Browsing articles in "pensions"
Thursday 31st March 2016 - 4:55 pm
Comments Off on Malcolm Turnbull puts a dodgy case to the Premiers

Malcolm Turnbull puts a dodgy case to the Premiers

by Alan Thornhill

The Federal government will use its economic heft, over the next few days, to force the States to impose their own income taxes, to cover an $80 billion cut in Federal health and education funding.

It says the cuts, over 10 years, have been necessitated by shortfalls in expected  revenue growth.

However figures published by the Australian Bureau of Statistics today, suggest otherwise.

They strongly suggest, that the argument Malcolm Turnbull has advanced, in this case, represents little more than an elaborate job shuffle.

At first, it all seems simple.

The Federal government and the States remain at odds over a tax reform plan that Malcolm Turnbull will put to the Premiers over the next few days.

The Prime Minister will urge the Premiers, at a dinner he will host for them tonight, to impose their own State income taxes to cover an $80 billion cut in Federal revenue, over the next 10 years.

The dinner will  launch proceedings in the latest meeting of the Council of Australian Governments, or COAG.

But Mr Turnbull’s already widely discussed proposal  has not found favour with the Premiers.

However the Prime Minister will insist that shortfalls in expected economic growth have made the cuts necessary.

He will, almost certainly, urge the Premiers over the next few days, to show patience as there are now fresh signs of strength emerging in the economy.

So what do we have, so far?

Another predictable argument between the Federal government and the States, over the carve up of the money used to govern this country.

Ho hum.

But let’s take a closer look at the figures the ABS published today.

They show a remarkably strong trend increase of 3.1 per cent in the number of job vacancies between in Australia between November  last year and February this year .

That left  Australia with 172,900 job vacancies in February this year.

The Bureau also reported  a spectacular trend rise – of 13.4 of cent – in these vacancies since February  last year.

Remarkably, the public sector led the way – with a 24.8 per cent trend rise – over the year, to February.

The  private sector also turned in a strong performance with a 12.4 per cent trend rise.

But as the Federal government is urging the States to do something they don’t want to do – that is impose their own taxes – they would be quite entitled to ask what these figures mean.

Does the spectacular rise in public sector job vacancies, for example, cover a lot of job churning?

The Premiers might  ask, for example, whether highly publicised job cuts – imposed by the Federal  government, were real or illusory.

That is were there a significant number of  Federal public servants who were sacked in  economy drives,  say on Fridays, who were back at new desks, perhaps by the following Mondays.

If job churning of this kind was significant, doesn’t  that cause the Commonwealth case for State income taxes  to collapse?

In any case, the   Federal  government will be hoping that all vacancies are filled quickly.

That would mean that many more people would – once again –  be paying tax and easing the Federal government’s budgetary problems.

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Tuesday 29th March 2016 - 12:35 pm
Comments Off on Australians working longer than ever before

Australians working longer than ever before

by Alan Thornhill

Australians aged 45 years and over are intending to work longer than ever before, according to figures released by the Australian Bureau of Statistics  today.

The Bureau said this was shown in the the results of a survey conducted in 2014-15.

 

It said these showed that 71 per cent of Australians intended to retire at the age of 65 years or over, up from 66 per cent in last survey result of 2012-13 and 48 per cent in 2004-05.

 

(More later)

Thursday 10th March 2016 - 11:23 am
Comments Off on Super:getting the tax breaks back on track

Super:getting the tax breaks back on track

by Alan Thornhill

Australia’s superannuation system has long been a favourite place for the rich to hide – and increase – their wealth.

But the Federal government is now planning to put a stop to that abuse of the tax breaks the system allows for contributions to super.

It is aiming to do that by re-stating the original objectives of superannuation, this time  in law.

Those aims, of course, are to ensure that as many Australians as possible have enough money to live decently in retirement, independently of the age pension.

The government is winning wide support, in its pursuit of this objective.

Both the welfare sector – and the superannuation industry itself – have issued statements today, supporting the government in its declared intention.

This occurred after a major review confirmed that the rich have been getting most of the tax breaks, going to super.

“As the Government’s Financial System Review pointed out, half the tax breaks for super contributions go to the top 20 per cent of taxpayers,” Dr

Cassandra Goldlie, the Chief Executive Officer of the Australian Council of Social Service said.

“There is a yawning gap between what the super system should do and what it actually does.”

“The system should ensure that every worker has an adequate income in retirement above pension levels,” Dr Goldie added.

“In reality it has become a wealth accumulation and tax avoidance vehicle for people with high incomes.”

But she added a qualification.
“Reaching agreement on the purpose of superannuation is an important step in the reform process, but it should not delay the comprehensive tax reform we have been promised,” Dr Goldie said.

“ It’s time to stop the endless tinkering with super and put things right.”

The Association of Superannuation Funds of Australia (ASFA) agreed.

Its CEO, Pauline Vamos, said:”The government’s commitment to defining the objectives of superannuation and enshrining this in legislation will provide an enduring reference point to guide future decision making by all policy makers,” she added.

