Monday, November 09, 2020

The surprising stock market

I follow only the Australian stock market but it generally mirrors Wall St. and I gather that it is still doing so at the moment

The surprise is how robust stock values are at the moment. The lockdowns knocked about 12% off the value of my portfolio but the election has substantially reversed that. My portfolio is now only about 6% down on where it was

There were a lot of pundits who said the market was in for a big fall. So what happened? It seems to be that investors now expect gridlock in American politics. And gridlock is something conservatives rather like. If there is no agreement in politics, no new laws will be passed and no new regulations will be issued. That means that businesses have to cope with market challenges only, not political changes. While the politicians are squabbling with one another, it gets them off the back of business

There was a good example of that during the British prime ministership of the unfortunate Theresa May. Her weak leadership plus a near balance in the House of Commons meant that very little got done politically. And British business boomed at that time.

So it seems that U.S. business is expecting something similar now. And that expectation will be well and truly fulfilled if, as expected, the GOP retains control of the Senate.

And over the last 4 years the GOP has very largely become the party of Trump. His attitudes and policies have not only won huge approval among the GOP rank and file but have also percolated into the thinking of most Senators, the contemptible Mitt Romney being the obvious exception. But even waverers like Romney, Collins and Murkowsky have generally gone along with the rest of their Senate colleagues anyhow. So a Senate dominated by Trump thinking will be a total roadblock to any of the insane new legislation that Biden has proposed.

And note that the GOP has also done well both in the House and in picking up State governorships. So even if sufficient new votes are "found" to deny the GOP complete control of the Senate, Congress as a whole will end up finely balanced and should as such fulfil its traditional role as a brake on change. Getting a majority for anything in either house is not easy. Only measures with a considerable degree of consensus behind them normally get up.

It took the first two years of his presidency for Obama and his supporters to get Obamacare through, during which little else got done

And I haven't even mentioned yet the now very conservative Supreme Court. The one big thing that conservatives wanted from Trump was to rebalance the Supreme Court and he achieved exactly that. And the Supreme court has a proven ability to knock on the head any adventurous legislation or regulations -- JR

Private health funds in financial peril call for tax rebate to be restored

Health funds keep a LOT of people out of public hospitals so governments have an interest in seeing that they keep going

A secret tax slug is adding nearly $250 a year to your health fund premiums and it’s contributing more to your insurance costs than the annual premium hikes.

Health funds will this week mount a major campaign to reverse the cash grab after more than 30,000 families dumped their insurance in June – pushing the industry into a death spiral.

The financial regulator last year predicted only three of the nation’s 38 health funds would survive past 2022 and new government data shows 11 of the nation’s 37 funds made a loss last financial year.

Half the funds will be in financial distress unless the government steps in, Private Healthcare Australia chief Dr Rachel David told News Corp Australia.

The Federal Government used to cover 30 per cent of the cost of health insurance under a tax rebate that applies to families earning less than $180,000 and individuals earning less than $90,000.

But under rule changes that came into effect in 2014, the rebate has been gradually eroded and is now worth just 24.81 per cent of the premium.

The rebate used to be 35 per cent for those aged 65-68 but has fallen to 29.2 per cent and it was 40 per cent for the over 70s but has fallen to 33.4 per cent.

Unless the policy changes the rebate is on track the slide to just 16 per cent of premiums by 2030, Dr Rachel David has forecast.

The reason the tax rebate is declining is that it rises by the annual rate of inflation each year while health fund premiums have been increasing by two to three times the rate of inflation.

This year’s October 1 premium rises added an average $103 to the cost of a family’s private health insurance bills while the cut to the tax rebate pushed up the cost by a further $237.

The Coalition promised in the 2013 election campaign it would reverse the policy when government finances allowed but has never acted on that promise.

The October federal budget showed the government intended to slash a further $710 million from the rebate over the next four years, Dr David said.

“What we’re arguing for at the moment is for them to basically put a floor under it so they are not reducing it by $710 million … our ideal would be to take it back to 30 per cent,” she said.

A spokesperson for Health Minister Greg Hunt said “the Coalition supports and will protect the PHI rebate”.

NED-2700-Health insurance rebate levels - 0
“We have cut the annual PHI premium rise by half on our watch. By comparison at the last election Labor intended to slash the PHI rebate. Our position remains unchanged,” he said.

The reduction in government support for health insurance has occurred at the same time as tens of thousands of families and young people are dumping their cover while elderly people who are more likely to use it join up forcing up premiums even more.

The proportion of the population with hospital cover has dropped from 47 per cent in 2014 to 43.6 per cent in June 2020.

At the same time public hospital waiting lists are on the rise and desperate uninsured people are self-funding minor procedures such as tendon repair, the removal of skin lesions, sinus surgery and removal of tonsils.

