by Alan Thornhill
The price of established houses in Sydney, Melbourne and Hobart all fell in the first three months of this year.
The Bureau of Statistics also reported that house prices, over all Australian capitals, fell by a weighted average of 1.1 per cent in that time, to a level 4.5 per cent below that seen 12 months earlier
However house prices in Perth, Brisbane, Canberra and Darwin escaped that trend, rising in the March quarter.
House prices in Sydney fell by 1.8 per cent in the March quarter and 4.6 per cent over the year.
However there were bigger falls in Melbourne, where house prices fell by 2.2 per cent in the March quarter and 6.6 per cent over the year.
Adelaide prices fell by 0.9 per cent in the quarter and 3.8 per cent over the year.
Meanwhile house prices in Hobart fell 2.7 per cent in the March quarter and 6.7 per cent over the year.
In Perth, though, house prices rose by 1.1 per cent in the March quarter, but remained 1.7 per cent down over the year.
Brisbane house prices edged up 0.4 per cent in the quarter, but were still 3.7 per cent down over the year.
In Canberra, prices rose 1.2 per cent in the quarter, but remained 0.5 per cent below those seen 12 months earlier.
In Darwin, prices rose 4.4 per cent in the March quarter and 3.5 per cent over the year.
by Alan Thornhill
Wayne Swan had ridiculed one of Australia’s richest men, Clive Palmer, who says he will challenge the Treasurer for his seat, in the next Federal elections.
Mr Swan said the mining magnate had once again repeated his “conspiracy theories” involving the CIA, as he announced his challenge.
The Treasurer also launched a stinging attack on the Liberal party, saying its Federal and Queensland leaders, Tony Abbott and Campbell Newman, are beholden to Mr Palmer, a major contributor to the party’s funds.
Mr Swan said it is now clear that the Liberal party will “fight to the death” for the interests of mining magnates, like Mr Palmer.
Labor, though, would pursue “a fair go” for all Australians.
“The land of a fair go is absolutely essential for our children,” Mr Swan said.
He said the Liberal party displayed its attitude in its opposition to the Minerals Resource Rent Tax, which would finance tax cuts for small business and higher superannuation contributions for working Australians.
Mr Swan launched his attack shortly after Mr Palmer announced that he would challenge the Treasurer for his seat in next year’s Federal election.
Mr Palmer’s announcement was blunt.
“I intend to put to the test to the people of this country my views against the treasurer in his home seat of Lilley,” the mining chief said.
He said Mr Swan, who won the seat in 1998, had been the sitting member for far too long.
“ It’s about time we get this country moving again,” Mr Palmer said”
Mr Palmer admitted that he has not yet spoken to Mr Abbott about his decision.
But he said Mr Swan’s attacks on himself and other mining leaders had prompted him to stand.
by Alan Thornhill
The Federal government has announced a new system of aged care which, it says, is based on capacity to pay.
The new system, which is to start on July 1 2014, will not affect old people who are already in aged care.
But those wealthy enough to do so, after that date, can expect to pay more for their care.
However, the Prime Minister, Julia Gillard, who made the announcement said people would no longer be forced to sell their homes, to get care, as sometimes happens now.
“All too often, families are forced to sell their home quickly, to raise money for a bond which can be up to $2.6 million,” Ms Gillard said.
“Labor will ensure more people get to keep their family home and no one will be forced into an emergency sale if urgent residential care is required,” she added.
“The system will be fairer, so contributions to the cost of aged care will be based on a person’s capacity to pay. There will also be annual and lifetime caps on care costs,” Ms Gillard said.
The Prime Minister said the present system of payments is unfair.
“Average pensioners are subsidising the accommodation and care costs of people earning many times what they do.,” she said.
Ms Gillard said the government had responded to demographic changes, including the facts that Australians are now living longer, and that a bigger proportion of the population will be aged, in future.
The government’s Living Longer, Living Better Package will involve $3.7 billlion in new money.
Much of its cost, though, will be met through re-arrangement of present aged care spending.
The main changes, as announced by Ms Gillard, were:-
* To make it easier for older Australians to stay in their home and receive the care they need, we will double home care packages from $59,876 to almost $100,000.
*We will provide new tailored care packages to people receiving home care, and new funding for dementia care. And we will cap costs, so that full pensioners pay no more than a basic fee, and others have caps as well, depending on their ability to pay.
*We will also make sure that more people get to keep their family home, and prevent the fire sales that I’ve referred to. We’ll do that by providing more choice about how to pay for care, instead of a bond up to $2.6 million, and bearing no resemblance to the actual cost of accommodation, you will be able to pay through a lump sum or a periodic payment, or a combination of both, whatever you choose.
* People will also have longer to make that choice, with a cooling off period introduced, so that they can take up their aged care place, and then think about the best way to pay. And you’ll have longer to pay if you need it, and longer to think about how to do it. There will also be a cap on care costs, with no-one paying more than $25,000 a year, and no-one paying more than $60,000 over a lifetime.
