Sunday, October 20, 2013

Political expenses. It's the white lie that's the worst one

Sunday Column

Of all the lies told in the parliamentary expenses scandal the most dangerous is the white one - the one designed to make it look as if it’s the rules themselves that are to blame, not the politicians who have abused them.

Foreign minister Julie Bishop tells it beautifully.

“I believe that there is a very grey area between what is official business and what is an event that could be characterised in another way,” she told the ABC’s AM program.

“When we are invited to events, most of the time it's in our capacity as a parliamentarian. If someone wanted to characterise it because I knew the people for example, well is that a social event?”

As unlikely as it seems, she was talking about a wedding.

The truth is that for back benchers the rules are unflinchingly clear.

Ordinary members of parliament can claim travel for only four purposes - meetings of their parliamentary party, “electorate business”, “parliamentary business” (such as representing the parliament or sitting on committees) and “official business” (defined as properly constituted meetings of government advisory bodies or functions representing a minister or presiding officer).

That’s it. Anything else - certainly a wedding, a ski trip or a trip interstate to take possession of a rental property, anything else is off limits. To suggest otherwise is to suggest the person making the claim can’t read.

And to suggest that things are alright because the finance department has paid the claim is absurd.

Coalition MP Don Randall did it while stonewalling over the $5259 he spent on the “electorate business” of a trip to Cairns with his a family member. Cairns is 3446 kilometres from his electorate.

He said the claim was "appropriately acquitted with the Department of Finance".

Anyone familiar with self-assessment will know that paying a claim isn’t the same as approving it, or even examining it...


The Tax Office pays almost everything we claim automatically. It simply checks that the numbers add up. Years later it might come after us in an audit, but until then it treats as as adults who can wear the consequences of our actions.

Randall later conceded that he was wrong - payment doesn’t mean approval. He said he would refund the payment “to ensure the right thing is done by the taxpayer and to alleviate any ambiguity”.

Ambiguity? Randall sits on the committee that oversees MP’s behaviour. Like George Brandis, the attorney general, his claims have been referred to the police. They are not alone in seeing ambiguity where others see clear rules. Few in politics, and few near the very top of politics, seem able to grasp the obvious truth - that for the most part there’s a clear boundary between what is right and wrong. There isn’t a “very grey zone”.

That those at the top can’t grasp that truth says something about them and also something about the blindness that sets in when people ascend to positions of power.

It isn’t just me saying that. The moral blindness that accompanies power has been well documented.

Dutch psychologists Joris Lammers and Adam Galinsky are leading the way. A few years back they divided sixty students into two groups. One they “primed” to feel powerful by asking them to remember occasions when they had power. The other, they primed to feel powerless.

Each was asked to take part in an experiment in which they could cheat. The group that felt powerful cheated more.

Then they asked each group what they thought of people who cheated on travel expenses. Bizarrely the powerful group not only cheated more but came down harder on cheaters. Lammers and Galinsky entitled their study Power Increases Hypocrisy.

In order to be sure, they carried out the experiment again and again in different contexts. In one they asked whether it was okay to break the speed limit to get to an appointment on time. The powerful group was more likely to say no, but also more likely to say it would speed. In another they asked whether it was okay to omit from a tax return income earned from a second job. The powerful group said it was not, but was also more likely to say it would do it.

They were sexual hyprocates as well. Lammers and Galinsky emailed magazine readers anonymous questionnaires. The higher they were in their organisation's hierarchy, the more likely they were to confess that they had been unfaithful.

Power corrupts, and it appears to do it through a kind of blindness that allows powerful people to think the rules apply to other people, not them. It’s our leaders who are at fault in the politicians expenses scandal, not the rules they are breaking.

In The Canberra Times and The Sun Herald


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Saturday, October 19, 2013

For Hockey's ears only. Treasury shuts the door on FOI

So far, for now

So worried is the Treasury about its ability to establish “an effective working relationship” with its new Treasurer Joe Hockey that it is attempting to block access to its incoming government brief under freedom of information laws.

It’s a turnaround from Treasury’s position in 2007 when it released a redacted version the incoming government brief prepared for Labor’s Wayne Swan.

“Release of the incoming government briefs would interfere with the establishment of an effective working relationship between the Treasury and Treasurer,” the department says in a letter to news organisations refusing FOI requests released late Friday.

“The need to develop a trusting relationship is particularly important in the early days of a new government, to set the tone for the future working relationship of the whole department,” the letter says.

Disclosure “would not be conducive to establishing a productive, trusting and effective relationship with the Treasurer and would adversely affect Treasury’s effectiveness as a central policy agency.”

The letter advises media organisations of their rights of appeal.

Peter Timmins, a lawyer specialising in freedom of information litigation, said he wasn’t surprised...


“That’s the way the bureaucracy has been moving for some years,’ he said. “They are increasingly speaking about the need to offer frank and candid advice. Former Attorney General Nicola Roxon used the phrase herself in setting up an inquiry into the laws earlier this year. The inquiry found that the existing laws did protect frank and candid advice, but the attitude of the bureaucrats has been hardening.”

Mr Timmins said he doubted whether Treasury would win an appeal. Some of the information in the brief, such as that dealing with economic conditions, would be uncontentious and could easily be released without compromising Treasury’s ability to talk to its minister.

In The Sydney Morning Herald and The Age






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11 out of 10. Coalition costings pass muster, for now

It's better than last time

The Coalition has received a clean bill of health on its election costings, with the Parliamentary Budget Office finding that if anything it understated the boost they will give to the budget.

The finding is in stark contrast to that of Treasury and the Finance Department three years ago which found errors and questionable assumptions in the Coalition’s policy costings amounting to $11 billion.

The Office is required to produce an independent assessment of the costs of each of the major parties promises within 30 days of a change of government.

If finds the Coalition’s policies will save the budget $7.15 billion over four years, rather than the Coalition's $6.09 billion the Coalition had claimed. The figure is an “underlying cash balance” measure of the kind most widely used to describe whether a budget is in deficit or surplus.

But looking further ahead the Office sees problems. It says the promise to more generously index military superannuation pensions will grow from around $30 million per year to peak at $460 million in 2046-47. The saving from delaying the by two years the scheduled increase in compulsory superannuation will climb from the claimed $875 million per year to a peak of $1.15 billion before sliding to just $80 million per year from 2023-24.

