Survey Results | Slack Investor

Global Wealth Report 2022

In a week where I have received a polite letter from my electricity provider that the daily rate and cost per Kilowatt-hour will be increasing by 27% from August 1, 2023 – it is always good to take a step back and realise that a bloke should count his blessings.

Every year the economic wonks at Credit Suisse produce the Global Wealth Report. It takes a bit of time to gather the figures worldwide, and the latest report available is from 2022, and gives an insight into the Covid-19 times using economic data from 2021. There is some good news, in that the global wealth per adult seems to be on an increasing trend.

The global median wealth per adult was just USD 1,613 ($2358 AUD) in the year 2000. By 2021, it had risen to USD 8,296 ($12 130 AUD), a five-fold increase equivalent to average annual growth of 8.1%.
Credit Suisse Global Wealth Databook 2022

There seems to be an expansion of the “middle class” in the developing world, but, sadly, the key indicator of wealth inequality is on the rise. In the prophetic words of Midnight Oil “Read About it (1982)”.

The rich get richer, the poor get the picture
The bombs never hit you when you’re down so low
Some got pollution, some revolution
There must be some solution but I just don’t know

Credit Suisse Global Wealth Databook 2022

2021 was a bumper year for New Zealand, the US and Australia, probably due to the rapidly increasing house prices during COVID-19, and the relative strength of local currencies against the US dollar in 2021. The wealth losses recorded by a few countries were relatively low and reflect currency depreciation against the USD.

World Distribution of Wealth

In 2021, Australia tops the table with a USD median wealth (median Net Worth) of $273 900 ($400 497 AUD) – again probably due to the ridiculously high real estate prices in this country. A reminder of the unequal distribution of worldwide wealth is that the global median wealth per adult was just $8296 USD ($12 130 AUD) in 2021.

The median wealth is used below as it reflects how the normal person is doing. The mean or “average” can be misleading in countries with a large wealth inequality. For example, in the US, due to some very rich individuals, the mean wealth per adult in 2021 was $579 050 USD. but the median wealth was $93 270 USD.

The 1%

Our calculations suggest, for example, that a person needed net assets of just USD 8,360 ($12 224 AUD) to be among the wealthiest half of world citizens at end-2021. However, USD 138,346 ($202 289 AUD) was required to be a member of the top 10% of global wealth holders, and USD 1,146,685 ($1 676 685 AUD) to belong to the top 1%.
Credit Suisse Global Wealth Databook 2022

A net worth of $8360 USD ($12 224 AUD) would put you in the top half of the world wealthy, and a nudge over a million USD ($1 676 685 AUD) would put you in the top 1%.

Perhaps I will just have to take this latest utilities price rise on the chin … and reflect on my good fortune by the geographical accident of birth in a western country.

General Practitioners (GP’s) in Australia … and April 2023 – End of Month Update

Slack Investor is a great believer in writing about experience and a few (fortunately) minor health matters has had him recently exploring Australia’s health system. In Australia, the General Practitioner (GP) is usually the first port of call if you have a health problem and of Medicare will fund a portion of your costs for a consultation. Your relationship with your GP is an important one and it is vital that you feel comfortable with your GP’s manner, knowledge and skills. There are two tiers of GP pricing in Australia.

Bulk Billed – where there is no extra consumer payment required if you have a valid Medicare card.
Mixed Billing – where patients will pay a a bit extra in addition to the Medicare allowance

Bulk billing doctors are becoming harder to find as the rate of bulk billing has fallen to its lowest level in 13 years . According to government figures, it was 80.5% in the 2022 December quarter. Though this figures is likely to be “grossly inflated” as many practices have charged a separate eftpos transaction at the desk and this does not appear in Medicare figures.

What should happen is that either the patient is bulk-billed and pays no money – or they are charged a private fee, a portion of which is rebated by Medicare directly into the patient’s bank account.
Dr Margaret Faux, Health Insurance Law Academic

Levels of bulk-billing are probably closer to 40% as shown in the recent survey by The Age. In answer to the question “Does your GP Bulk-bill or charge you a gap fee?”

Survey results from the Resolve Political Monitor conducted by The Age

This Age poll is in line with results by an excellent organisation called Cleanbill that are driven by a mantra that Slack Investor wholly agrees with …

” … healthcare is at its most accessible when you can see all of your options and their costs before you’ve made a booking.”
The mission statement for Cleanbill

The Cleanbill site is easy to use for locating GP’s in your area and transparently gives their total fees for a standard, or a long consultation. Once you have narrowed your search, you can usually make a booking straight from the site.

Only 42.7% of GP clinics serving nearly 18 million Australians
bulk bill (charge no out-of-pocket fee to) all patients.

At the 57.3% of GP clinics that charge an out-of-pocket fee the average extra cost for a standard, 15-minute consultation is $40.25 (out of a total cost of $80).
Australia-wide survey by Cleanbill – January 2023

The decline in bulk billing is not the GP’s fault as practice costs have continued to rise and the Medicare rebate has not kept pace with the rise in these costs. In 2013, the rebate was frozen for 6 years – and, even last year, though inflation was 6.1%, the Medicare rebate was only increased by 1.6%. The chart below shows how the rebate has failed to keep pace with inflation (CPI) and average weekly earnings (AWE).

