Budget Winners and Losers

Updated May 09, 2012 09:14:09

Federal Budget 2012 ABC News

Treasurer Wayne Swan has handed down his fifth federal budget at Parliament House in Canberra.

Here is a snapshot of the winners and losers fromthis year’s budget:

Winners

• $1.8 billion from July 2013 so 1.5 million families can receive increase to Family Tax Benefit A, with nearly half taking home an extra $600 a year
• $1.1 billion over four years to create new Supplementary Allowance of up to $210 a year for students, jobseekers and parents with young children on income support
• About 1 million households claiming Tax Benefit A to receive cash payment of $820 for each high school student and $410 for each primary school student under School Kids Bonus, replacing the Education Tax Refund
• $1 billion over four years to roll out the first stage of a National Disability Insurance Schemeexpected to cover 10,000 people from 2013-14 and 20,000 people from 2014-15
• $515 million to treat 400,000 people on the public dental waiting list and to help dentists relocate to rural and remote areas
• $700 million over four years to allow small businesses to “carry back” past profits to offset current losses by up to $1 million
• $475 million for 76 new health infrastructure projects to upgrade regional hospitals and doctor training support
• $3.2 billion aged care package over five years including measures to almost double home care assistance and improve pay and conditions for aged care workers
• $1,000 payment to companies for each worker they hire aged over 50 for at least three months
• $50 million to extend bowel cancer screening program so people aged 50 to 70 will be offered free tests every five years
• $3.56 billion for duplication work on the Pacific Highway in New South Wales on condition of matching state funding
• Flood levy exemption extended to victims of 2012 flooding across eastern Australia
• $6 million over four years for suicide prevention measures in Western Australia’s Kimberley
• $56 million to expand in-home tutoring program for children in up to 100 disadvantaged areas

Losers

• Government revenues down about $150 billion since start of the global financial crisis
• Around $5 billion cut from Defence, including deferral of the delivery of the first Joint Strike Fighter aircraft and scrapping of plans to equip the Army with new self-propelled artillery
• About 100,000 parents affected by cutbacks to parenting payments and shifting of single unemployed parents onto the Newstart Allowance once their children turn eight; budget saving of about $700 million over four years.
• Tax rate on superannuation contributions doubled from 15 to 30 per cent for people earning more than $300,000 a year
• Around 3,000 public service jobs already gone under increased efficiency drive
• Tax cuts for small business promised under the mining tax redirected to households because measures unable to garner enough support to pass Parliament
• $2 billion saved by not proceeding with standard tax deduction on work-related expenses that was due to begin in July 2013
• Commitment to lift spending on foreign aid to 0.5 per cent of gross national income to be met a year later than promised
• Around $1 billion could be saved by crackdown on living-away-from-home allowance for executives interstate or overseas
• Tightening of Pharmaceutical Benefits Scheme and some natural therapies to be removed from private health insurance coverage
• $2.5 billion saved by changes to Medicare levy surcharge and means-testing of private health insurance rebate;
• $923 million saved over forward estimates by scrapping of 50 per cent discount on interest income
• Recipients of Family Tax Benefit A & B and disability support to have payments cut if they travel overseas for more than six weeks a year
• Planned tax breaks for green buildings will not proceed, saving $405 million over the forward estimates
• 80 per cent cut to inbound duty free allowance reduced to 50 cigarettes or 50 grams of tobacco; $600 million saving over forward estimates
• Passenger movement charge up $8 to $55 from July 1, 2012
• Reduction in tax breaks for golden handshakes to save $196 million over forward estimates
• Phasing out of mature age worker tax offset to save $255 million over forward estimates
• Increased heavy road user charge to raise $166 million in 2012-13; almost $700 million over forward estimates

With the current global economic situation in the EU, the US,  Japan and Chinese economies, one would think that the current Australian government would be a little wiser with their spending and put aside for a rainy day…

Umbrellas out people….the storm is around the corner!

