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Australia helps retail investors buy government bonds

Australia arguably has one of the best individual retirement systems in the world. The government-sponsored system – superannuation – requires mandatory employee and employer contributions to retirement savings. In certain need-based circumstances, the government may also contribute. Australians take funding their retirements seriously, and the government is giving them a powerful new tool to save by moving trading of government bonds onto the Australian Securities Exchange (ASX). From the government:

Deputy Prime Minister Wayne Swan and Minister for Financial Services Bill Shorten today announce that Australian Government Bonds (AGBs) will be available for trading on the Australian Securities Exchange for the first time on 21 May.

Why is this important?

This will enable retail investors to buy and sell AGBs in a similar way to how they buy and sell shares. The retail trading of AGBs will make it easier for mum and dad investors, including many self-managed super funds, to hold and trade Commonwealth-backed bonds.

How did the government do this?

The Australian Office of Financial Management (AOFM) has made technical and commercial arrangements with the ASX and the selected registry operator to support the start of trading. The AOFM has also prepared concise disclosure documentation for retail investors.

Issuers are responsible for seeking exchange listings of their securities and providing retail disclosure. By moving these bonds to an exchange platform, the government is ensuring that retail investors are able to have the lowest possible transaction costs. If an investor needs to sell a bond, she is not just at the mercy of what a dealer desk wants to offer without any means of price comparison. The government is helping protect the savings of its citizens.

America should focus on rebuilding manufacturing

President Obama shut down his infamous “jobs council” at the end of January after very desultory efforts and no substantive outcomes. Reuters reports on what comes next:

In place of the jobs council, the administration said it will begin an expanded effort to work with the business community and other groups to boost economic growth, cut debt and fix a broken immigration system.

“It’s a broad engagement strategy to make sure the president’s message is getting out to the American people, because with their voices involved we think that we can still do big things,” Obama adviser Valerie Jarrett, his point person on working with business, told Reuters in a recent interview.

Australia focuses on improving academic resources

A special commission of the Australian government has been hard at work for the last two years examining how to improve the nation’s education system. Their baseline findings say that Australian academic performance had declined, and that more resources are needed. Australian Broadcasting Corporation reported on the findings of the Gonski Commission (named after its chairman businessman David Gonski):

The report says the performance of Australian students has declined at all levels over the last 10 years.

It says in 2000, only one country outperformed Australia in reading and scientific literacy, and only two outperformed Australia in mathematical literacy.

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