Rudd to offer generous concessions to bank accounts for savers

MUM and dad investors will receive generous concessions to park their savings with banks and building societies as part of sweeping tax reforms.

The Rudd Government is preparing to unveil a new savings scheme offering tax breaks similar to superannuation’s discount rate of 15 per cent, The Daily Telegraph reports.

It will encourage investors to deposit savings with the four major banks and other respected financial institutions.

But investors will have to “lock up” their savings — perhaps for between five and 10 years — to qualify for the special rate.

The new savings deal will be announced as part of the Government’s much-anticipated response to the Henry tax review.

It will be part of a suite of measures aimed at building a new savings culture in Australia.

But it is also hoped it will generate billions of dollars in bank deposits, cutting the need for finance houses to borrow from overseas.

The Government expects it will be popular with voters who currently face punishing tax rates on savings. Some taxpayers can pay up to 50 per cent on interest earned from their bank deposits.

Australia is one of the few countries in the world to tax bank savings at the full rate.

Among key reforms, taxpayers will be able to lodge their annual tax returns with a few clicks of a mouse.

And Australia’s antiquated tax system — containing 125 different taxes — will be streamlined to simplify arrangements.

It is understood the Reserve Bank and other financial authorities have raised concerns about the steady decline in deposits.

Bank CEOs have been lobbying Canberra for changes to taxation on ordinary bank deposits, claiming the superannuation industry gets a huge advantage.

And they have a strong ally in Treasury boss Dr Ken Henry, who has also raised concerns over the punitive rates faced by those who save with banks.

Source  :  www.news.com.au

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‘We’re selling education, not visas’

AUSTRALIA has delivered a blunt message to India that it is selling education, not visas, even as the Rudd government deploys its most senior ministers to patch up relations damaged over a series of Indian student assaults.

Trade Minister Simon Crean, whose visit to India this week overlaps that of Deputy Prime Minister Julia Gillard, outlined to the Confederation of Indian Industry yesterday federal government measures to crack down on shonky education and training providers in Australia.

But he said the crackdown could be successful only if similar action were taken in India to close down shonky education and immigration agents running scams to secure permanent Australian residency through student visas.

“Let’s be clear, we are offering a quality education in a safe environment,” Mr Crean said yesterday. “The quality of our education is what we are promoting, not the visa attached to it.

“For this to succeed, we also need the co-operation of the Indian government. The fact that politicians in both countries have been forced to focus on the issue improves the odds of coming up with a better system.”

Ms Gillard is understood to have delivered a similar message during meetings with Indian Human Resources Development Minister Kapil Sibal and, late on Tuesday night, with Indian Prime Minister Manmohan Singh, where greater engagement between the two countries on defence, energy and climate change were also discussed.

Mr Crean denied Australia’s international education industry needed to be remarketed in India, despite the fact it is widely seen — and in some areas promoted — as a pathway to permanent residency.

But he conceded better co-operation between Australian government agencies was also needed to help stem student visa abuses.

What the student issue has done is shed a light on the importance of interaction between Austrade, the Department of Foreign Affairs and Trade and those that market our services in the Department of Education, Employment and Work Relations in the protection of our brand,” he said yesterday.

In just eight days, India will have hosted three of Australia’s most senior politicians, Mr Crean, Ms Gillard and Wayne Swan.

By the end of the year, a total of eight Australian ministers will have graced Indian soil.

The ministerial offensive is aimed at patching bilateral relations, damaged by a recent series of attacks on Indian students in Australia, as well as building trade relations with the emerging Asian superpower.

Mr Crean, who is in India for a two-day meeting of G20 trade ministers ahead of the next Doha round of WTO talks in Pittsburgh later this month, said Australia’s trade relationship with India had historically been “underdone”.

The ministerial visits — which will culminate in a tour by Kevin Rudd later this year — were designed to correct that.

“We understand the fundamental importance of India to our future, just as we do China and the rest of Asia. This is going to be the fastest-growing region in the world for the next couple of decades, it is the place to be,” he said. “Australia fortunately positioned itself for that a couple of decades ago but we have to renew the effort.

“Obviously, if there is a hiccup in the relationship, as there has been here over student safety, of course we have to address it. Visits here are an important part of that.”

Canberra hopes that a successful culmination of the Doha talks — aimed at reducing international trade barriers — will help accelerate free trade agreement negotiations between Australia and India, still at the feasibility stage.

It was also concentrating on building trade ties in infrastructure and energy security areas, with particular focus on investments in gas and coal.

Mr Crean denied that Australia’s refusal to sell uranium to India — a non-signatory to the Nuclear Non-Proliferation Treaty — would hurt the progress of the talks, despite Mr Singh again raising the issue during his meeting with Ms Gillard.

Source  :  The Australian

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Rudd signs deal to help jobless

A PLAN to help up to 124,000 retrenched workers has united the states but drawn criticism in Canberra.

