Browsing articles in "Superannuation"
Sunday 3rd July 2016 - 8:09 am
Comments Off on “..Labor party is back” Shorten declares

“..Labor party is back” Shorten declares

by Alan Thornhill

“…The Labor party is back,” its leader, Bill  Shorten declared triumphantly, after the result of the first night’s count in yesterday’s Federal election was known.

 

However his conservative rival, the Prime Minister, Malcolm Turnbull was insisting that he could still form a government.

 

Independent observers, though, were saying that the results, so far, are so close that voters may still have to wait days to find out which of  these two men will be Australia’s Prime Minister for the next three years.

 

One thing is already certain, though.

 

Malcolm Turnbull has lost the gamble he took, when he called a double dissolution election, months early, in the hope of winning clear control of the Senate.

 

He did that in the hope of restoring peace in the building and construction industry, by reviving the Australian Building and Construction Commission.

 

The final outcome in the Senate will take even longer to decide than that in the House of  Representatives.

 

However one thing is already clear.

 

The new Senate will be peppered with independents and others who may well prove troublesome to the incoming  Prime Minister.

 

 

 

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Thursday 30th June 2016 - 1:49 pm
Comments Off on Our wealth: the $13.2 billion hit

Our wealth: the $13.2 billion hit

by Alan Thornhill

Australians have suffered their first fall in household net wealth since the September quarter of 2011.

 

This is shown in figures that the Australian Bureau of Statistics published today.

 

The Bureau said that during the quarter, household net worth fell by $13.2b.

 

“During the quarter, household net worth decreased by $13.2b, its first decrease since September quarter 2011,” the Bureau said.

 

It said the fall was  driven by “holding gains (real and neutral)  -of -$44.1b.”

 

Holding losses on financial assets, like shares, in the quarter were $46.5b.

 

These were driven by valuation decreases in the listed equities market ($17.8b) and insurance technical reserves (driven by superannuation assets) of $37.3b.

 

Households recorded holding losses of $2.2b on land and dwellings during March quarter.

 

This was their second consecutive quarterly loss, following holding losses of $8.0b in December quarter.

 

The Bureau put our household net worth at $8,640.6b at the end of the March quarter.

 

It said this was made  up mainly of $5,904.7b of land and dwelling assets and $4,305.2b of financial assets.

 

But they were set against $2,234.9b of household liabilities.

 

The Bureau  also said transactions in net worth were driven by net capital formation of $11.9b, of which net acquisitions of land and dwellings were $10.9b while other non-financial assets amounted to $1.0b.

 

It said net financial transactions were $11.3b, of which net acquisition of financial assets were $38.5b and net incurrence of liabilities were $27.2b.

 

The major contributors to financial assets transactions were net equity in reserves of pension funds ($17.7b) and deposits ($12.8b).

 

Households incurred liabilities predominately through long term loan borrowings ($26.3b).

The Bureau said holding losses on financial assets in the quarter were $46.5b.

 

These were driven by valuation decreases in the listed equities market ($17.8b) and insurance technical reserves (driven by superannuation assets) of $37.3b.

 

Households recorded holding losses of $2.2b on land and dwellings during March quarter 2016, their second consecutive quarterly loss, following holding losses of $8.0b in December quarter 2015.

Monday 27th June 2016 - 9:17 am
Comments Off on PM’s speech: the lustre and bluster

PM’s speech: the lustre and bluster

by Alan Thornhill

Anlysis

 

 

 

Malcolm Turnbull’s policy speech yesterday was a polished performance.

 

He managed to suggest, for example, that something very like the Brexit disaster could well sink Australia, too, if we don’t vote the right way on July 2.

 

Without actually saying so.

 

So is there a danger, in his message that might not be immediately apparent?

 

Arguably.

 

Is the lustre, of his carefully crafted message, for example, brighter than its bluster?

 

The Prime Minister assured voters, constantly, throughout his speech, that his Coalition has a plan to deal with all eventualities, that might arise over the next three years.

 

Without saying, too specifically, what it was

 

He also boasted that some 300,000 new jobs had been created, on his government’s watch.

