UPDATE MAY PART TWO

BIG BROTHER APPROACH TO AGEING POPULATION

The following article by David Koch appeared in the April 17, 2005 Financial Review Investor.

Lift the retirement age to 75 is fine but don’t let us wait until then to get our hands on our superannuation.

So they want to lift the retirement age to 75 and only allow access to our superannuation at that time as well. Bugger off! I know April is the month where so many kites are flown to gauge public opinion in the lead up to the federal budget in May, but the sooner we shoot this down the better for everyone.

Currently, the Federal Government is waging a Concentrated Campaign to scare the living daylights out of us about the cost of our ageing population. Its inter-generational report last year didn’t have much impact, so now it has set the Productivity Commission on to the project.

It is a critical issue and one which we have to deal with, but in a way that is creative, involves thought outside the box and isn’t designed to simply add to Treasury coffers.

We are going to have to adjust to an ageing population, but I will take a whole raft of measures to cope and a lot of cultural changes that encourage employers to acknowledge that mature workers have a positive contribution to make and shouldn’t be left on the scrap heap, as is the case at the moment.

Many people want to continue past the current retirement age of 65 and are active, healthy and a real bonus to any organisation that utilizes their skills. But many others are either not capable, or don’t desire to work beyond that age, and they should have every right to make their decision and to be supported where necessary.

All through their working life that’s been the message sent to them by the community and the Government, that retirement is an exciting part of life and you have the flexibility to enjoy it any way you want.

So rather than legislate a retirement age of 75 and use the Big Brother approach, we should be working more from a cultural point of view so that people make that decision themselves and are happy with the decision rather than having it forced on them. But it’s the prospect of making superannuation inaccessible until age 75 which really gets under my skin.

This is just a whole bunch of politicians seeing that enormous pot of super money, one that’s producing enormous tax revenue streams, and they want to make sure they can fleece it for longer. It’s as simple as that.

Rather than make superannuation more attractive for average Australians to retire on their maximum limit and therefore be financially independent and not a burden on the economy, this new alternative would seem to say “we’ll keep them starving for longer so we can rip more tax out of their nest egg.”

Everyone talks about the cost of an ageing population and the impact it will have on Health and Social Security. There’s no argument. But you get rid of the problem if people are well superannuated and can look after themselves.

So rather than increasing the restrictions on superannuation why not increase the attraction to tempt people to contribute more and then they can look after themselves. In one hit the ageing population doesn’t become a problem.

With the Federal Government sitting on one massive budget surplus after another over recent years, think about what the scrapping of the contribution tax on super would do.

It would cost 5 billion dollars a year, that’s less than half the budget surplus, and make a huge difference to the eventual super payout of average Australians.

It would provide a significant increase in their nest egg to make them more financially independent and able to cover costs of their retirement and be less of a burden on the Government and the economy. This is so much more productive than a piddling tax cut which is watered down by bracket creep and inflation and spent immediately rather than saved. I just don’t get it. It’s simple and logical and would mean we could cope with an ageing population.

In the Australian Financial Review Monday May 2, 2005 Sean Aylmer from New York writes:

CHAOS THEORY: BUFFETT’S WARNING ON MARKETS

Investment legend Warren Buffett has warned that the United States is unlikely to escape from its fiscal crisis without triggering “chaos” in financial markets.

He also believes cashed up equity and hedge funds have pushed up some asset prices in the U.S. beyond reasonable levels and agrees with Federal Reserve Chairman Alan Greenspan that longer term bond yields are too low.

Mr. Buffett known as the “Oracle of Omaha” also took a swipe at the focus of equity markets on quarterly earnings, saying it put unnecessary pressure on managers.

Addressing a shareholder meeting in Omaha at the weekend, he said the consensus view was that the U.S. could rebalance its current account deficit, likely to reach close to $US 700 billion ($897 billion, Australian) this year, and achieve a soft landing, but he added: “I don’t know what a soft landing is,” saying there would be a trigger in financial markets something like the collapse of hedge fund Long Term Credit Management during the Asian financial crisis in 1997 that would reverberate, sending asset prices much lower.

“There’s a significant possibility that we have some chaos in financial markets,” he said. “But I’m not an Armageddon type on the economy.”

“I think the trade deficit should be addressed but I don’t think it will pull down the whole place, though it may cause financial dislocation.”

The U.S. economy grew 3.1% in the March quarter, its slowest rate in 2 years. However economists believe the U.S. Federal reserve will still raise interest rates by 25 basis points to 3% this week to ward off inflation risks.

Mr. Buffett said he was bullish on the U.S. economy in the long term, but added that he did not expect the U.S. dollar to appreciate. “It does not make sense to bet against America. The big worry is terrorists and governments that have access to nuclear and biotechnological weapons. But in ten years we will be better off.”

In the shorter term, he is wary about inflation any pressures, unconvinced that the bogyman of the 1970s and early 1980s is dead.

“The trade picture is one that you would think would accentuate inflation (compared with) other circumstances,” he said.

He was confident that good business could pass on higher raw materials costs, and noted that corporate profits were at record highs and corporate taxes at historic lows.

Mr. Buffett mostly avoided questions about Berkshire’s potential culpability in reinsurance transactions involving American Insurance Group and former
Australian insurance company HIH, which are under investigation. In both the U.S. and Australia, Berkshire subsidiary General Re provided reinsurance contracts that propped up the accounts of insurance companies AIG and HIH.

Mr. Buffett, who has been questioned by regulators our the AIG deal, said culpability depended on what manager knew. “It gets down to whether there’s knowing participation,” he said. He said authorities were looking for reinsurance contracts that have no purpose and were possibly miss-used by some parties. “The facts on that remain to be seen. The question is whether risk is transferred.” Mr. Buffett said there was more money chasing deals then at any time in his memory.

Equity funds and hedge funds were throwing money around, making it tougher for Berkshire Hathaway to find appropriate buying opportunities. As a result, the company is close to $US 45 billion in cash.

“There is far more money looking at deals now than five years ago and they are willing to pay up more for the good but mundane businesses we’ve been successful buying in the past.”

“The problem right now is employing capital and that’s my job. With a little luck, and depending on the market situation, we will get a chance to do that” he said.

Mr. Buffett warned that businesses were being sold for prices at least

10% above what he would pay. We’ve seen no deal in the last 12 months that we have wished we had made and that wasn’t the case 20 years ago, he said.

“If someone is auctioning off a business today, there are people lined up to bid. The near term outlook for buying business we are not positioned favorably at all for that/”

Berkshire Hathaway and Mr. Buffett have largely ignored the professional investment community. Few stock market analysts follow the company and it is not on the S and P 500 even though it is a top 20 U.S. company by market capitalisation.

SMALL BUMP, BIG BILL

A broken wrist cost more than 17,000 dollars American to fix in the U.S. this article appeared in the Sydney Morning Herald Monday April25, 2005 where Mark Coultan discovered bulk billing had an altogether different meaning.

The bump on my wife’s wrist where the skin should have been smooth told its own story. We didn’t need a doctor to tell us it was broken. What we did need was expert help with which was navigating the American Health System. We had moved to The U.S. 13 days earlier and were still finding our way around with tourist maps.

The emergency room at Mount Sinai Hospital in Manhattan is not on a tourist map. In fact, like any hospital anywhere, it’s a place best avoided. Mount Sinai is a hospital of world renown, perched between the Upper East side and Spanish Harlem, between rich and poor, white and black, encapsulating everything about the excellence and inequalities of America.

On a wall in the ER (Emergency Room) a sign says “if you have a medical emergency or are in labour, you have the right to receive, within the capabilities of this hospital’s staff and facilities, an appropriate medical screening examination, necessary stabilizing treatment including treatment for an unborn child and if necessary an appropriate transfer to another facility, even if you cannot pay or do not have medical insurance, or you are not entitled to Medicare or Medicaid.”

During 4 ½ hours there, we watched a parade of the sick, the mentally disturbed and the poor. It was the first but certainly not the last time we would be asked: “What insurance do you have?”

To be fair to Mount Sinai, money was never an issue. And the standard of care was, as far as a layman can tell, excellent.

A week later we saw an orthopedic specialist for a follow up examination. That appointment which included X-rays, cost $US 480 (Australiann$615). Then came the bad news. The wrist would need to be operated on. They could do it next week but first a check up by a “primary care physician” was needed. This “internist,” as he was called, asked a few standard questions about medical history and allergies, got the stethoscope out, looked into the mouth and ears, and took some blood. That would be $US 450 please.

If he saw 12 patients a day, that would be $5000 US per day. Allowing a day, that would be worked out as an annual income of $US 1.25 million.