Other savings penciled in by the Coalition are unlikely to come in as early as it and the Office have assumed...


It has booked savings this financial year from abolishing the Schoolkids Bonus and axing the Regional Infrastructure Fund, measures which might not pass through the Senate.

Treasurer Joe Hockey said the finding “once and for all puts to bed the lies from the Labor party over numerous years that there was a black hole in the Coalition’s costings”.

Shadow Treasurer Chris Bowen said the true state of the government’s books wouldn’t be know until Treasury released the mid-year budget update due in December.

He said the analysis confirmed that over three million low income earners would lose the Low Income Super Contribution and that the public service would be cut at the rate of one job an hour for the rest of the financial year.

In The Sydney Morning Herald


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Wednesday, October 16, 2013

The US debt crisis. Apparently we have plans in our back pocket

Yea, sure

Apparently we have "back-pocket plans". Treasurer Joe Hockey said so in a US television interview.

But it's hard to know what those back-pocket plans are, mainly because we have no idea what would happen if the US failed to pay its debts. Would it push up the Australian dollar, would it push it down, would it send so much money flooding into Australia that foreigners were virtually paying us to take on our debt or would it dry up the flow so we couldn't borrow at all?

It's hard to know because it's unthinkable. The US is the world's biggest economy. Of course it can make the payments on its debts. Of course it will. Financial markets have pushed down the price of the US Treasury bills due to expire in the next few weeks as a precaution but after a few months the price returns to normal. Even money market traders - by nature excitable - aren't getting too excited.

My soundings tell me the officials Hockey says have ''back-pocket plans to deal with whatever arises'' aren't getting too excited either. US government debt is to international finance what the English language is to communication. It's the global standard. If it didn't exist it would have been invented. It's where savers put their money.

There's no fallback and there's no time to find one...


And nor is there an actual deadline. On CNN there's a ''debt ceiling deadline'' clock in the corner of the screen, counting down the hours, minutes and seconds until 3am AEDT Friday, when the US is said to breach its self-imposed ceiling. But if the deadline passes and Congress doesn't relent and increase the ceiling, nothing will happen at first.

Some time later, on November 1, the US has some big bills to pay: $67 billion in social security cheques and military pay and interest on government bonds.

It might need to reprioritise if it's to avoid breaching the debt ceiling, perhaps delaying some of the payments or replacing them with promises to pay later. There's no hard and fast date. Even if the US did miss some debt payments, its lenders might choose to look the other way. It has missed payments before. Everyone knows it's good for the money. It has to be.

In The Sydney Morning Herald


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Lessons from the Economics Nobel. We're less expert than we think

Wednesday column

Whether you’re standing in a queue at the supermarket, wondering whether to change lanes on the Harbour Bridge or making a big decision such as whether to buy or sell shares, take some time out of your day today to give thanks to the winners of this year’s Nobel Prize for Economics.

Eugene Fama, Robert Shiller and Lars Hansen have helped you in ways you might not even realise - all the more so because on the surface it seems they have been merely disagreeing, as economists often do.

We owe the greatest debt to Fama, passed over by the Nobel committee for decades until Monday night.

He demonstrated rigorously that if the supermarket crowd is big enough or if there are enough cars on the highway you will get no advantage from changing lanes. Anyone who could have been helped will have already helped themselves.

His groundbreaking 1969 study examined what happened to the price of shares as soon as there was a new piece of information that could have moved the market. It did, near instantly. Anyone trying to buy the day after good news (or by extension minutes after, or these days microseconds after) would be wasting their time. The good news would have already pushed up the price.

At one level it’s reassuring. There’s no point in switching stocks. At another level it is profoundly disturbing, so disturbing that most of us find it hard to accept the implication - no-one, not even the experts our super funds pay well, can pick stocks. All of the information that would have helped them guess how prices will move has already moved prices. Their guesses about what will happen next are no better than random.

Which isn’t to say that the experts don’t look good. SuperRatings says in the year to August Australian fund managers made an incredibly impressive 15.9 per cent. Over the same period the total share market climbed 21.7 per cent. Without putting too finer point on it, our fund managers would have done better had they sat on every share in the S&P/ASX 200 index and done nothing. Of course some of their investments are outside of the ASX 200 and in some years they outperform the market, but the point confirmed in study after study after 1969 is that on average stock pickers do no better than the market. More disturbingly still, the experts that do outperform in one year tend to underperform the next. Past performance is literally no guide to future performance, both for stocks and for the people who pick them.

And the mere process of chopping and changing appears to leave us worse off. In the American Economic Review Ilia Dichev of the University of Michigan used 20 years of data to compare the returns investors actually made buying and selling stocks to those they would have made had they had simply hung on to a basket of stocks.

In 18 of the 19 international stock markets he examined investors had harmed themselves by buying and selling. In Australia in the 20 years to 2004 the overall market grew in value 12.3 per cent a year. The amount Australian investors actually made was 11.7 per cent.

I am prepared to accept you find this hard to believe. It’s as if we are hardwired to believe in expertise...


But Fama’s findings have long since counted where it mattered. He ushered in a new era of index-linked funds management where funds did indeed do no more than sit on the index and have saved themselves the expense of hiring experts to advise them how to outdo it.

His work could be said to have stood the test of time, were it not for apparently contradictory finding of Robert Shiller, with whom he shares the Nobel Prize.

Shiller found that there are indeed predictable patterns in share market and other prices, but they are predictable over years rather than months or days. What is unpredictable in the short term turns out to be predictable in the long-term. If you think that’s odd, try drawing a graph of a wave that moves slowly up and down over the time and then make it wiggle unpredictably day to day. There are times when share prices are high relative to the underlying dividends (Shiller coined the phrase “irrational exuberance”) and long periods when prices are low. Working out why this should be so is where the third winner Lars Hansen comes in. He developed and is using a heavy-duty technique called the generalised method of moments.

Australian economists Richard Holden at the University of New South Wales and Justin Wolfers at the Brookings Institution summed up the findings online as being that financial markets are efficient (Fama), except when they’re not (Shiller), and that we have empirical evidence to prove it (Hansen). But the insights run deeper. Learning about markets and things such as our behaviour in queues tells us much about ourselves - our weaknesses , our strengths, our foibles and our incredible ability through the use of disciplines such as economics to come close to making sense of it.

