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Warren Buffett sells $4.7b Exxon stake in global oil rout

Buffett, revered by many as an investment guru, built Berkshire into the fourth-biggest company in the world through acquisitions and by picking stocks that surged in value. Photo: Andrew HarrerWarren Buffett’s investment company Berkshire Hathaway has exited its $US3.7 billion ($4.7 billion) investment in oil giant Exxon Mobil Corp. amid a slump in crude prices. Crude has fallen by about half since June as US production surged and the Organisation of Petroleum Exporting Countries resisted output cuts. The decline has ravaged oil company profits and forced major producers and drillers to slash spending and fire thousands of workers. Berkshire has “not really had the hot hand in energy,” said Fadel Gheit, an analyst for Oppenheimer & Co. in New York. “The whole energy sector obviously is now traded in completely different circumstances than they were only a year ago.” Buffett, revered by many as an investment guru, built Berkshire into the fourth-biggest company in the world through acquisitions and by picking stocks that surged in value like Coca-Cola and the former Washington Post Co. Still, he’s had a mixed record when it comes to investing in energy companies. One of his biggest winners was PetroChina In 2007, he booked a $US3.5 billion profit after selling an investment in the oil producer of about $US500 million. That was followed by an ill-timed bet on ConocoPhillips before crude prices peaked in 2008, and a $US2 billion bond investment in Energy Future Holdings that was later written down as natural gas prices plunged. Berkshire’s 41.1 million shares of Exxon cost on average $US90.86 apiece in 2013, according to the latest annual report. A regulatory filing Tuesday showed Buffett sold the holding during the fourth quarter. The oil company traded for an average of $US93.27 in those three months, so Berkshire could have sold the stake at a profit. Scott Silvestri, a spokesman for Exxon, declined to comment.

Energy holdings

Buffett also eliminated a smaller holding in ConocoPhillips while adding to a bet on Canadian synthetic crude oil producer Suncor Energy and oil refiner Phillips 66, according to the filing, which detailed the US stock portfolio at Buffett’s company as of December 31. The changes show that that there are differing views about energy stocks at Berkshire, said Jeff Matthews, a shareholder and author of books about the company. Buffett, 84, has been handing more funds to his back-up stock pickers, Todd Combs and Ted Weschler, as part of his succession plan. The billionaire Berkshire chairman and chief executive officer has said the biggest holdings in the portfolio tend to be his. “There was clearly no edict that says, ‘Oil is terrible, let’s get out,'” Matthews said in a phone interview. “Someone has a different opinion about it.”

IBM, Deere and Fox

Buffett affirmed his support for one of his biggest holdings, International Business Machines, in the fourth quarter, by adding 6.5 million shares. The stake is now worth about $US12.4 billion. Buffett didn’t respond to a request for comment sent to an assistant. Last year, the computer-services company fell below the price Buffett paid for most of the stake after abandoning an earnings forecast. CEO Ginni Rometty is trying to reignite growth at IBM by expanding sales for newer cloud computing and data analytics offerings. Berkshire also increased its investment in agricultural equipment maker Deere & Co. and disclosed a stake in Rupert Murdoch’s 21st Century Fox valued at more than $US160 million based on Tuesday’s closing price. Buffett has said he’s focused on buying whole businesses and expanding them over time. Berkshire now derives a majority of its profit from operating subsidiaries, including railroad BNSF, electric utilities and manufacturing operations. That’s a reversal from two decades ago when most profit came from insurance units. Investors have cheered the shift even as some of Buffett’s stock picks faltered. Berkshire shares rallied 27 per cent in 2014 to near-record levels. “Last year really shows” how the stock portfolio has become less important, said Cliff Gallant, an analyst at Nomura Holdings. “It wasn’t a stellar year for the portfolio, but it was a good year for the company.”


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Canberra Capitals captain Abby Bishop juggling Europe, America, Australia and motherhood

Mum’s the word: Canberra Capitals star Abby Bishop has a busy schedule. Photo: Matt BedfordCanberra Capitals captain Abby Bishop has met with Australian coach Brendan Joyce about a potential return to the Opals squad and changes to basketball’s parental policy, but she has reaffirmed her priority will always be to her adopted daughter Zala.

Bishop has also dismissed suggestions of potential burnout, the 26-year-old leaving Canberra on Thursday to accept a lucrative two-month deal in Hungary, before returning to America’s WNBA.

