by Alan Thornhill
Could your lifespan be affected by something as arcane as a mini-budget?
That’s putting the question a little bluntly, perhaps.
But quite a number of clever people apparently think so.
The President of the AMA. ,Brian Owler , is among them.
But let’s start at the beginning.
The Australian Medical Association is making no secret of its distress at cuts to health payments announced in last night’s mini-budget.
Critics say they add up more than $650 million.
And the Sydney Morning Herald reports that cuts to incentive payments, made to pathologists, to encourage bulk billing, have come in for particularly sharp criticism.
Critics are calling this the re-introduction of “co-payments by stealth.”
The government dismisses that charge.
But many doctors fear some people will avoid potentially life-saving procedures, like early screening for cancer, if that involves a fee.
And Mr Owler said the policy would increase costs for Australians, particularly the sickest and poorest patients.
The situation behind all this is a little complicated.
But the SMH, as always, describes it succinctly.
It says:”The incentive payments introduced by Labor in 2009-10 were hoped to maximise the numbers of patients receiving free services.
“The pathology incentive meant providers were given an extra $1.40 to $3.40 per patient.
“The diagnostic imaging incentive payment was 10 per cent of the set Medicare fee for each service, with the exception of MRI procedures which attracted a 15 per cent subsidy.”
The newspaper also quotes the Health Minister, Sussan Ley, saying that the incentives have not worked.
Ms Ley said the pathology incentive, which had cost taxpayers half a billion dollars since 2009-10, did not work, with bulk billing rates increasing just 1 per cent during that time.”
The government is confident that public health won’t be affected by the measure it announced last night.
It believes that competitive pressures in the pathology industry – made up of more than 5000 pathology collection centres – will ensure that high rates of bulk billing will continue.
by Alan Thornhill
Consensus on tax reform proved elusive when the Prime Minister, Malcolm Turnbull met State premiers and Territory leaders in Sydney today.
The State and Territory leaders went into the meeting of the Council of Australian governments seeking reversal of the $80 billion cuts to their health and education spending that flowed, ultimately, from the unpopular 2014 Federal budget.
Mr Turnbull, for his part, was seeking more stable revenue flows, as the mining boom subsided.
That led to the Federal Treasurer, Scott Morrison, ordering the Federal Treasury to model the likely impact of possible changes, including several that would include a higher Goods and Services Tax.
Although the Opposition has been warning that Mr Turnbull wants to impose a 15 per cent GST on “everything” in place of the present 10 per cent, a 12.5 per cent rate is now starting to look more likely.
But the Coalition remains determined to curb the big Federal deficits it inherited from its Labor predecessor,
Mr Turnbull opened today’s meeting by thanking the Premiers and Territory leaders for what he called “very collaborative discussion we had last night.”
He said:“We all understand that Australia’s economy is transitioning from an enormous mining construction boom.”
And added:”We recognise that we’ve seen a high rise in our terms of trade and as was always going to happen that has now subsided.
I think we all recognise that to ensure our continued prosperity we do need to be more competitive, more productive and more innovative.
However the COAG leaders did agree to keep on examining options for tax reform.
They also accepted a March deadline on their discussions.
”Mr Turnbull said after today’s meeting “there are many different options.”
“There are many different approaches and… ultimately what we need is a tax system for the 21st century.”
The Tasmanian Premier, Will Hodgman, said he was looking forward to putting some concrete proposals on the table by the proposed deadline of March next year.
Mr Hodgman said his focus was not to increase the tax burden.
“We believe that the better and more appropriate approach is to ensure that we use this discussion, which also has a very important element of understanding the inefficiencies in our systems,” he said.
ACT Chief Minister Andrew Barr said there are still some fundamental issues in the tax system that need to be addressed ahead of the looming deadline.
“Importantly, out of today was recognition from states and territories as well as the Commonwealth that this is a shared challenge,” Mr Barr said.
“But it’s one that the clock is ticking on and we can’t have another meeting like today in March.
“We have to start making decisions.”
by Alan Thornhill
Tax reforms the Federal government is considering would hit the poor harder than the rich, according to a new report.