 

Without mentioning that most of them are part time positions, with pay rates that don’t cover grocery bills

 

This has left many Australians, particularly the young and the old, without a place in Australia’s modern work-force

 

So it might well be worth looking again at just what the Turnbull forces are planning to do, as well as what Mr Turnbull, himself, is actually saying.

 

Tax cuts, both for Australians on high incomes – and the big corporates – are at the heart of his plan.

 

It may well be worth remembering, at this point, that much of the vote for Britain’s exit, from the EU, came from poor areas, in Britain’s north.

 

That is  from the very people who have suffered most, over the years, from the austerity that came with Thatcherism, and its successors.

 

Eminent economists, like America’s Paul Krugman are not impressed by arguments that rising wealth for the rich will produce more jobs for the poor.

 

Krugman says that’s like relying on “the austerity fairy” to overcome unemployment.

 

However that argument still appeals, even if its strongest appeal is to those who benefit most from it.

Sunday 26th June 2016 - 3:23 pm
Comments Off on PM urges Australians to vote for “stability”

PM urges Australians to vote for “stability”

by Alan Thornhill

Malcolm Turnbull says:  “the shockwaves in the past 48 hours from Britain’s vote to exit the European Union are a sharp reminder of the volatility in the global economy.”

Delivering his policy speech in Sydney for the July 2 elections, the Prime Minister also spoke of the need for stable majority government, experienced economic leadership and a national economic plan.

An edited copy of  his 4,000 word speech is reproduced below.

After praising senior Liberals who attended the launch, Mr Turnbull said Australia needs a national economic plan  which “recognises the nature of our times – both the opportunities and challenges – and gives us the resilience we need to succeed.”

“Only the Liberal National Coalition can deliver that plan, that security, that leadership,” he added.

“Everything we seek to achieve, all of our hopes, our dreams depend on strong economic growth, “ Mr Turnbull said.

In a strong economy, business is  confident and  prepared to risk investing, expanding and hiring.”

Mr Turnbull said:  “Our business tax cuts encourage small and medium businesses to do just that.

“A strong economy means a mum whose kids are now at school and wants to work a few more days, or work full time, will have plenty of opportunities to do so,” Mr Turnbull said.

“And our childcare reforms will make it easier for her to do so too,” he added.

“It means that young men and women who have left school and are looking for a job will find an employer who is hiring and is happy to give them a start.”

“Our PaTH program with job training and internships will provide additional support to youth employment,”Mr Turnbull added.

A strong economy means we can fund our Innovation and Science Agenda to ensure our kids learn the digital skills of the 21st century, our research is commercialised to create jobs here at home and investors support start-up companies.

A strong economy means that senior Australians know their children will be in good jobs, their investments will deliver better returns and that Government will have growing revenues to support their pensions and health care.

It means that the farmer is getting much better prices for his cattle and can afford to hire a local contractor to replace his fences, clean out a dam or build a new hay shed.

It means the cafe, the restaurant, the hotel has more tourists and they hire more staff to cater for them.

All thanks to our export trade deals.

A strong economy means that builders will be hard at work on new homes and tradesmen will have more jobs.

It means that a manufacturer has more export orders, can buy more equipment, hire more workers and expand their business.

A stronger economy means we can fund over $50 billion in 21st century road, rail and other infrastructure including the Western Sydney Airport and the 39,000 jobs it will create.

“A stronger economy means we can afford to fund world-class education and health services, including Medicare, without weighing down our children and grandchildren with more debt and deficits,” Mr Turnbull said.

A strong economy means we can meet and beat our international obligations  to address climate change and do so without massive hikes in electricity prices as Labor would do.

“We have a national economic plan because the prosperity and security of 24 million Australians depend on it,” he said.

Mr Turnbull said success in the 21st Century cannot be taken for granted.

“Always expect the unexpected.”

“We will need to renegotiate vital trade deals with Europe and Britain,” Mr Turnbull said.

“We concluded five in the last three years – Japan, Korea, China, Singapore and the Trans Pacific Partnership.