* And because these changes will increase the number of places, people won’t be forced to make sudden decisions under pressure because they’re scared they’ll lose the only place on offer. This means that people won’t be forced into those emergency fire sales.
by Alan Thornhill
The Federal government declared today that it would not be cutting “front line” services in next month’s budget and that it would produce a budget surplus.
The Assistant Treasurer, David Bradbury, told reporters: “We will not take a razor to front line services.”
But he added: “It is essential that we return the budget to surplus, because (that) is in the interests of the Australian economy.”
The Greens have declared they will fight any attempt by the government to use cuts to the public service, family benefits or research and development funding to return the budget to surplus.
New Greens leader Christine Milne said her the party would pursue more spending measures, including a rise in unemployment allowances, a national dental health scheme and a boost to schools funding, instead.
by Alan Thornhill
The Reserve Bank won’t want to be embarrassed again.
Not after it was caught off guard, back in February.
Australia’s big four banks all raised their interest rates at that time.
Even though the Reserve had left its marker rate on hold.
Those rises weren’t expected.
The commercial banks were meant to follow the Reserve Bank’s lead in such matters.
The Reserve’s embarrassment was evident in a series of carefully crafted statements it made, over the following weeks.
Yes, the Reserve mumbled, rising costs had justified those rises.
And the big four do have a right to set their own rates.
But the Reserve Bank’s marker rate is still “the primary determinant” of bank costs.
That last thought, came from Guy Debelle, an assistant governor of the Reserve Bank.
Was he trying to reassert the Reserve Bank’s traditional dominance of Australia’s domestic interest rates?
Some certainly think so.
The Reserve could, of course, make its intentions even clearer, by cutting its marker rate, when its board meets tomorrow.
It will be tempted to do so.
Big parts of the economy, such as the building and retail sectors, are still flat, at best.
Board members won’t have missed a hint that the Treasurer, Wayne Swan, dropped, either.
He declared that his plan to produce a surplus in his May budget would leave more room for movement in Australia’s monetary policy.
That, of course, is the Reserve Bank’s territory.
Debt problems in Europe are still worrying many Australians, particularly shoppers and potential home buyers.
Nothing would boost their confidence – more effectively – than another cut in interest rates.
So the board’s decision, on tomorrow, will be watched very closely.
by Alan Thornhill
More than one Australian in five is poor – and their incomes are still falling further behind the rest of the community.
This is shown in figures the Bureau of Statistics has just released.
Co-incidentally these figures, reflecting the extent of poverty in Australia, were published on the eve of the annual conference of the Australian Council of Social Service.
ACOSS has been arguing vigorously for higher pensions and allowances.
In a report entitled Life on Struggle Street, the Bureau reported that 4.9 million Australians – 22.6 per cent of the population – live in low income households.
That is an average of 2.9 people, living in households with incomes of no more than $465 a week.
That was less than half of the average – of $1,033 a week – for other Australians.
And the poor are still falling further behind.
The Bureau reported that., after adjusting for inflation, the incomes of poor families had risen by 21 per cent between 2003-04 and 2009-10.
The rest, though, had enjoyed an average rise of 27 per cent, over the same time.
Inequalities in wealth, though, are even sharper.
The average wealth of low income families was just $53,000.
For the rest, the average was almost 10 times greater, at $509,800.
Technically, though, the poor are not getting poorer.
The Bureau reports that, after adjustment for inflation, the average level of their wealth had remained flat, in the six years to 2009-10.
Relatively, though, the poor were, indeed, worse off.
Over the same time, the average wealth of other Australians had risen by 29 per cent.
by Alan Thornhill
The financial advice you get, to help you plan for retirement, will be very important for your future.
Yet a study, just completed, suggests that most of the professional advice, available in Australia, is “adequate” at best.
The Australian Securities and Investments Commission, which conducted the survey, concludes that the industry has room for improvement.
ASIC Commissioner Peter Kell said: “The results of ASIC’s shadow shopping research demonstrate that there is scope for significant improvement in the provision of good quality retirement advice in Australia.
“Our research found there are several areas where the financial advice industry needs to lift its game,” Mr Kell added.
ASIC’s research found that:
* over a third of the advice examples were poor (39%)
* there were only two examples of good quality advice (3%)
* the majority of advice examples reviewed (58%) were adequate.
“Advisers are important gatekeepers who have a key role to play in helping consumers plan and manage their finances,” Mr Kell said.
“ This underlines the importance for the industry to remove conflicts of interest and improve overall professional standards to ensure that their client’s trust is not misplaced, “ he added. he said.
ASIC said said financial advisers need to provide realistic and client focused advice.
This should include discussion of people’s retirement prospects, including how long their money will last.
It said this topic should be fully discussed,”even if this can on occasion be a challenging conversation.”
“‘Too much poor advice provided to our shadow shoppers was overly product focused and not strategic enough to help clients develop a realistic and achievable plan for their retirement,” Mr Kell said.
He said people planning for retirement need to make the most of their financial resources, given their resources, and likely risks,
Want more information?
That’s available at moneysmart.gov.au.
Weathercoast by Alan Thornhill
A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.
Available now on the iTunes store.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
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