I find it interesting how the Government would put funds in on one side of the ledger…only to take it right away again from the other.  For example: Family Tax Benefit A and Supplementary Allowance in…Carbon tax,  a rise in petrol prices, electricity, water, rent, mortgage repayments, potential job losses (don’t be fooled by the recently released unemployment figures either)…right out again!

And I noticed:

* Tightening of Pharmaceutical Benefits Scheme and some natural therapies to be removed from private health insurance coverage.

If you’re dosing yourselves and your children up with pharmaceuticals, they have just removed “natural therapies” from private health insurance.  That makes sense…the Government makes “nadda” from natural therapies, but a bucket load from the poison. Remedy – remove it from health insurance.  Watch for natural medicines and vitamins to be next on the hit list.

Take from this budget what you will, but know a  global economic collapse is eminent. Heck, America is talking about potential civil war in the coming weeks/months.  One only needs to imagine what effects another civil war in the US will have on an already crippled global economy.

And this time,  the Australian economy will not be spared. This Government is spending money it doesn’t have.  Don’t be sucked in with the so-called “extra funds” in our bank accounts, because it won’t be sitting in your accounts for too long – that’s for sure!

My advice:

• grow your own herbs and veges (at least you know what you’re eating)
• pay down your existing debt (as much as you can afford)
• think twice about buying a house  (refrain from committing to any more debt)
• start putting away some extra food and water (while food prices are still affordable)
•  fill up your gas tanks (at least over half way at all times)
• keep an eye on your superannuation investment options – (growth option – high interest – higher RISK)
• dust off your resume and begin to look at upskilling yourself
• always keep extra cash on your person or in your home somewhere (can’t always rely on your bank – another computer glitch could leave you short)
• Don’t always believe what you see or read on mainstream media – do your own research.  It’s FREE.

Is This The Canary Of Australia’s Collapsing Housing Coalmine?

Submitted by Tyler Durden on 04/18/2012 14:46 -04

When thinking of Australia, one traditionally imagines a country that is nothing but a secondary derivative of China’s trade surplus, and an unpegged currency that allows for more trading flexibility than the Yuan. As a result, recurring calls warning of a housing weakness in the country are often ignored as there always appears enough liquidity to mask the issue just long enough. That may all soon be changing. Earlier today, insurance company Genworth Financial pulled the IPO of its Australian unit, sending its shares plunging by over 20% and its default risk soaring. Unfortunately for GNW, and soon for the entire Australian financial sector, instead of merely blaming market conditions, in the IPO, which was supposed to take public up to 40% of the company’s Australian mortgage business, and has instead been delayed to 2013, GNW laid out a far more nuanced, and detailed explanation of what is happening. Alas, it also may be the canary in the coalmine that has been so long overdue in yet another regional, bubblelicious housing market.

Morgan Stanley’s David MacGown explains:

Genworth announced that it will delay the IPO of up to 40% of its Australian mortgage business to 2013 from a previously targeted 2Q12 transaction. Recent news reports hinted that weak equity market conditions could delay the unit’s IPO, but GNW’s rationale was more problematic: the company cited deteriorating market conditions in the Aussie mortgage market. Specifically, the company noted “…elevated loss experience in Australia as lenders accelerated the processing of later-stage delinquencies from prior years through to foreclosure and claim at a higher rate and severity than expected, particularly in coastal areas of Queensland that experienced natural catastrophes and regional economic slowdowns and among certain groups of small business owners and self-employed borrowers.”

If anyone is desperately looking for a clue that things may be about to go, er, downer underer in Austrlia, it doesn’t get any clearer than this. And if China is indeed facing a hard landing, or whetever the CCP wants to telegraph to the world in its first and foremost desire to avoid popular discontent, this may just be the straw that breaks the camel’s back.