With the WNBL season complete, the Capitals have granted Bishop an early release from her contract to accept the cameo deal in Hungary, which includes provisions for a nanny for 18-month-old Zala.

Bishop has been the primary career for her niece Zala since she was two days old and was recently granted full custody until she is 18.

Bishop stood down from the Opals squad at last year’s world championships due to Basketball Australia’s parental policy, which restricted children staying with the team.

Effectively a single mother, Bishop met with Joyce last week and has been included in a 34-player Opals squad after an outstanding WNBL season, in which she led scoring and rebounding.

“We didn’t go into too much discussion about the parental policy, but as much as I’m aware they’re changing things up a little bit in that and seeing what they can do with it,” Bishop said.

“I walked out quite positive, but I also made it quite clear again that Zala is my first priority. She’s put a lot of things into perspective. Obviously basketball is my life and my job, but I won’t be sacrificing my daughter for anything else. I made that quite clear and they understand that now, so we’ll see what happens.

“Zala’s a little bit older now, so that makes it a little bit easier for me now as well. But at the same time, it’s one of those things we have to work together with. At the moment I’d probably be the only woman in the team that’s got a child, so it’s something they’ve got to work through.”

Despite the Capitals missing the WNBL finals, Bishop is overwhelming favourite to take out the league’s most valuable player award after a stellar individual season.

While she is not contracted to return to the Capitals next summer, it appears likely Bishop will play with Miskolc in Hungary, then head to the Seattle Storm in the WNBA, before returning to Canberra.

Australia’s greatest female basketballer and Capitals teammate Lauren Jackson took on a similarly hectic schedule at her peak, but has struggled with injury in recent seasons.

Bishop said she wasn’t concerned she was taking on too much and was still in the frame to return to the Capitals next season.

“I’m one of those athletes who needs to be doing something all the time … I’m at that point in my career where I’m hitting some peak form and I need to build on it.

“Loz played from an early age back-to-back Europe and America, playing a lot of minutes, highly demanding on her body. For me, the last couple of years haven’t been as heavy as hers would have been, so my body feels good … I know how to look after my body.

“I’d love to stay [at the Capitals], obviously Canberra’s home and I feel like this is my team.”

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Creative juices firing up for Flash Festival encore run

Short+Sweet Canberra festival director, Alex Broun. WOY Woy Little Theatre’s inaugural Flash Festival was such a hit last year that the company will hold a similar event in September, preceded by writing, directing and acting workshops.

The Flash Festival involves the writing and staging of 10-minute plays, each of which has to incorporate a key word into its action.

Last year, the word was “flash”, and plays this year will have to use “free” in any of its meanings or forms as an integral element of the script. Woy Woy Little Theatre held the Flash Festival last year following the loss of, first, the Central Coast Short+Sweet Festival, then in 2012 the Newcastle Short+Sweet Festival, which attracted Central Coast writers and actors.

Hunter writers entered last year’s event, with a play by Newcastle Theatre Company member Debra Hely being one of the 10 works chosen for performance.

Appropriately, Alex Broun, one of the founders of the Sydney Short+Sweet Festival, which has led to similar festivals around the world, will host a short play-writing weekend workshop from March 27 to 29 at Woy Woy’s Peninsula Theatre (the venue for all workshops and performances).

The workshop will introduce participants to the skills of writing a short play.

After the Saturday, March 28, workshop participants will write a short scene or 10-minute play at home, which will be workshopped by local actors on the Sunday.

Director Aarne Neeme, who is the patron of Newcastle Theatre Company, will lead the directing workshop on June 6 and 7, and voice and acting coach Gabrielle Rogers will take participants through the use of voices and movements at an acting workshop on June 20 and 21.

The Flash Festival itself will be conducted with four performances over three days from September 25 to 27, culminating in the announcement of the winners and trophy presentation following the Sunday afternoon performance.

The manager of Gosford City Council’s Peninsula and Laycock Street Theatres, Chris King, praised Woy Woy Little Theatre for taking the initiative and financially underwriting the Flash creative concept by about $20,000. The council assisted last year’s festival by keeping hiring rates for the Peninsula Theatre to a minimum.

Bookings for the workshops will open soon. See woywoylt苏州美甲美睫培训学校.au and ccflashfestival苏州美甲美睫培训学校 for details.

Jesus Christ Superstar: Right man for the job

TOP CAST: Chris Bathgate, Alicia Paterson and Marty Worrall in Jesus Christ Superstar.CHRIS Bathgate smiles when he says he is perfect casting for the title character in Jesus Christ Superstar. “I’m a builder,” he notes.

That allusion in gospel references to Christ as a carpenter is followed by Bathgate observing that none of the performers he has seen as Jesus in the Andrew Lloyd Webber/Tim Rice rock opera have looked like they’d done hands-on building.

Bathgate’s casting is an example of the attention director Chris Maxfield and the production team of The National Theatre Company’s Jesus Christ Superstar have paid to the staging of the work.

While most productions of the musical have a team of mainly rock musicians accompanying the songs, this one has a 40-member orchestra, with a large string section that includes eight violins, four violas, two cellos and a double bass.

TNTC has followed Andrew Lloyd Webber’s original concept for the show. It began life in 1970 as a double vinyl record album, with the composer referring to it as an oratorio and the singers accompanied by a 56-member orchestra.

The success of the album led to the work being staged on Broadway in October, 1971, and it has been a worldwide hit ever since.

The musical’s popularity can be seen in the selling-out two weeks ago of the TNTC season at the Civic Theatre, even though it doesn’t open until March 11. It’s the first time in the theatre’s 85-year history that a show offering 7500 seats over five performances has done that.

Jesus Christ Superstar has had an interesting history. Its original Broadway season was picketed by members of Christian churches who claimed it was irreligious. But it is now widely accepted among church communities, and many of them have staged the show.

As well as being a builder, Chris Bathgate is a devout Christian, and appeared in December as one of the storytellers in The Grainery Theatre’s A Christmas Tale, a musical look at the events that led to Christmas, at Christ Church Cathedral.

He is impressed by the depth that composer Lloyd Webber and lyricist Rice have given to Jesus’ character as the musical shows the last seven days of his life and his different relationships – with disciple Judas Iscariot, his other apostles, and fallen woman Mary Magdalene.

Marty Worrall, cast as Judas, shares Bathgate’s appreciation of the detail the writing team have given to the characters and the demands placed on the actors portraying them.

Judas sees dangers in the fervent opposition of Jerusalem’s religious leaders, the Pharisees, to the down-to-earth messages of Jesus. But while he tries to warn Jesus about the dangers he faces, he is also used by the Pharisee leaders, Annas and Caiaphas, to betray Jesus.

The cast of 50 includes Alicia Paterson as Mary Magdalene, Des Robertson as Pontius Pilate, the Roman military commander in Jerusalem, Tony Keene as Caiaphas, Michael Godschalk as Annas, Ian Crouch as King Herod, and Mitchell Cox, Annie Devine, Brian Wark and Andrew Black in key supporting roles.

The show’s auditions attracted a wide range of people, with the cast including young performers such as 14-year-old dancer Ruby Hindle.

Andrew Lloyd Webber drew on the styles of classical composers including Beethoven, Grieg, Orff, and Prokofiev in writing the songs, with Tim Rice putting witty comedy into many of the pronouncements by those opposed to Christ.

The songs include Mary Magdalene’s I Don’t Know How to Love Him, Judas’ Heaven on Their Minds, plus What’s the Buzz, Everything’s Alright and Superstar.

The orchestra is led by musical director Greg Paterson, with Isabelle Leonard as choreographer, and set and lighting design by Scott Travis.

While the season – Wednesday to Saturday, March 11 to 14, at 8pm, plus a 2pm Saturday matinee – is booked out, phone 4929 1977, to see if there have been any ticket returns.

Chris Bowen’s brain freeze: The embarrassingly rich list of politicians who fluffed their figures

Labor politician & Federal Treasurer Paul Keating scratches his head as he announces the government will dump tax reform, 13 August 1985.SMH Picture by DAVID BARTHOportrait, headshot, politics, politician, ALP, Labor Party, smiling, mid-shot, laughing, black and white, black & white, 1980s, eighties Photo: David Bartho Labor politician & Federal Treasurer Paul Keating scratches his head as he announces the government will dump tax reform, 13 August 1985.SMH Picture by DAVID BARTHOportrait, headshot, politics, politician, ALP, Labor Party, smiling, mid-shot, laughing, black and white, black & white, 1980s, eighties Photo: David Bartho

Labor politician & Federal Treasurer Paul Keating scratches his head as he announces the government will dump tax reform, 13 August 1985.SMH Picture by DAVID BARTHOportrait, headshot, politics, politician, ALP, Labor Party, smiling, mid-shot, laughing, black and white, black & white, 1980s, eighties Photo: David Bartho

Chris Bowen on his tax gaffe: I chose not to answer

Shadow treasurer Chris Bowen is on the back foot today after his embarrassing display of ignorance regarding tax rates during an interview with Alan Jones last night. To make him feel better, we celebrate (or mourn) the worrying history of politicians not knowing their facts and figures.

