Browsing articles in "Superannuation"
Thursday 5th March 2015 - 1:19 pm
Comments Off on Your part in Australia’s future – the Treasury’s view

Your part in Australia’s future – the Treasury’s view

by Alan Thornhill

Women, young workers, older workers and those with disabilities will need to take bigger roles in the nation’s work-force in future, according to a new report.

The Federal government’s Intergenerational report, which takes a 40 year look into Australia’s future, was released by the Federal Treasurer, Joe Hockey, today.

The report, prepared by Treasury experts, makes recommendations on what should be done, to ensure that Australians continue to enjoy high living standards, in the years ahead.

It urges continued steps to improve productivity and broaden work-force participation.

The report also says Australia needs to “harness the full potential” of its demographic groups.

And it acknowledges that policies to support parents and prospective parents will be needed to achieve that objective.

The Treasury said: “To enhance productivity, government will need to continue to focus on reforms that can improve the competitiveness of our businesses and markets.”

It would also need to:” provide an environment that encourages entrepreneurship and innovation.”

The Treasury said: “This will also include taking advantage of opportunities presented by changing technologies and new markets, both at home and abroad.

“In addition to these policies, the Budget must be balanced to avoid ever-increasing deficits and spiralling debts,” it added.

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Thursday 5th March 2015 - 12:50 pm
Comments Off on Our “best years are ahead of us,” but…. Treasurer

Our “best years are ahead of us,” but…. Treasurer

by Alan Thornhill

The Federal Treasurer, Joe Hockey, says the Intergenerational Report he released today will allow the government to focus on production and productivity.

Mr Hockey declared that “these are the drivers of economic growth.”

“I believe that our best years are before us,” Mr Hockey said as he predicted that Australians would live “longer and healthier” lives.

The report, prepared by the Federal Treasury, on the government’s instructions, takes a 40 year look into Australia’s future.

Mr Hockey said:” It is fantastic that Australians are living longer and healthier lives but we need to address these demographic changes.

“If we don’t do something, we risk reducing our available workforce, impacting negatively on growth and prosperity, and our income will come under increasing pressure.

“To drive higher levels of prosperity through economic growth, we must increase productivity and participation. If we are to achieve these goals we need to encourage those currently not in the workforce, especially older Australians and women, to enter, re enter and stay in work, where they choose to do so.

“With a growing population that will live longer, the Intergenerational Report shows the growth in the costs of many services, especially in health, that will put pressure on the budget and threaten the sustainability of those services.

“Every day our spending exceeds Government revenue by more than $100million.

“To make up the shortfall we have to borrow that $100 million per day.

“If the status quo had remained, the growing debt burden projected in the Intergenerational Report would have been a major drag on our prosperity and a threat to services that our community expects.

“That is not the social compact we want,” Mr Hockey said.

He said the Government had “set out a credible trajectory to once again live within our means.”

And much progress had been made, Mr Hockey said.

Wednesday 25th February 2015 - 7:18 am
Comments Off on Labor urges restraint on welfare

Labor urges restraint on welfare

by Alan Thornhill

Labor is urging the Federal government not to use a report – that is due to be released today – to slash welfare payments.

The McClure report is expected to recommend a major simplification of Australia’s complex welfare system.

But Labor fears the government might want more.

Jenny Macklin, the Shadow Minister for Families and Payments, is urging restraint.

She says:” Vulnerable Australians do not deserve another round of Abbott cuts.

Ms Macklin said Australians are “rightly concerned that the McClure Review will be used by the Abbott Government as justification for another round of savage cuts to vulnerable Australians.

“It looks almost certain that people with disability will be the big losers, as the Government moves to push them onto different levels of payments,” she said.

“Scott Morrison must immediately rule out leaving any Australians worse off as a result of the McClure Review,” she said, referring to the Social Security Minister.

“He must also guarantee that there will be no cuts to payment rates or benefits that go to the most vulnerable Australians.

