Author: abul-jalaluddin

Superannuation Industry: Funds, Assets and Investments

Australian superannuation is an exceptional retirement savings system in the World. Employees including self-employed persons become members of superannuation funds; they make compulsory and voluntary contributions to the funds; the contributions are invested by the funds over the employees’ working life and finally the sum of the contributions plus earnings minus taxes and fees are paid as an income stream or lump sum to the contributors when they retire. There are various types of superannuation funds in the industry. Retail Funds offer superannuation products to general public. Industry Funds draw members from the employees of a range of employers...

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Distribution of GST revenue to states and territories

Goods and Services Tax (GST) is levied by the Federal Government of Australia and the total GST revenue collected is distributed to the States and Territories to fund their services and associated infrastructure. The Commonwealth Grants Commission (CGC) is responsible to manage the distribution of GST revenue to achieve Horizontal Fiscal Equalisation (HFE) amongst the States and Territories. The CGC defines HFE as “State governments should receive funding from the pool of GST revenue such that, after allowing for material factors affecting revenues and expenditures, each would have the fiscal capacity to provide services and the associated infrastructure at...

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NSW Budget 2018-19: An election entreat to entice voters

The budget has established a NSW Generations Fund to guard against intergenerational budgetary pressures with a capital of $3 billion. The fund will grow through future contributions and investment returns. Half the returns from this fund will go to My Community Dividend, a NSW state initiative which will provide funds to local projects worth between $20,000 and $200,000. This budget has a surplus of $3.9 billion, being the last one before the next election in March 2019. Health There will be $8 billion over four years to fund 40 new and upgraded hospitals, including $740 million to transform Liverpool...

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Royal Commission on Banking and Financial Service Providers

The Governor-General of the Commonwealth of Australia established a Royal Commission on 14 December 2017 for an inquiry into the conduct of banks, insurers, financial services providers and superannuation funds. It will also consider how well equipped Australian regulators are to identify and address misconduct in the industry. The Commission is tasked to submit its interim report no later than 30 September 2018 and the final report of the inquiry with recommendations no later than 1 February 2019. Australia has one of the strongest and most stable financial systems in the world and hence, the outcome is expected to...

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Inconsonance of free trade agreements with economic theory

The contemporary free trade agreements including recently resurrected Trans-Pacific Partnership (TTP) are subject to multiple protectionist clauses or special deals which impede competition based comparative advantages and hence, in disagreements with economic theory. No wonder why these free trade agreements do not generate reasonably equal economic benefits for all partnering countries. Economists’ advocacy on “free trade agreement” is premised on the Theory of Comparative Advantage discovered by David Ricardo, a British economist, in 1815. As we all benefit from specialising in an occupation we are good at or trained in, similarly exchanging goods and services with people of other...

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