John Howard: “Yeah, I’ve given you – well it’s 6.25.”

During his last and ultimately unsuccessful political campaign in 2007, prime minister John Howard incorrectly stated the interest rate level of the day. In a TV interview, Mr Howard told the questioner that the Reserve Bank’s official rate was 6.25 per cent when in fact it had been increased to 6.5 per cent two months earlier. “Mmm,” was the stiff response when he was corrected.

John Hewson: “If it is a cake shop, a cake from a cake shop that has sales tax, and it’s decorated and candles as you say, that attracts sales tax”

John Hewson’s absurd “birthday cake interview” in 1993 is perhaps the most notorious of all. While a debate was raging about the opposition’s proposed GST, Dr Hewson was unable to explain how the controversial policy applied to the simple example of a birthday cake. The interview is widely considered to be a factor behind his losing “the unlosable election”.

Annastacia Palaszczuk: “Pass”

Days before last month’s Queensland state election, opposition leader Annastacia Palaszczuk was left red-faced after being unable to state the rate of GST in Australia. Most people would know it’s 10 per cent, but in a quick-fire round of basic questions, it proved too much for the woman who would go on to narrowly win the premiership in a shock upset for the Newman Liberal-National government.

Julie Bishop: “The cash interest rate at present is 7 … I’m just trying to think. Was it 7.25? I’ll have to go and check that one.”

Julie Bishop, then shadow treasurer and deputy opposition leader, exhibited quite some confusion in 2008 when trying to tell an interviewer the official cash rate. “It was 7.25,” they responded, “but it was reduced by 0.25.” Ms Bishop would go on to step down from the treasury portfolio in early 2009.

Paul Keating: “I’m still on the big picture … and I may splash a bit of paint.”

Paul Keating forgot to lodge his own tax returns in 1985 and 1986 when he was Treasurer. His excuse? Too busy: “My fortunes are tied up with the economy.. I’m still on the big picture, painting the big picture, and I may splash a bit of paint,” he said. “I did make a mistake, but unlike the leader of the opposition, my mistake did not cost half a million people their jobs. My mistake did not retard the economy for 20 years. My mistake did not introduce a massive domestic recession, unlike his mistake which almost destroyed the fabric of the Australian economy.”

Wayne Swan: “Who’s got my chart?”

When asked in a press conference about his own inflation forecast in 2008, treasurer Wayne Swan spent more than a minute rifling through papers looking for the answer in what was an excruciatingly awkward display. Watching the vision, the relief when he finds it is almost palpable.

Kevin Rudd: “I think the high threshold kicks in, I think, at $175,000, then I think it cascades down the spectrum.”

Aspiring prime minister Kevin Rudd gave this erroneous response in 2007 when asked to state the income threshold of the top tax rate. The answer he needed was $150,000 and treasurer Peter Costello was quick to jump on the gaffe, saying Rudd “couldn’t even name a single rate … a single threshold” and that the one he named “just doesn’t exist”.

Joe Hockey: “When Australians spend the first six months of the year working for the government with tax rates nearly 50 cents in the dollar, it is a disincentive”

Treasurer Joe Hockey, in a radio interview last month, bemoaned the “disincentive” of Australia’s high tax rate. Whether he was exaggerating or misunderstanding, Mr Hockey suggested people pay about half their income to the government through income tax. The highest tax rate of 45 cents in the dollar only kicks in past $180,000, meaning just 2.3 per cent of taxpayers. Australia’s tax-to-GDP ratio is about 30 per cent, including all taxes, state and federal.

John Kerin: “GOS…GOS…what’s GOS?”