The COVID-19 surgery ban has seen public hospital waiting lists surge with 80,000 fewer elective surgery procedures in public hospitals so far in 2020.

“We’ve had reports in the news in Victoria and South Australia that wait times for category three surgery could be years and years, even 10 years in South Australia,” Dr David said.

It will cost state and federal governments half a billion dollars to clear this public hospital surgery backlog, the industry has calculated.

Consumer’s Health Forum chief Leanne Wells said the tax rebate already cost $6 billion and before more taxpayer dollars were spent propping up the industry there needed to be a proper inquiry into the value of health insurance.

“Fifty five per cent of Australians do not have health insurance, yet the rebate endures at the cost of $6 billion or more while public hospital waiting lists continue to rise,” Ms Wells said.

Australian Medical Association president Dr Omar Khorshid said the AMA supported restoring and indexing the rebate for private health insurance to help make it more affordable for Australians.

“In particular, consideration should be given to prioritising those on lower incomes and younger cohorts. There is an obvious benefit here for Government – the more young people join, the bigger the insurance pool, the cheaper insurance gets for everyone – which benefits government and most importantly, patients,” he said.

Aboriginal welfare: Evidence shows CDC works

Jacinta Nampijinpa Price

The Cashless Debit Card (CDC) has long faced opposition from those who claim that not allowing welfare to be spent as recipients choose denies them ‘financial freedom’ and imposes unnecessary restrictions.

But this ‘financial freedom’ can fuel destructive lifestyles. And it is the responsibility of government to ensure that taxpayer money is spent on the aims of welfare — to provide the necessities of life — rather than drugs, alcohol and gambling.

The evidence shows that the CDC works. Nine months following the first trial period across Ceduna and East Kimberley, 41% of participants reported a decrease in alcohol consumption.

Similarly, at nine months, 48% of participants who used illegal drugs reported a decrease in use. Of those with gambling problems, after nine months 48% reported a decrease.

Some days I visit my local supermarket and encounter an alcoholic family member who asks me for money to support their addiction.

This practice, known as ‘humbugging’ is endemic in regional and remote Indigenous communities. The demands made are rooted in a millennia-old system of sharing in family and moiety groups, that aimed to ensure everybody got some food.

I have learned not to carry cash for this reason. I can use the excuse that I only have my card and therefore I am unable to hand over cash.

Every day on the streets of Alice Springs and throughout the communities, humbugging has become a way for those with substance and gambling problems to scam money to support them.

And it’s also become one of the leading ways that Indigenous people who want to keep their lives on track — or even get ahead — are held back.

So it’s no surprise that many other Aboriginal Australians are forced to deploy similar measures to those I use to avoid the ‘humbugging’ demands.

Labor and the Greens would be happy to allow some welfare recipients to maintain their right to destroy their lives with alcohol, substance abuse or gambling while their children, families and communities continue to suffer

New education centre aims to end culture war over student testing

An education veteran is warning student testing has become a battleground for culture wars between those who argue teachers are avoiding accountability and others who say it reduces education to a set of numbers.

But Tom Alegounarias, the former chair of the NSW Education Standards Authority and one-time president of the Board of Studies, said assessment was too important to be derailed by simplistic debates, as it was vital to a quality education system.

With Professor Jim Tognolini, he has set up a Centre for Educational Measurement and Assessment at Sydney University. It aims to build teacher confidence and expertise in testing, undertake research and provide expert analysis.

“On the one hand you have people arguing that teachers are unaccountable and afraid of testing because of accountability,” Mr Alegounarias said. “On the other hand you have teachers who say the purpose of education is being perverted for the sake of an ideological commitment to numbers and a market-type accountability.

“This has distracted the profession and the community in general from more fundamental educational purposes.

“What we want the centre to do is build the depth and expertise of teachers, and the confidence of teachers - and in turn the community - that students are being assessed with reliability, validity and accountability. Ours is an educational mission, not a political one.”

In recent years, debate has raged within the sector over tests such as NAPLAN. Many also argue the Higher School Certificate has had its day, prompting the NSW Education Minister, Sarah Mitchell, to say she was concerned about a “faddish push” to downplay the importance of exams.

Mr Alegounarias will chair the centre, and Professor Tognolini will be chief executive. The board will include representatives from the three school sectors, academics and teacher representatives, including unions.

It will be self-funded, not-for-profit, and sit within the Sydney School of Education and Social Work, in the Faculty of Arts and the Social Sciences.

Professor Tognolini said the recent NSW curriculum review and Gonski report emphasised the importance of good quality assessment evidence to teachers, and the challenges.

“The centre will work collaboratively with other assessment centres across Australia and internationally to learn from and have an impact on assessment and measurement issues that are truly global in their reach,” he said.




No comments: