Say What Wednesdays

Shorten vs Morrison

Government “Spending”

  • Everything is portrayed as a ‘cost’, which is ironic.
  • “Costs” from the Government’s perspective is simply NOT charging you tax. Not taking all income earned is a trillion-dollar cost to them.

 

Shorten’s Policies

Lowering 50% CGT discount to 25% (for assets purchased after 1 July 2017)

  • People will potentially hold onto assets longer because they will be taxed so much if they were to sell.

Negative Gearing – Removal of negative gearing (grandfathering existing)

  1. (ABS Stats) 21% of households own a second home as an Investment property
    • 35% of dwellings are investment properties (rental properties)
  2. Can’t offset more tax than is paid
    • What if property is not rented for a while?
    • People may not buy highly leveraged – high growth properties
    • What if rates go up? A lot of properties in the past were negatively geared
    • Depreciation already gone, property may become less attractive
    • Less incentive for investors to hold an investment property, less available to renters, so therefore with the decreased supply the price of rent increases.

Family Trusts

  1. Implement a 30% floor on the taxation that applies to distributions made by discretionary trusts
  2. Distributions cost $3.5bn to government in lost tax revenue

The removal of Franking Credits

  1. Australian Market – unfranked 5.5% to 6.5% dividend yield on major bank stocks still smashes the 1.8% yield on US equities
  2. Change of company behaviour
    • The American model – Reinvestment of funds is better for companies than double taxation of income for shareholder (reduced shareholder value)
  3. Remember, the Government might say that this is costing them money, but really, it’s just money that they aren’t able to collect in taxes!

Health Funding – additional $2.8 billion funding for hospitals

  1. Additional money doesn’t equal additional efficiency, it depends on how the money is spent. Throwing extra money at a problem doesn’t necessarily solve it. For example, the hospital in Adelaide.
  2. Help reduce emergency department and elective surgery waiting times and provide more beds, doctors and nurses

Education

  1. Scrap upfront fees for 100,000 TAFE students and to spend $100 million modernising TAFES around the country.
  2. Promised about 200,000 extra places at universities
  3. He did not give a costing for the extra university places

Increased funding for even further regulation and red tape

  1. ASIC – lambasted the Government for cutting funds to AISC as a “disgrace” and “immoral” and pledged a $25 million taskforce for public prosecutors
  2. ASIC has gone industry funded – their revenue has gone up and just moved away from tax payer funding

How all of this can be funded?

  1. Can afford the extra spending because he would not “spend” $80 billion on big business tax cuts.
  2. Extra government spending enabled by this revenue-raising – think back to past public works programs, like the NBN or pink batts, or solar panels

Morrison  

  1. Retirement age to 67, not increasing to 70.
    • Whilst it’s not nice to have to increase the eligibility age for the pension, life expectancy has increased by 25 years since the age pension was introduced…and eligibility age has only gone up by 2 years.
  2. Cuts for small and medium businesses will cost up to $3.6 billion over four years
  3. $7.6bn on infrastructure spending
    • Increasing rails and road networks etc
  4. Not sure about what the details or other polices are – nothing is clear at this stage.

 

Securing your Road to financial independence

Welcome to Finance and Fury Everyone has heard of more money, more problems – it is a bit of a contradictory statement It is false as money can cover bills and be used in emergencies It is true as not valuing money can lead to problems How to value money? What is...

Furious Fridays: The Devil giveth and the Devil taketh away

Furious Friday The Devil giveth and the Devil taketh away Welcome to Finance and Fury! If you haven’t listened to last Friday’s episode go check it out, it’s a prelude to this episode. Today we are going to discuss the founder of Communism – Karl Marx, along with his...

5 property investing myths you have to stop believing immediately.

Welcome to Finance & Fury! Today we’re talking about five property investing myths you have to stop believing. At the moment property has gone from being the most talked about, exciting thing… to the most talked about, negative thing. Since 1994 there has been...

Building a strategy to fit your goals

Welcome to Finance and Fury Today we are continuing from last week, and going through strategies to fit your goals. Some bad news… The workbook will be released next week because there are a few pieces missing, as it doesn’t achieve what I wanted it to. So as a DIY...

Say What Wednesdays: The slippery sponsorship slope and why I’ll never sell out

Happy New Year! Welcome to Finance & Fury’s Say What Wednesday. It’s been pretty quiet on the question front, I’m guessing with everyone away over the holidays… so today will be a quick episode covering the number 1 question I got all of 2018 but never answered –...

When property will work – and when it won’t! Quick tips for property investment

Episode 13 When property will work – and when it won’t! Quick tips for property investment Welcome to Finance and Fury Quick tips to help with making successful investments in property When property will work – and when it won’t! It is two-fold – How well the property...

Say What Wednesdays: High Roller; Start Investing with $1,000

Say What Wednesdays High Roller; Start Investing with $1,000 Welcome to Finance & Fury, the Say What Wednesday edition, where we answer your personal finance questions each week. Today’s question comes from Tara; “Hi Finance & Fury, love the show! I was...

The skinny on spare change investment apps and building wealth when you’re earning $25,000 or less a year.

Say What Wednesday The skinny on spare change investment apps and building wealth when you’re earning $25,000 or less a year. Welcome to Say What Wednesdays – Where we answer your personal finance questions each week. Two questions this week from Chris: No 1 what are...

Say What Wednesdays: The Trump Economy

Say What Wednesday The Trump Economy Today, we’re talking about the Trump economy, and the state of the US market. Love him or hate him, America is doing better than ever – Trump just can’t stop winning when it comes to a lot of political and economic factors. In his...

History repeats itself – GFC’s, and how the banks and government regulation have impacted financial crashes in the past

Furious Friday History repeats itself - GFC's, and how the banks and government regulation have impacted financial crashes in the past This week we continue with where we left off last week’s episode - is it the Banks, or Government Regulation and interference, that...

Pin It on Pinterest

Share This