Comments Closed

Ten questions about Obamacare you were too embarrassed to ask



I heard that Obamacare starts on Tuesday. What is Obamacare, anyway?

Passed in 2010, Obamacare is a national law with two goals: making health insurance better for people who already have it and getting health insurance for more of the 60 million people who are uninsured. To do this, the law makes a bunch of new rules for private insurers (like Aetna and BlueCross/BlueShield), public insurers (like Medicaid), employers and everyday citizens. This concept was piloted by Massachusetts in 2006 under then-Gov. Mitt Romney.

Here’s the upshot: About half of all Americans — about 160 million people — already have private health insurance, mostly bought by employers. If this applies to you, Obamacare matters only if your plan was stingy. Under the law, insurers must now pay for many things that used to be optional, like prescription drugs, having a baby and mental health care, among other services. The law also blocks any extra charges for routine checkups, cancer screening and some other stuff. Obamacare also limits your yearly out-of-pocket fees, such as co-pays for going to the hospital. It also forbids insurers from kicking you out if you get sick. One other thing: Starting in 2015, workplaces with more than 50 people must provide insurance to full-time workers. Another change: Your paycheck must show how much your boss pays for your health coverage, which may shock you.

Moving on to the roughly one-third of Americans on Medicare (mostly for seniors) and Medicaid (for the poor and disabled): Life won’t change much for seniors on Medicare, other than having an easier time getting prescription drugs. However, Obamacare includes a big expansion of free health care for the poor, through Medicaid. Starting now, nearly all families making less than $31,000 yearly could get free Medicaid, which means 17 million of the 60 million uninsured could be covered.

Everybody else — the remaining 20 percent who don’t have private insurance and don’t qualify for Medicare or Medicaid — has to go buy health insurance from an online government superstore called an exchange. That’s what is opening Oct. 1. You cannot be turned away, and depending on how much money you make, the government kicks in anywhere from nothing to a lot to help you out. Experts think 22 million people of the 60 million uninsured will comply.

In the end, 20 million Americans still won’t have insurance, though.

All this isn’t cheap, so Obamacare cut payments to hospitals and created new taxes for rich people, medical device makers, and health insurers, among many other tweaks to fund the law. According to the Congressional Budget Office, these revenues plus projected savings in Medicare in the next few years should balance out Obamacare’s cost.

The fine print: Obamacare is a gigantic law made of 10 separate titles, with hundreds of other provisions. Less-publicized sections deal with childhood obesity, drug development, special pilot programs, nursing home care and much more.

2. That answer was too long, so I didn’t read it. Can you just show me some cartoons instead?

The Kaiser Family Foundation, in partnership with Free Range Studios, created a seven-minute cartoon video explaining Obamacare. Narrated by Charlie Gibson, a former anchor of ABC’s “Good Morning America,” it features the YouToons, who have won rock-star level fame among health policy wonks.

3. Why did we need to change things in the first place? I was perfectly happy with the old system.

You weren’t the only one. According to Gallup, 82 percent of Americans were quite pleased with their health care. The problem really was with the other 18 percent. People routinely got kicked off their plans for getting pregnant, having a pre-existing condition, or losing a job. Afterward, no one would sell them insurance. Many people also had bad health plans that imposed all kinds of restrictions. In addition, 60 million Americans had no health insurance at all, and as a result, many people lost their homes, endured bankruptcy, and suffered other hardships trying to pay for treatment for their illness. Among industrialized nations, the United States was an outlier in having no basic guarantee of health care.

4. Why are some people so mad about Obamacare?

Obamacare isn’t perfect by any means. But there are two groups that really hate it: those who wanted a single-payer, fully socialized system, and those who claim to be free-market zealots.

Single payer folks think private insurance is wasteful, and they prefer the government to just pay for medical care and eliminate bills, as in England. (Some people called this a “Medicare for All” option.) They dislike investing additional money in a patchwork of private insurers. But such a plan is politically impossible in the foreseeable future.

