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Wednesday 7th December 2016 - 1:25 pm
Comments Off on economy goes backwards

economy goes backwards

by Alan Thornhill

The Australian economy shrank by 0.5 per cent in the September quarter.This shock result, reported by the bureau of statistics today is the first of its kind seen in Australia since the aftermath of the Queensland fires in March 2011,  More later,.

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Tuesday 6th December 2016 - 2:34 pm
Comments Off on Rising prices boost Australia’s trade

Rising prices boost Australia’s trade

by Alan Thornhill

A strong rise in export prices helped Australia produce

a much better economic performance over the past year than many expected,

 

The bureau of statistics reported today that these prices rose by

47.2 per cent in that time.

 

An easing in coal and iron ore prices had previously distracted

attention from the broader range of commodities Australia exports.

 

The bureau also said that the Australian economy grew by 2.9 per cent in the

12 months to the end of September, on trend figures.

Tuesday 6th December 2016 - 8:25 am
Comments Off on The news: Tuesday December 6

The news: Tuesday December 6

by Alan Thornhill

New Zealand’s “overworked”  PM, John Key, quits ABC
Reserve Bank board to review Australia’ s  interest rates  today ABC
Monday 5th December 2016 - 11:30 am
Comments Off on The news: Monday December 5

The news: Monday December 5

by Alan Thornhill

New Zealand PM John Key quits  ABC

 

 

 

Far-right candidate Norbert Hofer has lost Austria’s presidential election. BBC

 

Twenty-four bodies have now been  taken from a dance hall in the US town of Oakland

after a weekend fire  ABC

 

Several public service strikes  are expected today but authorities are confident that social

security payments won’t be affected  ABC

Sunday 4th December 2016 - 3:41 pm
Comments Off on Older people face “higher” costs ASFA

Older people face “higher” costs ASFA

by Alan Thornhill

 

Older Australians have had to face bigger price rises than the broader community over recent months and that has meant that some older people are no longer  able to maintain a comfortable living standard.

 

The Association of Superannuation Funds in Australia, which reported these developments today, said the costs met by retired Australians had outpaced the consumer price index in the September quarter.

 

ASFA CEO Dr Martin Fahy said annual growth in the overall Consumer Price Index remained low but retirees faced a number of cost increases in the September quarter.

 

“The increase in cost of living in retirement highlights the need for saving an adequate amount for retirement,” he said.

 

“In order to achieve a comfortable standard of living in retirement, an individual requires a minimum of around $545,000 and a couple around $640,000.”

 

Currently, less than 20 per cent of single people aged more than 65 are able to support a standard of living at or above the ASFA comfortable level. Only around 30 per cent of all couples are able to support a standard of living at that level.

 

Dr Fahy said the percentages would lift to 50 per cent or more of retirees, provided the rate of compulsory contributions rises to 12 per cent and individuals make voluntary contributions.

 

“A low interest rate and investment return environment provides challenges, although a low inflation rate by historical standards is of some assistance to current and future retirees,” he said.

 

In calculating the lump sums needed, ASFA has revised downwards its previously assumed long term nominal investment return from 7 per cent a year to 6 per cent a year, while at the same time reducing the assumed growth in future community living standards from 3.75 per cent to 2.75 per cent a year, in line with recent subdued average wages growth in Australia.

 

Both the choice of investment option and rate of contributions will be crucial for standard of living in retirement.

 

Dr Fahy said ASFA encourages people to get in touch with their superannuation fund or adviser to find out what options are available, so they have the best chance of living their post-work years free from major financial worries.

 

In regard to the specific developments in the September quarter, the most significant price rises were fruit (+19.5 per cent), vegetables (+5.9 per cent), electricity (+5.4 per cent) and property rates and charges (+4.0 per cent).

 

The most significant offsetting price falls were automotive fuel (-2.9 per cent) and telecommunication equipment and services (-2.5 per cent).

 

It is not unusual for both property rates and charges and the cost of electricity to increase in the September quarter as the amounts that can be charged are reviewed on an annual basis by regulators in a number of States and Territories. In particular, the rise in the price of electricity was driven by increases in wholesale electricity costs across the eastern and southern states.

 

The availability of pensioner concessions and discounts is very important for many retirees, helping them to meet what are often substantial fixed or largely unavoidable costs in retirement.

For instance, in NSW, a pensioner concession card is estimated to save retirees about $1,470 a year, according to ASFA calculations. The sum includes a $630 reduction in water, sewerage and stormwater charges, a $300 discount on car registration, $250 discount on council rates, $235 discount on electricity and a $55 discount on the pensioner’s driver’s licence fee. A Telstra fixed line customer can also get up to $180 a year in discounts on call and access charges.

