June 09 Edition
With the Budget on May 3 now almost forgotten 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. Also the traditional divide in areas of concern are being emphasised
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 - and seemingly getting tighter, with some recent ones even suggesting Labor might win.
I also note concerns on economic growth, the changes to superannuation as well as continuing cuts in other areas. It will be a while yet before it is clear just what the final outcomes of policy in both parties will be.
In the middle of the election campaign it is inevitable there is more commentary on the issue.
Globally there seems to be increasing worry about the global economy.
Thursday, 2 Jun 2016 | 5:30 PM ETCNBC.com
Gross: Stellar returns of last 40 years won’t repeat - Janus portfolio manager Bill Gross discusses his investment playbook and outlook for the markets
In his June investment outlook released Thursday, the widely followed bond fund manager contended that bond and stock returns realized in the last 40 years are "a grey if not black swan event that cannot be repeated." Investors should not expect 7 percent returns on bonds or returns in the high single digits or double digits on stocks, Gross told CNBC on Thursday.
"The markets are entirely different and it would pay to travel to Mars as opposed to stay on Earth, because the returns here are very, very low," the manager of the Janus Capital Unconstrained Bond Fund, said on CNBC's "Power Lunch". -----
Not sounding all that good…..
General Budget Issues.
Date May 30, 2016 - 6:00PM
Chief Political Reporter
Treasurer Scott Morrison has moved to pre-empt concerns about a potential slow-down in economic growth figures that will be released in Wednesday's national accounts.
And he has lashed Opposition Leader Bill Shorten's class warfare attack on a tax cut for big banks and big business in the Sunday night's election debate, describing it as a "retro ideological frolic" and cynical politics designed to play to the Labor base. The Treasurer stressed he was not "commentating on the markets" but pointed out market expectations were that as the March 2015 growth figure of 0.9 per cent dropped out, it would be replaced by a figure of about 0.6 per cent growth for the March 2016 quarter and GDP growth of 2.7 per cent for the year to March, down from 3 per cent.
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- May 30 2016 at 11:45 PM
- Updated May 31 2016 at 7:45 AM
Treasurer Scott Morrison is ramping up attacks on Labor's opposition to corporate tax cuts in anticipation figures this week will show economic growth slowed last quarter.
Speaking after profits from mining to manufacturing and property services tanked by almost 5 per cent in the March quarter - escalating concerns about the sustainability of share investor dividend expectations - Mr Morrison indicated Wednesday' s national accounts were likely to underscore the economy's fragility. "This is a very sensitive time for the Australian economy," he said in an interview. "Wherever the figures land, the policy objective doesn't change - and that's about securing growth in this economy. You can't increase investment by taxing it more."
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- The Australian
- 12:00AM May 31, 2016
Treasurer Scott Morrison says he believed people were ‘very alive’ to the global challenges.
Scott Morrison has redoubled his argument for $48.2 billion in company tax cuts to ward off a business slowdown, as the government braces for weaker growth in tomorrow’s national accounts, intensifying the election fight with Labor over economic management.
The Treasurer expressed concern at a fall in company profits just as Labor stepped up its attack on the ambitious tax cuts for generating an economic gain that was too small and took too long to create more jobs. Labor Treasury spokesman Chris Bowen is blaming the Coalition for a 26 per cent fall in private investment since the last election and dismissing the company tax cut for adding “a tiny 0.1 per cent” to the nation’s economic output every year.
Mr Morrison took on critics of the tax cut by insisting the government would fight for “every inch of growth” and voters should not trust Labor or others who rejected a proven option to expand the economy. “I think we’re being very honest with people, I think we’re being incredibly honest,” he told The Australian. “We’re saying it’s a tough economy out there.”
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May 31, 2016 10:00pm
THE trade and current account deficit figures yesterday and the GDP ones today will combine to lay out with brutal clarity our post-China resources boom reality. The good, the bad and the ugly.