The angriest people — those looking to provoke a national economic default over Obamacare, comparing the law to the Fugitive Slave Act, or calling it the “the most dangerous piece of legislation ever passed” — are worried Obamacare will cost too much and also harm the quality of doctors’ care. They believe the existing system had problems but worked well enough for most people. Unfortunately, many vocal Obamacare opponents regularly misstate facts. Their vitriol is best understood not as based on rational policy disagreement but as political theater.

Still, it’s true most Americans don’t like being forced to buy insurance, though paradoxically they also hate excluding people who are already sick from buying insurance. Obamacare supporters counter the “mandate” spreads risk more widely and thus allows insurers to stop discriminating based on pre-existing conditions.

5. So the insurance marketplace is open. Got it. What do I need to do?

If you already have health insurance, Medicare or Medicaid, you don’t need to do anything. If you don’t, go to www.healthcare.gov and follow the directions. You’ll end up getting various choices with prices adjusted for your age and income, typically separated into platinum, gold, silver and bronze options. If your income falls between 100 and 400 percent of the poverty line (between $23,550 and $94,200 for a family of four), you’ll get a subsidy so your actual cost will be anywhere from 2 to 9.5 percent of your gross pay. This calculator helps estimate your subsidy: . One more thing to keep in mind: If you’re up to age 26 and don’t have insurance through an employer, your parents’ insurance can cover you.

One unfortunate quirk: If you make less than the poverty level and live in a state that refused to expand Medicaid, you’re pretty much out of luck. Because of an infuriating shortcoming in the law, you must pay full price on the exchanges.

If you need to learn more, go to LocalHelp.HealthCare.gov to find help in your area. Typically, people window-shop more than a dozen times before buying. If you buy, the policy kicks in on January 1, 2014.

6. Whatever. I hate Obamacare and refuse to move a finger. What can they do to me?

To be honest, not much, though you should at least browse the exchange and see what you’re turning down. In deeply Republican Oklahoma, for example, the cheapest policy is only $96 per month. Still, if you blow off Obamacare and don’t get insured by April next year, your grand total fine is only about $100 (though it will increase over the years). And there’s another loophole: If the policy costs more than 10 percent of your annual income or you don’t pay any federal taxes, you won’t have to pay a penalty anyway. (In Massachusetts, less than 0.3 percent of people paid any penalty.) In short, if you don’t participate in Obamacare, the government won’t send black helicopters after you.

7. Unlike that other person, I am psyched about signing up for health insurance. Once I do, am I all set if I end up in a hospital or get really sick with cancer?

Sadly, the answer isn’t simple. It’s true that you wouldn’t have to mortgage your house and lose everything since you’re insured. But just as with auto insurance if you get in an accident, different policies have different deductibles. If you gambled and bought the cheapest bronze insurance, for example, you may have to cover the first $2,000 of any hospital bill before your insurance starts covering some of the costs. After that, you still pay a share of the bills until you hit the “out of pocket maximum.” Obamacare limited that to $6,350 — above and beyond what you pay in premiums — but then delayed that maximum. (This is why the cheapest policies may not be the best.)

Worse, some insurance policies may recommend a hospital, but not all the doctors in that hospital may participate in the insurance network. So you can get in the weird situation where you go to an in-network hospital for a complex medical problem, but the specialists (like pathologists) who treat you but don’t participate in the network. Bam! — You’re stuck with their huge bills with no help from your insurer since the doctors are “out of network.” (This is the case for many current insurance policies as well and is not a direct consequence of Obamacare.) Worst of all, Obamacare imposes no limit on charges from out-of-network doctors, so you could still lose your house.

Bottom line: Over time, further regulations may fill in these gaps. For now, be very careful when you buy your plan — and be sure to understand the benefits.

8. I’m 27 and make about $35,000 a year. According to my paycheck, I pay only $150 dollars per month for my health care plan, which is less than my cable bill. Why are people so worked up about health care costs?

For now, you’re shielded from the actual cost. The amount taken out of your paycheck is just your small share of the premium. Your employer in fact is kicking in hundreds and hundreds of dollars each month as well — big money that could have ended up in your pocket if premiums were lower. Plus, a large portion of your federal and state taxes pay for health care for the poor and elderly. According to one estimate, you’re actually paying $10,000 per year for health care — more than a quarter of your earnings — and workers with families pay even more.