In The Canberra Times, The Sydney Morning Herald and The Age


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Thursday, October 03, 2013

About that trade balance. It's been wrong and getting wronger

Suddenly it's been fixed up, and it's worse

Suddenly Australia’s trade balance has turned nasty - not because of anything we’ve done, but because of what we’re now counting.

Until this week the official count for the past financial year showed four of the twelve months in surplus. A massive series of revisions means none are now in surplus and the total deficit is approaching $18 billion rather than the previously-believed $11 billion.

Its both a warning not to take too seriously talk of a deficit or a surplus (something some of our politicians are cottoning on to when discussing the budget) and also an insight into how thoroughly the Australian Bureau of Statistics is attempting to do its job.

The fine print at the end of Wednesday’s trade figures explains that until now the Bureau has only taken account of imports worth more than $1000. That’s the threshold above which it’s compulsory to complete a Customs declaration. It’s also the threshold above which parcels delivered by the post are subject to goods and services tax.

Work done by the Productivity Commission on the value and volume and under-the-radar imports has enabled it to include a guestimate of monthly totals for the first time. And its done it right back to 1998. Those early revisions don’t amount to much. Amazon and eBay were in their infancy. But since 2010 the total has been climbing rapidly, from around $4 billion per year to close to $8 billion.

Retailers are certain to jump on the figure and say it shows how much they are being undermined by untaxed and unchecked parcels from overseas...


The Bureau believes around around 90 per cent of the newly-included low value imports are consumption items.

But $8 billion still isn’t much out of total retail sales of $260 billion. And many of the items would still be imported even if the parcels were opened and taxed.

More disturbingly for tax collectors the ABS hints that many of these physical imports are about to vanish. The next frontier will be “intangible” imports - ebooks, music, software, online subscriptions, gambling - all delivered without a single parcel crossing the oceans. It’ll be hard for the ABS. It’ll be hard for the Tax Office too.

In The Sydney Morning Herald and The Age


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5368.0
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Wednesday, October 02, 2013

There won't be any more (rate cuts this year)

It's over. Fix your rate if you want

In the words of the immortal Charlie Rich, “there won’t be any more”.

The Reserve Bank is done with cutting rates. Expressed in words the market will understand: there’s scarcely any easing bias left.

Earlier this year the Bank was ending each of the monthly reports that follow its board meetings with a statement that, “the inflation outlook as currently assessed may provide some scope for further easing, should that be required to support demand”.

Not any more. And not because the inflation couldn’t easily accommodate a further rate cut.

It’s because things are turning out as the Reserve Bank hoped they would. The housing market is picking up, just as the Bank intended when it started cutting rates. The dollar is much lower (even after the recent lift it’s down 10 per cent in the six months). Business and consumer confidence is climbing. And the overseas outlook is more positive than it’s been in years, notwithstanding what will most probably be only a short-lived government shutdown in the United States.

When you are getting what you want it’s wise to give thanks. And not push further.

China, Europe, the United States and even Japan are looking better than they did. Overseas measures of business and consumer confidence are lifting, as are the measures of home. While there’s not yet the roaring optimism of the pre-GFC days, it’s entirely possible it’ll come. The Bank believes that’s now more likely than a return of self-fulfilling pessimism.

Sydney home prices are up 10 per cent in the year to date, Melbourne home prices up 7.1 per cent...


While to some that’s a cause for concern, to the Reserve Bank its a necessary consequence of its four most recent interest rate cuts working. Housing demand is interest rate sensitive. When it picks up prices pick up. That’s the surest way the Bank can tell its cuts are getting traction.

By themselves the higher prices don’t worry the Bank. If they were associated with lower lending standards or a rush to greater leverage it would be concerned. But there’s little evidence they are just yet, and there’s unlikely to be evidence for some time. If there are such signs, further down the track, the Bank might might have to push up interest rates, but it’s a problem for the future. (And as far as the Bank is concerned, it’s a an easier to manage problem than the stagnation it had thought it was facing.)

There won’t be any more rate cuts this year, and the way things look right now there won’t be any more next year. Glenn Stevens pointedly reminds us in his governor’s statement that the full effects of earlier cuts “are still coming through, and will be for a while yet”. The Bank’s rule of thumb is 18 months. It cut rates in October, December, May and August. It’s rule suggests each of those cuts is yet to fully work its way through the system.

In today's Sydney Morning Herald








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Monday, September 30, 2013

Cutting emissions. Hunt has twice as much to do


The Coalition may have to cut Australia’s greenhouse gas emissions twice as fast as has been planned.

An analysis of international commitments in the wake of the latest report of the Intergovernmental Panel on Climate Change suggests Australia will be obliged to cut emissions to 10 to 15 per cent below 2000 levels by 2020 rather than the 5 per cent the Coalition had been promising.

The Coalition’s policy document commits it to a 5 per reduction “without the need for a great big new tax”. But it confirmed during the election campaign it would honour a commitment of the previous government to cut further if “conditions relating to the extent of global action are met”.

A new analysis by the Climate Institute finds some of those conditions have been met.

“The agreements say we would be prepared to move to a bigger cut, anywhere up to 15 per cent, if we got comparable commitments from other developed countries and policies in major developing countries that would substantially slow emissions growth,” said acting chief executive Erwin Jackson.

“Work by the Climate Change Department obtained under freedom of information concludes that the conditions surrounding developing countries have already been met. For instance China has made commitments consistent with a 25 per cent cut.

“Now the United States has committed to a 17 per cent cut on 2005 levels which is equivalent to a around a 20 per cent cut on 2000 levels.”

“The average of what developed countries have committed to is somewhere between 10 and a 12 per cent cut.”

“Unless we are prepared to act in bad faith, we will be required to lift our target to a cut of at least 10, maybe 15 per cent during next year’s round of international meetings,” Mr Jackson said.

Professor Frank Jotzo of the ANU Centre for Climate Economics and Policy agreed...


“By most yardsticks China and the United States now have significantly stronger targets than Australia's,” he said.

Committing to more, as Australia has said it is prepared to do, would send “a positive signal about Australia's commitment - that commitment is under a cloud of doubt following the announcement that the carbon price will be repealed,” he said.

Mr Jackson stressed that Australia’s commitment to prepared to do more was not binding but was essentially a political commitment.

The independent Climate Change Authority chaired by former Reserve Bank governor Bernie Fraser will deliver an interim report in October on whether changed international conditions necessitate a higher target.

In May former Labor government climate change advisor Ross Garnaut said he thought the Authority should recommend a 17 per cent target.

