Changes to taxes 1st priority as Bill Morneau takes finance portfolio

 

One of the first priorities for Bill Morneau, Canada's new finance minister, will be to revise Canadian tax law to reduce taxes on the middle class and raise them on the wealthiest taxpayers.

Prime Minister Justin Trudeau has asked that a new tax law be ready by Jan. 1.

The Liberal Party's election campaign also promised a slew of personal income tax changes, including ending income splitting for families with children under 18 and revamping the limits on Tax-Free Savings Accounts, which would need to be drafted quickly to apply in 2016.

Trudeau's choice for the job of enacting those changes is Toronto Centre MP Morneau, the former head of a human resources company and one of Ontario Premier Kathleen Wynne's advisers on the Ontario Pension Plan.

"We campaigned on the real challenges facing middle-class Canadians. We went around the country telling people that we wanted to deal with the fact that middle-class people and families have financial challenges," Morneau said.

"What is important is to make sure the tax system works," he said in an interview on CBC News Network's Power & Politics.

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The finance post usually goes to a political veteran, but Trudeau opted instead for a personal adviser who also has Bay Street savvy.

Morneau had no timeline for the task ahead of him. He said he wanted to talk to his deputies before revealing anything about the timing of a fiscal update or changes to tax laws.

Morneau is new to political office, one of 54 Liberals to win a seat in the Greater Toronto Area in last month's federal election. But he rejects the idea that he is a rookie, pointing to his years of business experience.

Morneau said Canadians want to know that the finance minister has "the history, experience and judgment to make decisions," he said.

"I'm looking forward to making a difference and seeing Canada do well."

A married father of four, Morneau stepped down as executive chair of Morneau Shepell, a large Canadian human resources services company that manages many private-sector pensions, after winning his riding.

He stepped away from his position as chair of the C.D. Howe Institute, an economic think-tank, when he decided earlier this year to run in the federal election.

He has been an economic adviser to Trudeau's Liberals since February. Despite being a multi-millionaire, he has publicly expressed an interest in income equality, saying Canada cannot thrive unless all Canadians are doing well.

"I'm concerned that we make sure that the next generation of Canadians feels they had the capacity to get ahead," Morneau told CBC News.

"Income inequality is something that's not good for anyone...  If there is continuing inequality, it does take away hope for those who aren't doing as well."
Pension adviser

As finance minister, he will be working with the provinces in any reform of the Canada Pension Plan, one of the Liberal promises. Ontario's plan was designed to be a supplement to the CPP amid concern the plan no longer provides adequate benefits.

Morneau said pensions are an important issue and he will consult with the provinces and others on the issue.

"We need to address this because we're seeing Canadians aren't saving enough for their retirement, particularly Canadians in the $50,000 to $100,000 income bracket," he said.

But his immediate job will be a reassessment of Canada's economic and financial health as the new government begins its mandate. The economy is not doing as well as was projected in the last Conservative budget in April and that may play havoc with both federal finances and economic planning.

Morneau said he did not yet know when that review would happen.

Low oil prices have slowed Canadian growth and the plunge in commodities prices is having ripple effects across the economy. The Liberals have pledged a new round of infrastructure spending to foster growth and provide jobs.

Morneau will be in charge of Ottawa's books as that spending ramps up and there will be pressure on him to justify any expansion of the federal deficit.

But the finance minister said that he did not regard that promise as a "licence to spend."

"We need to be prudent in managing the resources the Canadian government has," he said.

Morneau, 53, has a master's degree from the London School of Economics and a master's degree in business administration.

According to his election website, Morneau has been chair of boards at St. Michael's Hospital and youth shelter Covenant House and serves on the board of the Canadian Merit Scholarship Foundation and The Learning Partnership.

He also founded a special school for Somali and Sudanese youth in an African refugee camp.

This Content was originally posted on: CBC News

 

Finance Ministers Meet to Discuss Greek Bailout

European Finance Ministers to Meet 

Eurozone finance ministers are set to discuss how soon Greece receives its next disbursement of funds from the country’s latest international bailout at their monthly gathering on Monday in Luxembourg. No major decisions are expected at the meeting, the first of its kind since Greek voters returned Alexis Tsipras to power as prime minister last month. But it will be an opportunity for Greece’s finance minister, Euclid Tsakalotos, to reassure ministers that his country is carrying out the reforms required to continue tapping the bailout, worth up to 86 billion euros, or about $96.5 billion. On Tuesday, the ministers, joined by their counterparts from European Union countries outside the single-currency zone, will try to reach a political deal on a law forcing the bloc’s 28 member states to exchange information about preferential tax agreements like those granted by Luxembourg to Amazon, and by the Netherlands to Starbucks.