One of Australia’s shortest-serving treasurers, John Kerin, couldn’t recall what GOS stood for (gross operating surplus). Just under five months into the job in 1991, Mr Kerin fumbled the question in a cringeworthy press conference and was promptly dumped as treasurer by prime minister Bob Hawke.

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Social pics: Out and about in Newcastle

Social pics: Out and about in Newcastle Miss Surfest Final Heat, Belmont Sporties, February 12: Emilie Mayo of Maitland and Jarred Reardon of Warners Picture: Dean Osland

Miss Surfest Final Heat, Belmont Sporties, February 12: Nicole Cassel of West Wallsend and Jacinta Lawrence of Maitland. Picture: Dean Osland

Miss Surfest Final Heat, Belmont Sporties, February 12: Shantell Chapman of Belmont, Kirstie Michalak of Hamilton and Jacci Allanson of The Hill. Picture: Dean Osland

Miss Surfest Final Heat, Belmont Sporties, February 12: Chloe Johnson of Tingira Hts, Erin Pinkerton of Edgeworth and Bryce Tamsett of Merewether Heights. Picture: Dean Osland

Miss Surfest Final Heat, Belmont Sporties, February 12: Storm Crowe of Newcastle and Jennifer Hunt Miss Heritage Australia. Picture: Dean Osland

Miss Surfest Final Heat, Belmont Sporties, February 12: Jasmine Coombs of Wyoming, Jessica McIlveen of Port Macquarie and Kayla Steele of Caves Beach. Picture: Dean Osland

Miss Surfest Final Heat, Belmont Sporties, February 12: Monique Sisley of Warners Bay and Hazel August of Charlestown. Picture: Dean Osland

Absinthe by Spiegelworld, Wheeler Place, Newcastle: Anne and Ron Walkom both of Wickham. Picture: Simone De Peak

Absinthe by Spiegelworld, Wheeler Place, Newcastle: Lauren MacDonald of Killingworth and Anne Nichols of North Lambton. Picture: Simone De Peak

Absinthe by Spiegelworld, Wheeler Place, Newcastle: Arron Masters of Mount Hutton and Murray Kranz of Kahibah. Picture: Simone De Peak

Absinthe by Spiegelworld, Wheeler Place, Newcastle: Shandele Pascoe and Diane Pascoe both of Medowie. Picture: Simone De Peak

Absinthe by Spiegelworld, Wheeler Place, Newcastle: Brock Harvison and Eliza Jupp both of Maryland. Picture: Simone De Peak

Absinthe by Spiegelworld, Wheeler Place, Newcastle: Harry Gelzinnis of Waratah and Emma Stephenson of Adamstown. Picture: Simone De Peak

Absinthe by Spiegelworld, Wheeler Place, Newcastle: Milla and Peter Sneesby both of Elermore Vale. Picture: Simone De Peak

Absinthe by Spiegelworld, Wheeler Place, Newcastle: Brenda Hall and Lacey Hall both of Medowie. Picture: Simone De Peak


Electricity companies rorting the system, inquiry told

The network portion of the power bill for Victoria’s household is about a quarter of the bill compared to half in other states, Gerard Brody, the chief executive of the Consumer Action Law Centre told a Senate Inquiry Wednesday.Victoria’s electricity network operators such as Ausnet and Jemena may be more efficient than their interstate counterparts and the network portion of household bills have not increased as much, but this has not stopped the companies from attempting to rort the system, a government inquiry has heard.

The network portion of the power bill for Victoria’s household is about a quarter of the bill compared to half in other states, Gerard Brody, the chief executive of the Consumer Action Law Centre told a Senate Inquiry Wednesday.

“However, this has not stopped the networks using the regulatory system to obtain returns” that are higher than would be the case otherwise, he said, pointing to the regulator’s decision to force customers to pay “excess expenditure” relating to the roll-out of smart meters to the tune of $111 million.

“This means that the cost of the rollout was this much higher than initially budgeted for, but consumers still pay the difference,” he said.

“As for-profit privately-run businesses, it is natural for these businesses to seek to maximise returns. The point is whether the regulatory regime is sufficient.

“It has been estimated that appeals of [Australian Energy Regulator] determinations of revenue allowances has resulted in $3 billion additional being paid for by consumers,” he said.

The success of these appeals indicated it was poor rules that enabled businesses to recover so much money

The Consumer Advocacy Centre has also thrown its weight behind allowing network companies to write down the value of assets which are no longer needed as demand for electricity supplied through the network deciness and consumers switch to new energy sources, such as solar panels, which may not need to utilise the power network.

