The Intergenerational Report seems to state the bleedin' obvious!
One of the clearest (and concerning) presentations we have seen in the past few months on the problems that Australia is facing was given by John Daley, the CEO of the Grattan Institute. His views were reaffirmed in Wednesday's Editorial & Opinion section of the Australian Financial Review.
Put simply Daley's argument is that based on current facts and future assumptions the government's income and expenditure outlook is broken. The current budget deficit of around $40 billion a year is not going to be fixed in short-term, and unless it is addressed, it's going to get worse.
We have an ageing population, which apart from the social, health and demographic issues is going to result in increasing pressures on the budget, with a larger proportion of the population relying on welfare, and a smaller proportion (62% by 2050) of the population in the workforce and therefore contributing tax revenue.
As Janine Perrett from the Switzer Report noted today governments need the vision and political will (both of which in her opinion are totally lacking today) which enabled superannuation and the GST to be introduced which were both big picture innovations that have had significant ramifications since.
Whether either side of politics currently has either vision or political will is debatable. However the current system where everyone wants more from the government, either in the form of handouts or taxation concessions, while paying less tax, is simply not going to solve the problem.
Sooner or later the current sacred cows such as concessional superannuation taxation in retirement phase, negative gearing, and welfare for the wealthy are going to have to be addressed. Sooner or later one side of politics or the other, preferably both, are going to have to bite the bullet and increase and broaden the GST.
In our mind the sooner the better because in the meantime we are just digging the hole, out of which we will all have to climb, deeper.
Specific results received this week include the following PERFORMANCE UPDATES:
In January, Alpha Beta Asian Fund returned -1.30%, bringing the Fund's return since inception to 20.90%.
Allard Investment Fund increased 5.5% during the month of January and 24.73% over the previous twelve month performance.
In January, Insync Global Titans Fund returned 1.30% bringing the Fund's prior 12 month performance to 12.81%.
FUND REVIEWS released this week, with the potential for earning CPD points: Totus Alpha Fund; Bennelong Long Short Fund
FUND IN FOCUS VIDEO released this week: Understanding Hedge Funds - Part 2 explains the basics Short Selling.
25-27 May 2015 - Digital Marketing for Banking and Financial Services Summit
And now for something completely different and continuing our theme from last week's hedge clipping, for all those frustrated parents and office colleagues, we bring you this instructional video.
On that note, I hope you have a happy and safe week-end.
Kind regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
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