state’s 30-year-old health infrastructure needs to be more efficient.
The divisional medical director, a member of a ministerial advisory group for the state Labor government’s controversial health reform plan, Transforming Health, knows first-hand the scope of the problem facing state-based health networks across the country.
“What we’re trying to do is to ensure that people get the same good health outcomes no matter where they end up in the health system and there’s clear evidence that that’s not the case now in hospitals around Adelaide,” Dr Maddison said yesterday.
-----
KIM LANDERS: A Federal Government plan to provide better care for people with chronic illnesses is being cautiously welcomed by consumer health groups.
The $20 million trial of what will be called "Health Care Homes" will help GPs tailor care for their patients.
Political reporter Tom Iggulden has more from Canberra.
-----
March 31, 20167:10am
The Federal Government today is promising to revolutionise care offered to the more than four million Australians with multiple chronic diseases.It is billing the package as one of the biggest reforms in Medicare’s 30-year history with the aim of keeping sufferers out of hospital and leading happier, healthier lives.
It could also ease the pressure on the public hospital system. Half of all potentially avoidable hospital admissions in 2013-14 were to treat chronic conditions. That is one every two to three minutes.
-----
Federal government’s ‘healthcare homes’ scheme gets a tick for better coordinated handling of the chronically ill but a fail on funding details
The federal health minister, Sussan Ley, announced the government’s plans for ‘healthcare homes’ on Thursday. Photograph: Mick Tsikas/AAP
Thursday 31 March 2016 17.02 AEDT Last modified on Thursday 31 March 2016 18.00 AEDT
Medical experts have welcomed federal government plans to trial better coordinated healthcare for people suffering multiple chronic illnesses, but have questioned funding levels and when the program will be rolled out nationally.
On Thursday the health minister, Sussan Ley, announced a plan for “healthcare homes” – primary healthcare centres or GPs – to coordinate tailored care packages for patients with multiple chronic conditions. The cost of health services would be bundled into regular quarterly payments rather than patients paying on each visit. The plan also proposes more data collection and use of digital health records to measure patients’ progress and share information between doctors.
-----
Opinion
Before Malcolm Turnbull and the states start haggling over hospital funding, it's worth looking at why the system costs so much to run. Maybe it's not just cash, but waste and inefficiencies that need addressing, writes Mike Steketee.
It is the question worth asking before Malcolm Turnbull and the premiers start haggling at today's COAG meeting over how best to pour more money into hospitals. Yes we are an ageing population and the health system is devising ever more clever ways to treat us.
-----
Health Insurance Issues.
March 28, 20168:00am
Sue Dunlevy News Corp Australia Network
EXCLUSIVE
A PREMIUM rise three times the inflation rate has unleashed consumer rage on health funds with more than half a million people planning to quit their cover.
Premiums will rise by around $200 a year for a family and around $100 a year for singles on April 1. And almost half of all health fund members plan to shop around to find a better deal a Galaxy poll commissioned by health fund iSelect has found.
More than 530,000 Australians told the survey they planned to ditch their insurance altogether, a move that could increase pressure on public hospitals.
-----
A premium rise, signed off by Health Minister Sussan Ley, of three times the inflation rate will likely result in around 500,000 Australians giving up their private health insurance.
A Galaxy poll commissioned by iSelect has found that more than 530,000 Australians are planning to ditch their health cover, which could put a huge increase of pressure onto public hospitals.
On April 1, premiums will rise by around $100 for singles and $200 a year for families, pushing members to either shop around or drop their cover entirely.
-----
- Up to 530,000 Australians expected to ditch private health insurance
- Premiums are increasing an average $200 for families from next month
- 71 per cent of those covered will 'take action' when prices go up on 1 April
- Almost 500,000 people dropped or changed cover last year
- Analysts say many people are 'confused' by law around waiting periods
- The Private Health Insurance industry is worth more than $20 billion
Published: 14:30 EST, 28 March 2016 | Updated: 14:47 EST, 28 March 2016
-----
Drummond was well versed in dealing with regulators while head of finance and strategy at NAB. His day-to-day job involved regular contact with the Australian Prudential Regulation Authority, the prudential supervisor for Australian banks.
Also, he was very familiar with the Financial Conduct Authority in the UK thanks to his handling of the sale of NAB's UK operation, Clydesdale. That sale was only allowed to go ahead after NAB agreed to put aside £986 million ($1.86 billion) in provisions to cover the potential cost of Clydesdale's mis-selling of payment protection insurance, fixed rate tailored business loans and interest rate hedging facilities.
-----
- The Australian
- March 30, 2016 12:00AM
The headline figures say health insurance premiums will rise 5.59 per cent from Friday. But thousands of Australians have already been told their premiums are rising by twice that and more.
The average figure is only that: a guide to across-the-board increases, leaving funds on the defensive as they are questioned by customers whose policies now cost more than $5000 a year.
Average premium rises are nearly three times higher than wages growth of just 2 per cent in 2015, leaving some, including incoming Medibank Private chief executive Craig Drummond, to describe runaway healthcare costs as not “fully sustainable’’.
-----
- The Australian
- March 30, 2016 12:00AM
Not-for-profit health insurers are increasing market share with customers turning away from big companies as annual premiums rise.
Members Own Health Funds, which represents 15 not-for-profit and mutual private health insurance funds, attracted 34.7 per cent of net industry growth in 2015, against a market share of 20.7 per cent.
The industry body said independent research conducted last month also showed that while overall industry growth in the private health insurance market slowed by 12.9 per cent from 2014 to 2015, MOHF’s growth increased by 24.9 per cent.
-----
- The Australian
- March 31, 2016 12:00AM
Private health insurers have warned that the federal government’s funding battle with the states must address the increasing cost shift from public hospitals to the private sector, arguing it could reduce premiums.
The health insurance industry highlighted that there had been a substantial rise in benefits paid to public hospitals to cover private patients, with the figure hitting more than $1 billion in the past year.
In the 2014-2015 financial year, on top of that figure, private patients also brought into the public system an estimated $173.7 million in prostheses payments and $467m in medical fees.
-----
2 Apr 2016 - 4:40pm
There's growing anger and confusion over whether Australia's private health insurance industry is providing their customers value for money.
2 Apr 2016 - 4:40 PM
Around the country, Australians are getting unwelcome news in the mail. From April 1, health insurance premiums have gone up by about $200 a year for a family and around $100 a year for singles.
The average annual cost to a family is about $4,000. The average premium is going up 5.6 per cent, or $200.
-----
Pharmacy Issues.
Profession waits for more information on professional service future
Community pharmacists are waiting for further news on the timeline for the first tranche of 6CPA professional service trial programs.
Federal Minister for Health Sussan Ley announced at APP 2016 earlier this month the first three trials to be funded out of the $50 6CPA Pharmacy Trial Program.
However there is not, as yet, a timeline for the trials launch, duration, assessment or implementation.
The first three trials are:
- Improved medication management for Aboriginal and Torres Strait Islanders through pharmacist advice and culturally appropriate services;
- Pharmacy based screening and referral for diabetes; and
- Improved continuity in the management of patients’ medications when they are discharged from hospital.
-----
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 - although narrowing it seems to be largely focussed on Super! Enjoy. Only a month to the Budget.
David.