More:

 Unlike the troubled US MI business, GNW’s Canadian and Australian businesses have been consistently profitable, with the Australian business producing run rate quarterly earnings averaging about $50 million per quarter over the last two years. GNW now expects the Aussie MI business to report a “modest” first quarter loss.

It gets worse for the US company, whose loss of nearly $1 billion in market cap today alone may be just the beginning.

• I had been constructive on the GNW recovery story, anticipating an improving trajectory of US MI losses (helped by profitable new business written), continued performance of the International MI business, and in particular the 2013 return of the US life companies to positive earned surplus and thus dividend-paying status to the holding company. I viewed the Australian MI IPO as another positive step in this process in that it was expected to provide additional financial flexibility (estimated proceeds of approximately $500mm as estimated by MS equity analyst Nigel Dally (Pressure Building to Shrink to Prosperity, 2/1/12) to the holding company while managing the company’s global MI exposure.
• With the IPO shelved until 2013, I see little in the way of near-term positive catalysts for the credit. But it’s important to note that a 2012 IPO isn’t necessary for the company to maintain strong holding company liquidity. With $1.4B of cash in hand, GNW can easily cover an estimated $350mm of holdco interest and operating expenses and $222mm of maturities. Moreover, with the US MI subsidiaries running above the 25:1 risk-to-capital ratio limit (28.8:1 for the segment, 32.9:1 for the lead company at 12/31/11) and climbing as the company writes new business this year, it’s reasonable to posit that GNW’s North Carolina regulators will require the company to inject additional capital in order to continue writing new business. NC and numerous other state regulators have granted waivers of the 25:1 limit, allowing the company to write new business without injecting fresh capital. I estimate as much as a $250mm injection. The net of these cash uses implies that GNW would still end 2012 with nearly $600 million in holdco liquidity, and note that this estimate assumes no dividends from operating subsidiaries. GNW has previously projected $300mm of dividends from its life insurance and wealth management units this year and dividends of $160mm from International MI. Holding company liquidity is the key credit positive for GNW at this point.

Yet for those who are worried the only move here in GNW is up, the trade may well be to start getting increasingly cautious on other Australian equities such as QBE, ANZ, NAB, WBC and CBA. Because, to mix metaphors, when the light is shone, there is never just one canary. And central-planner can only delay mean reversion for so long…

www.zerohedge.com

 

Investor worries new crisis will be felt in Australia

Michael Janda ABC

Updated April 10, 2012 – au.news.yahoo.com

One of the world’s most famous contrarian investors says he is worried that a new phase of the global financial crisis will be felt in Australia.

Marc Faber, author of the Gloom, Boom and Doom report, says the Chinese economy is a major source of uncertainty.

“Most economies will say, well, we’ll have a soft landing, that’s the worst,” he told AM.

“But I’ve been working in the investment business for 40 years. All the time I’ve heard about soft landing and no recessions and no crashes and no panics and so forth.

“So who knows, maybe the Chinese economy will decelerate more rapidly than is generally expected and possibly even crash, in which case it would have a huge impact on economic activity around the world.”

He says that impact will be felt in Australia.

“If there is a meaningful slowdown in China, then obviously the Australian economy will suffer very badly,” he said.

“I happen to think that the Australian economy will suffer regardless because we have a very elevated property market that has become unaffordable for a large number of people and we have already some cracks in the property market.

“We have a very high household debt to GDP ratio so I’m not optimistic about the Australian economy.”

Mr Faber says the American economy is another reason for concern.

“Right now the US stock market is outperforming other markets,” he said.

“But I think that in the US, the fiscal deficit is a huge problem to which there are hardly any solutions, for the simple reason that the Democrats want to spend and the Republicans also want to spend. Nobody really wants to increase taxation.

“So the deficit will, in my opinion, continue to increase and will necessitate money printing, but it may not lift economic activity.”

He says any increase in the quantity of money will drive symptoms of inflation.