“And he must explain how the Abbott Government’s response to this review will tackle poverty, spread opportunity and provide support to people who need it.

“To prove they are serious about supporting low income Australians, the Liberal Government should also use this opportunity to drop its $5.5 billion worth of cuts to family payments, its cuts to pension indexation and its savage attack to rip unemployment benefits away from jobseekers for six months at a time, currently before the parliament.

“Nine months after the Abbott Government’s horror budget last year, vulnerable Australians are still reeling,” Ms Macklin said.

“Tony Abbott has already attacked the living standards of pensioners, young people on Newstart and low and middle income families,” she added.

Tuesday 24th February 2015 - 12:45 pm
Comments Off on Men advance in life expectancy:ABS

Men advance in life expectancy:ABS

by Alan Thornhill

The life expectancy of Australian men is now 80.1 years.

The Bureau of Statistics, which published this figure today, said it was the first time this indicator had topped 80.

But women, on average, can still expect to live longer, with a life expectancy of 84.3 years.

However men are slowly closing the gap.

Caroline Daley from the ABS said:”… over the last ten years the gap has narrowed.

“Life expectancy for men has increased by 2.3 years while the life expectancy for women has only increased by 1.5 years,” Ms Daley said.

These figures were part of a study called “Gender Indicators.”

The Bureau also reported that both men and women had lower participation rates in sports and recreational physical activity in 2013-14 than they had in 2011-12.

“After adjusting for age, participation for males 15 years and over dropped 5 percentage points to 61 per cent and there was also a 4 percentage point drop for females to 60 per cent,” the Bureau said.

Men and women were taking different paths in education, last year, too.

“In the 18-24 age group, more women than men are studying for a Bachelor Degree or above (34 per cent compared to 25 per cent), while men are more likely to study Certificates III and IV (11 per cent compared to 6 per cent),” Ms Daley said.

“In 2014, 42 per cent of females between 25 and 29 years of age had attained a Bachelor Degree or above while just 31 per cent of males had achieved a similar education level,” she added.

There’s more, in Gender Indicators, at www.abs.gov.au

Friday 20th February 2015 - 1:15 pm
Comments Off on Financial stability:the Treasury seeks advice

Financial stability:the Treasury seeks advice

by Alan Thornhill

Are you worried about the stability of Australia’s financial system?

And do you know just what needs to be done to fix it?

Well, then, the Treasury is waiting to hear from you.

It is seeking public submissions on Financial market infrastructures such as central counterparties and trade repositories, and to some extent also major exchange markets.

FMIs – as us insiders call them.

It says:” FMIs have been growing in importance under recent global reforms, in particular those requiring central clearing of OTC derivatives.

“There is accordingly increased awareness that a failing FMI could pose a risk to the stability of the financial system and that a resolution framework is required to guard against that risk,” the Treasury added.

But hurry.

The closing date for submissions is Friday March 27.

Sunday 7th December 2014 - 5:28 pm
Comments Off on The FSI’s recommendations

The FSI’s recommendations

by Alan Thornhill

The Financial System Inquiry admitted that some of the 44 detailed recommendations it made for an overhaul of Australia’s financial system would require further discussion.

But what were those recommendations?

They include:-

On banks

Strengthening policy settings that lower the probability of failure, including setting Australian bank capital ratios such that they are unquestionably strong by being in the top quartile of internationally active banks.

Reducing the costs of failure, including by ensuring authorised deposit-taking institutions maintain sufficient loss absorbing and recapitalisation capacity to allow effective resolution with limited risk to taxpayer funds — in line with international practice.


On superannuation and retirement incomes

Setting a clear objective for the superannuation system to provide income in retirement.

Improving long-term net returns for members by introducing a formal competitive process to allocate new workforce entrants to high-performing superannuation funds, unless the Stronger Super reforms prove effective.

Meeting the needs of retirees better by requiring superannuation trustees to preselect a comprehensive income product in retirement for members to receive their benefits, unless members choose to take their benefits in another way.