The reforms – which include raising the GST to 15 per cent – are to be discussed with State Premiers on Friday – at a meeting of the Council of Australian Governments.
This follows warnings from some of the Premiers that they will face crippling deficits in their State budgets, if they don’t get more Federal revenue.
At the Premiers’ request, the Federal Treasurer, Scott Morrison, has asked the Federal Treasury to model a number of options, including several that would include raising the GST from its present level of 10 per cent.
But the latest report came from the Parliamentary Budget Office.
It says:“the regressive nature of the GST is highlighted by the proportion of income paid in GST as household incomes rise.
“On average those in the lowest income decile are estimated to pay over 12 per cent of their disposable income on GST, or about three times the proportion paid on average by those in the highest income decile.
This disparity primarily reflects the distribution of household saving (as lower income households spend more as a proportion of their income than higher income households.).
by Alan Thornhill
Speculation on tax reform has peaked ahead of a meeting between the Treasurer, Scott Morrison, and State premiers on Friday.
The Federal government has insisted, in the lead up to this meeting, that “everything will be on the table” as these talks progress.
Labor has responded by alleging that Malcolm Turnbull is secretly planning to increase the GST.
Opposition strategists know that an effective campaign on the GST will be their best chance of defeating the still popular Prime Minister, at the Federal elections expected next year.
Lingering divisions in the Liberal party – mostly flowing from the September coup in which Mr Turnbull replaced Tony Abbott as Prime Minister, might help.
Especially as Mr Abbott is finding it difficult to remain heroically silent, about his loss.
But Mr Turnbull knows, deep in his political heart, that his own scare campaign, on the carbon tax, is also the best card he has in his hand.
And – perhaps for that reason – he has been reluctant to say – flatly – that his government won’t increase the GST if it is re-elected next year.
There are several good reasons for not doing so.
After all, coalition governments don’t have a particularly good record, when it comes to keeping pre-election promises, particularly on tax.
Why draw attention to that?
Then there would be recalcitrant premiers to convince, if a Prime Minister did want to increase the GST.
Why give them time to organise, too?
Much better to keep mumbling about “everything being on the table” when it comes to tax reform.
There are risks, of course.
That was illustrated – all too well – today when Fairfax newspapers claimed to have a secret document showing not only that massive increases to the GST are likely, but that the Medicare Levy could rise as well.
There is an old game, in politics, called “frightening the horses.”
And our politicians – on all sides – are quite good at it.
by Alan Thornhill
As you read this, a delegation of Australian politicians will be flying out to the Pacific to meet local islanders
Steven Ciobo, the Minister for International Development and the Pacific, who will be leading the group, said it would be visiting Fiji, Tonga, Samoa and Solomon Islands.
He said the delegation would be observing the outcome of Australia’s aid and investment in the region.
Its aim would be to strengthen Australia’s relations with its Pacific neighbours.
But that’s only half of the story.
Members of the delegation may well find themselves spending more time listening than they expect.
Australian aid is welcomed – and highly valued – in the Pacific.
But that has never meant that it is above criticism.
One senior Pacific politician, for example, liked to talk about what he called “boomerang aid.”.
His point was that too much of the money that Australia sets aside, to help the people of the Pacific, actually ends up in the pockets of Australian aid workers, instead.
So who is going on this trip, for Australia?
Mr Ciobo said the members of the bi-partisan delegation he is leading are Nola Marino the Chief Government Whip, Jane Prentice, the Federal Member for Ryan, Sharon Claydon the Federal Member for Newcastle and NSW Senator, Deborah O’Neill.
These are serious people doing an important job, in Mr Ciobo’s view.
As he says:“the delegation underlines the strength and breadth of support in Australia for closer relations with our region.”
That declaration will be welcomed in the Pacific.
Tongans, in particular, often feel their geographically isolated position in the world very keenly.
So they won’t be allowing these Australian politicians to fly back home without knowing how they see the great issues of the day.
And for Pacific Islanders, no issue is greater than climate change.