“This will mean that those [who continue to use the networks] are not unduly burdened by continuing to bear the costs of sustaining the full network,” Mr Brody said.

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Posts keep shifting on retirement savings goals

A COMMON question asked by new financial planning clients is, “How much money do I need to retire on?” The best answer to that is, “How accurate do you want me to be?”

One of our human foibles is that we see certainty where there is none. We see financial forecasts such as federal budgets or GDP predictions as robust, when they’re more like educated guesses.

Retirement saving is often like the federal budget. We target a reasonable number and hope it works out. ASIC’s MoneySmart website says that for a “comfortable” retirement, a couple will require a $744,000 super balance and that will produce $57,000 of annual income. It’s a reasonable forecast, but it’s a long way from certain that it will be enough for you.

Firstly, “comfortable” is a matter of perspective. Personal factors like health, the ability to continue or resume working and likely inheritances will also have a big impact on how much income you’ll need.

Next there’s longevity. Retirement planning is often done on the basis of life expectancy but that has been increasing and many people will live much longer than this.

Even if you budget for living until your late 90s (most don’t), there’s a chance your planning won’t work out. You’re more likely to live past the century mark than to die in a car accident, and it’s roughly 200,000 times more likely than being killed by a shark.

Finally, you need to work out how much risk you’re willing to take with your retirement planning. Actuarial firm Accurium says if you want to retire at 65 and live off $70,000 a year, with a 95 per cent chance of it working out, you’ll need $1.6 million – more than double what ASIC says you’ll need.

Many retirement plans prepared by financial advisers would come with a similar likelihood of success.

These retirement plans aren’t wrong. Just don’t assume the forecasts are cast in stone. Poor investment returns, living longer than expected, needing to spend more than anticipated or further cuts to the age pension could compromise these plans.

If you’re uncomfortable with this risk, what should you do about it? Unfortunately, there’s no good solution. Lifetime annuities are limited in their availability and pay meagre interest rates. But investing heavily in shares or other growth assets in retirement increases your exposure to volatility instead. The only good solution is to save more in the first place. But brace yourself for the difference this makes.

ASIC’s MoneySmart provides a handy retirement planning calculator that allows you to change the default forecasts. Changing a couple’s life expectancy from 90 to 100, for instance, increases the required savings for a “comfortable lifestyle” to $1.25 million. To also get your forecast income to $70,000, to provide a margin for error on the spending side, you’ll need more than $2 million.

Reducing spending, increasing super contributions, shifting away from high-cost investment strategies and extending your retirement date can make a huge difference to your retirement savings. Retiring a few years later than planned, for instance, could add about 20-40 per cent to your retirement savings and substantially reduce the risk of them running out.

I don’t mean to be a party pooper. But your retirement plans should be based on a solid understanding of whether you’ve got “more than enough” or “barely enough”. Don’t make the mistake of assuming certainty where there is none.

Richard Livingston is a founder of Eviser.

NOEL WHITTAKER: Time to face tough choices

IT’S been a hectic time in politics over the past fortnight, with one message emerging loud and clear: most voters are not prepared to accept the tough medicine that is needed to get the country’s finances back on track.

It’s hyperbolic discounting at work. The longer the period between the remedy and the outcome, the less likely it is that people will accept tough choices today that will have beneficial effects in the future. But the longer we put off making the changes, the harder it’s going to be when drastic action is forced upon us.

Today, let’s look in detail at three major influences at work; it will give you an idea of the massive problems facing any party in power.

The first is increasing life expectancies. Today, there are 3.45 million Australians aged 65 and over. This is 14.7 per cent of our current population of 23.5 million. By 2034 – just 19 years away – the number is expected to be 6.1 million, which is almost 20 per cent of the projected population of 31.6 million.

The thought of one in five Australians being aged 65 or over is scary enough, but it gets even worse when you consider these projections did not take into account the medical breakthroughs that are certain to happen in the next 20 years.

In a situation where debt has become the norm, and deficits are forecast for years ahead, how is a government going to find the funds to provide the health services and age pension to deal with all those ageing people?