All employees be given the ability to choose the fund into which their suprannuation guarantee contributions are paid

On consumers

Improving the design and distribution of financial products through strengthening product issuer and distributor accountability, and through implementing a new temporary product intervention power for the Australian Securities and Investments Commission (ASIC).

Further aligning the interests of firms and consumers, and improve standards of financial advice, by lifting competency and increasing transparency regarding financial advice.

Empowering consumers by encouraging industry to harness technology and develop more innovative and useful forms of disclosure.
These recommendations seek to strengthen the current framework to promote consumer trust in the system and fair treatment of consumers.

Regulation

Improving the accountability framework governing Australia’s financial sector regulators by establishing a new Financial Regulator Assessment Board to review their performance annually.

Ensuring Australia’s regulators have the funding, skills and regulatory tools to deliver their mandates effectively.

Re-balancing the regulatory focus towards competition by including an explicit requirement to consider competition in ASIC’s mandate and conduct three-yearly external reviews of the state of competition.

Improving the process for implementing new financial regulations.

Tax

Tax breaks on housing, shares and super should be scrapped and the GST applied more broadly


Financial advisers

Fundamental to fair treatment is the concept that financial products and services should perform in the way that consumers expect or are led to believe.

The current framework is not sufficient to deliver fair treatment to consumers.

The most significant problems relate to shortcomings in disclosure and financial advice, which means some consumers are sold financial products that are not suited to their needs and circumstances. Although the regime should not be expected to prevent all consumer losses, self-regulatory and regulatory changes are needed to strengthen financial firms’ accountability.

The Inquiry’s recommendations to improve consumer outcomes aim to:

Improve the design and distribution of financial products through strengthening product issuer and distributor accountability, and through implementing a new temporary product intervention power for the Australian Securities and Investments Commission (ASIC).

Further align the interests of firms and consumers, and improve standards of financial advice, by lifting competency and increasing transparency regarding financial advice.

Empower consumers by encouraging industry to harness technology and develop more innovative and useful forms of disclosure.
These recommendations seek to strengthen the current framework to promote consumer trust in the system and fair treatment of consumers.

Sunday 7th December 2014 - 3:53 pm
Comments Off on Super funds welcome FSI report

Super funds welcome FSI report

by Alan Thornhill

The superannuation industry has welcomed the report of the Financial Systems Inquiry, even though it criticised the industry’s performance.

Pauline Vamos, the Chief Executive of the Association of Superannuation Funds Australia, said ASFA congratulated the Inquiry on its report, which she said is “sound.”

Ms Vamos said 28 of the inquiry’s recommendations have the potential to impact on the superannuation and retirement incomes system.

“This is a reflection of how important the role of superannuation is in the broader financial system, as both an institutional investor and a consumer product provider,” Ms Vamos said.

“We support the majority of the specific recommendations,” she added.

“ASFA agrees that there needs to be consideration given to the tax concessions applied to superannuation, and whether or not they are equitable, particularly when it comes to people on very high balances,” Ms Vamos said.

Sunday 7th December 2014 - 12:01 pm
Comments Off on Murray inquiry identifies “weaknesses”

Murray inquiry identifies “weaknesses”

by Alan Thornhill

Although Australia’s financial system has performed strongly, it does have several weaknesses, according to a new report.

The report, by former Commonwealth Bank Chief, David Murray, says the weaknesses include taxation and regulatory settings which distort the flow of funding to the real economy.

Mr Murray also reported that the system remains susceptible to financial shocks,

He said, too, that superannuation is not delivering retirement incomes efficiently..

Mr Murray also reported that unfair consumer outcomes remain prevalent.

And, he said, policy settings do not focus on the benefits of competition and innovation.

“As a result, the system is prone to calls for more regulation,” Mr Murray concluded.

However the Treasurer, Joe Hockey, signaled that the government would not be rushing to fix these problems.

He said it would take the necessary time – and seek more submissions from interested parties, including consumers.

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Alan Thornhill is a parliamentary press gallery journalist.
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