The Coalition has promised to abolish the Climate Change Authority, but it is is still in place pending legislation which would need to pass through the Senate.

Environment minister Greg Hunt told Fairfax Media he remained committed to axing the authority in order to “stop bureaucratic duplication”.

However until then, the Authority would “continue under the law and I will review any material it produces, as I consider all reports,” he said.

The Coalition was committed both to the previous government’s 5 per cent reduction target and “to the conditions for any further change”.

During the election campaign the caretaker Labor government asked the Coalition to restate its concurrence with the documents Australia had signed. Mr Hunt gave that assurance and is prepared to extend Australia’s commitment beyond 5 per cent on the same terms as was Labor.

In The Sydney Morning Herald


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Friday, September 27, 2013

Looking for a job? Your odds aren't good



THE ODDS OF FINDING A JOB

The Good...

Unemployed per vacancy

Northern Territory 1.9
Western Australia 2.8
Australian Capital Territory 2.9

...the Bad,

NSW 4.8
Victoria 5.6
Queensland 5.3

...and the Ugly

South Australia 7.5
Tasmania 11.2

ABS 6354.0 6202.0


It’s harder to find a job than at any time in the past eight years. The Bureau of Statistics says there were just 142,900 vacant jobs on offer in August, fewer than in any August since 2005. Australia had 690,400 unemployed, meaning only one in five could have found an unfilled job no matter how hard they tried.

The Bureau of Statistics survey is Australia’s most comprehensive. It surveys employers rather than counts advertisements and so is unaffected by changes in the way positions are filled. In the past year alone it shows a collapse in vacancies of 20 per cent.

At the same time the number of people identifying as unemployed has climbed 15 per cent, pushing down the chance of success in finding a job from one in three to one in five.

The mining industry has just 4900 vacancies, half as many as the 10,300 on offer at the peak of the boom in late 2011. The construction industry has 12,800 vacancies, way down on the peak of 20,300 reached in May 2012.

The worsening odds of finding a job put into perspective the claims of the previous government that it was unwilling to lift the $501 per fortnight Newstart allowance because the best way to help the unemployed was "to assist them to find employment, not to increase income support payments". They show most unemployed Australian would be unable to find employment no matter how much help they were offered.

Job seekers can improve their chances by switching states...


The ABS data shows there’s a one in two chance of landing a vacant job in the Northern Territory and a one in three chance in Western Australia and the ACT. By contrast in NSW and Queensland it’s one in five, Victoria close to one in six, and South Australia one in seven. By far the worst state in which to look for job is Tasmania where the chance of landing one has climbed to one in eleven.

But Australians are reluctant to switch states. Separate ABS data released on Thursday shows the jobs-hungry state of Western Australia received a net population inflow of 2200 from the rest of the nation in the first three months of the year. In the same period it took in a net 14,000 arrivals from overseas.

And the jobs outlook in the good states is getting worse. Western Australia has 13,000 fewer vacancies than it had a year ago. It now has only half as many vacancies as NSW and fewer than Victoria and Queensland. The traditionally buoyant Australian Capital Territory is about to hit by public service cutbacks.

In The Age

August 2013 (August 2012) August 2011
NSW 4.8 (3.5) 4.1
Victoria 5.6 (4.5) 3.0
Queensland 5.3 (4.0) 3.2
Western Australia 2.8 (1.4) 1.6
South Australia 7.5 (4.2) 4.6
Tasmania 11.2 (6.7) 5.7
Australian Capital Territory 2.9 (1.5)
Northern Territory 1.9 (1.6) 1.4
Australia 4.8 (3.4) 3.2


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6354.0 6202.0>

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Thursday, September 26, 2013

Get set. Be careful. House prices are taking off

And the Reserve Bank is frightened

The Reserve Bank has pleaded with home buyers to be “realistic” and told banks to maintain standards amid signs of a takeoff in Sydney and Melbourne real estate prices.

RP Data says Sydney prices have surged 8.6 per cent so far this year and Melbourne prices 5.3 per cent. In just the past three months Sydney prices have climbed 5.4 per cent and Melbourne prices 4.8 per cent. If continued, the pace will ensure double digit price rises in the year ahead.

Sydney clearance auction houses are reporting clearance rates of approaching 90 per cent; Melbourne auction houses, 80 per cent.

The Bank’s Financial Stability Report released Wednesday draws attention to reports of Sydney sale prices “exceeding price guidance and valuations by wide margins”.

“An increase in housing market activity more generally is not surprising given reductions in interest rates,” the Bank says.

“However, it is important that those purchasing property maintain realistic expectations of future dwelling price growth.”

Adding to the Reserve Bank’s concern is an explosion in property investment by self-managed superannuation funds which now account for one-third of all super funds, up from 9 per cent two decades ago. Since 2007 self-managed funds have been able to borrow to invest in property.

The Bank says self-managed funds are a “new source of demand that could potentially exacerbate property price cycles”. It is also concerned that the owners of the funds may be “exposed to greater financial risks than they envisage”.

The boom in property investment appears to be “particularly sharp” in NSW, the report says. “Investor housing loan approvals now account for around 40 per cent of the value of loan approvals in the state, a share last recorded in 2004,” the Bank says.

The interest-only share of home loan approvals “appears high” at around 40 per cent...


The Bank is concerned that investors have drawn the wrong lessons from the previous ramp up in prices in the lead up to the global financial crisis. At those times “prices grew rapidly in response to disinflation and financial deregulation”. The bank says neither of those conditions are present at the moment. “Long-run future growth in dwelling prices might be expected to be more in line with income growth” it says, warning that prices might not climb as high as the new investors believe.

Figures released separately by the mortgage monitoring firm RateCity on Wednesday show that an extraordinary three quarters of all loans now require only paper-thin deposits of 5 per cent, up from one half three years ago.

RateCity chief executive Alex Parsons said some of the loans on offer now require no deposit whatsoever.

“Lenders are loosening the belt on home loan criteria, meaning many more potential borrowers are eligible for loans that may not have been approved in the past,” he said.

“There’s an obvious temptation to jump into the market if an institution will lend you 95 per cent of the property’s value. But it means any increase in interest rates, or a reduction in your income, will have a much bigger impact.”

The Reserve Bank report calls on lenders to maintain “prudent risk appetite and lending standards, especially in the current low interest rate environment.”

