July 2 Edition
Budget Night was May 12, 2015.
Parliament has risen - the Government is very happy how things have gone so all is well with the world.
Sadly some global authorities are suggesting we lurk in a fool’s paradise. Others disagree so I guess only time will tell!
In reading about the state of our country one of the best places to start is the IMF who spend 2-3 weeks meeting with all sorts of experts, the Treasury and so on - off the record - and then report what they find - often to the annoyance of the Treasurer!
See here:
What the Treasury, not the Treasurer, really thinks
Date June 26, 2015
BusinessDay contributing editor
Joe Hockey promised in the budget last month that we'd be roaring back to 3.25 per cent growth in 2016-17 and even stood by the silly assumption that we'd do 3.5 per cent for the two years after that. Photo: Andrew Meares
Ask not what the International Monetary Fund recommends for Australia, but what Australia recommends the IMF recommends. That was the most important aspect of an IMF official's sombre warning for our economy this week. It's a chance to find out what the Treasury and Reserve Bank really think.
Despite the attention we sometimes give the IMF, it doesn't give us much. Australia is not one of the countries it worries about – it doesn't devote many resources to guessing what's going on here because it largely trusts what the RBA and Treasury tell it. Note that's "Treasury", not "Treasurer".
To remain a high-growth country, to be the high-wage, high-productivity nation we can and should be, we'd have to become a lot smarter about what we do and perhaps bolder in how we go about it.
What tends to happen for the IMF review of Australia's performance is someone visits for a couple of weeks, talks on a background basis to the Treasury and RBA boffins, as well as a few trusted souls from the states and private sector, and subsequently produces a report that doesn't stray far from the official family's view - especially if the official family first gets to review said report.
Colleague Peter Martin this week reported what the IMF visitor had to say after his fortnight of Down Under economist hobnobbing and before he writes the report. At least as important as what the IMF regional assistant director thinks of us is the extent to which his views are formed by what Treasury and the RBA really think.
Here is some of the recent other news and analysis.
General Budget Issues.
PRIME Minister Tony Abbott has praised his Treasurer Joe Hockey for his handling of the Federal Budget despite a recent spate of criticism.
"Now, Joe has copped a lot of crap lately, but since the budget, hasn't it changed!" Mr Abbott told the NSW Liberal Party state council conference," he said.
"Because what Joe has done is brought down the best budget ever for the small businesses of Australia - and didn't the small businesses of Australia finally deserve some recognition and reward.
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The Commonwealth Bank has just released its latest Business Sales Indicator (BSI) and says there are early signs that Joe Hockey’s small business stimulus plan is working.
The bank said that the BSI, “which includes businesses such as Office Furniture, Commercial Equipment, Electrical Parts and Computers, and Computer Equipment and Software, recorded spending growth of 1.9 per cent in trend terms in May – the biggest rise since May 2012“.
In trend terms the move was a more reserved 0.8% in May, which is in line with the gains in March and April. But that still means “annual sales growth stood at 7.5 per cent, well above the decade average of 5.3 per cent,” the bank said.
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Money Editor
The world’s neoliberal policeman has its doubts about Joe Hockey’s economic policy.
Joe Hockey has got it all wrong.
Rather than obsessing over getting back to surplus as soon as is humanly possible, he should be borrowing more money, raising the GST, and cutting tax concessions to the rich.
That, at least, is the view of the International Monetary Fund, the body that acts simultaneously as the world’s insurance policy and its economic policeman.
Following an official visit to Australia, the IMF said on Wednesday: “Australians have enjoyed exceptionally strong income growth for the last couple of decades. But the waning of the resource investment boom and the recent sharp fall in the terms of trade have brought this to a halt.”
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The Abbott Government's attempt at a friendlier budget appears to be easing consumer anxiety around government policy, but has failed to offset growing fears about job security, according to a fresh data from National Australia Bank.
Consumer anxiety rose in the second quarter of the year as worries over job security and cost of living increased, offsetting falling concerns surrounding government policy after Joe Hockey handed down his second Federal Budget, NAB said.
The bank's consumer anxiety index increased to 63.5 points in the second quarter, up from a result of 6.18 in the first quarter, with anxiety levels rising in all surveyed categories except government policy.