“In six years Labor concluded none,” he said.

“We have carefully considered what we need to do to succeed, to make the transition from an economy fired up by a once in a century mining construction boom to one that is more diverse, more innovative, smarter, more productive – an economy that wins, and keeps on winning.”

“So there is a clear cut choice at this election,” Mr Turnbull said.

“We present our fellow Australians with a national economic plan every element of which supports more investment, stronger economic growth and more jobs.

“Our plan invests $1.1 billion to promote leading-edge innovation in our industries and to prepare our children for the jobs of the future.”

Our plan promotes export trade deals to generate 19,000 new export opportunities, giving our businesses premium access to the biggest economies in our region.

Our plan invests in local defence industries to ensure every defence dollar possible supports advanced manufacturers and thousands of Australians jobs.

Our Enterprise Tax Plan provides tax relief to tens of thousands of small-to-medium family businesses now and to all companies over time so they can invest, grow and hire more Australians.

“On the other hand, our opponents in the Labor Party have no economic plan.”

“Labor believes its best hope of being elected is to have trade union officials phone frail and elderly Australians in their homes at night, to scare them into thinking they are about to lose something which has never been at risk,” Mr Turnbull said.

“That’s not an alternative government, that’s an Opposition unfit to govern.”

Every element of Labor’s platform would discourage investment and employment.

He described it as: “a recipe for economic stagnation.”

“If returned at this election, we will convene a joint sitting to restore the rule of law in the construction industry and reinstate the Australian Building and Construction Commission, Mr Turnbull said.

So Australians could  have the building infrastructure  they need  “at a price they can afford.”

He said:  “housing values would fall in a fragile property market and rents would rise, because of Labor’s investment destroying ban on negative gearing and 50 per cent hike in capital gains tax.

“This threat is real.

“ So we need to be crystal-clear about what our votes will mean,” Mr Turnbull said.

“If your local vote is for Labor, Greens or an Independent, and you are in one of the 20 or so key battleground seats across the country, it is a vote for the chaos of a hung Parliament, a budget black hole, big Labor taxes, less jobs and more boats,” he warned.

Only a Liberal or National vote ensures stable government, a clear economic plan, real funding for the aged, Medicare and education; more jobs and strong borders.

Mr Turnbull urged Australians to: ““Vote for your local Liberal or National in the House and in the Senate.”

“In the last calendar year, there were 300,000 new jobs,” the Prime Minister said.

“Our unemployment rate of 5.7 per cent is well beneath what was anticipated when the Coalition came to office,” he added.

None of this happens by chance. Strong economic leadership supporting hard-working Australians means that, even with difficult global headwinds, we continue to grow our economy and expand our workforce.

And, today, I can announce additional policies from our Coalition team to support our national economic plan for jobs and growth.

Mr Turnbull said his government is determined to ensure none of our regional communities are left behind as we make the transition to a stronger new economy.

“… our regions must be at the frontline of the drive for innovation, jobs and growth,” Mr Turnbull said.

Our ‘Regional Jobs Fund’ is a major commitment… he added.

“As we build a stronger economy, it is vital that we also do all we can to ensure all Australians, especially young Australians, are not left behind,” he added.

So the Coalition woulds deliver a record $73.6 billion over the next four years for all Australian schools,” he said.

“Today, I can announce an additional $48 million for scholarships under the Smith Family’s Learning for Life program, to help disadvantaged students to complete year 12 and transition to work or further education and training,” he added.

“The Coalition will also invest $31 million in programs to encourage more girls and women to study and work in science, technology, engineering and mathematics,” Mr Turnbull said.

It would also help older Australians get smartphones.

He said only about one household in five, with people aged 60 or above, had a smartphone.

“To make their lives easier, to help them retain their independence, and to keep them connected to families and friends, I am announcing today a $50 million Coalition strategy to assist seniors who want to improve their digital literacy skills,” he said.

“And as announced earlier today, my Government will be investing $192 million more in front line mental health services including twelve suicide prevention sites around Australia and ten more headspace centres; and at the same time using smart phone and other technology to make these services more accessible,” he said.