They will also serve to emphatically reinforce the two-tier message that Treasurer Scott Morrison has been trying to get across since budget night — an effort, which he has stepped up this week in anticipation of these critical figures.
The first and in a broad sense the overlaying element of the message is the absolutely fundamental need to encourage business — small, big and wicked multinational all — to invest and keep investing in Australia. Not just for one year or even one decade, but for decades.
Business — again, whether big or small, local or foreign — needs two things fundamentally, to embark on such long-term financial commitments. The first is a welcoming investment environment; the second is some confidence in sustained stability of both government policy and political governance.
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The federal government's 10-year plan to cut the company tax rate to 25 per cent will struggle to pass the Senate if the Coalition wins the election, with all those likely to hold the balance of power opposed to some or all of the package.
As the government used better-than-expected economic growth numbers to argue the tax cuts were needed to shore up an underlying weakness in the domestic economy, the Greens confirmed their opposition to the entirety of the tax cuts with the release of costings by the Parliamentary Budget Office which estimated the cost of the cuts over a decade would be $51 billion.
While just $3 billion different from the $48.2 billion Treasury estimated for the government, Greens treasury spokesman Adam Bandt, who commissioned the PBO modelling, called it "a death blow to the argument that company tax cuts are affordable".
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- The Australian
- 12:00AM June 4, 2016
“If something cannot go on forever, it will stop,” said Herbert Stein, economic adviser to presidents Nixon and Ford. Stein was mocking concerns about the “unsustainable” US current account and budget deficits in the late 1980s. He had a point, both grew much larger.
Calling things unsustainable is often a cover for expressing disapproval for other reasons. The federal budget has been in surplus in fewer than 20 of the 116 years since Federation, so deficits are clearly sustainable. What isn’t sustainable is a rising stock of public debt (and interest payments) as a share of national income.
Both main political parties are rightly and routinely admonished for doing little to stem the rising tide of federal and state government debt, which has tripled to about 34 per cent of GDP over the past 10 years. But the spectacular ascent of private debt, which has doubled to about 160 per cent of GDP over the past 20 years, hasn’t rated a mention by either side of politics in this election.
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Health Budget Issues.
Date May 29, 2016 - 2:41PM
Legal affairs, health and science reporter
The Australian Medical Association's new president has vowed to repair the group's relationship with government, which he says has been partly damaged by speaking out on asylum seekers.
Western Australian obstetrician and gynaecologist Dr Michael Gannon - who counts Coalition MPs among his friends - pledged to work "constructively" with whichever party formed government, shortly after he won the association's election at its national conference in Canberra on Sunday.
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May 29, 2016 12:54pm
IT’S precisely the medical relief the Prime Minister needed — the doctors’ lobby has elected a new president who says he wants to work more closely with the Federal Government.
As the Royal Australian College of General Practitioners today launches television ads against the six-year freeze on Medicare rebates, its sister organisation the Australian Medical Association has elected a new president who has boasted of his close relationship with Coalition ministers.
West Australian obstetrician Michael Gannon told News Corp Australia earlier this year he wants to the AMA to work more closely with the government and said he thought the previous AMA leadership was too lefty.
Dr Gannon is a personal friend of Assistant Minister for Health Ken Wyatt and says he knows Finance Minister Mathias Cormann socially and he wants the AMA needs to rebuild its relationship with the Coalition Government.
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Michael Gannon, who had previously said the AMA was becoming too left wing, says the six-year freeze is ‘unfair’ and ‘wrong’
The new AMA president, Dr Michael Gannon, says the freeze on indexation for Medicare rebates until 2019-20, announced in the budget, reflects ‘continued under-investment in general practice’. Photograph: Mick Tsikas/EPA
Sunday 29 May 2016 15.40 AEST Last modified on Sunday 29 May 2016 15.58 AEST
The new head of the Australian Medical Association has said fighting the Coalition’s “unfair” and “wrong” six-year Medicare freeze is his highest priority in his new post.