Though Obamacare may lead to lower premiums for many people who are sick and hard to insure (mostly by bringing more healthy people into the system), it doesn’t aggressively attack the bigger problem of rising costs. The law does fund some experiments for cheaper and better health care, but the data so far is underwhelming. Obamacare is best understood as a plan to improve health insurance access, but not as a plan to lower the existing costs much. On the bright side, some private insurers, like Blue Cross Blue Shield, are pioneering new approaches. But health care still will be a huge drain on take-home pay and the national economy.

9. What was that whole thing with the Supreme Court and Obamacare last year?

To get people insured, Obamacare sat on a “three-legged stool.” It includes a mandate for people to buy insurance if affordable, a prohibition on insurers from barring any buyers regardless of health status, and a huge expansion of free health care for the poor through Medicaid. Because states have to pay for part of Medicaid, several strongly opposed expansion, and Florida and other states filed a lawsuit to stop Obamacare. (To be honest, however, Obamacare promised to give states almost all the extra money.)

In the end, the 2012 case was a mixed victory for Obamacare. The Supreme Court upheld the law broadly and the mandate (the first two legs of the stool), but it made the Medicaid expansion optional for states (cutting out the third leg). Though extending free care to the poor would cost states quite little, 22 mostly Republican states have refused to take the money and insure more poor people. This is a major problem for Obamacare’s central goal and likely will leave millions more people uninsured. If you live in one of these states, are poor and don’t have Medicaid, you are out of luck.

10. Is Obamacare here to stay, or could it be repealed?

Once Obamacare starts working and delivering insurance, it will become practically impossible to repeal as more and more people get covered. So opponents are trying to kill it before it gets started. Even in the face of a government shutdown, Obamacare funding is considered “mandatory” and will continue unaffected.

Thus far, the U.S. House of Representatives has voted to repeal Obamacare more than 40 times since passage, but it has been blocked by the Senate. Despite the drama surrounding the pending government shut-down and debt-ceiling limit, the law is almost certainly here to stay.

Still, Obamacare will require many changes over time. Numerous problems remain regarding the insurance provisions (for example, there is no limit on out-of-pocket costs for out-of-network doctors). Additionally, the employer mandate might be better structured as based on payroll rather than number of workers. However, these tweaks will require legislators to work together — a problem when Congress is at a historically low level of productivity.

Patel, a former White House policy adviser, is a fellow of the Brookings Institution and a primary care doctor.

Sanghavi, a pediatric cardiologist, is a fellow of the Brookings Institution and Slate’s health care columnist.

© 2013, Slate



Comments Closed

Guilty Hinch facing jail for contempt

A contrite and unusually cautious Derryn Hinch stood on the front steps of the Victorian Supreme Court contemplating jail after being found guilty yet again of contempt.


While the situation may be a familiar one for the former high-profile broadcaster and victims’ rights crusader, he says the circumstances are different from earlier convictions that arose from conscious flouting of court rules.

“The thing about this one is that I didn’t do it,” Hinch said on Wednesday.

“I don’t think I’ve done anything wrong.”

A few minutes earlier, Justice Stephen Kaye had found Hinch guilty of breaching a suppression order imposed during the notorious Jill Meagher rape and murder case.

The judge found Hinch not guilty on a second charge of contempt involving the publication of the same material.

The court heard Hinch posted information on his internet blog in April this year revealing Ms Meagher’s murderer Adrian Ernest Bayley had previous convictions, was out of jail on parole and was on bail.

The publication occurred on the day Bayley pleaded guilty to raping and murdering Ms Meagher.

Hinch also asserted that Bayley’s parents had warned the police their son was likely to attack a woman and that the police sexual crimes squad had twice asked the parole board to lock him up.

Justice Kaye said in his judgment that Hinch’s article had contravened the suppression order, frustrating its effect and interfering with the administration of justice.

Hinch’s lawyer maintained his client hadn’t known about the order when he published his article, that publication was in the public interest and that other media organisations had carried the same and more sensitive information about Bayley.

Outside court Hinch said he was carrying the can for the behaviour of the wider news media.

“I said from day one, I’ve been made a scapegoat and a whipping boy over this,” he said.