The Reserve Bank of New Zealand will require New Zealand banks to restrict low deposit mortgages just 10 per cent of their portfolios from October 1.

In The Age


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Monday, September 23, 2013

Open season on suing Australia? Not yet. Robb's cautious

Foreign corporations wanting to sue Australian governments will have to cool their heels.

Incoming trade minister Andrew Robb says Australia’s negotiating position on the Trans Pacific Partnership Agreement remains in place despite an election commitment to overturn the blanket prohibition on so-called investor-state dispute settlement provisions.

The previous government declared point-blank Australia would never again sign an agreement with an ISDS provisions. One of the few trade agreements Australia has signed with such a clause has allowed a Hong Kong-based subsidiary of the tobacco giant Philip Morris to take Australia to an international tribunal over its plain packaging laws, despite having lost its case in the High Court.

It is believed the United States was close to accommodating Australia’s insistence by carving out an exemption for Australia while requiring each of the other ten signatories to be bound by the provisions.

Australia is the only country to have successfully concluded at trade deal with the US without such a clause, the US-Australia free trade agreement signed by the Howard government in 2004.

The Trans Pacific Partnership trade agreement will be the world's biggest - incorporating Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam, as well as Japan which joined in this year.

US companies are enthusiastic users of the provisions...

The United Nations Conference on Trade and Development says a record 58 ISDS cases were underway in 2012. In one a US resource company is suing the Canadian province of Quebec for imposing a moratorium on coal seam gas extraction while it examines claims of environmental damage.

Opening Australian governments to lawsuits over resource extraction, foreign land purchases, pharmaceutical benefits and health measures is a potential minefield for the income government.

Its policy is to “remain "open to utilising investor-state dispute settlement clauses as part of Australia’s negotiating position”.

In a written statement to Fairfax media Mr Robb said it would be “premature to discuss positions we may wish to pursue on this or any issue under discussion in the Trans Pacific Partnership agreement negotiations”.

“In opposition the Coalition stated that it would consider the inclusion of ISDS provisions in free trade agreements on a case-by-case basis. It would be wrong, however, to assume that this changes Australia’s current position on ISDS in the context of the Trans Pacific Partnership negotiations.”

Mr Robb will attend trade minister’s talks on the Trans Pacific Partnership on the sidelines of the APEC meeting in Bali on October 3. Prime Minister Abbott will discuss the partnership at a meeting of leaders including President Obama in Bali on October 7.

In The Sydney Morning Herald and The Age


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Sunday, September 22, 2013

The truth about women. Why Abbott's Cabinet won't last

Sunday column

Never has a prime minister’s first Cabinet been more insulting. Never has it mattered less.

I can understand the bewilderment many Australians felt hearing we were going to be run by a board of 19 men and 1 woman. Junkee.com reckons there are more women on the board of AFL, the Prostate Cancer Foundation, the executive of Zoo Magazine, in the Iranian Cabinet and in Saudi Arabia’s Olympics team.

It’s not as if women aren’t qualified. An extraordinary 30 per cent of Australian women in their thirties and forties have university degrees. A less-impressive 27 per cent of similarly-aged men are so qualified.

Should we be worried about the Cabinet? Not in the least. It’s the Coalition that should be worried. It has a serious problem using and finding talent. Australian men should be worried as well, because away from the Cabinet things are moving against them at a blistering pace, so quickly most don’t have a clue what’s happening.

Professor Sue Richardson spelled out the changes at this week’s Social Policy Conference at the University of NSW. One of Australia’s leading labour market scholars, she directs research at the National Institute of Labour Studies and sits on Fair Work Australia's minimum wage panel. Delivered just hours after Abbott unveiled his Cabinet, her address was entitled Breadwinner Men and the Gentle Invaders. It showed women grabbing men’s jobs, their incomes and their prospects in marriage.

It starts with education. Back at the start of the 1980s an impressive 11 per cent of men in their thirties and forties had university degrees. Only 5 per cent of women did. Now it’s 27 per cent for men and 30 per cent for women. The job market has been flooded with graduates, especially women graduates.

What has it done for male earnings? In the past three decades the earnings of male graduates have increased not at all when adjusted for inflation. That’s right, not at all. It isn’t that the wages for particular jobs haven’t increased, it’s that male graduates are being elbowed out of the way for the good jobs, forcing them to take jobs that would have once been done by less qualified people.

Richardson was surprised. She and her colleague Josh Healy had thought that low income blokes would be suffering the most. Instead “it’s the high education blokes, they no longer have a monopoly over well-paid jobs”.

Many no longer have jobs. Richardson flashed on the screen a graph the proportion of men in each age group with jobs in 1982. Then she showed the proportion with jobs now. The proportion in work in each age group had fallen, right up to the age of 60...






It’s unlikely to be voluntary. “In our culture men work,” Richardson said. “Who is supporting them. Is if their parents, their girlfriends, the government? Or are they just poor?”

“The contrast with women is spectacular.”



At each age group a much greater proportion of women are employed now than in 1982 - in some cases 50 per cent more. The traditional dip in employment seen in the ages when women had babies has all but vanished.

Displaying a slide that read “Are men still marriageable” Richardson asked why a rational woman would bother to marry a man who couldn’t earn an income.

“You’d just have another dependent in the house” she said, to nervous laughter all around. For highly educated men marriage rates are little changed, but for low-educated men the marriage and cohabitation rate has plummeted. It’s fallen from 80 per cent three decades ago to less than 70 per cent.



Richardson doesn’t think this is because low income men are choosing not to marry. “They are finding it hard to attract a mate,” she says.

Three decades ago there were three low-educated women for every two low-educated men. Those were very good odds. Now it’s one to one, and many of the women are looking for men with better prospects.

Employment-wise that change ought to be good for low educated men. They are competing with fewer women. But (notwithstanding the mining boom) it’s the traditionally male industries that are shrinking.

“It’s the feminised areas of the economy that are growing; things such as aged care, child care, health care, retail, tourism,” Richardson says. “But men are reluctant to equip themselves to enter these industries, and they can face gender bias when they try.”

Richardson says men are accustomed “to being on top”. When they are not, they often “don’t know what to do”.

Women by contrast have faced centuries of disadvantage. They are used to turmoil and they know how to take advantage of it. Abbott’s Cabinet won’t last long.