West Australian obstetrician Dr Michael Gannon, appointed to a two-year term as AMA president at the organisation’s national conference on Sunday, said general practitioners could not endure more restrictions imposed upon their working conditions.
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The Opposition Labor Party has promised to establish an Australian Healthcare Reform Commission to guide the continuous improvement of the nation’s healthcare system if elected at the 2 July Federal poll.
Opposition Spokesperson on Health, Catherine King announced the plan, saying a new Centre for Medicare and Healthcare System Innovation would also be established to develop, trial, evaluate and implement new payment and service delivery models to reduce health expenditure while improving the quality and safety of care.
“Much like the successful National Health and Hospitals Commission, the new Commission will have a key advisory role,” Ms King said.
“It will investigate, develop and evaluate proposed changes to Australia’s health system, and advise Governments — including State and Territory governments — on these changes.”
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- The Australian
- 12:00AM June 1, 2016
Growth in GP numbers of almost 50 per cent over the past decade — 2.5 times population growth — has undermined doctors’ ability to charge fees above the Medicare Benefits Schedule.
A growing glut of doctors has forced GPs to “chase patients” and pushed bulk-billing rates to record highs, leaving Medicare vulnerable to overuse that will add to its projected cost blowout of more than $35 billion within a decade.
Growth in GP numbers of almost 50 per cent over the past decade — 2.5 times population growth — has undermined doctors’ ability to charge fees above the Medicare Benefits Schedule, according to Australian Population Research Institute analysis.
The findings cast doubt on Labor’s and doctors’ claims that the Coalition’s plan to freeze the MBS for a further two years until 2020, to save $925 million, would hit bulk-billing rates. “There are so many GPs seeking patients that few could risk charging a co-payment because patients would go around the corner to a competitor who bulk bills,” said report author Bob Birrell. “Oversupply is the cause of escalation of GP costs that the Coalition is trying to curtail. But freezing the rebate is just a Band-Aid.”
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- The Australian
- 12:00AM June 3, 2016
Growth in “urgent” after-hours home doctor visits has prompted a leading provider to call for greater monitoring to prevent operators ripping off Medicare or allowing patients to abuse the system.
The number of services — funded through higher than normal Medicare rebates and usually bulk-billed — has doubled in just four years, from 733,685 in 2010-2011 to 1,475,547 last financial year, when it cost Medicare about $200 million.
Non-urgent after-hours visits increased in the same period, albeit only to 310,948, whereas standard-hours home visits declined, from 1,288,377 to 1,176,724, continuing a downward trend.
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Superannuation Issues.
- The Australian
- 12:00AM May 30, 2016
A clash over superannuation sharpened the election fight last night as Malcolm Turnbull promised voters there would be no further changes to the system after the controversial reforms in this month’s budget while Bill Shorten attacked the “poison” of retrospective tax laws.
Mr Turnbull used a televised debate with Mr Shorten to assure Australians that a Coalition government would not go beyond the super tax increases now before the public, while attempting to highlight sweeteners in the package that help women and those on low incomes.
In a debate that lacked fireworks and showed both men relying on prepared lines, the two leaders refused to accept that the other would have a mandate in power — highlighting the risk of a deadlock in the Senate under a Coalition or a Labor election victory. -----
- The Australian
- 12:00AM June 1, 2016
Watching Foreign Minister Julie Bishop’s grilling on Neil Mitchell’s program on radio 3AW yesterday on the Coalition’s proposed superannuation changes was painful.
It was patently clear that one of the government’s most senior and experienced members did not know what the transition to retirement scheme was and did not understand the impact of the proposed $1.6 million cap on
tax-free super.
Challenged on the fact that many more people would be affected by the sweeping super changes proposed on budget night than the 4 per cent the Treasurer declared, Bishop could only answer that this was the number given to her by the Treasury in a “briefing”.
