Browsing articles in "pensions"
Tuesday 31st May 2016 - 4:53 pm
Comments Off on Government spending:the talk

Government spending:the talk

by Alan Thornhill

Australian governments are still better at talking about spending restraint than matching their outlays to their income.

This is shown once again in March quarter figures that the Bureau of Statistics published today.

These showed that our governments – at all levels – raised $116.605 billion through tax collections in the quarter, a 2.4 per cent fall from the result seen in the final quarter of 2015.

The Bureau also reported that once general government expenses were counted the nation’s governments were left with a net operating shortfall of almost $4.6 billion, for the first quarter of this year.

So how did we cope?

Easily.

The authorities simply brought out our governments’ credit cards and borrowed another $7.6 billion.

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Tuesday 31st May 2016 - 12:34 pm
Comments Off on Super:Who’s missing out?

Super:Who’s missing out?

by Alan Thornhill

Analysis

So you are young and self-employed, but you’ve remembered retirement, right?

Well, perhaps.

But there is a special reason for asking that, apparently intrusive, question.

Recent research, by the Association of Superannuation Funds of Australia (ASFA) found that almost one young, self employed Australian in four has no super.

The Association’s Chief Executive Officer Pauline Vamos also says it is “extremely concerning” that older Australians, who have been self employed, often have much less money in their superannuation accounts than others, as they approach retirement.

She is urging young self-employed Australians to do a little retirement planning.

Ms Vamos admits that she is also disturbed by another finding that emerged from ASFA’s research.

Nearly 10 per cent of the workforce is self-employed and it is currently not compulsory for them to make superannuation contributions.

In the run up to retirement, those who are self-employed and are aged 60-64, have around half the superannuation of employees.

Only 27 per cent of those in their 60s who are self-employed, and soon to reach retirement, have more than $100,000 in superannuation, compared to 50 per cent of employees under the Superannuation Guarantee (SG).

Ms Vamos said that is “extremely concerning.”

The research also found that said people with lower-value business assets were also found to be more likely to have lower superannuation balances, or no super at all.

Those with lower-value business assets were also found to be more likely to have lower superannuation balances, or no super at all.

Ms Vamos said many sald many self-employed Austtralians would not have enough money fpr a comfortable retirement

““We encourage all Australians to think about the lifestyle they want in retirement and to setup, and make regular contributions to superannuation,”
she said .

“Business assets such as financial, shares or investment properties are often believed to serve as de-facto superannuation. However many of those who are self-employed do not have significant business or financial assets, and may struggle sustaining the standard of living they are used to when they reach retirement age.

“Business assets such as financial, shares or investment properties are often believed to serve as de-facto superannuation. However many of those who are self-employed do not have significant business or financial assets, and may struggle sustaining the standard of living they are used to when they reach retirement age.

“Superannuation is a purpose built system for the building of retirement savings. Because it is a long-term investment, the earlier you start putting more into super, the more you benefit from the effects of compounding interest. Contributing to super makes for a sound business decision.”

Because it is a long-term investment, the earlier you start putting more into super, the more you benefit from the effects of compounding interest. Contributing to super makes for a sound business decision,” Ms Vamos said.

While making contributions to super is currently not compulsory for the self-employed, if they do, there are a number of benefits they can potentially claim from the Government, such as bonus co-contributions, she added.

“Now is an opportune time for all, particularly those who are self-employed, to assess where they are in terms of their retirement planning, where they want to get to and how to save enough money to get there,” Ms Vamos concluded.

“Now is an opportune time for all, particularly those who are self-employed, to assess where they are in terms of their retirement planning, where they want to get to and how to save enough money to get there,” Ms Vamos concluded.

Sunday 29th May 2016 - 10:59 pm
Comments Off on Our political leaders present themselves, carefully

Our political leaders present themselves, carefully

by Alan Thornhill

The Prime Minister, Malcolm Turnbull, told voters tonight that growth is necessary for Australia.

He said that is fundamental.

And – taking care to appear Prime Ministerial – Mr Turnbull said his government had a plan to achieve growth that would produce new jobs and prosperity.

