Volatile stock markets are again threatening superannuation payouts.

Jeff Bresnahan, the Managing Director of SuperRatings, says:”…Australia’s super funds have been well and truly caught up in the May correction across world markets.”

He said the estimated loss – “as of yesterday” would be some 4.1 per cent.

Mr Bresnahan said, though, that this had followed “a solid gain” of 13.9 per cent over the previous 12 months.

He noted,  too, that Australian mining stocks had suffered a 2 per cent fall, immediately after the Federal government announced its new super profits tax, on the nation’s resource industries.

Thousands of Australians, who retired after the share market crash of late 2008, were shocked at the hit it inflicted on their payouts.

However, there have been significant gains since then.

Mr Bresnahan noted that.

“The solid long term results continue to reinforce the success of a diversified portfolio across various economic cycles,”
he said.

However Mr Bresnahan added a warning.

“…but the increased volatility within these portfolios is an interesting addition to the debate,” he said.

Mr Bresnahan said that complocatef the strategies that should be followed, in the new investment scene.

You will get a tax cut tomorrow night’s Federal budget – but it will be small.

Indeed, the Federal Treasurer,Wayne Swan, who made the promise, said the cut would be “modest,” for Australians on average weekly earnings.

These cuts have been scheduled for some time.  The first tranche was paid in the Rudd government’s first budget and the second last year.

Mr Swan recalled all this, in a pre-budget television interview yesterday.

“…of course, as you know, we  are delivering the third tranche of our tax cuts,” the Treasurer said.

Mr SWan also said, though, that the most important thing Australians would see, in this year’s budget, would be the funding of overdue improvements to Australia’s health system.

“This is a very significant reform in the budget,” he said.

Tomorrow night’s budget, though, will definitely not be a traditional, big-spending election year budget.

Mr Swan is adamant about that.

The big spending, that came with the Federal government’s stimulus measures, in the wake of the global economic crisis, have now largely passed.

However Mr Swan  said that they had, definitely, been worthwhile.

“We were terribly exposed and what we did do was act decisively to put in place the most effective fiscal stimulus among advanced countries.” Mr Swan said.

There will be some late surprises in the budget, though.

One will be a new scheme, negotiated with Australian airlines, which will save the Federal government $160 million over four years, by wiping out frequent flyer points for MPs and their staff.

A 2 per cent cap will also be placed on rises in Federal spending, in this year’s budget.

Australia’s new mining boom will also be reflected in this year’s budget.

Mr Swan admitted that this would allow the government to return to budget surpluses earlier than had been previously expected, after the crisis.

However we certainly won’t see a budget surplus tomorrow night.

Mr Swan  also said yesterday he would spend the rest of his weekend putting “the finishing touches” to what he  called “a no frills budget.”

“Our public finances are among the strongest in the world,” Mr Swan said.

Indeed, the Reserve Bank Governor, Glenn Stevens, had described them as being in “terrific shape,” the Treasurer added.

Some may regard the list of features, that Mr Swan spelt out, as impressive.

These were:-
-Very strict spending limits
-The biggest health reforms since the introduction of Medicare
-A big boost for superannuation Tax cuts for small business and
-More infrastructure investment.

However, with the Rudd government slipping badly, in recent opinion polls – and an election due later this year – there can be little doubt that Mr Swan would be feeling much more comfortable tomorrow night, if he could throw in one or two solid vote grabbing announcements.

The Treasurer says he won’t be doing that.

His brave statements, though, must hurt.

The National Australia Bank should have known better.

Unsolicited credit cards are a big no-no under Australian law.

However the bank did send out American Express cards, to certain  customers who had not requested them.

That was a mistake.

The cards went to NAB Qantas Gold account customers, after the airline made changes to its frequent flyer program, from April 1 this year.

The NAB described the new cards as “companion cards.”  They worked on the customers’ existing credit card accounts.

No new accounts were opened and credit limits were not changed.

However, its move attracted an adverse assessment from the Australian Securities and Investment Commission.

ASIC, as the commission is known, “raised concerns” over the matter with the bank.

It said the law prohibits the distribution of unsolicited credit cards, unless they were specifically requested – in writing – by the customer.

This prohibition does not apply to replacement cards.

However, in a statement just issued, ASIC said the bank had “responded positively.”

The NAB had promised to write to all the customers concerned, asking if they wished to keep the card sent to them, if they have not already used it.