That was an expensive day for us (or our insurers) but not as expensive as it would become. The day before the operation, the surgeon’s office rang to tell us what it would cost. The surgeon’s fees would be “more than $8,000” and the hospital fees would be $9,443. An anesthetist would be extra.

The day we returned to the hospital for the operation we entered via the front door on Fifth Avenue. Patients are greeted in the 12 storey atrium by a woman who accompanies you to the reception desk before you get to see a doctor, you sit down with a clerk: “What insurance do you have?”

Since then we have had follow up visits to the orthopedic surgeon (included in his original fee) and twice weekly rounds of physiotherapy. The first visit was $US 300.43. Don’t forget the 43 cents.

We have since had other encounters with the U.S. health system. To start children in American schools, they need a physical examination, $US 300 please.

We have found cheaper primary care physicians only $US 150 a visit. In America, bulk billing has an altogether different meaning. While Manhattan is more expensive than the rest of America, it does raise an interesting question.

Why are American health costs so much higher than the rest of the world?

In a recent New Yorker magazine article Atul Gawande told the story of being offered a staff job at a hospital after 8 years as a resident. After years of being paid about $US 40,000 a year, the surgery boss asked him: “How much should we pay you?”

“You tell me what you think is appropriate income to reasonable that’s what we will pay you,” his boss said.

Gawande was stamped. He doesn’t say what he asked for, but the question leads to an even more awkward one: The Money or the patient? Gawande quoted the example of a doctor who decided to work one six hour day a week, and also do six operations a week. His net income was $US 1.2 million a year. He managed this by refusing to deal with insurance companies. For his patients, it was cash or see somebody else.

Gawande’s article describes being a doctor in America as a daily war with insurance companies, which bury doctors in paperwork, bureaucracy pre-approval numbers, visit codes and regulations about what they will and won’t pay for.

Insurance companies reject between 15-30 per cent of the claims doctors send them. The way to get rich is simply to win the war with the insurance companies.

No wonder that every doctor’s surgery seems to have three staff where there would be one in Australia. It’s their job to ask: “What sort of insurance do you have?”

Little wonder doctors make you sign a document that you will be responsible for any payments the insurance company rejects.

In America the cost of health insurance is most often provided by employers. No job no health insurance. There are safety nets, but there is still 16 percent of the population, or about 40 million, uninsured at any one time. Up to half of poor Hispanic people are uninsured at some time during a year.

Why is health care so expensive in America? In the U.S. journal Health Affairs, public health experts Reinhardt, Peter Hussey and Gerard Anderson pointed to America’s wealth (they can afford to pay more) a high murder rate and a higher than average impact from HIV/AIDS and tobacco related illnesses compared to other industrialized nations. They also pointed to the power of doctors to set their own prices, caused by the “fragmented organisation of the financing of health care.” Costs were lower in countries where Governments bought health services.

In the U.S., health insurance is provided by a multiple of companies each offering different plans with different rules some that require co-payments and some that won’t pay for certain treatments. Because health insurance is typically tied to employment it becomes part of the costs borne by population ages America faces becoming UN competitive with its trading partners.

One study suggested that if health insurance rises by 10 per cent a year, it will add $US 20,000 to the cost of employing someone within a decode. Already General Motors reportedly spend $US 1,500 of every car it sells on health insurance. The cost of health care is such that the Pentagon will have to choose between new weapons systems and looking after soldiers health.

There will be more pressure to save money. One area will undoubtedly be pharmaceutical costs, an area in which despite some pre-election maneuvering, the new Free Trade Agreement between Australia and the United States comes into play. Some in America have accused other countries of not bearing the costs of developing new drugs by using their purchasing power to keep drug prices down, as the Australian Governments does with the Pharmaceutical Benefits Scheme.

Reinhardt Hussey and Anderson Characterise health spending as an exercise in the “political economy of sharing.” One option they said was getting the tip half of the population to pay for bottom third’s health insurance essentially through the tax system. The other option, a multi-tier system in which “a person’s health care experience would be allowed to vary by his or her ability to pay for health care” was already the case for many U.S. families.

The U.S. spends more on health than any other Nation: about 14 per cent of GDP (Australia spends just over 9 per cent).

Does all this extra money buy better health? The U.S. ranked 24^th in a World Health Organisation (Who) study of the number of years one can expect to live in good health. Australia ranked second to Japan.