“Agreeing and adhering to objectives will increase confidence, lead to greater levels of equity, and improve retirement outcomes for all Australians by reducing the politics in policy making.

“The purpose of the system as outlined by the government in today’s discussion paper—to provide income in retirement to substitute or supplement the Age Pension—is a worthy objective, and the good news is that the system is already well on its way to meeting this purpose as well as many of the supporting principles,” Ms Vamos said.

“ The current tax concessions supporting the system are sustainable, and superannuation takes substantial pressure off the Age Pension,” she added.

“ ASFA estimates that government expenditure on the Age Pension will remain under 3 per cent of the gross domestic product for the foreseeable future.”

“ASFA also believes that the superannuation system has an extended purpose.”

Ms Vamos said that was to enable all Australians to be financially confident in retirement, with the measure of success being that the majority of retirees are not reliant on any pension, and that their superannuation balance provides them with enough to have a comfortable standard of living,”

 

Monday 8th February 2016 - 7:04 am
Comments Off on PM speaks more cautiously about a higher GST

PM speaks more cautiously about a higher GST

by Alan Thornhill

Ma1colm Turnbull’s enthusiasm for a higher Goods and Service Tax appears to be fading in the shadow of approaching Federal elections.

The Prime Minister has been careful, in the past, to remain non-committal on the idea, although he has confirmed that his government has been considering it.

That led Labor to mount what Mr Turnbull calls a scare campaign on the issue.

That, in turn, produced distinct unease among government MPs, particularly those in marginal seats.

However, in an ABC television interview, Mr Turnbull said his government would be looking to increase productivity with the tax reforms it would introduce in its May budget this year.

He said:” With the GST income tax swap proposal, it has not yet passed that first test and that’s the analysis that is being undertaken.”

This was, perhaps, the first time that Mr Turnbull has been so frank, on this subject.

But he set out the government’s objectives quite bluntly.

“… we have not made a decision on that yet,” he said“ and it does pose a lot of complexity.”
“ The objectives of this or any other tax change have got to be fairness, no increase in net taxes.”
“W don’t want to increase the total tax take….
“And it’s got to deliver a strong growth and jobs outcome,””otherwise it isn’t worth the trouble and expense of making the change.”

Mr Turnbull said the present proposals had not yet passed the first test in that regard.

Friday 5th February 2016 - 11:05 am
Comments Off on Tax reform:why you are on the drip

Tax reform:why you are on the drip

by Alan Thornhill

The Federal government’s plans for tax reform – including the GST – are likely to be released gradually over coming months.

The Prime Minister, Malcolm Turnbull made this clear in an interview with an Adelaide radio station early today.

He said the full extent of the reforms would “of course” be revealed on Budget night in May.

However Mr Turnbull added the government might make some announcements before then.

There have been persistent reports that the government is considering increasing the goods and services tax from its present rate of 10 to 15 per cent and broadening its Impact, possibly to include food.

The government has refused either to confirm or deny these reports.

That led the Opposition Leader, Bill Shorten, to criticise the government for what he calls its “lack of transparency” on the issue.

T ax reform is likely to be a major issue at the next Federal elections.

The present government’s term expires in September.

But the election to choose a replacement could be delayed until 2016.

Mr Turnbull warned Coalition MPs early this week that an early election could also be “a live issue” in certain circumstances.

That has left some, particularly those in marginal electorates, very  nervous.

They point out that any increase in the GST would be unpopular and warn, too, that Mr Turnbull has left himself little time to convince voters that such a change is necessary, if he does decide to go down that path.

 

 

 

 

 

 

Friday 29th January 2016 - 11:27 am
Comments Off on Treasury Secretary explains his budgeting

Treasury Secretary explains his budgeting

by Alan Thornhill

 

 

 

The Treasury Secretary, John Fraser, warned last night that government spending has reached very high levels.

It said it has been estimated that this spending will reach 25.9 per cent of economic output in 2015-16.

Mr Fraser said this assessment was made last December, at the time of the Federal government’s Mid-Year Economic and Fiscal Outlook publication (MYEFO).

Speaking in Sydney, he added:” There have only been four other periods since 1970 when this ratio has exceeded 25 per cent.

“Three of these are associated with economic recession and deficit blowouts – during the early 1980s and the 1990s, and of course just after the GFC.”

Mr Fraser said it’s important that Australia retains “its top credit rating.”

He said Australia about one of only 10 countries in the world to have a triple-A rating from all three major ratings agencies.

But he said that is not at risk.

In fact the agencies assessing the Federal government’s situation last December had been “quite impressed” with its progress towards a budgetary balance.”

But Mr Fraser said that, increasingly, “…we need to frame a Budget over the four years of the forward estimates.”

“ If anything, the forward estimates now seem to be a little more important.”

Mr Fraser said:“There have only been four other periods since 1970 when the government spending to output ratio has exceeded 25 per cent.