“It angers and puzzles me as to why the Herald Sun and The Age both printed the fact that they expected Bayley to plead guilty to the murder of Jill Meagher and were not charged.

“I’ve been convicted because in a blog … I mentioned parole.”

Hinch, who has previously been jailed for contempt, acknowledged he could again go to prison.

“It’s a real prospect, but I won’t worry about it until it happens,” he said.

“I’m gutted, it has hit me hard.”

In relation to the second charge, Justice Kaye said while Hinch should not have published the article in question, he could not be satisfied beyond reasonable doubt that it prejudiced any future trial Bayley may face.

Hinch will be sentenced after Justice Kaye hears submissions on penalty on October 11.



Comments Closed

China web users’ scathing critique of giant Tiananmen vase

A giant vase installed in Beijing’s Tiananmen Square ahead of a national holiday has met with scathing criticism from Chinese internet users after a newspaper revealed its cost on Sunday.


An enormous psychedelic-looking red pot — 13 metres high and 11 metres in diameter — topped with huge fake flowers and imitation peaches was installed this week on the square, the symbolic centre of the Chinese state.

But it came at a cost of more than 570,000 yuan ($93,000), up 8,000 yuan from similar displays the previous two years, according to the state-run Beijing Youth Daily.

The cost prompted critical comments among Chinese internet users — even though the report said that the overall number of flowers used around Beijing for China’s National Day had halved. 

“Who permitted spending taxpayer’s money in this way?” one user of Sina Weibo, a Chinese equivalent of Twitter, wrote.

Another user wrote: “570,000! That money could be put to much better use.”

The report said that some money-saving measures, including the use of 800,000 small flower pots in the square and surrounding streets, compared to 1,000,000 last year, had been introduced.

China’s new President Xi Jinping has touted a campaign to reduce government waste, introducing a ban on new government buildings and guidelines for banquets, after reports of corrupt officials indulging in wasteful lunches and unnecessary building projects.

A county in eastern China built a giant copper sculpture of a puffer fish at a cost of around 70 million yuan, reports said this week, arousing angry comments about government extravagance.

Tiananmen Square usually gets a makeover ahead of China’s National Day which falls on October 1, and is a platform for the ruling Communist party to showcase its achievements and drum up nationalist sentiment.

The festival sees thousands of tourists from across China descend on the square, where Mao’s preserved body is on display in a dedicated mausoleum.

A yellow crane lowered a fresh image of Mao — albeit identical to its predecessor — which stares out over the square, into position on Saturday as guards watched on, pictures showed.

The area around Tiananmen — which means “gate of heavenly peace” — has been the site of key events in Chinese history, including Mao’s announcement of the establishment of the People’s Republic of China, and a government-led crackdown on student protesters in 1989 which saw hundreds, perhaps thousands, killed.



Comments Closed

Greens lose out to PUP in WA Senate race

Greens senator Scott Ludlam has lost his West Australian Senate seat, after the results from the Australian Electoral Commission confirmed another victory for the Palmer United Party (PUP).


After a tight count involving complicated preference votes, three Liberal senators, two Labor senators and Zhenya Wang from PUP were declared winners.

David Johnston, Michaelia Cash and Linda Reynolds will represent the Liberals, Joe Bullock and Louise Pratt will represent Labor, and Mr Wang will be the PUP’s latest parliamentary representative.

PUP has secured two other Senate seats, with former rugby league forward Glenn Lazarus winning in Queensland and Jacqui Lambie in Tasmania.

On Tuesday, party leader Clive Palmer finished only seven votes ahead of his Liberal National Party opponent in the federal seat of Fairfax on the Sunshine Coast of Queensland, triggering a recount of every vote.

Mr Palmer said he now looked forward to working with Prime Minister Tony Abbott.

“The Senate election results for the Palmer United Party are a tremendous achievement in our election debut,” Mr Palmer said in a statement.

“The Palmer United Party looks forward to working with the Abbott government to get Australia back on track.”

Mr Wang said he was humbled by his surprising win.

“It is an honour to be able to represent WA and I am looking forward to serving my local community and this great state in the Senate to the best of my ability,” Mr Wang said.