Our current income tax system is unsustainable. The 65s and over are our fastest growing group, yet 87 per cent of them pay no income tax at all. This is due to a combination of concessions. The Seniors and Pensioners Tax Offset (SAPTO) enables a couple to earn $28,974 each per annum without paying tax, while anybody over 60 can hold their superannuation in a tax-free fund while drawing a tax free income from it.

Raising the taxes on super without cutting back SAPTO won’t work because retirees with less than a million dollars in super would simply exit the system and continue to enjoy a tax-free existence. The only realistic option available is to widen the GST so there are no exemptions.

Most senior citizens expect at least a part age pension. Currently, increases are linked to average weekly earnings, but the Coalition is trying to stem the rate the pension goes up. They have proposed the rate of increase be linked to cost of living from September 2017.

Let’s assume increases in average weekly earnings are 4 per cent, inflation is 2.5 per cent, and the couple’s full pension now is $30,000 a year. If it remains linked to earnings, the pension would rise to $45,000 a year in 10 years and $67,000 a year in 20 years. By linking it to the CPI, it becomes $38,000 a year in 10 years and $49,000 in 20.

Surely it is a no-brainer to reduce the increase in the age pension so that it keeps pace with the cost of living?

Unfortunately, due to the adversarial nature of politics, the opposition is running a scare campaign claiming that age pensions are being reduced – yet all the Coalition is trying to do is slow down the rate of growth.

Put all this together and you have an ageing population, all who vote, who will be a growing drain on government finances at the same time as the government is shackled by a tax system which cannot cope. Eventually, something’s got to give.

Noel Whittaker is the author of Making Money Made Simple andnumerous other books on personal finance. His advice is general in nature and readers shouldseek their own prefessional advice before making any decisions. Email [email protected]苏州美甲美睫培训学校.

Great-grandmother Jean Harrison killed in suspected hit-and-run

Great-grandmother Jean Harrison had a special knack for seeing kindness in the hearts of all those she encountered, her family says.

That special trait has made it even more difficult for them to fathom just how a motorist could have struck her as she walked along a street in Miller in Sydney’s west on Tuesday before driving away, leaving her lying on the road with a fractured skull, neck and pelvis.

Mrs Harrison, 83, who had more than 20 grandchildren and just as many great-grandchildren, was taken to Liverpool Hospital where she was admitted to the intensive care unit.

She was surrounded by family when she died from her injuries early on Wednesday.

“Everyone says their grandmother is such a sweet lady but, honestly, Nan never had anything bad to say about anyone,” her grandson Daniel Webster said.

“Even in the worst person, she’d always see some kindness in their hearts. She was such a gentle, compassionate lady. It makes it so much harder that something this tragic could happen to her.”

At the weekend, Mrs Harrison’s family had gathered to cut a cake for her 83rd birthday. She had taken great joy in cradling her youngest great-granddaughter, Xanthe, who is nine weeks old.

Mrs Harrison had lived in the same house in Miller for more than 50 years, after migrating to Australia from England. Her husband died about 15 years ago, but she did not want to move away from the only home she had known in Australia and where her family had grown up, Mr Webster said.

One of Mrs Harrison’s rituals was to wander down to the local shops, where she would sometimes have a coffee and pick up some food.

“Every day, she would go down to the shop. It was her thing to do, and people would stop and chat to her, and she would talk about her grandkids, about how much she loved her family. It was really everything to her,” Mr Webster said.

Mrs Harrison was believed to have been making her regular trip to the shops when she was found lying in the middle of Shropshire Street, near the intersection of Dorset Place, in Miller, about 11.45am on Tuesday.

Police and paramedics came to her aid, but she was unable to tell them how she had been injured. Detectives say initial investigations suggest that she had been struck by a vehicle.

Mr Webster said that, if a hit-and-run driver was responsible for his grandmother’s death, he hoped the driver understood the consequences of his or her actions.

“I hope they have some sort of conscience to be able to come forward. It’s not going to change the fact that we’ve lost her now, but if they have any sort of heart, it’s better for them and better for everyone to come forward,” he said.

“The police should catch them sooner or later, and it would give some sort of solace to our family to know that someone that could do this could come forward.”

At the time she was found, Mrs Harrison was wearing a cream short-sleeved top and a brown floral skirt and was carrying a dark shoulder bag.

Police are appealing for anyone who may have seen Mrs Harrison before she was found on the road, or who has any information about the incident, to call Green Valley police or Crime Stoppers on 1800 333 000.

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