 

For most other living costs in retirement retirees have to meet the full cost of any price increases, which can be quite substantial. In this context the rise in fruit and vegetable prices was due to adverse weather conditions, including floods, in major growing areas, impacting supply and prices. Self-funded retirees also face higher costs than retirees who qualify for at least some age pension.

Table 1: Budgets for various households and living standards for those aged around 65 (September quarter 2016, national)

  Modest lifestyle Comfortable lifestyle
  Single Couple Single Couple
Housing – ongoing only $75.25 $72.23 $87.21 $101.10
Energy $42.98 $57.09 $43.62 $59.16
Food $78.39 $162.38 $111.98 $201.57
Clothing $17.71 $28.74 $38.32 $57.49
Household goods and services $27.56 $37.37 $77.53 $90.83
Health $44.24 $85.39 $87.78 $154.92
Transport $90.76 $93.33 $135.25 $137.82
Leisure $75.01 $111.76 $227.32 $311.52
Communications $8.28 $14.50 $22.76 $28.97
Total per week $460.19 $662.79 $831.79 $1,143.38
Total per year $23,996 $34,560 $43,372 $59,619

The figures in each case assume that the retiree/s own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. Single calculations are based on female figures. All calculations are weekly, unless otherwise stated.

Table 2: Budgets for various households and living standards for those aged around 85 (September quarter 2016, national)

  Modest lifestyle Comfortable lifestyle
  Single Couple Single Couple
Housing – ongoing only $75.25 $72.23 $87.21 $101.10
Energy $42.98 $57.09 $43.62 $59.16
Food $78.39 $162.38 $111.98 $201.57
Clothing $17.71 $28.75 $38.33 $57.48
Household goods and services $48.39 $68.60 $150.43 $174.12
Health $95.56 $148.36 $130.87 $208.79
Transport $37.76 $47.20 $42.48 $51.92
Leisure $47.79 $71.30 $123.53 $170.76
Communications $8.23 $14.41 $22.63 $28.80
Total per week $452.06 $670.32 $751.08 $1,053.69
Total per year $23,572 $34,952 $39,164 $54,942

The figures in each case assume that the retiree/s own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. Single calculations are based on female figures. All calculations are weekly, unless otherwise stated.

Sunday 4th December 2016 - 7:47 am
Comments Off on The news: Sunday December 4

The news: Sunday December 4

by Alan Thornhill

A fall in US unemployment raises hopes of a rise in interest rates.BBC

 

 

China-lodges-diplomatic-protest-after-Donald Trump’s-call-with-taiwan-president-tsaiin theage.com.au

Slth

 

Teenager struck by lighting during a storm in southern Queensland ABC

Saturday 3rd December 2016 - 6:50 am
Comments Off on The news: Saturday December 3

The news: Saturday December 3

by Alan Thornhill

Indigenous Affairs Minister Nigel Scullion rejects an ANU report describing

the government’s work for the dole scheme as ” a disaster .”ABC

 

 

The nation’s Treasurers have agreed to develop a new way to encourage investment in affordable rental and

community housing, but the Commonwealth is still resisting calls to change tax concessions. ABC

 

A dramatic raid by more than 75 border force and federal agents has left two leading suppliers of produce to major Australian supermarkets facing allegations of employing illegal migrant workers. SMH

Friday 2nd December 2016 - 12:14 pm
Comments Off on Retail sales still rising

Retail sales still rising

by Alan Thornhill

Australia’s retail sales rose by 0.5 per cent in October, on seasonally adjusted figures the Bureau of Statistics published today.

 

The bureau said this followed a 0.6 per cent rise in September.

 

It added that in seasonally adjusted terms, there were rises in food retailing (0.6 per cent), household goods retailing (0.7 per cent), other retailing (0.8 per cent) and cafes, restaurants and takeaway food services (0.4 per cent).

 

 

But there were falls in clothing, footwear and personal accessory retailing (-0.4 per cent) and department stores (-0.4 per cent) in October 2016.

In seasonally adjusted terms, there were rises in Queensland (0.8 per cent), Victoria (0.5 per cent), New South Wales (0.3 per cent), Western Australia (0.4 per cent), the Australian Capital Territory (0.9 per cent), Tasmania (0.6 per cent) and the Northern Territory (0.3 per cent).

 

But sales in South Australia fell (-0.1 per cent) on seasonally adjusted figures.

The trend estimate for Australian retail turnover rose 0.4 per cent in October 2016 following a 0.4 per cent rise in September 2016.

 

Compared to October 2015 the trend estimate rose 3.3 per cent.

 

Online retail turnover contributed 3.9 per cent to total retail turnover in original terms.

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Alan Thornhill

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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