Abbott would “hack into” your retirement:PM

Julia Gillard warned today that Tony Abbott’s policies would leave working Australians without enough to live on in retirement.

The Prime Minister reminded finance industry leaders in Sydney that the Opposition Leader opposed two key government policies.

These are the proposed minerals resource rent tax (MRRT) and gradually increasing compulsory superannuation contributions to 12 per cent, by 2020.

Ms Gillard said these policies are linked.
 
“We can only get to 12 per cent by 2020 if we use part of the proceeds of the Minerals Resource Rent Tax to mitigate the lost revenue incurred by taxing super at concessional rates,” she warned.
 
“Neither the goal of increasing universal super contributions from 9 to 12 percent, nor the MRRT itself, are supported by our opponents,” the Prime Minister added.
 
She described that as:”A risk for every Australian heading towards retirement – for every Australian under 65.”

Ms Gillard also said Mr Abbott’s policies are also a risk to Australia’s future economic stability.
  
“And a risk to jobs,” she added.

Ms Gillard said the $1.4 trillion now in superannuation accounts will play a key role in providing the investment Australia needs to become – and stay – more competitive.

Hacking into the retirement savings of generations to come would be an act of social and economic vandalism that we cannot allow,” Ms Gillard said.
 
“Superannuation has helped ensure Australia spends one of the lowest amounts on age pensions as a percentage of GDP of any advanced economy,” she added.
 
“Latest Treasury estimates are that 12 per cent super will mean $10 billion saved each year on pension outlays in 2030,” Ms Gillard said. 
 
“Our superannuation savings pool, standing at an incredible $1.4 trillion, has doubled in just seven years.
 
“That wealth is held in retail and corporate funds, industry and government funds and self-managed funds.
 
“No model has a majority.
 
“Each model has its benefits.
 
“What unites us all is the understanding that universal superannuation is here to stay.
 
“Medicare, it is now a fundamental part of Australia’s social compact.
 
“A glittering economic achievement which has created jobs and opportunity for millions of Australians,” M Gillard said.

So far, Mr Abbott has not replied.

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Family incomes stagnate:Statistician

We are less enterprising than we were before the crash.

And family incomes have stagnated in Australia over recent years.

These developments, exposed in the results of a new survey conducted by the Australian Bureau of Statistics, may well throw fresh light on the state of the national economy.

People, who have become used to steadily rising real incomes, for example, might well curb their shopping, when income growth stops.

Especially when other – already recognised – factors such as worries about high interest rates – and the weak global economy – are also at work.

The bureau said the results of its survey of household income and income distribution for 2009-10 showed that there had been no significant change in average family incomes in Australia since the previous survey in 2007-08.

That is after adjustment for inflation.

However the survey did show that there have been structural changes in the economy.

One was “a decline in the number of households whose main source of income is unincorporated business income.”

We are simply not as willing now as we once were to try our luck in small business.

The bureau also reported that there has also been an increase in the number of families whose main source of income is government pensions and allowances.

The survey showed, too, that the so called “fat cats” in the Federal public service have also lived up to expectations.

Along with working families in Western Australia, they chalked up some of the highest average household incomes in the nation.

South Australian and Tasmanian families, though, had “below average” family incomes.

Predictably, too, the bureau also confirmed that Australia’s wealthiest families are still getting along very nicely.

It said:”The wealthiest 20 per cent of households in 2009-10 had captured 62 per cent of total household wealth.”

Their average net worth was $2.2 million.

What, though, of the poor?

The bureau says they have just 1 per cent of total net household worth, at an average of just $32,000 each.

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Carbon compo:Who misses out?

The unemployed, sole parents and students will not be fairly compensated under the Federal government’s carbon tax scheme, according to a new report.

The report, by the Australian Council of Social Service, also finds that those who depend on welfare organisations, like Meals on Wheels, might well suffer.

The ACOSS report accepts, though, that overall, the scheme will have only a “modest impact” on family living costs.

It accepts, too, that pensioners would be fairly treated.

“The increases in social security payments and tax cuts are also fair in the sense that they are mainly directed to households on lower incomes, who will be disproportionately affected by the carbon price and have the least ability to improve energy use-efficiency,” the report says.

But it adds a caution.

“….it is inequitable that the package does not offer the same level of assistance to unemployed people, sole parents and students on income support…”

The report explains that:”This inequity stems from the current underlying inequities in the current social security payment system.”

The report says this needs urgent attention.

It says that could be done” either through the climate change package….or by extending the Utilities Allowance to those social security recipients who are presently ineligible.”