In The Canberra Times, The Sun Herald


Sue Richardson, 2SER Thursday September 19 2013 Right click to download




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Saturday, September 21, 2013

Remembering Arch McKirdy, the man who made the ABC real





The presenter of Australia's most popular radio program had a wicked secret he kept from his 1960’s ABC audience.

After ten each night he introduced it with the words: “This is Arch McKirdy inviting you to ...relax with me.”

Over time the gap between the “to” and “relax” became longer and longer. During the break he would turn off the microphone and glare through the glass into the ABC Forbes Street control room with a “watch how long I am going to stretch it tonight” expression. The staff would squirm as the gap grew and grew.

After seemed like an eternity he would turn his microphone back on and finish the introduction. Then he would then turn it off, hit the talkback button and roar with laughter.

Arch and Relax with Me were legends well before he joined the ABC.

Born in country Victoria into a musical family (his father ran country dances and encouraged Arch to play drums and guitar) he auditioned for the job of cadet announcer at 3TR Sale in 1941 at the age of 17.

Its sister station 3SH in Swan Hill was short staffed because of the war and he moved there for a few months before joining the army, on the usual condition that he could return to his job when the war ended. Within two years the army had shifted him to its entertainment unit where he toured the Pacific for the rest of the war becoming a singer and comedian and mixing with some of Australia’s best jazz musicians.

Back in Victoria he did a music appreciation course and then headed to Sydney and 2UW where he took over Bobby Limb’s midday show and then an evening program called Starlight Serenade which he renamed Relax With Me.

‘Modern jazz’ would have been one description of the music, although he preferred the less-specific “music for adults” which gave him licence to play whatever seemed right for the mood he was trying to create in the minutes leading up til midnight. Tony Bennett, Sarah Vaughan and Ella Fitzgerald made frequent appearances as did Artie Shaw and Louis Armstrong who would drop in and play their favourite records when they were in town. More than a radio program, it was a chance to “sit down, share a piece of music and talk together”.

Tobacco giant Philip Morris noticed and showered dollars at the program and at Arch personally, moving their money with him as he moved to 2SM and then 2GB, all the time presenting Relax With Me and all the time sponsored by Ardath cigarettes.

In his 2005 ABC Andrew Ollie memorial lecture broadcaster John Doyle recalled his family sitting around the lounge room in at night in the 1950s “letting Arch McKirdy guide us through Benny Golson or Oscar Peterson or Charlie Parker.”

“With voice alone he fashioned the smoky atmosphere of a New York Jazz Club,” Doyle said. “His live commercials for Ardath had him ignoring the copy and the ad would sometimes be reduced to a pause, followed by the sound of a match being struck and an ecstatic draw.”

(Arch discretely moonlighted for one of the other Philip Morris brands, intoning unseen in radio, television and cinema advertisements: “Where there’s a Man, there’s a Marlboro” - a source of amusement to those who knew the wiry and diminutive figure.)

All the while he was juggling parallel careers as a co-host Channel 7 children's television show The Land of Make Believe and as the promoter of jazz concerts showcasing Australian talents such as Don Burrows and Julie Bailey.

At the height of his commercial fame in 1964 he infuriated Philip Morris by moving Relax with Me and his audience to the ABC where it could no longer be sponsored but would be heard coast to coast seven nights a week. He said he did it partly because he could see the way the commercial radio was moving. The Top 40 would soon smother other programs.

An “odd fit” at first according to ABC colleague Margaret Throsby he soon made the program the nation’s most popular, drawing listeners in to a mesmerising mix of quietly spoken intimacy and sensuous sounds.

Throsby says he told her the title of the program was iconic.

“I don’t use that lightly. He used to say more babies had been conceived to his program than any other,” she says. “I hung on his every word. He was a gentle man and a gentleman, and a generous man, who really deeply understood what broadcasting is all about.”

Then in November 1972 after 2403 shows for the ABC and aged just 48 he moved into management. His new title “Director of Radio Presentation” scarcely seemed worthy of one of Australia’s most loved broadcasters. Yet Arch had plans for the job few in the ABC of time foresaw.

For next two decades he took by the hand young broadcasters such as Norman Swan, Geraldine Doogue and Fran Kelly, teaching them to speak not the Queen’s English as the had previously been required, but how to do something closer to making love to their audience.

He would start by telling them to put the width of a fist between their lips and the microphone, and then ask them to imagine a personal friend on the other side (for him it was his wife Margaret). Then he would ask them to talk to that person; not to read ‘one, word, at, a, time’, but to talk in groupsofwords, breathing and pausing naturally while thinking about what they were telling that person and why.

Many of his students would have once been regarded as unsuited for broadcasting. But he never tried to change their voices, merely how they were used.

“It was about your brain as much as your voice,” said Doogue. “His contention was that you had to remove every barrier between yourself and your audience, to let people see who you were. And you had to like who you were.”

Arch himself went further. He would recall how during Relax with Me he would occasionally pretend to forget a an artist’s career highlight, ask for help and then thank the listener who phoned in. He never wanted to be seen as anything other than the listener’s friend.

He probably gave different advice to everyone who saw him.

“He was a brilliant diagnostician,” said Swan.” He would zero in on a small problem, your particular problem, and fix it.”

“It was bespoke service,” said Doogue. “He would unlock whatever it was that worked for you, because your voice is so personal. He would never offer too much, because confidence is fragile.”

In the early 2000s he worked at SBS, training ethnic broadcasters to speak real English, rather than the stilted sentences they had thought were appropriate. At the SBS Dateline he would come down from his home in the Blue Mountains to guide video journalists through the process of talking to viewers as if they were on location.

He died on August 26 aged 89 surrounded by family. He left behind his first wife Frances and her sons Grant, Mark and John and his second wife Margaret and daughter Megan.

And he left behind a legacy greater than his on-air contribution. The generation that followed communicates naturally in large part because of Arch.

His grandson Lewis is on Triple J. On Friday August 30 ABC Jazz paid a tribute to Arch by re-broadcasting his final two hour show. The tribute started at 2pm, as Lewis was doing his show. The synchronicity of two McKirdys broadcasting simultaneously on ABC radio made the tribute more poignant.

Peter Martin was trained by Arch McKirdy. Peter Wall worked with Arch McKirdy on Relax With Me and is a former ABC radio manager.


In The Sydney Morning Herald




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Wednesday, September 18, 2013

For the fridge door. Abbott's new Ministry







A TEAM TO BUILD A STRONGER AUSTRALIA

The incoming Coalition Government will restore strong, stable and accountable government to build a more prosperous Australia.