This complements our support for Veterans’ mental health programs, itself a reminder that we best honour the diggers of Gallipoli and Fromelles by supporting the veterans and their families of today.

Mr Turnbull said; “only a strong Australia can be a safe Australia.

“After six years of abject Labor neglect and indecision, our continuous shipbuilding strategy will ensure Australia retains a sovereign capability to build and sustain naval vessels, securing thousands of advanced manufacturing jobs for decades to come,” he added.

Mr Turnbull said:”Labor’s abandonment of John Howard’s proven border protection policy opened the door to the people-smugglers:

The results had included:-

  • 50,000 unauthorised arrivals on 800 boats,
  • 1200 deaths at sea, of which we know,
  • Over 8000 children put into detention,
  • 17 detention centres opened, and
  • An $11 billion border protection budget blowout.

“In contrast, the Coalition has restored security at the border, integrity to our immigration program – and with it, public trust,” he said.

“I am proud to announce that today marks 700 days without a successful people-smuggling venture to our country,” he added.

“I am also very proud to announce that we have removed every child from detention in Australia,” Mr Turnbull said.

Labor had failed Australia before.

“The people-smugglers are looking for the earliest sign that an Australian government will waver,” he added.

Mr Turnbull said: “our policies are tough.

“But  these policies have stopped the drownings at sea, and restored the integrity of, and trust in, our large but orderly immigration and refugee programs,” he added.

To further strengthen our domestic security I announce initiatives that go to that most fundamental of liberties – the right to live without fear of violence.

Mr Turnbull also said: “my first announcement as Prime Minister was a new $100 million package to encourage all Australians to confront squarely and honestly the ugly truth of violence against women and children in our society.

“Today, I can announce a $64 million commitment to crack down on the trafficking of illegal firearms on our streets, in particular by criminal gangs,” he added.

He said he is asking Australians to make a clear choice — to back a strong and stable Coalition majority government that can press ahead with its plan for a stronger new economy.

That would deliver the economic security that enables Australians to fulfill their aspirations.

“That is why I am asking my fellow Australians at this election to support our Coalition’s National Economic Plan for a Strong New Economy,” he said.

Saturday 4th June 2016 - 9:24 am
Comments Off on Hold firm on super :pensioners tell PM

Hold firm on super :pensioners tell PM

by Alan Thornhill

Malcolm Turnbull is facing pressure from all sides over his plan to place caps on the tax advantages that come with superannuation.

While some Liberal Senators are already threatening revolt if the Prime Minister goes ahead with his plan, after winning the July 2 elections a much bigger group-pensioners- is letting him know that they will be unhappy if he doesn’t.

They made their views known, in a news statement early today.

They said:”The nation’s seniors peak body, COTA Australia, and the Australian Council of Social Service (ACOSS) signed a joint letter to the Prime Minister, concerned that good policy was under threat from pressure being applied by a small number of adversely effected individuals.

COTA recently surveyed its membership Election Panel and 87 per cent agreed that ‘the current tax concessions on superannuation contribution favour the well-off’.

The COTA and ACOSS joint letter calls on the Government to hold firm on key features of its Budget superannuation reforms:

“we write to urge you to hold firm in resisting calls to weaken, defer or abandon the key features…of the superannuation reform package contained in your recent Federal Budget.

We have…been very concerned that the tax treatment of superannuation prior to this Budget was not ‘fit for purpose’.

“Superannuation had become a wealth and estate management tool, especially for those with the highest incomes, and this has been having a seriously negative affect on the integrity, credibility and cost of our superannuation system.

“The Budget measures to limit the amount of accumulated superannuation on which earnings will be tax free; to place a lifetime limit on the level of non-concessional contributions; and to lower the annual limit on concessional contributions all go a significant way to addressing those concerns.

“The existing tax system offers too little support for people with low incomes, most of whom are women. The proposed tax offset for low income earners…will have a positive impact…and must be pursued.”

COTA and ACOSS also wrote to the Opposition Leader and Leader of the Greens to urge consensus:

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.

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,”

 

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