The cards sent to those who do not agree will automatically be “deactivated,” ASIC said.

They are all at it.  The Treasurer.  The Reserve Bank.  And you can expect to hear a lot more of it.

Jawboning that is.  We haven’t heard that  word for a while.  But it’s right back in style now.

Jawboning, of course, is economists’ jargon for trying to talk up the economy, in bad times.

Some might see it as a mark of desperation.

But as regular readers know, the Reserve Bank’s assistant governor, Malcolm Edey, launched the season in Sydney yesterday, reminding business leaders that there are – apparently good -  reasons to expect that Australia will continue to perform better than most other countries  in the current global downturn.

Mr Edey also urged his audience to look for signs of improvement, including some that can already be seen.  He said these include  stimulatory measures, both here and abroad and the “normal cyclical dynamics.”

The Federal Treasurer, Wayne Swan, was just hours behind him.

He told reporters in Sydney that the latest retail sales figures show that the government’s economic stimulus packages are working.

Mr Swan pointed, in particular, to the 1.8 per cent growth the Statistician recorded in Australia’s retail sales over the December quarter.

That, of course, was on seasonally adjusted figures.

On trend figures, which the Bureau regards as more reliable, that growth was just 0.7 per cent.

In volume terms, which eliminate price effects, the picture was even more subdued.  Trend growth, on that measure, was just 0.3 per cent in the quarter, while seasonally adjusted figures showed 0.8 per cent growth.

The detailed figures were particularly interesting.

They showed that Australians continued to spend strongly on food, during the quarter, with supermarket sales rising  1.8 per cent.

But we are not eating out as much as we once did.  The nation’s cafes, restaurants and take away food bars all suffered reverses in the quarter.

So did Australia’s clothing and soft goods stores.

But Mr Swan wasn’t dealing with small stuff, like that.  His message was  firmly upbeat.

He pointed out that Australia is still doing much better than the United States, where retail sales plunged by 7 per cent in the December quarter.

“So this is a solid result,” the Treasurer said.

“And I think  it shows that our Economic Security Strategy has supported employment in Australia in this critical period.”

Not everywhere, of course.  Virgin Blue announced yesterday that it would be shedding 400 jobs.

The planned merger of British Airways and Qantas is no sure thing.

The Federal government is spelling out tough terms, for the proposed merger.

That task fell to Antony Albanese, whose complex ministry includes transport.

“The Australian government believes in an Australian based and a majority Australian owned Qantas,” he says.

“At no stage has the government indicated support for any other proposal, in principle or otherwise,” he adds.

But Albanese also admits that Qantas has informed him that it is “exploring a potential merger” with British Airways.

But he insists that no proposal has yet been put to the government for approval.

“Any merger would need to comply fully with Qantas’s obligations under the Qantas Sale Act, the Foreign Acquisitions and Takeovers Act, the Trade Practices Act and Australia’s international air services agreements,” Albanese warns.

So what does all that mean?

Well the Qantas Sales Act, for a start, means that this airline’s main operational base and headquarters must remain in Australia.

The name Qantas must also be preserved.

The company must be incorporated in Australia.

Two thirds of its board must be Australians.

So must the chairman.

Presumably, though, Qantas knew all this, when it opened these talks with its British rival.

A burst oxygen bottle may have ripped open the fuselage of a Qantas jet, bound for Melbourne, on Friday night.

So the Civil Aviation Safety Authority has ordered the airline to check the oxygen cylinders on all of the airline’s Boeing 747 aircraft.

The authority’s spokesman, Peter Gibson, said the checks would begin immediately.

Gibson said that while investigators have still to establish the cause of Friday night’s incident, the authority knew that there were two oxygen bottles close to the damaged area.

Investigators established that one was missing from the stricken aircraft.

Qantas says it will comply with the order and the inspections should be completed by Friday.

The damaged aircraft was 16 years old.

Although no-one was seriously injured in the incident, some of the passengers on board have reported that they had difficulty using the oxygen masks, which fell from the plane’s bulkhead, during the emergency.

Those claims will be investigated in detail.

The aircraft, which was travelling from London to Melbourne, was forced to make an emergency landing in Manila.

CASA is undertaking its own investigation of the mis-hap.

So far, there has been no suggestion that terrorists were involved, in any way, in the incident.