Greece to Unveil a Budget

Greece is to unveil its draft budget for 2016 on Monday, offering its forecast for the country’s austerity-battered economy and setting out tax increases and spending cuts promised to the country’s international creditors. The blueprint is expected to be scrutinized in Luxembourg on the same day by eurozone finance ministers. Later on Monday, Prime Minister Alexis Tsipras is to present his policy program in Greece’s Parliament. The Parliament has scheduled for Wednesday a vote of confidence in Mr. Tsipras’s new government, which he is expected to secure.

 U.S. Trade Deficit for August

On Tuesday, the United States government will report the latest data on the nation’s trade balance in August. Wall Street is looking for the trade deficit to widen to $44 billion from $41.9 billion in July. The stronger dollar this year and slowing growth overseas are hurting exports, while making imported goods cheaper for domestic consumers. Some experts are looking for an even bigger gap in August than the consensus calls for. If they are right, it will cut further into estimates of economic growth for the second half of 2015.   

Next Libor Rate Trial to Begin

A second criminal trial is expected to begin in London on Tuesday in an inquiry by British prosecutors into the manipulation of a global benchmark interest rate known as the London interbank offered rate, or Libor. Tom Hayes, a former trader at Citigroup and UBS, was convicted at a trial in August of conspiring to manipulate Libor and sentenced to 14 years in prison.

Microsoft Hardware Showcase 

Microsoft, known as one of the world’s biggest software makers, now makes so many hardware products that it is staging an event on Tuesday to show them all off. The event in New York City will serve as a showcase for all the Microsoft-made devices that will go on sale later this year and run Windows 10, a just-released operating system that it designed to run virtually any gadget. New Microsoft smartphones and Surface tablets are sure to be among the devices on display. The company may also share more details about HoloLens, above, an augmented reality headset that it previously promised to release around the time Windows 10 went on sale.

This Content was originally posted on: THE NEW YORK TIMES

European Commission changes tone over financial regulation

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The EU signalled an end to six years of hitting banks and traders with tougher rules, as Brussels announced a shift towards growing capital markets and cutting red tape that hampers investment.

In a sharp change of tone from that after the 2008 financial crisis, the European Commission on Wednesday appealed for evidence of “unnecessary regulatory burdens” and “other unintended consequences” of banking and markets laws.

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The call for evidence, made by Lord Hill, European commissioner in change of financial regulation, was announced alongside details of a programme aimed at creating a capital markets union (CMU) across the EU that would make it easier for businesses to access financial markets.

The moves are part of an EU push to improve its investment climate as the bloc tries to overcome sluggish economic growth and high unemployment.

In addition to the CMU, the plans also include a €315bn fund aimed at long-term investment.

The centrepiece of the CMU includes cutting the paperwork that companies encounter when issuing shares, a push to simplify the EU’s complex web of national insolvency laws and steps to revive the securitisation market.

The EU has also pledged to look at fees and other “unjustified barriers” that make it harder for fund managers to operate across borders and to cut capital charges for insurers when they invest in infrastructure projects. Other measures seek to promote venture capital.

“During the past five years . . . regulators at European level have concentrated on crisis management,” Jyrki Katainen, vice-president of the commission responsible for jobs and investment, told the FT.

“Stability has come back . . . now we are in the situation where we have to use the European regulatory power to create new markets.”

The CMU plans have been welcomed by the UK, where the City of London stands to benefit from policies aimed at making it easier for funds to operate across the common market.


arriett Baldwin, economic secretary to the Treasury, said the measures would “strengthen financial stability and create new opportunity for financial services, which Britain is particularly well-placed to benefit from.”

The UK has often found itself at loggerheads with Brussels, particularly when France’s Michel Barnier was the commissioner in charge of the financial services portfolio from 2010-14.

Mr Barnier oversaw more than 40 laws aimed at toughening regulations on banks and markets, including measures to cap banker bonuses and to crackdown on short selling.

Lord Hill, who succeeded Mr Barnier, has specific responsibility for delivering the CMU.

He said in an interview with the FT on Wednesday that the call for evidence on regulatory problems did not signify any lack of faith in legislation adopted since the financial crisis.

“It is not to say that the big reforms . . . the architecture we put in place [post crisis] was wrong,’’ Lord Hill said.

“It is to say that when you’ve done 40 major pieces of legislation in five years . . . common sense tells you that you are unlikely to have been able to work out all the consequences and interconnections. It is sensible to look at it.”

Banks and large investors have already warned of unintended consequences from some post-crisis rules, notably that plans to boost the transparency of bond markets threaten their liquidity.

They also fear measures to open up the market for financial research could backfire on smaller businesses.

However, Lord Hill also said it would be a mistake for the financial services industry to see the call for evidence on regulatory problems as a free-for-all to water down post-crisis rules.

This Content was originally posted on: Jim Brunsden

Fed holds rates unchanged amid low inflation, financial tumult

Following the conclusion of a closely watched meeting, the Federal Reserve is keeping interest rates at record lows, citing a weak global economy, low inflation and instability in financial markets.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the FOMC said in a statement released at the conclusion of its latest two-day meeting.