“The people of Australia have bestowed a great responsibility on myself and the Palmer United Party and I would like to thank them for the opportunity.”

Senator Ludlam, whose term expires on June 30 next year, said he was expecting the result to be confirmed at 3pm (WST), despite some close scrutiny of the count.

“Everyone is going to have a close look at the numbers and see if there is cause for a recount,” he told ABC radio.

“But it appears they (PUP) have been elected on roughly half the vote of the Greens, and that is the sort of result our voting system throws up from time to time.

“(Losing) is still sinking in, but I would love to keep working on the things I have been working on – and if you think politicians do a crap job, then you should just try it.”

Senator Ludlam said there was an urgent need for electoral reform.

“It is an elegant system being expertly gamed and manipulated,” he said.

“The whole purpose of an electoral system is to accurately as possible reflect the voting will of the Australian people. It has let us down in this instance.”

The Australian Sports Party, which was in the running, also lost out on preference votes.



Comments Closed

ALP contenders back free vote on marriage

Neither prospective Labor leader will back moves to force all Labor MPs to vote in favour of same sex marriage.


The party’s platform currently supports gay marriage but gives its parliamentary representatives a free vote on the matter.

But Australian Workers Union boss Paul Howes thinks that’s a mistake.

He’ll tell an Australian Marriage Equality forum in Sydney on Wednesday it’s an issue of social justice, not individual conscience.

The forum will include supporters of same sex marriage across party lines, including Tony Abbott’s sister Christine Forster.

“Just like with racial discrimination, it is vital to understand that our past discrimination against people in same sex relationships is not some sort of fundamental starting point for humanity,” Mr Howes will say.

“I want tonight to urge my party to finally disown this phony notion that we should be affording equal respect to both sides of the gay marriage debate, as if it were some exquisitely balanced moral quandary that could never be unlocked by mere mortals. It is not.”

He wants the party’s 2014 national conference to change the rules so there isn’t a conscience vote.

But both leadership candidates Bill Shorten and Anthony Albanese say while they personally support same sex marriage, it should be a conscience matter.

Mr Albanese said legalising same sex marriage was a reform whose time had come and parliament should act.

“But equally, I believe this can best be achieved when all members and senators are given a free vote on any future legislation,” he told AAP.

With Labor MPs split on the issue and the coalition insisting its politicians vote against same sex marriage, several bills put to federal parliament have been doomed.

Mr Shorten’s spokeswoman said he was of the view that limiting the vote would not be consistent with his vision for a diverse, inclusive Labor Party.

The Australian Christian Lobby managing director Lyle Shelton said the issue had been given a fair go.

“It would be damaging for to Labor continue to tie itself to this agenda,” he said.

“Labor’s 2014 national conference should really be focussing on how the party can better appeal to the centre on social policy, including how best to promote policy which supports, wherever possible, a mother and father for children.”



Comments Closed

Fully solar house for sale in UK

The UK’s first fully solar-powered new build home has gone on the market.


The Solar House, which is set in two acres in Great Glen, Leicestershire, was completed last week and is thought to be the first new build home to be entirely heated by the sun’s energy all year round.

The five-bedroom timber frame property, which is on the market for STG1.2 million ($A2.08 million), features solar electric energy, triple glazing and rainwater storage. There is also a charge point to charge an electric car.

Developers Caplin Homes believe hybrid solar panels, which collect both electrical and thermal energy, on the detached house will collect enough solar energy to provide heating, hot water and electricity to run the home throughout the year.

Excess energy collected during the warmer months will be stored underneath the house in an Earth Energy Bank (EEB) and pumped back to heat the home in winter. It is only expected to require heat from the EEB for about 10 weeks of the year.

The house is connected to the main electricity network but Caplin believes enough energy will be generated to power the home and any electrical items.

Michael Goddard, director of Caplin Homes, said: “The design and construction, down to the materials, were used specifically for their low footprint.”

“We want to prove government targets are achievable and genuine zero-carbon homes are a viable investment for UK house builders.

“The solar house shows how existing technologies can be used for a large family home but we plan to offer solutions for all house sizes.

