NAB Federal budget summary webcast 11 May 2011

I went to the Budget Breakfast yesterday hosted by NAB at Crown, Melbourne.  Whilst there weren't any BBQ stoppers the presentation/economic update given by NAB's Chief Economist, Alan Oster was useful.  His main message is that NAB's economic modelling is much the same as Treasury's.

Here is NAB's webcast: watch Alan Oster present his summary

View webcast (link opens in new window - you'll need to enter your name)

Budget 2011 - Based on Optimism & Tough as Tofu

The federal government’s anticipated return to Budget surplus in fiscal year 2012-13 is built on optimistic assumptions about the short-term strength of the economy that may not be achieved, says the Institute of Chartered Accountants in Australia.

The Institute’s tax counsel, Yasser El-Ansary, says the government is expecting the health of the non-mining sectors of the economy to rapidly improve over the next two years, but based on current indicators, there’s no guarantee that will happen. 
http://www.charteredaccountants.com.au/News-Media/Media-centre/2011/Return-to-surplus-built-on-optimistic-assumptions

A useful summary of the budget provisions has been prepared by the Institute together with Thomson Reuters:  https://www.charteredaccountants.com.au/~/media/Files/Industry%20topics/Tax/Current%20Issues/Federal%20budget/Weekly%20Tax%20Bulletin%20Special%20Budget%20Report%202011ICAA

"Tough as Tofu": Stephen Long, economics correspondent for the ABC commented on Budget night: 

The Government's found savings of $22 billion over the four years of the forward estimates, but there's only about $17 billion or so in genuine cuts to expenditure - the rest are tax increases and levies.
The reality is that, over the course of the forward estimates, the genuine cuts to expenditure are pretty much offset by increases in expenditure

See:  http://www.abc.net.au/news/stories/2011/05/10/3213131.htm?section=business

Actuary analyses Australian Residential Housing market

Anthony Street (ex Macquarie Bank) presented this paper to the Institute of Actuaries in Australia at their biennial convention, 10-13 April 2011.

In my opinion it is the best statistical evidence showing why there is a property bubble in Australia.

I commend this paper to you: it is quite readable and Street does not have a vested interest in the field unlike almost all other commentators.

Presentation slides:

http://www.actuaries.asn.au/Library/events/Conventions/2011/HouseOrHome-Presentation.pdf

Audio:

http://www.actuaries.asn.au/Library/events/Conventions/2011/HouseOrHome-Audio.mp3

Paper:

http://www.actuaries.asn.au/Library/events/Conventions/2011/Con2011_Paper_Street.pdf    

Investment Allocation: SMSFs increase holdings in ASX listed shares

Popularity of listed instruments on the rise - but the real shift is to cash

Investor Daily reports today the latests ASX research into share ownership has shown self-managed super funds (SMSFs) are allocating a larger proportion of their investment portfolios to listed investments.

Also of note:

• the proportion of SMSF investments in unlisted managed funds have dropped to 16% from 46% in 2006 and 38% in 2008
• residential property holdings are down from 19% in 2008 to 12% in 2010; commercial property made up 14% of SMSF portfolios in 2008 down to 8% in 2010
• SMSF holdings in real estate investment trusts and listed property trusts fell from 20% in 2008 to 4% in 2010.

Australian equity holdings have stayed steady at 52% but SMSFs have shied away from overseas shareholdings, down from 9% to 3% allocation in 2010.

Where has all the money gone?  The underlying assumption in this piece is that investors have largely gone to cash - secured returns of around 6% proving to be very appealing to SMSFs' risk appetite.

See article by Darin Tyson-Chan: http://www.investordaily.com/11558.htm