The Opposition Leader, Bill Shorten, responded by saying that fairness is needed for growth.

And he said the government’s plan to give big foreign companies $50 billion worth of tax cuts over the next 10 years is not fair.

He said a well educated population, with access to good health care, is essential.

The two leaders were speaking in the second of their debates in the current election campaign, leading to national elections on July 2.

Tonight’s debate was the first to be televised publicly.

The first was carried only on pay television.

Although both leaders were criticised tonight for not giving enough detail about their policies, both would probably be reasonably happy with their performances.

Both managed to avoid embarrassing mistakes.

And both stuck to carefully considered strategies.

Mr Turnbull sought to re-assure those who share his philosophies and to convince doubters that voting for a reckless spending Labor government on July 2 would be just too risky.

And Mr Shorten, who realises that he is less well known than his rival, took care to present himself as a moderate responsible leader, who will advance thoroughly thought out policies, in this campaign which still has five weeks to run.

Friday 6th May 2016 - 4:38 pm
Comments Off on RBA reveals all

RBA reveals all

by Alan Thornhill

Australian shoppers are spending more and saving less, according to the Reserve Bank.

The bank made this observation in the May Economic statement, which it published today.

Its main purpose, in publishing this month’s statement, was to explain why the bank cut its marker interest rate by 25 basis points last Tuesday, to a new low of 1.75 per cent.

The bank confirmed, in its statement, that its board had been thinking of cutting this rate, for some time.

It peaked – at 17 per cent – in the late 1980s.

But the bank is expecting much quieter times, in the period ahead.

It noted that wage growth had been “modest.”

It said:“ This implies a further gradual decline in the household saving ratio over the forecast period.”

The bank also said:”The amount of residential construction work still in the pipeline is substantial and has continued to increase.”

“This points to further strong growth in dwelling investment, albeit at a gradually declining rate consistent with the decline in building approvals since last year.”

“ In established housing markets, conditions have stabilised over the past six months or so.”

“ Housing prices have grown moderately over 2016 to date, following a small decline at the end of 2015.”

“ Housing credit growth has eased a little over recent months to be around 7 per cent in six-month-ended annualised terms in early 2016.”

“ This follows increases in mortgage rates and the strengthening of banks’ non-price lending terms in response to supervisory actions.”

“In above average and business credit growth has picked up over the past year or so.”

“ Nevertheless, indicators of investment intentions suggest that non-mining business investment is likely to remain subdued for a time, although it is expected to gradually pick up later in the forecast period as overall demand strengthens.”

“ Mining investment is expected to continue to fall as projects are progressively completed,” the bank said.

Wednesday 4th May 2016 - 8:12 am
Comments Off on The budget:clearing the decks

The budget:clearing the decks

by Alan Thornhill

Last night’s Federal budget favours the “big end of town” according to the Opposition Leader, Bill Shorten.

The Treasurer, Scott Morrison, concedes that the document he brought into Federal parliament then is not a traditional budget, with easily identified winners and losers.

However, he raised eyebrows by insisting that a modest income tax, for those on high incomes, benefits average wage earners.

But above all, this budget will deliver the one thing the Turnbull government wants most.

That is a clear run to the early election the Prime Minister, Malcolm Turnbull, will almost certainly call on July 2.

The parameters, on which that election will be fought, have now been clearly spelt out.

For Labor, its all about fairness.

The government will make a case for growth and jobs, with the mainly small – and bland – changes it announced in the budget.

And the Reserve Bank asserted its independence – on budget day – by cutting its marker interest rate by 25 basis points, to a new low of 1.75 per cent.

It says the risks of doing that are, at least, lower than those of not doing so.

So what else is the government aiming for, in its budget?

• A deficit of $37.1 billion this financial year.
However, it is also aiming to make big international corporations to pay their full share of tax, on the income they earn in Australia.

• 2.5 per cent economic growth, both this financial year and next.

• A 1 per cent cut in the small business tax rate, to 27.5 per cent.