Doctor’s salaries are not necessarily the problem. “Doctors do make more here, but their take home pay is only a little over 10 per cent of the total, “says Joseph Newhouse a professor of health policy at Harvard. Newhouse says that for years America’s health costs have been increasing at about the same rate as the rest of the world. They just started from a higher base.

The economist Paul Krugman has summarized it this way: “The United States has the most privatized, competitive health system in the advanced world, it also has by far the highest cost, and close to the worst results.

AUSTRALIA – U.S. FREE TRADE AGREEMENT WILL DEMOTE AUSTRALIA TO A THIRD WORLD NATION

It is with deep regret that we predict the Australia – U.S. Free Trade Agreement will reduce our once great country to a third World Nation, sooner rather than later.

Within 4 years of August 1, 2005 Medicare and the Pharmaceutical Benefits Scheme will be dismantled, because the Australian Government whether it be the Howard Liberal- National Coalition or the Beazley Labor Party will be bankrupt and because they have sold all the people’s utilities: i.e. Bank, Airlines, Airports and shortly Telstra. Our Government will have insufficient income within 4 years to finance Medicare, PBS and every chance they won’t be in a position to pay social security to any Australian.

The reason is that through the FTA with the United States we will allow all the American Multi Nationals under the Access to Services and Investment market access across our entire services regime. For those of you who have perused our entire website since day one, you would be aware that under the “Duel Reciprocation Tax Agreement 1953 (Robert Menzies) that the Foreign Multi National have paid very little or no tax to the Australian Government. At a later date as the FTA begins to destroy our country we will name the Coalition and Labor Opposition Members who voted to support the FTA.

In fact Taree held a Forum re: the FTA and it must be noted that Senor Trade Adviser Andrew Ethell and Stephen Deady, First Assistant Secretary, Trade Development Division, Department of Foreign Affairs and Trade and the signatory to the U.S. – Australia FTA represented Minister for Trade Mark Vaille.

Stephen Deady spat out the usual political rhetoric in the hope of covering his back side. He failed miserably, Link >>>> June 2004, Link >>>> Update September 2004, Link …. Update November 2004.

30 YEARS OF POLITICAL WHITE – ANTING IS BITING MOST AUSTRALIANS

In March 1975, Gough Whitlam and his Government agreed to accept, the Lima Declaration. On the 11.11.75 the Whitlam Government was dismissed by the Governor General Kerr and replaced by a care taker Fraser led Government; and was eventually elected to govern.

In 1982 there was a trilateral agreement with Prime Minister Fraser, President Reagan and Margaret Thatcher to introduce Neo-Liberalism, aka Globalisation. Unfortunately for Mr. Fraser in 1983 he lost the Federal election and was replaced by Labor’s Bob Hawke. In 1984 the Messiah of the Australian worker betrayed us the worker by embracing Mr. Fraser’s Neo-Liberalism policy by introducing Customs’ controlled Tariff Classification Orders.

Link >>>> Update July 2004

Link >>>> Update October 2004

The Messiah (Hawke) and the World’s best Treasurer Paul Keating deregulated our baking system leading to the closure of 2,000 branches, whilst 50,000 plus bank workers were made redundant which led to a major reduction in services and higher prices for Administration Fees. Then Hawke and Keating sold our Airline followed by the sale of the “Peoples Bank” the Commonwealth. Keating was defeated by the Howard Coalition who went on to fully sell our Airports and partially privatized Telstra. In fact after the Howard Coalition’s dictatorship begins on July 1, 2005 you can almost guarantee that they will sell off the remainder of Telstra.

The Howard Government when in opposition were critical of the Keating Government’s financial management, and yet Treasurer Costello has multiplied our National Debt by three times plus. It’s no good having an annual budget surplus if the Government fails to invest in future infrastructure, creates a larger National Debt and as of Thursday May 5,2005 we’ve recorded our forty first consecutive Trade Deficit.

Let’s reiterate the “Lima Declaration” was the fore runner to the introduction of Neo-Liberalism. Which consisted of:

Tariff Classification Orders
Bank Deregulation
Privatisation of Government Utilities
Gats (A General Agreement on Trade In Services)
Deregulation of our Pork, Chicken and Dairy Industry
Deliberately increasing our Foreign Debt
Signing a Free Trade Agreement with the United States
The elimination of Tariffs on Imports
This allowed cheap Foreign imports to enter Australia which is in conflict with our domestic produce
Successive Government’s for the past 30 years are responsible for destroying our farming and Manufacturing
The Federal Government’s responsible for where Australia is today - Whitlam Labor (ALP), Fraser (Coalition), Hawke (Labor), Keating (Labor), Howard – Anderson Coalition (Liberal – National).