The report says, though, that:”The proposed tax cuts are progressive and welcome.

“They would deliver a higher increase in disposable incomes, relatively, for people on low incomes than for high income earners.”

It says: “This is appropriate given that the carbon price disproportionately increases prices for those on low incomes.”

The report adds: “The tax cuts would also improve the financial work incentives for unemployed people and carers returning to low paid employment and simplify income tax arrangements for the more than one million individuals who would no longer need to file a tax return.”

However, it warns that there is a gap in the carbon tax compensation package.

“ACOSS is concerned that the package does not explicitly recognise or address the likely impacts of a carbon price on the capacity of community sector organisations to deliver essential services,” it says.

It says:”Many welfare service providers spend disproportionately on essential goods and services likely to be impacted by a carbon price, notably energy and food.

So cost increases, that come with the new scheme, might well lead to cuts in the level or quality of services these organisations provide.

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Many still suffer:ACOSS

It’s been a cold winter for many Australians.

A bitter one, too, for those at the bottom of the socioeconomic heap.

A survey, published by the Australian Council of Social Services, makes that clear.

In reveals that community and social groups have simply not been able to keep up with rapidly rising demands for their help.

ACOSS says more Australians have been turning to these groups for help.

Many got it.

ACOSS said the 745 community groups surveyed had, together, provided help more than 6 million times.

That was a 12 per cent increase on the previous year.

But many others missed out.

ACOSS says this shows that the common perception that Australia has fully recovered from the global financial crisis is false.

“…the stark reality (is) that a growing group of people in Australia are simply not doing well,” the Chief Executive of ACOSS Dr Cassandra Goldie said.

The survey showed that more than one in twenty people, who needed help, had simply been turned away.

People were denied services on approximately 345,000 times, Dr Goldie said.

” This represents a 19 per cent increase,” she added.

So who needs that help?

And who is missing out?

Both the young and the old have been hit.

The survey showed a 128 per cent leap in the number of older Australians needing residential care.

And the number of young people needing help rose by almost a third.

“Our survey shows this growing need for help is placing enormous strain on community services with almost all services experiencing heightened demand.

“Funding levels have not kept pace with the increase in demand,” Dr Goldie said.

The survey showed that 50,000 Australians who sought help to get a roof over their heads were simply turned away.

So were almost 36,000, who sought help with mental health issues.

Sole parents, too, are doing it tough.

The survey showed they are “disproportionately high” users of social services.

ACOSS said almost half of those who sought help were not in paid work.

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New credit line suggested for older Australians

Older Australians – who need care – could get access to a new, government-sponsored line of credit if a new report by the Productivity Commission is accepted.

The Commission’s just published report proposes an Aged Care Home Credit scheme.

The Prime Minister, Julia Gillard, thanked the commission for its report.

She said the Government would be guided by four principles, in developing its response.

Ms Gillard said these are:-

First, that every older Australian has earned the right to be able to access quality care and support that is appropriate to their needs, when they need it.

Secondly, older Australians deserve greater choice and control over their care arrangements than the system currently provides.

Thirdly, funding arrangements for aged care need to be sustainable and fair, both for older Australians and for the broader community.

And finally, older Australians deserve to receive quality care from an appropriately skilled workforce.

The Commission says the new credit line it has proposed help meet older people’s care and accommodation expenses without having to sell their home.

” A person’s spouse, or other ‘protected person’ would be able to continue living in that home when an older person moved into residential care.” the Commission said.

It noted that more than one million older Australians presently receive aged care services.

This number is expected to exceed 3.5 million by 2050.

The Commission said the range and quality of services provided to older Australians has improved over recent decades.

But it also said “more needs to be done.”

The Commission said future challenges include the increasing numbers and expectations of older people, a relative fall in the number of informal carers and the need for more workers,

It warned, too, that the present aged care system suffers key weaknesses.

It is difficult to navigate.

Services are limited, as is consumer choice.

Quality is variable.

Coverage of needs, pricing, subsidies and user co-contributions are inconsistent or inequitable.

Workforce shortages are made worse by low wages and some workers have insufficient skills.

The Commission said its proposals address these weaknesses and aims to deliver higher quality care.

“The focus is on the well being of older Australians — promoting their independence, giving them choice and retaining their community engagement.

The Commmission said that the reforms it proposes would give older people access o a simplified ‘gateway’ for: easily understood information.

This would help with issues such as needs assessment, financial capacity, entitlements and local services.