“Three of these are associated with economic recession and deficit blowouts – during the early 1980s and the 1990s, and of course just after the Global Financial Crisis.

Mr Fraser added that:“We are a rich country in so many ways and we can look forward to sustained economic growth if we have the right attitude and policies.”

Then he added:“A stronger long term fiscal position will go hand-in-hand with other policies to lift our growth and living standards.”

 

 

Tuesday 5th January 2016 - 5:43 pm
Comments Off on Government planning to slug pensioners:Labor

Government planning to slug pensioners:Labor

by Alan Thornhill

Many pensioners will be hit hard by changes he Federal government is planning to the assets test Labor says.
In a statement today, The Shadow Minister for Families and Payments, Jenny Macklin,said new data, released today shows the true cost of Malcolm Turnbull’s changes to the pension assets test, which will cut the Age Pension for 330,000 elderly Australians.”

She recalled that the legislation to change the pension assets test and cut part-pensions passed the Parliament in June 2015 under what she called “a dirty deal between the Liberals and the Greens.”
“In total, about 330,000 part-pensioners across Australia will have their cost of living increased because of the Liberals’ pension cuts,” she said.

“We now know exactly where these cuts will hit hardest when the Turnbull Government’s changes to the assets test kick in from 1 January 2017,” Ms Macklin said.

“The data shows the electorates where the most people will lose part of their pension, and the electorates where the most people will lose their entire pension,” she added.

 

“Pensioners all across the country are going to have their household budgets cut by the Liberals”

.

“These cuts will be particularly felt in regional Australia and the suburbs of Melbourne and Adelaide. ”

“In total, about 330,000 part-pensioners across Australia will have their cost of living increased because of the Liberals’ pension cuts. “

“Tony Abbott may be gone for now, but Malcolm Turnbull has done absolutely nothing to change his unfair policies,” she said.

 

“ Tony Abbott’s pension cuts are now Malcolm Turnbull’s pension cuts.”
“Cutting the part-pension shows how out of touch the Liberals are,” Ms Macklin said.

 

“ They are hurting struggling pensioners while doing nothing to crack down on the outrageous tax avoidance by multinational companies making billions of dollars. “
“Mr Turnbull needs to explain why he thinks it’s fair for Australian pensioners to have their cost of living increased while some massive multinational companies pay little or no tax. “
“Under the Liberals, multinational companies get a free kick, and Australian pensioners get kicked in the guts. “

 

“The Abbott-Turnbull track record for pensioners is nothing short of dreadful,” Ms Macklin said.
“First they tried to cut pension indexation – a cut that would have meant pensioners would be forced to live on $80 a week less within ten years. “

 

“Then they cut $1.3 billion from concessions which help pensioners with the cost essential services like electricity, water and public transport.”
“Then they did a deal with the Greens to cut the pension for 330,000 part-pensioners by changing the assets test.

“The Liberals also want to increase the pension eligibility age to 70, meaning Australia would have the oldest retirement age in the developed world,” Ms Macklin said.

“…now Malcolm Turnbull wants to slug Australian pensioners with a 15 per cent GST, hitting households by up to $4,000 a year and reducing the living standards of Australian pensioners,” she added.

 

“Only Labor is standing up for Australian pensioners by opposing cuts to the pension and any increase to the GST,” Ms Macklin said.

 

The government has not yet replied to these charges, which Ms Macklin made in a statement today.

Tuesday 15th December 2015 - 6:32 pm
Comments Off on Mini-budget takes “safe road” to surplus:Treasurer

Mini-budget takes “safe road” to surplus:Treasurer

by Alan Thornhill

The Federal Treasurer, Scott Morrison, insisted that he is taking Australians on “the safe road” to a balanced budget when he published his Mid Year Economic and Financial Outlook document today.

 
However he admitted that the nation will still face deficits of $37. 4billion in 2015-16, $33.7 billion in 2016-17, $23 billion in 2017-18, and $14.2b in 2018-19.

 

Mr Morrison said the journey to budget balance needed to be “safe and careful” with the expected date of a return to surplus pushed back another year to 2020-21.

 
Using the metaphor of the Christmas car trip, he said he expected a lot of Australians to ask  “are we there yet?”.

 

“We need to take a safe and careful route and one (that) does not put at risk our jobs and growth,” he said.

 

The government has announced extra spending on its humanitarian program since its May budget.

 

Its decision to permanently accept an extra12,000 refugees from Syria and Iraq , in particular, will cost $158 million in 2015-16, and $909 million over four years to 2018-19.

 
Offsetting savings were announced in today’s mini budget.

 
These will include removing bulk-billing for pathology services and reducing bulk-billing for diagnostic imaging services and MRI services.

 
This will reduce spending by $197 million in 2016-17 and by $639 million over four years to 2018-19.

 

 

There will also be cuts to childcare.

 
These will include reducing the childcare subsidy for families earning more than $250,000 a year.

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