June 18 Edition
Budget Night was May 12, 2015.
The selling phase is over and now we are to see the passage through Parliament this week and next.
I suspect the remarks from Mr Hockey re housing costs may still be reverberating!
As ever it is hard to know just what will be the big news in these last two weeks.
Here is some of the recent news and analysis.
General Budget Issues.
The Budget Office revealed Australia would be $42.5 billion better off by scrapping negative gearing
Olivia ChangJun 7, 2015, 10:32 AM
A push to abolish negative gearing could put a temporary lid on Sydney and Melbourne’s surging property market — and bolster the pockets of the federal government.
Figures released by the Parliamentary Budget Office revealed government revenue would increase by $3 billion over the next four years — that’s $42.5 billion over the next 10 years — by curtailing negative gearing.
The tax break — allowing investors to claim expenses for rental properties to reduce their overall taxable income — is utilised by 1.3 million Australian landlords who claimed $13.8 billion in tax losses in 2012 to offset other income, according to ATO data.
Despite this, only a small sector of wealthy Australians in the top income brackets have been able to reap the benefits of negative gearing flow. Research by the Australia Institute think tank revealed one third of the rebates from negative gearing went to the richest 10% of households with more than half going to the wealthiest 20%.
11:00pm, Jun 7, 2015
The Coalition has dropped the debt and deficit scaremongering, but it’s still borrowing like crazy. Here’s how it works.
‘Debt and deficit’ is the bogeyman that helped the Coalition crush Labor in the 2013 election, but since the May budget it has rarely been invoked.
That’s not because there has been any change to the status quo. The government is still borrowing hundreds of millions of dollars every week.
Rather, it’s because, first, the government has failed to devise a compelling strategy to fix the deficit; and second, Treasurer Joe Hockey has realised that by talking down the economy, he is spooking businesses and consumers.
9 Jun 2015 - 4:43pm
By The Backburner
9 Jun 2015 - 4:43 PM
After a controversial Federal Budget and continued inflated housing prices, exasperated Treasurer Joe Hockey has advised Australian taxpayers to just “have more money” and consider simply “being rich” in the face of new government rebates for business and continued cuts.
“Honestly, it’s not that huge of a deal,” said Hockey after prolonged criticism of Australian housing prices, the Budget and the Government’s general direction. “There wouldn’t be that much of an issue if everyone just had a little bit more cash floating around. We’d be totally fine if that were the case.”
Despite renewed opposition to negative gearing and increased cost of living, there has been little attempt to resolve this from the Government. Speaking from Canberra, Hockey spoke plainly on the issues facing young Australian. “I understand the struggles facing young people today, but most of them could be alleviated if they simply had more money, or considered making more money in the very near future.”
Date June 10, 2015 - 2:34AM
Economics Editor, The Age
Would-be owner-occupiers have become a minority in a housing market they once dominated.
The latest figures released on Tuesday show would-be owner-occupiers accounted for just 48.4 per cent of the money borrowed for home loans in April - the lowest proportion on record.
Investors accounted for the other 51.6 per cent.
The figures were released as the Treasurer Joe Hockey told a Sydney media conference that housing was still affordable, saying if it wasn't, "no one would be buying it".
The figures suggest that housing is becoming increasingly unaffordable for would-be residents who find themselves outbid by investors armed with the tax advantages associated with negative gearing.
Date June 12, 2015 - 12:15AM
The Abbott government doesn't want you to think critically about the budget.
If it did, it would have welcomed the modelling from the National Centre for Social and Economic Modelling (NATSEM) a couple of weeks ago.
The budget may seem like old news now, but it shouldn't.
It's going to lead to serious losses of disposable income for low and middle income families, with a single-parent family with two children (with an annual income of $55,000) set to lose a huge $20,648 by the end of 2018/19.
That's what NATSEM found.
Date June 13, 2015 - 12:15AM
In January 2014, as he got down to the hard work of preparing his first budget, Joe Hockey told a colleague the year ahead would see the sun set on his "Sunrise Joe" persona.
The new Treasurer grasped, acutely, the size of the task ahead.
When Joe is on he is fantastic but when he is not, he is dreadful
Federal coalition MP
Eighteen months later, Hockey's colleagues are talking about another gaffe this week from an accident prone Treasurer.
Date June 13, 2015 - 9:20AM
A Federal Court judge has slammed the Abbott government for ruling out changes to negative gearing, superannuation concessions and GST as part of its tax review, saying the entire debate is politically infected and "handcuffed" from being able to achieve any useful reform.
Justice Richard Edmonds, who was appointed to the Federal Court under the Howard government in May 2005 and has previously been critical of the lack of political will by leaders to carry out tax reform, said the Abbott government's review will turn out to be just as useless as the former Labor government's attempts back in 2009.
Former treasury secretary Ken Henry carried out a review back then, which was released in 2010 by the then treasurer Wayne Swan, but Mr Henry and his panel were restricted from including GST in the debate.
Health Budget Issues.
Date June 8, 2015 - 4:43PM
As a doctor, my work is defined by examining the evidence and recommending the solution. This applies whether I'm treating patients as a gastroenterologist or advocating for change as the president of the Royal Australasian College of Physicians.
The evidence from Australia's immigration detention centres is in. They seriously and irrefutably harm the health of children and adults who have sought our protection.
As a doctor, I cannot think of any other scenario in which my ability to speak freely about serious harms being inflicted on my patients would be restricted.
Date June 10, 2015 - 11:41PM
Secret trade negotiations, new details of which have been released by WikiLeaks, will undermine Australia's Pharmaceutical Benefits Scheme, and push up the cost of medicines for the Australian public.
In the latest of a series of high profile leaks, WikiLeaks has published more draft treaty text from the controversial Trans Pacific Partnership (TPP) negotiations which the Abbott government claims will boost trade and investment across 40 per cent of the world economy.
Trade and healthcare experts are deeply concerned that the TPP agreement has the potential to undermine Australia's Pharmaceutical Benefits Scheme (PBS) and other similar health programs such as that administered by New Zealand's Pharmaceutical Management Agency.
Medical Research Fund
Andrew Tillett, Canberra
June 8, 2015, 12:35 am
The fate of the Abbott Government’s $20 billion Medical Research Future Fund hangs in the balance, with growing concerns the process to divvy up funding could become politicised.
Palmer United Party’s WA senator Dio Wang has joined Labor and the Greens in raising questions over the governance arrangements for the fund.
The Government plans to pour savings from the health system into the fund, with it expected to swell to $20 billion by mid-2020.
The fund is meant to start operations on August 1, with an initial $10 million to be distributed to researchers in 2015-16.
Pharmacy Guild members will have their 2015-16 Membership renewal rates reduced by 25% as a thank you to all Members for their support during the negotiation of the 6CPA, the Guild has announced in Forefront.
Both the proprietor and the premises components of the Guild annual subscription will be reduced by 25% in the Unity Rebate and this will be reflected in the Guild’s annual membership subscriptions, which are currently being mailed out to members.
Pharmacy Guild National President George Tambassis says the Guild wanted to provide the Unity Rebate due to the massive support from its members on the ground.
“After the huge grass-roots effort visiting, calling and writing to local politicians, the Guild has decided to acknowledge the critical role played by our members which has been absolutely instrumental in the 6CPA outcome,” he says.
It is going to be very interesting to see what happens to the polls and consumer confidence over the next 2-3 months - especially if we see the Senate knocking more savings back as is seeming likely! Already there was a small drop in confidence last week and no improvement this week. The monthly measurement - post budget - was not good at all!