Older Australians would also be able to:-

–receive aged care services that address their individual needs, with an emphasis on re-ablement where feasible

–choose whether to receive care at home, and choose their approved provider

–contribute, in part, to their costs of care (with a maximum lifetime limit) and meet their accommodation and living expenses (with safety nets for those of limited means)

– choose to pay either a periodic charge or a bond for residential care accommodation

– if they wish to sell their home, retain their Age Pension by investing the sale proceeds in an Australian Age Pensioners Savings Account

–have direct access to low intensity community support services and

– be able to choose whether to purchase additional services and higher quality
accommodation.

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Crackdown on illegal workers

The Federal government is planning to impose big fines on employers who hire people to work in Australia illegally.

The agricultural, fishing, building and retail industries are believed to be among the biggest offenders.

The Federal Immigration Minister, Chris Bowen, made the announcement, after receiving a major report on the issue.

The report, by legal expert Stephen Howells, says there could be more than 100,000 illegal immigrants working in Australia.

Some arrived as tourists, others as students.

Mr Bowen said there is a hole in Australia’s existing laws.

That existed because the Howard government had failed to act, several years ago, after receiving similar advice.

“The Gillard Government will take action to address deficiencies in the existing laws…” Mr Bowen said.

It would ensure that Australia has an effective sanctions system.

Employers who ignore the new laws can expect fines of up to $10,000, for each illegal worker.

Mr Bowen said the trade in illegal workers raise many issues.

He says these include “serious organised crime, taxation and welfare fraud, sexual exploitation and abuse of vulnerable workers.”

He insisted, though, that boat people are not part of the problem.

“The review …found that asylum seekers arriving by sea are not part of the problem, and are a very small number by comparison,” Mr Bowen said.

Mr Bowen said the government has accepted the review’s main recommendations, in principle.

These include:-

* Introducing a new three-tiered employer sanctions regime with civil penalties and fines, as well as maintaining the current criminal penalties

* Putting in place protections for employers that do the right thing by checking work entitlements

* Better education and awareness for employers and labour hire groups on their obligations and

* Greater powers for compliance officers to gather documentary evidence against non-compliant employers.

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What retirement costs

A retired couple needs an income of $54,562 a year to live comfortably, according to a new study.

The Association of Superannuation Funds of Australia, which conducted the study, said that figure reflects prices in the March quarter.

As retired people know, these have been rising rapidly.

The study showed that the prices retired Australians face jumped 1.3 per cent in the quarter.

Food prices played a big part.

They rose by 2.9 per cent in the March quarter.

The floods and cyclone which Australia saw earlier this year hit food prices, particularly banana prices,very hard.

The ASFA study also showed that a retired couple, seeking a modest lifestyle, would need to spend $31,263 a year.

It also estimated that single people, seeking a comfortable retirement, would need an income of $39,852 a year, while those satisfied with a modest lifestyle would need incomes of at least $21,587 a year.

There’s an implied message for younger Australians, too, in ASFA’s figures.

They show that the Age Pension won’t fund even a modest lifestyle in retirement.

The full Age Pension – without supplements – currently adds up to $17,443 a year for singles and a combined amount $26,296 a year for couples.

That’s at the full rate.

Have you checked your superannuation lately?

ASFA thinks you should.

We agree.

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Consumer confidence crashes

Consumer confidence has crashed – as rich Australians – and those with home loans – become alarmed

This is shown in Westpac’s latest survey of consumer confidence.

The bank’s chief economist Bill Evans said the index had fallen 8.3 per cent this month, from an already low level.

“This is a surprisingly weak result,” Mr Evans said.

He said the index had now reached its lowest level since May 2009.

Mr Evans said that while aftershocks of the global financial crisis, such as European debt worries had contributed, there were special factors as well.

The latest result had followed seven interest rate hikes – up till last November – and talk of more to come.

“The only other time in recent history when the index has been sustained around the current level was during the period following the introduction of the GST.” Mr Evans said

That had also coincided with the bursting of a dot com bubble.

Mr Evans said the latest survey had closed the day before the Federal government announced details of its carbon price scheme.

But that might also be blamed.

“…by far the largest fall in confidence – 11.1 per cent – was in the highest income group,” Mr Evans said.

He said this the group would be the least generously compensated for the government’s carbon price package.

Mr Evans noted, too, that the confidence of people who have mortgages had also “plummeted.”

He said this had occurred while the Reserve Bank Governor, Glenn Stevens, had remained “hawkish” on interest rates.

“This is continuing to undermine confidence amongst households who – it would appear – are incredulous that such a policy is favoured given the current circumstances.”

The Australian Bureau of Statistics also reports that lending levels remained weak in May.

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