In a press conference following the statement's release, Fed Chair Janet Yellen said "the situation abroad bears close watching," an acknowledgement of the recent flare up of volatility in global markets, such as in China.

There has been debate recently over how closely the Fed is watching foreign developments, particularly after Vice Chairman Stanley Fischer in August said, "the Fed's statutory objectives are defined in terms of economic goals for the economy of the United States, but I believe that by meeting those objectives, and so maintaining a stable and strong macroeconomic environment at home, we will be best serving the global economy as well."

Betsey Stevenson, a former Chief Economist at the Labor Department who is now at the University of Michigan, tweeted that she believes the Fed made the right call.

12 Rules on Personal Finance

                   The best way to save money is to make more

 

1. Don’t get a salary. A salary will never make you money.

2. Don’t invest any of your money. Investing is for wealth preservation, not wealth creation, so first you have to make wealth.

3. Come up with ten ideas a day. This doesn’t seem like “personal finance” but it is.

4. Don’t try to save money by not buying expensive coffee or taking subways instead of cabs. That’s a myth. The best way to save money is to make more.

5. Learn how to copywrite.

6. Come up with ten ideas for how two people can help each other. Introduce them and stay out of the way. This is real networking. Not fake networking where people hand business cards to strangers.

7. When you have wealth, never invest more than 2% of your wealth in any one idea.

8. Don’t enter a business with a lot of competition. Enter a business with a monopoly. This means high profits, high perks, great education.

9. Read a lot about things that have nothing to do with finance. Then combine them.

10. Sleeping eight hours a day might be the most important personal finance rule.

11. Be around people who love you and who you love. Eliminate people who bring you down.

12. Gratitude = Abundance. You can only be grateful for what is abundant in your life or what will be abundant in your life. So practice gratitude / abundance all day long.

Trust your body. With everything you do, everyone you meet, ask, “is this good for me?” Your unconscious brain will tell you yes or no. Wait for it to answer.

Once it answers, follow the advice.

Look everywhere for what is hidden. The people who know personal finance hide the money very carefully.

The people who don’t know personal finance have TV shows about it.

CRH appoints new group finance director

International building materials group CRH said on Monday that Senan Murphy will assume the role of group finance director from January 4th 2016.

Mr Murphy (46), will join CRH from Bank of Ireland where he is currently the chief operating officer and a member of the group’s executive committee. He previously held positions as chief operating officer and finance director at Ulster Bank, chief financial officer at Airtricity and numerous senior financial roles in GE, both in Ireland and the United States.

He will replace Maeve Carton, who will become group transformation director as previously announced. Both will be members of the group board.

Albert Manifold, group chief executive, said that Mr Murphy’s appointment : “ strengthens and broadens the executive management team at an important time for the group as we continue to focus on business performance and value creation”.

Drinking water doesn't prevent a hangover, study says

Raiding the fridge or downing glasses of water after a night of heavy drinking won't improve your sore head the next day, Dutch research suggests.

Instead, a study concluded, the only way to prevent a hangover is to drink less alcohol.
More than 800 students were asked how they tried to relieve hangover symptoms, but neither food nor water was found to have any positive effect.
The findings are being presented at a conference in Amsterdam.
A team of international researchers from the Netherlands and Canada surveyed students' drinking habits to find out whether hangovers could be eased or if some people were immune to them.
Among 826 Dutch students, 54% ate food after drinking alcohol, including fatty food and heavy breakfasts, in the hope of staving off a hangover.
With the same aim, more than two-thirds drank water while drinking alcohol and more than half drank water before going to bed.
Although these groups showed a slight improvement in how they felt compared with those who hadn't drunk water, there was no real difference in the severity of their hangovers.

 

Previous research suggests that about 25% of drinkers claim never to get hangovers.
So the researchers questioned 789 Canadian students about their drinking in the previous month and the hangovers they experienced, finding that those who didn't get a hangover simply consumed "too little alcohol to develop a hangover in the first place".
Of those students who drank heavily, with an estimated blood alcohol concentration of more than 0.2%, almost no-one was immune to hangovers.
According to lead author Dr Joris Verster, from Utrecht University, the relationship was pretty straightforward.
"The more you drink, the more likely you are to get a hangover.
"Drinking water may help against thirst and a dry mouth, but it will not take away the misery, the headache and the nausea."

'No cure'

Dr Verster said part of the problem was that scientists still do not know what causes a hangover.
"Research has concluded that it's not simply dehydration - we know the immune system is involved, but before we know what causes it, it's very unlikely we'll find an effective cure."
He said the next step was to carry out more controlled trials on hangovers.
Dr Michael Bloomfield, from University College, London, said the economic costs of alcohol abuse ran into hundreds of billions of euros every year.
"It's therefore very important to answer simple questions like, 'How do you avoid a hangover?'
"Whilst further research is needed, this new research tells us that the answer is simple - drink less."
The paper is presented at the European College of Neuropsychopharmacology conference.

What strategies do people use when they have drunk too much alcohol?