Prime Minister Kevin Rudd signed a deal with the states and territories to give intensive help to unemployed people aged over 25.

The Council of Australian Governments (COAG) conference in Darwin agreed to give the jobless access to government-subsidised vocational training.

Labor says the “compact with retrenched workers” will help up to 124,000 people.

“Workers who have been retrenched as a consequence of this global recession have lost their jobs through no fault of their own,” Mr Rudd said.

“Acting to support young Australians who are finding it hard to enter the labour market … represents an important intervention by government.”

Under the agreement, the Federal Government’s new employment agency Job Services Australia matches retrenched workers, aged over 25, with a path to a qualification.

The state and territories would set aside training places.

The training is for people who have been out of work since January 2009 and who are registered with a Job Services Australia provider.

The entitlement is available from now until the end of 2011.

It follows an “earn or learn” COAG agreement reached in April to make youths aged 15 to 19 undertake training and guarantee places for 20-24 year-olds in skills development.

The Rudd Government says it has invested $300 million in programs to help retrenched workers, but it did not provide a cost for the latest one.

Queensland Premier Anna Bligh said COAG’s new scheme would prepare Australia for economic recovery.

“We know only too well how quickly this country can find itself in a situation of serious skills shortage.”

But Opposition employment participation spokesman Andrew Southcott said training programs for the unemployed had failed when Labor last took that approach in the mid-1990s.

“Training for training’s sake, without a job at the end of it, is cruel to the unemployed,” Mr Southcott said.

“The experience around the world is that a skills-first approach for the unemployed tends to be very expensive and you have poor outcomes.”

Source  :  www.news.com.au

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Grocery Choice website scrapped

THE Rudd Government has dumped one of its key election promises, the Grocery Choice price monitoring website, after supermarkets failed to provide enough information to make the site reliable.

After a meeting today with major supermarkets, Competition Minister Craig Emerson announced that the measure – an election promise that was aimed at keeping grocery prices low – would not proceed, The Australian reported.

“Upon close examination of the data requirements for reliable price information, I have formed the view that it is not feasible to generate that information in a timely manner, “ Dr Emerson said.                                                                                                                                                                                                                                                   

The scheme had been due to be up and running next week.

The dumping of Grocery Choice comes after the Government last year abandoned FuelWatch after it was defeated in the Senate.

Mr Rudd campaigned heavily prior to the election on easing the cost-of-living pressures on working families and increasing competition in the petrol and grocery sectors.

Both FuelWatch and Grocery Choice were criticised for not putting downward pressure on prices.

Earlier this month it emerged that the consumer advocate Choice would be forced to go it alone on the website as the major supermarket chains continued to drag their feet over supplying price data.

Choice took over the running of the website from the Rudd Government, which launched it after campaigning on easing cost-of-living pressures before the election.

The $13 million site, which originally launched last August, was heavily criticised for displaying information that was too general and outdated to be useful.

Source  :  www.news.com.au

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The Rudd Government to tighten rules for margin lending

THE Rudd Government will give the $21 billion margin lending industry three weeks to digest a proposed overhaul of the regulatory and legislative regime.
The Minister for Corporate Law Nick Sherry will today release a draft copy of the legislation with a view to introducing it into parliament next month.

The legislation includes new national laws to regulate margin lending under a standard national regime, reports The Australian.

Margin lending is not currently regulated in Australia and is considered to have been one of the main destroyers of investor wealth as the stockmarket collapsed last year.

It cost some investors their homes as their margin lending accounts blew up, triggering margin calls many couldn’t afford to pay.

Mr Sherry said yesterday taking out equity on a family home was a key area of interest to the Government.

“One area where we have had a high level of concern has been where people have been advised to take equity out of their family home and then to use this debt to leverage into buying shares through a margin loan.

“This double-debt trap, with a home as security, is of serious concern,” he said.

“Under our new responsible margin lending laws the lender will be required to assess a person’s true loan-to-value ratio

“This means the lender can no longer assume the money brought to the table is not itself debt, a major new improvement” that would reduce the risk of people losing their homes.

Properly geared margin lending, backed by full disclosure, had a place, but the Rudd Government would not tolerate ordinary Australians being misled into grossly inappropriate margin loans that could cost a family everything they owned, including their home, he said.

Under the new laws, lenders will be regulated by the Australian Securities and Investments Commission and be required to hold an Australian Financial Services Licence, be members of low-cost external dispute bodies, clearly disclose fees and commissions before lending, and lend under a tailored margin-lending-specific set of responsible lending obligations.

Between June last year and December 30, the number of margin calls received by 205,000 Australians with margin loans increased 458 per cent, as the share market dropped 40 per cent.

http://www.news.com.au/perthnow/money/story/0,26926,25441887-5015860,00.html

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