For they know, all too well, that if rising sea temperatures, cause the Antarctic ice sheet to melt, many of the beautiful islands they call home, would simply disappear beneath the sea.
The BBC reports that World leaders, meeting in Paris last week, approved a draft text they hope will form the basis of an agreement to curb global carbon emissions.
The 48-page document will be discussed by ministers today.
They will try to arrive at a comprehensive settlement on outstanding issues this month,
Some of them will be tricky.
The French climate ambassador has warned that major political differences still need to be resolved.
Delegates from 195 countries worked through the night at the conference centre in Le Bourget, conscious of a Saturday deadline imposed by the French president.
The aim now is to turn this draft text into a long-term agreement.
And although they are on the other side of the world, Pacific Islanders are determined to make their voices heard, in support of that objective.
With good reason.
They have already seen what can go wrong, when many people feel compelled to leave home, for whatever reason.
These include civil war.
That’s what happened in the Solomon Islands, when 30,000 islanders from Malaita took to the sea in canoes, intending to settle on the island of Guadalcanal.
That gave the world an early glimpse of what the results of large population movements can be.
So Australia – and the world – have good reason to press their climate change negotiators for a tight agreement.
by Alan Thornhill
Thousands of Australian families will be worse off under the Federal government’s child care changes, according to Labor.
However the Shadow Minister for Education and Early Childhood, Kate Ellis, admitted, in a radio interview, that she could not say which ones would be hit in that way, as the government had not provided sufficient detail.
Ms Ellis did say, though, that the National Centre for Social and Economic Modelling, which had produced the only published research on the new measures, had concluded that they would leave one family in four worse off.
“They announced that they thought that one in four current users of the child care system would be worse off as a result of changes to the activity test,” Ms Ellis said
“”…. the Government is saying they are tightening up how many hours of subsidised care families are entitled to get and trying to bring it closer in line with their hours of work.”
“ The problem with that is that casual workers, for example, or part-time workers, might only work a number of hours, but of course, they still pay for 12 hours child care.”
“ That is the way that the system operates and that is the way that the system bills,” Ms Ellis said.
by Alan Thornhill
The Australian economy grew by 0.9 per cent in the September quarter – and 2.5 per cent over the year.
This is shown in figures the Bureau of Statistics published today.
The Bureau said the biggest contribution to economic growth in the quarter had come from exports of goods and services.
”This was concentrated in mining commodities,” it added.
It said this followed a decline in the June quarter.
The Bureau also said strength was seen in the broader economy in household consumption spending, which rose 0.7 per cent in the quarter and new and used dwelling construction, which was 2 per cent up.
However it noted that gross fixed capital spending had been the major area of weakness in the domestic economy.
The Bureau said this was consistent with falling investment in the mining sector.
“Public gross fixed capital formation fell by 9.2 per cent in the quarter,” the Bureau added.
Australia’s terms of trade also fell by 2.4 per cent, on seasonally adjusted estimates, in the quarter it added.
by Alan Thornhill
There has been a big improvement in Australia’s current account, but governments are still spending more than they raise and home building approvals are down.
These developments are all confirmed in figures the Bureau of Statistics published today.
The Bureau noted that the nation’s September quarter current account deficit – of $18.1 billion – was $2.4 billion smaller than that seen in the previous quarter.
It said that, in seasonally adjusted chain volume terms – the surplus on goods and services, increased by $6.1 billion from that chalked up for the June quarter.
Significantly, the Bureau said “this is expected to contribute 1.5 per centage points to growth in the September quarter 2015 volume measure of GDP.”
But the picture in the building industry, which has been one of the bright spots in the economy, was less encouraging.
The Bureau said private sector house approvals fell in October.
It recorded a fall of 0.6 per cent in the month and said that – in trend terms – approvals have now fallen for seven months.
The Bureau also noted that – despite all their talk of austerity and deficit reductions – Australia’s politicians – overall – are still spending more than they raise.
It said taxation revenue fell by 14.7 per cent, in the September quarter, to $101.3 billion.
However total expenses, for all levels of government, had risen by 0.1 per cent – in that time, to $149.8 billion.
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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