• Cutting the company tax rate to 25 per cent for all companies, over four years.

Monday 2nd May 2016 - 6:30 pm
Comments Off on Labor again ahead in the polls, but…

Labor again ahead in the polls, but…

by Alan Thornhill

A new Morgan Poll once again puts Labor in front, but the pollster adds that if a federal election were held today, the result would probably be too close to call.

Gary Morgan, the Executive Chairman of Roy Morgan research, said it could well result in a hung Parliament.

He said that in early May ALP support was up 1 per cent at 51 per cent.

The Coalition’s support fell 1 per cent, to 49 cent on a two-party preferred basis.

“ This is the best result for ALP since Malcolm Turnbull became Prime Minister in September 2015,” he added.

Significantly the Roy Morgan confidence level also fell, slightly, to its lowest level ince Mr Turnbull became Prime Minister.

It showed that only with 39.5 per cent of Australians believe that Australia is ‘heading in the right direction’ while 41.5 per cent believe the country is ‘heading in the wrong direction’

This week’s Morgan Poll on Federal voting intention was conducted over the last two weekends, April 23-24, and April 30 and May 1, 2016, with an Australia-wide cross-section of 2,951 Australian electors.

Sunday 1st May 2016 - 5:10 pm
Comments Off on The PM’s hard sell

The PM’s hard sell

by Alan Thornhill

Analysis

Malcolm Turnbull might well find it hard to sell the budget strategy his government will introduce into parliament on Tuesday.

Not that there is anything particularly striking about it.

Indeed early indications that the Treasurer, Scott Morrison, gave in a television interview on Sunday, suggest that his first budget is likely to be a timid document.

The most attractive thing the Turnbull government is offering is an extra $1.2 billion for Australia’s schools, if they agree to meet new minimum standards of literacy and numeracy.

The Labor government, of Julia Gillard, tried that.

It didn’t work, then, and is difficult to believe that it will work in future.

That’s largely because our politicians, not our educators would, once again, be setting those standards.

Labor learnt from its mistake and has advanced some thoughtful ideas, under its Gonski proposals.

The Prime Minister has also ceded some ground to Labor, with his less that adroit handling of the election, itself.

He might well have allowed the current session of Federal parliament to run its full term.

That would have meant a full parliamentary election about September, or perhaps even a little later.

But he was not satisfied with that.

So he threatened to call an early election, if the Senate would not agree to his plan to revive the Australian Building and Construction Commission.

The Senate called his bluff.

That has left Mr Turnbull facing an unusually long election campaign, with little to say.

Yes, there will be some tax cuts, for people earning more than $80,000 a year, some tightening of the superannuation tax rules, for what Mr Morrison calls people on “very high” incomes, and tobacco taxes will be increased.

But negative gearing and the GST will both be left alone.

And, yes, our new submarines will be built in Australia.

But this still looks more like nervous politicians’ strategy, drawn up to win the next election, than the bold reforming approach, the country may actually need.

And John Howard’s former chief of staff, Peta Credlin, might well have a point.

She was quoted, in the Murdoch press, at the weekend, saying the Opposition Leader, Bill Shorten, is the man to watch now, as he has been busily working away at policies, while all this has been going on.

Thursday 14th April 2016 - 1:50 pm
Comments Off on Trend job growth eases

Trend job growth eases

by Alan Thornhill

Trend employment growth in Australia has eased.
The Bureau of Statistics reported today that this indicator, which the Bureau regards as the most reliable it produces, fell to just 2.2 percent in March.
That was down from 2.6 per cent in December last year.
On its more commonly used seasonally adjusted measure, the Bureau reported that the number of Australians with jobs rose by 26,100 in March.
That left the nation’s seasonally adjusted labour force participation rate for March at 64.9 per cent.
The Bureau said too that – on the same basis – the number of people unemployed fell by 7,300 during the month
This left Australia with a seasonally adjusted unemployment rate of 5.7 per cent for the month, 0.1 percentage points below the February level.

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Alan Thornhill is a parliamentary press gallery journalist.
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