“The central bank does not know where these symptoms will occur, so it creates one distortion in the market to the next distortion to the next bubble,” he said.

“And so you have booms and busts and much higher economic and financial volatility.”

 

Australia and New Zealand could adopt a single currency

Interesting how this particular subject was bought to light some years ago and then squashed…and now it comes to light, yet again!

Interesting again though, if you read the preamble of the “Commonwealth of Australia Constitution Act” you will notice that New Zealand is listed as a “colony” of Australia.

Read for yourself:

COMMONWEALTH OF AUSTRALIA CONSTITUTION ACT

An Act to constitute the Commonwealth of Australia              
[9th July 1900]
6. "The Commonwealth" shall mean the Commonwealth of Australia as 
established under this Act.
  "The States" shall mean such of the colonies of New South Wales, New Zealand, Queensland, Tasmania, Victoria, Western Australia, and South 
Australia, including the northern territory of South Australia, as for 
the time being are parts of the Commonwealth, and such colonies or 
territories as may be admitted into or established by the Commonwealth 
as States; and each of such parts of the Commonwealth shall be called "a
State".
Can anyone help to explain this one??
Australia-and-New-Zealand-could-adopt-single-currency.html

Australian Bill Allows For Sterilizations Without Parental Consent At Any Age

Source: Naturalsociety.com March 5, 2012

I am totally disgusted and can not even bring myself to make comment…A must read!

Written by the Western Australia Mental Health Commission (MHC) and overseen by Mental Health Commissioner and clinical psychologist Mr Eddie Bartnik, objections can still be submitted to Australian parliamentary members in each state until March 9th.

Read more: australian-bill-allows-for-sterilizations-without-parental-consent-at-any-age

Cameron’s own goal flop: gas prices in Britain have never been higher! ($8.11 per gallon)

Just as a continuation to one of my earlier posts this week re: gas prices in the US, here is an example of what the Brits are paying for their gas right now…

Are we going to see these crazy prices on our shores soon?

camerons-own-goal-flop-gas-prices-in-britain-have-never-been-higher

Source: maxkeiser.com

Technical glitch hits Commonwealth ATMS

Technical glitch…ummm.  Sounds a little fishy to me.  Might be a good idea to have some cold hard cash stored somewhere JUST in case of another glitch.  Let’s just say, I’m pretty sure this won’t be the last one….

Better to be safe then sorry…when one can’t access their own money, when they want to, one must take other precautions, while you still can.

story-e6freuy9-1226284621370

Fire Water Australia – A MUST SEE Doco!

This is a must see video.  Take the time to check it out…guaranteed to make your blood boil!

 

Greek and NZ Debt Crisis is Linked! Evelyn Gilbert MR NEWS Counter-Spin Feb 23 2012

I can’t say I’m clued up on the finer details of  what is going on in Greece at the moment, aside from the fact  that they are in debt to their eyeballs and the Greek people have had enough, hence the protests etc..

But, I must say, just listening to Evelyn speak about the austerity measures being implemented, one must think that the Global economy is not in a good place at present.

Gas prices soar due to tensions with Iran refinery closures

I was sent this article link from a friend in the US this morning.  What we need to be thinking about, those of us living downunder, is if these are the exorbitant prices being paid in the US, then one only needs to wonder what we’re going to be paying here in Australia?

Bearing in mind that these price hikes are taking effect today, even before news of war in the Middle East between Israel, Iran, the US etc.

We must remember that the price of oil basically affects our everyday lives! Not just what we pay at the petrol pump, but our food, our jobs – EVERYTHING!

Take heed readers…might be time to start thinking of contingencies plans for your families.  Don’t get caught with your pants down!

Add to your plan, a trip to Supercheap Auto to buy a locking petrol cap for $21.99.  Expensive petrol can do some crazy things to our fellow citizens.  Might be a good investment, I think.

gas-prices-soar-due-to-tensions-with-iran-refinery-closures