The Medicare GP rebate has failed to keep pace with inflation (CPI) and average weekly earnings (AWE) – From ochrehealth.com.au

… more than half of GP practices (55%) plan to reduce bulk-billing and increase gap fees this year
2023 GP Insights Report

Are we heading down the track to a US – style system?

Slack Investor has lived in the US – and hopes not! … and, is pleased that the new Australian government is putting a bit of thought and money into this problem with an announced $2.2b injection of funds into Medicare – no detail yet.

Now Slack Investor does not want a completely “free ride” as he realises that healthcare must be paid for. Even in the much admired Scandinavian health systems there is usually a co-payment associated with a visit to a doctor of $20-25 AUD.

In Australia, many patients pay hundreds of dollars for non-GP specialist consultations, and $40–$50 out of pocket for GPs.
Dr Jillian Farmer – Insight Plus

So perhaps it is just a matter of nudging the co-payment down a bit by increasing the Medicare rebate, and some other reforms – all will be revealed on the Australian government budget night – 9 May 2023.

Slack Investor is hoping for some progress as the Australian Healthcare system is generally good … but could be better. In the meantime, if you are looking for a GP, use Cleanbill to help you find one.

April 2023 – End of Month Update

Slack Investor remains IN for Australian index shares, the US Index S&P 500 and the FTSE 100. It was a positive month for the Slack Investor followed markets. The ASX 200 up 1.8%, the S&P 500 up 1.5%, and the FTSE 100 powering on, and up 3.1% for the month.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Household Comfort … and March 2021 – End of Month Update

The couch seems to be looking good for some, but not for others. ME Bank have updated the annual Household Financial Comfort Index that surveys 1,500 Australians every year to get an idea of how Australia is travelling in a money sense. Slack Investor was surprised at the research results which revealed that over the past six months, to December 2020, the “financial comfort” of Australian households has reached a record high of 5.89 out of 10. This index is 5% higher than before COVID-19! However, it is full-time workers that report the highest financial comfort across the workforce.

*The changes in the Household Financial Comfort Index since 2012 (Scores out of 10) –* ME *Household Financial Comfort Report* 2020

The high financial comfort can probably be linked with some households going into “savings mode” as the uncertainty caused by COVID-19 on the economy, and the very high levels of government support.

Although, not everyone feels the same after a year of COVID-19. About 30% of households said that their financial situation has worsened. Clubs, pubs, gyms, air transport, restaurants, education, and the creative arts were hit particularly hard – with the cohorts of casual workers and adults under 24 shouldering the burden of Coronavirus disproportionally.

Household Response to the Pandemic

*The main method that households used to ease the financial burden during COVID 19 (Columns %) and the line showing level of financial comfort associated with each method –* ME *Household Financial Comfort Report* 2020

The main ways that households chose to ease the effects of the pandemic were 1. Dipping into savings (14%); 2. JobKeeper payments (Govt. wage subsidy) (11%); 3. Superannuation withdrawal (9%); 4. Delaying bills (7%). With JobKeeper payments having now ended, the raid on super halted, and the other main methods likely exhausted, it looks like a tipping point is approaching.

“And, at $90 billion, (JobKeeper) it’s the single largest economic support program that any Australia government has ever undertaken.”
Australian Treasurer Josh Frydenberg – ABC News

The Australian government’s massive JobKeeper program ending is likely to cause a big rupture in the economy with many small businesses who have, till now, been just “hanging on “. Many of these businesses are likely to cease trading. For employees, Treasury estimates that up to 150,000 workers will move from JobKeeper into unemployment.

Financial Cushion

With tough times ahead, there will be many who would wish for a financial cushion. Slack Investor has often banged on about the need for an emergency fund of cash that will help when one of life’s inevitable bits of bad new turns up. In December 2020, about one in five households reported virtually no, or very low, amounts of cash savings (<$1000).

How much in cash savings does your household currently hold – including savings accounts, term deposits and offset accounts? – ME *Household Financial Comfort Report* 2020

As for the pandemic effect on retirement savings, the reality of individual super balances is starting to bite with the report revealing that only around 18% of households expect to fund retirement with their own superannuation and 42% expecting to use both private savings and the government pension.

“Financial comfort levels are up for now, but many households
are on the cliff’s edge. They’ve lost income, their jobs and entire
livelihoods, their wafer-thin savings buffer is dwindling, and government support is the main action stopping them from falling over.”
Household Financial Comfort Report – 2020 ME Bank survey –

March 2021 – End of Month Update

Slack Investor remains IN for Australian index shares, the US Index S&P 500 and the FTSE 100. All Slack Investor followed markets this month had solid rises (ASX 200 +1.8%; FTSE 100 +3.5%; S&P 500 +4.2%).

In these uncertain times, especially with the high prices on the US market, I am monitoring my index funds weekly and if, at the end of the week my Index funds are below the stop loss, then I will put a post on the blog and sell at the next opportunity. All Stop Losses are Live.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index). The quarterly updates to the Slack Portfolio have also been completed.