This is the team that will scrap the carbon tax, end the waste, stop the boats, build the roads of the twenty first century and deliver the strong and dynamic economy that we need.

First term governments are best served by Cabinets with extensive ministerial experience.  Fifteen members of the incoming Cabinet have previous ministerial experience.   The four members of Cabinet without ministerial experience have made significant contributions to the Shadow Ministry. 

The simplification of ministerial and departmental titles reflects my determination to run a “back to basics” government.

The Australian people expect a government that is upfront, speaks plainly and does the essentials well.

The Cabinet will be assisted by a strong team of ministers with proven capacity to implement the Government’s policies.

Parliamentary secretaries will assist senior ministers and be under their direction. 

Good government requires a strong Coalition.  As Deputy Prime Minister and as Minister for Infrastructure and Regional Development, the Hon Warren Truss MP will be responsible for ensuring the Government delivers on its major infrastructure commitments across Australia.  Mr Jamie Briggs MP will be the Assistant Minister for Infrastructure and Regional Development with specific responsibility for roads and delivery of our election commitments across metropolitan and regional Australia.

The Hon Julie Bishop MP will serve as Minister for Foreign Affairs and will be a strong voice for Australia during a time when Australia is a member of the United Nations Security Council.  Australia in addition will assume the Chair of the G20 on 1 December for a year.  Senator the Hon Brett Mason will be Parliamentary Secretary to the Minister for Foreign Affairs. 

With the unemployment rate at its highest level in four years and with Treasury forecasting that the number of unemployed will rise to around 800,000 by the middle of next year, helping Australian businesses generate more jobs underpins our agenda to build a stronger economy.

Senator the Hon Eric Abetz as Minister for Employment, Minister Assisting the Prime Minister on the Public Service and Leader of the Government in the Senate will be responsible for reducing impediments to employment growth.  In keeping with our pre-election commitments, the Coalition Government will restore the Australian Building and Construction Commission, return the industrial relations pendulum to the sensible centre and re-invigorate Work for the Dole.  Mr Luke Hartsuyker MP will be Assistant Minister for Employment and Deputy Leader of the House. 

Senator the Hon George Brandis QC will be Attorney-General, Minister for the Arts and Vice President of the Executive Council and will be responsible for establishing a bipartisan process that will lead to a referendum and recognition of indigenous Australians in the Constitution.  Mr Michael Keenan MP will be Minister for Justice.

Strengthening the economy, lifting productivity and turning around Australia’s competitive decline will be at the heart of the new Government.  By strengthening the economy we can create more jobs and better afford the services that we all want. 

As Treasurer, the Hon Joe Hockey MP will lead the Government’s work to restore the Budget position and grow a stronger economy.  Senator Mathias Cormann, as Minister for Finance, will be responsible for delivering better value for taxpayers.  Senator Arthur Sinodinos AO will be Assistant Treasurer.  His lifetime of experience in the public sector will provide further strength to our economic team.  Mr Steven Ciobo MP will be Parliamentary Secretary to the Treasurer and Mr Michael McCormack MP will be Parliamentary Secretary to the Minister for Finance.

Mr Barnaby Joyce MP will be the Minister for Agriculture and will be working to fulfil Australia’s potential as the food-bowl of Asia. The agricultural opportunities for Northern Australia in particular are immense.  Senator the Hon Richard Colbeck will be Parliamentary Secretary to the Minister for Agriculture.

Labor’s decision to split education across multiple portfolios hindered the capacity of different parts of the system to work together to improve educational standards.

The Hon Christopher Pyne MP will be Minister for Education and Leader of the House and will work with the states and territories to deliver real improvements across all aspects of education.  The Hon Sussan Ley MP as Assistant Minister for Education will continue her work with child care and early childhood education.  Senator Scott Ryan will be Parliamentary Secretary to the Minister for Education.

The Hon Ian Macfarlane MP returns as Minister for Industry having held this role during the last two terms of the Howard Government.  Mr Macfarlane’s experience and record of success will be invaluable as we seek to build more competitive industries across Australia.  The new Industry portfolio will include responsibility for energy and resources. The Hon Bob Baldwin MP will be Parliamentary Secretary to the Minister for Industry.

I regret the absence of Sophie Mirabella who was a champion for Australian industry, particularly manufacturers.

The Hon Kevin Andrews MP will be Minister for Social Services and be responsible for the largest area of expenditure and payments in the Budget.  The new department will also be responsible for settlement services, multicultural affairs and the administration of aged care.  Senator Mitch Fifield will be Assistant Minister for Social Services responsible for the development of the National Disability Insurance Scheme and aged care.  Senator Marise Payne will be Minister for Human Services.  Senator Concetta Fierravanti-Wells will be Parliamentary Secretary to the Minister for Social Services with special responsibility for multicultural affairs and settlement services.

The Hon Malcolm Turnbull MP as Minister for Communications will deliver a new business plan for the NBN so that we can deliver fast broadband sooner and at less cost.  Mr Paul Fletcher MP will be Parliamentary Secretary to the Minister for Communications.

The Hon Peter Dutton MP will be Minister for Health and Minister for Sport.  Senator Fiona Nash will be Assistant Minister for Health.  Responsibility for mental health will rest with Peter Dutton ensuring responsibility for this issue remains in Cabinet.

Small business employs almost one in two Australians and its stand-alone presence in Cabinet acknowledges its role in job creation. The Hon Bruce Billson MP is an evangelist for small business and will drive the Government’s small business agenda.

The Hon Andrew Robb AO MP, serving as Minister for Trade and Investment, will be Australia’s ambassador for jobs by expanding Australia’s participation in free trade agreements.

Senator the Hon David Johnston will be Minister for Defence and will drive the development of the Defence White Paper as well as overseeing the Coalition’s defence procurement programme.  Senator the Hon Michael Ronaldson will be the Minister for Veterans’ Affairs, Special Minister of State and Minister Assisting the Prime Minister for the Centenary of ANZAC.   The Centenary of ANZAC will be a significant marker in our country’s history. Mr Stuart Robert MP will be Assistant Minister for Defence with responsibility for personnel matters.  Mr Darren Chester MP will be Parliamentary Secretary to the Minister for Defence.