And as for you Labor supporters you can wipe the smirk off your face. The Federal Labor Opposition was the last line of defence to protect Australian’s from the U.S. – Australia Free Trade Agreement. So what do the Traitors do, they cross the floor in both houses of Parliament and support the Howard Government?

STEALING CANDY FROM KIDS

The NSW Carr Labor Government’s transport Bureaucracy is at it again. At a Public School in the Canterbury – Bankstown District for children to catch a return Government bus to sports which is less than 2 k’s each way parents or guardians of these children are being charged 4 dollars.

Not satisfied with excessive road tolls, Land Tax, Pensioners concessions for short trips being over the top for those attending local medical centres and Stamp Duty. Remember when the Labor Party used to represent the Battlers but now prefer to take candy from the mouths of our kids.

MAJOR PARTIES TURN BLIND EYE TO QUESTIONABLE BANKING PRACTICES

For more than a decade we’ve been calling for a royal commission into fraudulent banking practice’s with the widest terms of reference, re: shadow Ledgers and the failure to issue bank statements voluntarily or on demand.

The CEO’s of the 4 major banks continue to protest their innocence of questionable practices. If this is the case, they have nothing to hide from an Independent Inquiry. Or do they?

PHARMACY DEREGULATION WILL ELIMINATE AUSTRALIA’S PHARMACEUTICAL BENEFITS SCHEME

Consultants, ACL Tasman have recommended to the Howard Government that Australian Pharmacies be deregulated.

Woolworth’s CEO Roger Corbett applauds the ACIL Tasman’s verdict adding this will lead to cheaper medicines in Super markets.

Roger Corbett is the same man who told us Dairy Deregulation would benefit all Australians. More than a thousand Dairy Farmers have been forced out of their industry with thousands more about to quit. Farm gate milk prices since Deregulation was reduced from 52 cents to 27 cents a litre on average.

When you consider dairy food prices have risen more than 40% plus since Deregulation, it’s obvious the only winners are the milk processors, Woolworth’s, Coles and Aldi.

Take note Deregulation of our Pharmacies will lead to the dismantling of our Pharmaceutical Benefits Scheme and will be the forerunner to the collapse of Medicare.

The U.S. – Australia Free Trade Agreement could lead to our Health System being substituted by the United States System. God help us!

The American System is very expensive and if you can afford it, you’ll be okay, but if you can’t, bad luck, you’ll suffer you’ll die.

WILL COMMUNISTS HAVE THE LAST LAUGH RE; AMERICA?

Back in 1944 U.S. Congressman Samuel Pettingill warned that Communism would try to help America spend itself into Bankruptcy and was striving to get Americans to become totally dependent on a centralized Government.

In his speech Pettingill gave his fellow members of the U.S. house of Representatives the 12 points of the Socialist Manifests for the destruction of free Government. Read it right now and see how close the pattern is to what is going on here.

“The people must be made to feel their utter helplessness and their inability to solve their own problems. While in this state of mind, there is held up before them a benign and all wise leader to whom they must look for the cure of all their ills.”

“The principle of local self government must be wiped out, so that this leader of group in control can have all the political power readily at hand.”

“Constitutional guarantees must be swept aside. This is accomplished in part by ridiculing them as outmoded and an obstruction to progress.’’

“The law making body must be intimidated and from time to time rebuked, so as to prevent the development of public confidence in it.”

Economical, the people must be ground down by high taxes which under one pretext or another they are called upon to pay. Thus they are brought to a common level and all income above a meagre living is taken from them. In this manner, economic independence is kept to a minimum.

“Disarm the citizens so they cannot fight back”

“A great public debt must be built up so that the citizens can never escape its burden making government the virtual receiver for the entire Nation.”

“A general distrust of private business and industry must be kept alive so that the public may not begin to rely upon its own resources.”

“Government bureaus are to be set up to control practically every phase of the citizen’s life.”

“The education of the youth of the nation is taken under control so that all may be inoculated at an early age with a spirit of submission to the system.”

“To supplement and fortify all the foregoing, there is kept a steady stream of Government propaganda to extol all that how and kneel to vilify those who dare to raise a voice of dissent.”

Don’t say it can’t happen here. Australia 1975? Check each of these points and see how far it is happening, Australia 2005?