Estate agent Anthony Fox, of Country Properties, in Kibworth, who are selling the property, said there had already been a lot of interest in the house, especially from families.

Mr Fox said: “It has only just gone on the market and we’ve had incredible interest from people looking to buy the house but also from people looking to build their own.

“People are very keen to reduce their carbon footprint and they’re fascinated by the technology and the prospect of their home being self-sustaining and self-sufficient.”

The project has been completed by a consortium of sustainability specialists, including Caplin Homes; Newform Energy, which provided the hybrid solar panels, heat pump and control system; John Cotterill Sustainable Architecture and De Montfort University.

As part of the project, an MSc research student from De Montfort will monitor the house’s performance over its first year.



Comments Closed

Wages growth tipped to fall behind

Wages in Australia will fall relative to emerging Asian and developed European economies in the next 20 years unless productivity is boosted, accounting giant PricewaterhouseCoopers says.


Of 21 economies analysed by PwC, Australia had the highest average monthly wage in 2011, followed by France, Canada and Japan.

But by 2030, Australia could move to fourth on the list, with South Korea pushing ahead to top spot.

Over the next two decades, PwC expects the average monthly wage in Australia to increase by less than $US400 to $US4,818.

South Korea’s average monthly wage is expected to rise from $US2,361 to $US5,040.

Low productivity growth and an expected decline in the Australian dollar meant it was hard for wages, and therefore standards of living, to grow, PwC partner and economist Jeremy Thorpe said.

Australia needs to improve productivity through industrial relations and tax reform, and also needs to look at its immigration policy to ensure it attracts people with the right skills, Mr Thorpe said.

Companies also need to be willing to adapt the way they do business in order operate more efficiently, he said.

“Higher productivity growth is the only way to increase real wages and unless we tackle the productivity challenge, Australians may have seen the best of it, in terms of standard of living, for some time,” Mr Thorpe said.

The PwC report found wages would grow most strongly in emerging economies such as China, Poland, Turkey, Mexico and South Africa, due to higher productivity growth.

But wages were also expected to grow faster in the UK, Germany, France and the UK, than in Australia.



Comments Closed

Cordner, O’Donnell likely for Roosters

Club great Luke Ricketson has urged the Sydney Roosters to start Boyd Cordner and Luke O’Donnell in Sunday’s NRL grand final despite the injury cloud hanging over the pair.


The star forwards both trained with the team on Wednesday at Moore Park, making it increasingly likely they’ll overcome their respective fitness concerns and be late inclusions to face Manly in the decider.

Cordner is aiming to return after seven weeks on the sidelines with a broken ankle, while O’Donnell missed last week’s preliminary final with a hamstring strain.

Roosters’ premiership winner Ricketson fought through serious injury to play in both the 2000 and 2002 grand finals, and has already spoken to Cordner and O’Donnell about their preparations.

Ricketson is confident both will play and said coach Trent Robinson should go one step further and inject them immediately into the starting side.

The 40-year-old said their impact in the early exchanges could be telling and the Roosters’ couldn’t afford to risk their bodies cooling down after the warm-up.

“I’ve seen a lot over the years with injuries that you’re better off getting him out there instead of sitting him on the sideline and cooling down after a warm-up or worrying about the injury,” Ricketson said.

“Get (Cordner) through the warm-up and get him out there for the first 20 minutes and if he’s playing well and sticking to his job you keep him out there.

“The Manly pack will come out and challenge the Roosters … and that will really spur (O’Donnell) on. He’s an intimidating player and I think he’s got to be in there in the first 10 minutes.”

Neither Cordner or O’Donnell was named in the Roosters’ 17-man grand final team, but after both running on Friday they appear set to be called up – probably at the expense of young forwards Dylan Napa and Isaac Liu.

Superstar Sonny Bill Williams was a spectator at training on Wednesday, wearing a compression sock and tape on his left leg.

Williams played through calf soreness leading into the finals and also battled food poisoning last week, however the dual international would appear to be a certain starter in what could be his last game of rugby league.

Ricketson was little better than a 50/50 proposition when plagued by hamstring injuries ahead of the ’00 and ’02 grand finals.