NAB chief economist Alan Oster said Australians had responded positively to May's Federal Budget, with "a significant fall" in anxiety levels related to government policy.
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Date June 25, 2015 - 3:21PM
Jason Cadden
Concerns about job security, health and spending power are now the main factors dampening confidence, and will likely drag down spending in the coming months, NAB chief economist Alan Oster said. Consumers are growing more anxious but this time it's not the government's fault.
Worries about job security and the cost of living are overshadowing a positive response to this year's business-friendly federal budget.
National Australia Bank's consumer anxiety index rose 1.7 points to 63.5 points in the June quarter, with anxiety up in all categories except government policy.
A year ago it was Joe Hockey's harsh spending cuts and charges such as the $7 Medicare co-payment fee that weighed on consumer confidence and spending.
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Friday, 26 June 2015 2:05
Eloise Keating
Treasurer Joe Hockey is urging small businesses to open their wallets before next Tuesday in order to take advantage of his government’s $20,000 asset write-off scheme by the end of the financial year.
Hockey told Parliament during question time yesterday the government has so far saved the budget bottom line $14.2 billion as a result of passing a number of its budget measures through the House of Representatives and the Senate.
He said the progress means “small business can go out, have a go and give their employees a fair opportunity to participate in … wealth creation”. And Hockey said this weekend is the perfect time to have that go.
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Health Budget Issues.
3:42pm June 23, 2015
Prime Minister Tony Abbott has called for a mature debate on the future of health system funding after a federal government discussion paper flagged handing responsibility for public hospitals to the states.
The option contained in a leaked document on Federation reform, held by the prime minister's office, has been slammed by state premiers.
It comes after other options to change school funding were leaked and then swiftly ruled out by the federal government on Monday.
Mr Abbott said officials in state and federal government departments had for months been discussing ideas for reform and many things would be considered and rejected during this process.
Discussion paper on federation reform raises option to leave $18bn in public hospital funding responsibilities to states
Tuesday 23 June 2015 15.52 AEST Last modified on Tuesday 23 June 2015 19.03 AEST
The states have slammed reports the federal government is considering leaving the funding of public hospitals to the states.
The option, contained in a leaked discussion paper on federation reform, could cost the states and territories $18bn a year.
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Complaints about the private health insurance industry have been rising as customers are increasingly drawn to cheaper, basic-level policies, often unaware that they are not covered for a growing list of procedures.
Insurers including Medibank Private, HBF and NIB have recently launched new products that, with various exclusions and restrictions, appear to be tailored towards budget-conscious customers.
While the trend appears to be driven by rising premiums and government policy designed to encourage participation, private hospital operators are becoming concerned about its impact.
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Pharmacy Issues.
Australians could soon see the prices of some of its most common medicines halved under a new generic drug deal.
Pressure is mounting on the Senate to pass the legislation this week after Federal Health Minister, Sussan Ley, signed an $18.9 billion deal with the Pharmacy Guild and Generic Medicines Industry Association which could drop the prices of over 2,000 common prescription medicines.
Ley said that the focus should be on having “more affordable medicines for consumers” especially since “so many Australians now are suffering from chronic diseases”.
In particular, Ley pointed to medication for cholesterol and heart conditions which could drop to $10 per script for general patients.
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Date June 22, 2015
Health and Indigenous Affairs Correspondent
Taxpayers could save $320 million a year by only paying for the best-value drug when cheaper drugs work just as well as more costly ones, according to a report by a former federal health department head.
The Grattan Institute report, by health program director and former top bureaucrat Stephen Duckett and Grattan health fellow Peter Breadon, evaluates the effectiveness of therapeutic price premiums, a policy which is supposed to make patients pay the difference between an expensive drug and its cheaper equivalent. One aim of the policy is to put pressure on drug companies to drop their prices to reduce the risk of patients switching from their drug to a less costly equivalent.
But the pair argue that while the idea behind the policy is good, it is "broken" in Australia because the scheme covers too few drugs, premiums charged are too small, and patients are often unaware of whether their drug attracts a premium.