Several weeks after the budget it is clear that senior members of the government either don’t know or don’t want to know the true impact of the changes on super.
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- The Australian
- 10:57AM June 1, 2016
One of the great dangers that governments in Australia face is that many in Treasury hate superannuation and don’t have a deep understanding of how it works in the lives of ordinary Australians.
Accordingly, the department led Treasurer Scott Morrison into claiming that only 4 per cent of Australians would be affected by the superannuation changes proposed in the budget.
The first person who can loosely be described as being ‘on the government’s side’ to raise the alarm was Tony Abbott’s former chief of staff Peta Credlin. She emphatically told Andrew Bolt that once the public understood the superannuation changes, the government would be forced to modify them as the election approached. -----
- The Australian
- 9:57AM June 1, 2016
Assistant Treasurer and Minister for Small Business Kelly O'Dwyer is delighted to explain the Coalition’s superannuation policy.
Assistant Treasurer Kelly O’Dwyer has declined to directly comment on Peta Credlin’s declaration that she has been “completely absent from the campaign” and has not articulated the government’s superannuation policy sufficiently.
Ms O’Dwyer said she was not going to “commentate on a commentator”, but that she was delighted to be on ABC RN Breakfast radio earlier this morning.
“This is the first invitation I’ve received to be on your show to talk about superannuation, and I’ve actually been spending a lot of time travelling around the country talking to people about our small business tax cuts and superannuation policy,” Ms O’Dwyer told host Fran Kelly.
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Malcolm Turnbull won't be happy his enthusiasm about an economy in transition is being overwhelmed by arguments about "transition to retirement" and the government's other changes to superannuation.
So instead of being able to celebrate better than expected growth figures as confirming its "economic plan", Coalition messaging keeps being diverted by the antagonism, mainly from its own supporters, to its plan for super.
That leaves the Treasurer and the Prime Minister belatedly trying to refine their big super sell to emphasise such changes will help pay for those who will supposedly benefit from making the system "fairer".
According to the government's list, that includes women with more flexible arrangements, lower income earners who get a tax credit and people over 65 who can now keep contributing.
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Superannuation experts warn a planned crackdown on transition-to-retirement pensions will hurt middle-income savers and burden the industry.
Transition-to-retirement pensions are in the spotlight after Foreign Minister Julie Bishop was unable to explain incoming changes to the scheme during a radio interview with 3AW's Neil Mitchell his week.
The scheme was designed to allow individuals aged 56-65 to wind back their work hours while maintaining their income levels. Under the current system transition-to-retirement pensions are tax free, but the government has said it will levy a 15 per cent tax on the earnings from July 1, 2017.
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June 2, 20168:28am
AAP
Seniors are confused - and some are outraged - at the federal government's superannuation changes.
The issue has been put in the spotlight with some coalition MPs admitting they are receiving concerns from voters and will be seeking further consultation on the budget measures should they win the July 2 election.
"We accept that there is a need for some reform ... but I don't think it has been well sold and that's really fed into this whole area of people now resisting, I suspect, the importance of reform," National Seniors Australia chief executive Michael O'Neill told ABC radio.
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- The Australian
- 9:38AM June 2, 2016
From what I am hearing, the protests from Coalition members over changes to superannuation are far more vicious and widespread than what is being described in the media.
And so they should be.
The Coalition is still telling half-truths and untruths about some of the changes it proposes to make to super.
Indeed, almost every time a minister speaks on the subject the government digs a deeper superannuation hole.
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Catherine Chivers looks at the key changes and potential Budget 2016 impacts on superannuation and taxation of small businesses.
On Tuesday 3 May 2016, Treasurer Morrison handed down his inaugural Federal Budget plan which was focussed on "growing jobs and supporting small business sustainably".
From a financial planning perspective, key measures involve changes to superannuation and taxation of small businesses. As expected, there will be a mixed series of impacts for clients, especially within the superannuation space.
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I look forward to comments on all this!
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David.