However, from personal experience he’s been able to advise young gun Cordner and experienced journeyman O’Donnell, that they can’t afford to miss such an opportunity if they’re anywhere close to full fitness.

“You’ve just got to get yourself there for grand final day,” he said.

“I remember in 2002 I was never playing all week and two days out coaching staff gave me until game day to make a decision. Looking back now if I watched them do the victory lap (without me) I would have been devastated.”

Ricketson admits that for the injured player there’s an element of worry that you could let the team down, but he believes there’s far less risk of that in the modern game.

“In the old days there was a mentality of making your own mind up a little bit. But the medical staff are a lot more scientific and technical than that,” he said.

“I think a clearance from the club will give you the confidence you’re going to be OK on the day.

“Boyd has been out for a while but he’s young enough and good enough to push through it.

“He thought he could have played last weekend … Luke had a twinge last week but with treatment this week I think he’ll be fine.”



Comments Closed

Housing recovering despite slow August

The housing sector remains on the road to recovery despite a worse than expected fall in the number of approvals for new homes in August.


Local council approvals for the building of new houses, townhouses and apartments fell 4.7 per cent in August, more than economists’ expectations of a 1.0 per cent fall.

But despite the fall in August, the overall trend remains positive, ANZ economist Dylan Eades said.

“On a month to month basis, these data are quite volatile and do tend to bounce around quite a bit,” Mr Eades said.

“Overall, the story for the residential construction market remains relatively positive.”

Over the year to August, building approvals were up 7.7 per cent, seasonally adjusted, Australian Bureau of Statistics figures show.

“What we’re seeing now is just an unwinding of the strength that we did see in the previous month,” Mr Eades said.

“We’re still very much of the view that given the lower interest rate environment, dwelling approvals will continue to strengthen over the rest of this year and next year as well.”

St George economist Janu Chan said the volatility was driven by multi-unit developments such as apartments and units, approvals for which fell 6.5 per cent in August, after a 24.4 per cent surge in July.

“Despite the weak headline result, we suspect that the fall is largely reflective of data volatility, and that a recovery in dwelling investment remains underway,” Ms Chan said.

“Rising house prices should further encourage growth in housing construction, which will help support economic activity.

Investment in housing needs to strengthen and contribute to economic growth as the economy moves away from being driven by mining investment, she said.

“In time, this should alleviate some of the housing shortages which exist in parts of the country,” Ms Chan said.

But Invast chief market analyst Peter Esho said the August figures broke the positive trend set in July, despite the view that lower interest rates would strengthen prices and demand for new homes.

“That hypothesis seems to have completely fallen apart by today’s building approval numbers,” he said.

“The RBA’s rate cuts alone are not enough to see building approvals take off and a fiscal response should now be more carefully considered as part of an overall policy.”

Housing Industry Association chief economist Harley Dale said the figures showed the pace of the housing recovery was too slow and government action was needed.



Comments Closed

Argentina prop Diaz joins Highlanders

The 20-year-old Diaz has won four caps for the Pumas and started the opening match of this season’s Rugby Championship against South Africa, before he was dropped back to the bench for the second game.


“We’re really excited about Matias joining the team for next season,” Highlanders general manager Roger Clark said in a statement.

“There are not many quality tight-head props available in the New Zealand market, so to be able to confirm a young player of his potential is great news.”

Diaz’s signing could also open the door for other Super Rugby teams to attract developing talent from the South American country, with Southern Hemisphere rugby officials looking at a possible expansion of Super Rugby from 2016.

SANZAR chief executive Greg Peters told Reuters earlier this year that realigning the competition to include Argentine teams was being discussed.

“There is no doubt they make no secret of their aspiration to be in Super Rugby,” Peters said in an interview. “That’s part of the discussions right now is to how they can be accommodated.

“The professional game in Argentina does not exist, their professional game is in Europe.

“For them to be successful long term they will need to have an involvement in the professional game and not just the international level.”

Diaz is the second international signing by the New Zealand franchise in two days with the team confirming on Tuesday that Japan scrumhalf Fumiaki Tanaka had re-committed with the Dunedin-based side for another season.

(Reporting by Greg Stutchbury; Editing by John O’Brien)