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It’s all systems go for the Sixth Community Pharmacy Agreement after the Senate today passed the government’s PBS reform package.
The government had tied the 6CPA to the passage of its reform bill, meaning it needed to be passed by 30 June – the expiry date of the Fifth Agreement.
The reform bill passed today, with two more sitting days left before that date, after the Greens and Labor supported the bill.
While key CPA items like location rules are now protected for the life of the agreement, the controversial ‘optional’ pharmacy co-payment discount of up to $1 per script is also now law.
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Some medicines could become cheaper after the government's multi-billion dollar deal with pharmacists cleared parliament.
A bill to implement the sixth community pharmacy agreement passed the Senate with Labor and Greens support on Tuesday, seven days before the previous five-year agreement ran out.
The $18.9 billion deal, signed off with the Pharmacy Guild of Australia in May, allows 5450 community pharmacies to continue dispensing medicines under the Pharmaceutical Benefits Scheme.
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Medicines Australia says it is “extremely disappointed” with a last-minute decision by Health Minister Sussan Ley to abandon a Strategic Agreement, which it says casts a shadow over the future stability of the local medicines industry and also puts patient safety at risk.
The purpose of the Agreement was to provide a level of stability and clarity for the local medicines industry in return for supporting a $6.6 billion savings package of which $4.2 billion was to directly impact its members, Medicines Australia says.
Medicines Australia says it had also offered to work with the Government on patient safety concerns which will allow the substitution of biosimilar medications by pharmacists without, it says, appropriate evidence that this is safe and without the consent of a patient’s GP or clinician.
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The Senate has passed a PBS bill that promises to reduce the price of some medications and lock in the agreements for the 6th Community Pharmacy Agreement.
Here are some of the main points of the National Health Amendment (Pharmaceutical Benefits) Bill 2015:
1. A 5% price cut for patented (F1) medicines from 1 April 2016
2. Extension of price disclosure to further drive down price of medications from 1 October 2016
3. Pharmacists allowed to discount PBS co-payment by $1 from 1 Jan 2016 (Patients take longer to reach PBS safety net)
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Australian patients are being forced to wait up to 15 months longer to access the latest breakthrough medicines than in the US or Europe because drug companies are delaying bringing them down under, a new landmark report has revealed.
25 June 2015
Australian patients are being forced to wait up to 15 months longer to access the latest breakthrough medicines than in the US or Europe because drug companies are delaying bringing them down under, a new landmark report has revealed.
The independent review of the Therapeutic Goods Administration’s (TGA) medicines and medical devices regulatory framework – released today – finds Australia’s safety regulator had one of the most efficient and consistent approval processes in the developed world.
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Australians would have faster access to certain new drugs and devices under a reform blueprint that would require local regulators to focus more on post-market monitoring and surveillance.
A government-commissioned review has found the Therapeutic Goods Administration was well-regarded internationally — more so for its handling of drugs than devices — but in need of reforms to cope with the “rapid pace of innovation and change”.
A three-speed regulatory system has been proposed to ensure new drugs with sufficient overseas approvals, or unique requirements, are fast-tracked on to the Australian market. The channels for generic drugs and biosimilars — which have a different composition than patented drugs but similar effects — would be two-speed, again with those products sufficiently assessed overseas given expedited approval.
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A government-appointed review panel has recommended sweeping changes to the TGA, including fast-tracking authorisations for some drugs and rubber-stamp approval for those approved in similar jurisdictions.
The Review of Medicines and Medical Devices Regulation examined the TGA’s regulatory framework and processes with a view to identifying areas of unnecessary red tape and opportunities to streamline the regulatory framework.
The reviewers say the TGA generally works well and does not suffer from excessive red tape by international standards.
It takes 391 days to approve a new drug on average, compared with 478 days for EU regulators and 304 days for the FDA.
Among its 32 recommendations, the review panel suggests that new drugs and generics be given automatic TGA approval — subject to local conditions — if the manufacturers could show they had already gained approval in a similar jurisdiction.
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It is going to be very interesting to see what happens to the polls and consumer confidence over the next 2-3 months - especially if we see the Senate continuing to knock back some saving as is seeming likely!
Enjoy.
David.