The Hon Greg Hunt MP as Minister for the Environment will have responsibility for the abolition of the carbon tax, implementation of the Coalition’s Direct Action plan, the establishment of the Green Army and the creation of a one-stop-shop for environmental approvals.  Senator Simon Birmingham will be Parliamentary Secretary to the Minister for the Environment and have responsibility for water.

Mr Scott Morrison MP will be Minister for Immigration and Border Protection.  Senator Michaelia Cash will be Assistant Minister for Immigration and Border Protection.  This is a strong team to stop the boats. 

Recognising its key role in border protection, Customs will be in this portfolio.

Senator Cash will also be appointed as Minister Assisting the Prime Minister for Women. 

As promised, the administration of indigenous affairs will move into the Department of Prime Minister and Cabinet.  Senator the Hon Nigel Scullion will be Minister for Indigenous Affairs.

Recognising the value of deregulation to improving Australia’s productivity, responsibility for driving the Government’s deregulation agenda will shift to the Department of Prime Minister and Cabinet. 

Mr Josh Frydenberg MP and Mr Alan Tudge MP will be my Parliamentary Secretaries.

The Hon Bronwyn Bishop MP, with my support, is nominating for the role of Speaker.

The Hon Warren Entsch MP has agreed to chair a new Joint Parliamentary Committee on Northern Australia. Carefully developing our long-term plan for Northern Australia will be a priority of the new Coalition government.

The Hon Philip Ruddock MP has agreed to be Chief Government Whip.  I can think of no better person in the House to guide the 30 or so new Coalition members in their duties.  Ms Nola Marino MP and Mr Scott Buchholz MP have also agreed to be Whips. Mark Coulton is the Nationals’ Chief Whip.

The Senate Whips are elected by the Liberal and Nationals Senate Party Rooms.  The current Senate Whips are Senator Helen Kroger (Chief Government Whip), Senator David Bushby (Deputy Government Whip), Senator Chris Back (Deputy Government Whip) and Senator John Williams (Nationals Whip).

This is an experienced and talented team.  It will deliver results for the Australian people from day one. 

16 September 2013








DEPARTMENTAL SECRETARIES

As part of the Machinery of Government Changes agreed by the Governor-General the Honourable Quentin Bryce AC CVO this morning, Her Excellency has made a number of appointments of Secretaries.

Ms Lisa Paul PSM AO has been appointed as the Secretary of the Department of Education.  Ms Paul has been Secretary of the Department of Education, Employment and Workplace Relations and the Department of Education, Science and Training and brings a wealth of experience and knowledge to this new Department. 

Dr Paul Grimes PSM has been appointed as the Secretary of the Department of Agriculture.  Dr Grimes was formerly Secretary of the Department of Sustainability, Environment, Water, Population and Communities and has had a distinguished career at the State and Commonwealth levels in a number of Departments.

Ms Glenys Beauchamp PSM has been appointed as the Secretary of the Department of Industry.  Ms Beauchamp has been Secretary of the Department of Regional Australia, Local Government, Arts and Sports.  She has had an extensive career in the Australian Public Service at senior levels with responsibility for a number of significant government programmes.

Two new Secretaries have been appointed.  Dr Gordon de Brouwer PSM has been appointed as the Secretary of the Department of the Environment and Ms Renée Leon PSM has been appointed as the Secretary of the Department of Employment.

Dr de Brouwer has most recently been an Associate Secretary in the Department of the Prime Minister and Cabinet where he has had primary responsibility for advising on Australia’s participation in the G20 process.

Ms Leon has been a Deputy Secretary in the Department of the Prime Minister and Cabinet where she headed the governance group.  She was previously Chief Executive of the ACT Department of Justice and Community Safety and has held a number of senior positions in the Commonwealth Attorney-General’s Department.

I take this opportunity to acknowledge three former Secretaries, Dr Don Russell, Mr Blair Comley PSM and Mr Andrew Metcalfe AO.   Each of these Secretaries has made a substantial contribution to public life in Australia and I wish them well for the future.

Dr Martin Parkinson PSM has advised the Treasurer that he will be standing down next year.  He has agreed to stay on to the middle of 2014.  The Government will be discussing a further appointment with him next year.

I look forward to working again with Australian Public Service.

18 September 2013




ADMINISTRATIVE ARRANGEMENTS




TAKE TWO





And a memory of simpler times

Made by The National Film Board 1957. Directed by Shan Benson. Enjoy:






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Tuesday, September 17, 2013

Relax. Early retirement won't kill you

Even if financially it's not so good

It’s known as “quit and die” - the belief that men who retire early die sooner. And it is said to be backed up by evidence.

In one often-cited but rarely-seen study the Shell Corporation is said to found that its employees who retired at 55 were nearly twice as likely to die in the next decade as those who kept working.

But evidence of a solid link has been hard to find, in part because ill health is one of the reasons people retire early.

Now Australia’s Centre of Excellence in Population Aging Research believes its cracked the puzzle.

In new research released Tuesday it says there is no such effect. Men who retire early are no more likely to die at any age than those who stay working.

The lead Australian author John Piggott had to get around what he called “confounding influences”.

“Some people retire early because they are ill. Six months later they die. But they didn’t die because they retired early,” he says.

“Some people retire early because their firm has shut down. They are demoralised and depressed, they face financial stress and their social networks break down. But they didn’t necessarily die early because they retired early, it might have been because of the way it happened.”

Professor Piggott and researchers from Norway took advantage of an usual “natural experiment”...

In 1989 Norway introduced an early retirement program that covered some firms and not others. Around half its private sector employers steadily cut the minimum age for access to retirement benefits from 67 to 62. The others did not. Many years on the data shows no statistically significant difference in death rates up to the age of 70.

“It means you can leave work without worrying about losing years; do whatever works for you,” Professor Piggott says.

For the government the implications are that it too needn’t worry about hastening death by encouraging people to work longer.

“If it were firmly established that working longer led to an earlier death policy makers would feel kind of mean,” he says.

Professor Piggott supports delaying the age at which Australians can gain access to tax-free superannuation, but not because of any concern about lifespan.

“Many people retire at 60, get $400,000 tax-free and then three years down the track have only $160,000 and need to get back into the workforce. That’s extraordinarily difficult at age 63, and they can’t get the pension. I would lift the age for access to tax-free super in line with increases in the age for access to the pension,” he says.

Professor Piggott served on the Henry Tax Review.

In The Sydney Morning Herald


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