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Choice Urges Home Owners To Be Cautious When Buying Home Insurance
Choice, the consumer group is advising consumers who live in places that are prone to flooding from taking out insurance in an irresponsible manner, whilst at the same time heavily criticizing the industry according to the insurance council.
Recently the advisory group held its annual Shonky Awards, where the group awarded lemon trophies for dubious dodgy and deceitful goods and services.
Choice singled out the insurance industry, following this summer’s flooding in Victoria, Queensland and New South Wales.
According to Choice, this year’s flooding left people who lived in the three states without any cover as insurers sought to avoid their liabilities.
Rob Whelan the executive director and chief executive of the Insurance Council of Australia says the group may scare property owners who are at risk from buying flood insurance.
“We don’t want a situation to arise in which property owners do not have appropriate cover for their property because they were put off by irresponsible and inaccurate statements by Choice,” Mr Whelan said.
According to Mr. Whelan, 130,000 claims were made and determined in the immediate aftermath of the flooding and cyclone which struck Queensland during last summer. Of that, only 725 claims ended up in dispute, representing just 0.6 per cent of the outstanding total, which were referred by policy holders to the insurance ombudsman.
“Those property owners with a flood risk should be responsibly encouraged to purchase flood insurance and not leave themselves unprotected. Handing out dummy awards is a stunt, not a solution. It’s not worthy of Choice.” he said.
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Australian Consumer Confidence Rises In Response To Rate Cut
In November the Westpac-Melbourne Institute Consumer Sentiment index surged for the first time since the beginning of 2009, after the central bank cut its benchmark interest rate in response to a declining threat of inflation, and fears of uncertainty in Europe.
The index of consumer confidence rose by 6.3 per cent in November after the Reserve Bank of Australia slashed borrowing costs to 4.5 per cent from 4.75 per cent at the start of the month.
The index rose to 103.4 points during November, up from 97.2 points October, the Institute said in a statement.
“This result is around our expectations and is clearly driven by the decision by the Reserve Bank to cut the official cash rate,” said Westpac chief economist Bill Evans.
In justifying its decision the Reserve Bank cited easing inflation pressure, an increased threat of higher unemployment and the potential for the sovereign debt crisis in Europe threatening to spill over into the rest of the world.
In November the RBA also revised down its economic growth and inflation forecasts out until the end of 2013.
Unsurprisingly, Mortgage were the most optimistic, posting a 13.9 per cent gain in confidence as all major lender quickly reacted to the interest rate decision, by passing on the rate cut to their borrowers. Mortgage free home owners posted a 6 per cent increase in confidence, whilst the confidence of tenants fell by 6.8 per cent.
The index’s level is the highest it has been since May, suggesting that pessimists are slight outnumbered by their optimistic counterparts for the first time since June
Government Abolishes Age Limit For Super Contributions
Australian employees who are over the age of 70 will no longer be prevented from superannuation contributions following a surprise announcement by the Gillard government.
According to Bill Shorten the Assistant Treasurer, the age limit for contributions from employers would be abolished, effective July 1st 2013.
Originally the government had intended to simply raise the age limit from 70 to 75, but after an intense lobbying effort, has decided to remove it altogether.
Mr. Shorten says that as many as 18,000 individuals over the age of 75 who are still working, would for the first time receive the compulsory super.
“It will improve the adequacy and equality of the retirement income system and provide an incentive to older Australians to remain in the workforce,” Mr. Shorten said.
Bronwyn Bishop, a spokesperson for the opposition claimed that Labor had hijacked her policy which she announced back in February.
Susan Ryan, Commissioner for Age Discrimination says it “sends a strong and positive message to older employees and to employers that age should not be a barrier to employment”.
According to Ms. Ryan, more people were extending their employment beyond the normal retirement age, and the change would enable them to benefit from larger super savings when they eventually did retire, and lower the government’s pension bill at the same time.
Michael O’Neill, chief executive of National Seniors heaped praise on the proposed changes, saying that under the current system: “the clock ticks over and you lose your super”.
Mr. Shorten announced the changes when introducing legislation which will increase the compulsory super paid by employers to 12 per cent from 9 per cent.
Mr. Shorten said that as many as 3.6 million Australians who earned less than $37,000 annually, were no longer obliged to pay taxes on contributions to their super.