ID :
27332
Wed, 10/29/2008 - 19:55
Auther :
Shortlink :
http://m.oananews.org//node/27332
The shortlink copeid
Govt looks at solution for retiree funds
Treasurer Wayne Swan says the federal government and regulators are exploring ways
to assist people who need access to money frozen in mortgage and investment funds.
Mr Swan on Wednesday defended the decision to allocate $83 million to regulators to
fast-track applications by funds for banking licences which, once granted, would
allow deposits to be freed up.
The treasurer's defiance followed a positive day of local share trading in which
share values rose five per cent before pulling back later in the day, while the
Australian dollar finished almost four per cent higher on Tuesday's close at 64.10
US cents.
But Opposition Leader Malcolm Turnbull expressed scepticism over the funding boost -
to be split between the Australian Prudential Regulation Authority (APRA), the
Australian Securities and Investments Commission (ASIC) and the Department of the
Treasury - saying it was an admission by the government it had made an error in
guaranteeing bank deposits on October 12.
The positive day in the share market was tempered by evidence of a softening in the
employment market and a forecast of a "shallow recession" early next year by leading
investment bank JP Morgan.
The Department of Education, Employment and Workplace Relations' Skilled Vacancies
Index showed a 3.7 per cent fall in job vacancies in October with declines in 17 of
the 18 occupations surveyed.
And the second part of a five-year study of 8,000 workers, conducted before the
financial crisis by the University of Sydney, found an increasing number of wage
earners were finding it harder to make ends meet.
There had been an increase of four per cent to 56 per cent since last year in the
number of workers - particularly single parents and households with children and
only one parent in work - finding it hard to cope.
There was one bright light on the banking horizon with St George Bank recording a
0.9 per cent rise in its net profit for the year to $1.17 billion, ahead of its
merger with Westpac.
However, St George chief executive Paul Fegan expected the uncertain outlook for the
economy to persist.
Mr Fegan said he fully supported the government's decision to guarantee bank
deposits but suggested it might need to take further action.
"These measures are extremely helpful but there are still many issues to be resolved
and the situation continues to be uncertain," Mr Fegan said.
Mr Swan said he appreciated concerns by investors and funds alike.
"But we must bear this in mind. Yes, redemptions from some funds have been frozen,
and that has certainly put people in a very difficult situation, but at this stage
many people out there are still receiving distributions from the funds," Mr Swan
told Macquarie Radio.
"We are looking at what can be done when it comes to the hardship provisions to
assist those people and we are working through that issue with the industry as we
speak."
Mr Turnbull took a swipe at the government, saying the funds management industry had
"pretty severe" reservations about the decision to fast-track bank status
applications.
He said he thought it would be difficult for a cash management trust or mortgage
fund to raise the capital required in the current market in order for it to meet
APRA's requirements for regulated deposit-taking institutions.
"But we'll reserve our final judgment until we've spoken to Treasury. We've
obviously been having some discussion with the industry ... but at this stage it
certainly isn't a silver bullet," Mr Turnbull said.
Earlier, Mr Swan accused Mr Turnbull of double standards over the opposition
leader's revelation in his parliamentary register of members' interests that he had
moved money from a property fund shortly before the freeze on redemptions.
Mr Turnbull told Network Ten that while he had money in funds that were affected by
the freeze, the money he had moved recently was from a property fund unaffected by
the freeze.
"The fund that is referred to is actually not a fund of the kind that has been in
controversy. It is not a mortgage trust or a cash management trust," Mr Turnbull
said.
to assist people who need access to money frozen in mortgage and investment funds.
Mr Swan on Wednesday defended the decision to allocate $83 million to regulators to
fast-track applications by funds for banking licences which, once granted, would
allow deposits to be freed up.
The treasurer's defiance followed a positive day of local share trading in which
share values rose five per cent before pulling back later in the day, while the
Australian dollar finished almost four per cent higher on Tuesday's close at 64.10
US cents.
But Opposition Leader Malcolm Turnbull expressed scepticism over the funding boost -
to be split between the Australian Prudential Regulation Authority (APRA), the
Australian Securities and Investments Commission (ASIC) and the Department of the
Treasury - saying it was an admission by the government it had made an error in
guaranteeing bank deposits on October 12.
The positive day in the share market was tempered by evidence of a softening in the
employment market and a forecast of a "shallow recession" early next year by leading
investment bank JP Morgan.
The Department of Education, Employment and Workplace Relations' Skilled Vacancies
Index showed a 3.7 per cent fall in job vacancies in October with declines in 17 of
the 18 occupations surveyed.
And the second part of a five-year study of 8,000 workers, conducted before the
financial crisis by the University of Sydney, found an increasing number of wage
earners were finding it harder to make ends meet.
There had been an increase of four per cent to 56 per cent since last year in the
number of workers - particularly single parents and households with children and
only one parent in work - finding it hard to cope.
There was one bright light on the banking horizon with St George Bank recording a
0.9 per cent rise in its net profit for the year to $1.17 billion, ahead of its
merger with Westpac.
However, St George chief executive Paul Fegan expected the uncertain outlook for the
economy to persist.
Mr Fegan said he fully supported the government's decision to guarantee bank
deposits but suggested it might need to take further action.
"These measures are extremely helpful but there are still many issues to be resolved
and the situation continues to be uncertain," Mr Fegan said.
Mr Swan said he appreciated concerns by investors and funds alike.
"But we must bear this in mind. Yes, redemptions from some funds have been frozen,
and that has certainly put people in a very difficult situation, but at this stage
many people out there are still receiving distributions from the funds," Mr Swan
told Macquarie Radio.
"We are looking at what can be done when it comes to the hardship provisions to
assist those people and we are working through that issue with the industry as we
speak."
Mr Turnbull took a swipe at the government, saying the funds management industry had
"pretty severe" reservations about the decision to fast-track bank status
applications.
He said he thought it would be difficult for a cash management trust or mortgage
fund to raise the capital required in the current market in order for it to meet
APRA's requirements for regulated deposit-taking institutions.
"But we'll reserve our final judgment until we've spoken to Treasury. We've
obviously been having some discussion with the industry ... but at this stage it
certainly isn't a silver bullet," Mr Turnbull said.
Earlier, Mr Swan accused Mr Turnbull of double standards over the opposition
leader's revelation in his parliamentary register of members' interests that he had
moved money from a property fund shortly before the freeze on redemptions.
Mr Turnbull told Network Ten that while he had money in funds that were affected by
the freeze, the money he had moved recently was from a property fund unaffected by
the freeze.
"The fund that is referred to is actually not a fund of the kind that has been in
controversy. It is not a mortgage trust or a cash management trust," Mr Turnbull
said.
