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.

 

How to create a rising share market?

  Welcome to FInance and Fury, the Furious Friday Edition.  Following the series of the Lucky Country – You don’t need to have listened to the last few FF eps for this one – rare event – but will be talking about a few related factors, like GDP growth, Interest...

Agenda 2030 – A global conspiracy theory, or something to actually worry about?

Welcome to Finance and Fury, The furious Friday edition Intro ep to a new FF series – probably going to be the biggest Today – episode to give the bird's eye view of the overall topic - massive topic - ranges from education, energy, transportation, medicine prices,...

We’re addicted to easy hits of dopamine, and it’s impacting our ability to build wealth

Episode 22 We're addicted to easy hits of dopamine, and it's impacting our ability to build wealth Today we will talk about the fundamental principle of being wealthy. It’s very basic, and, if you get it right, you will start to accumulate wealth…which is the whole...

Are tech shares like Afterpay and Facebook are a good long-term investment option?

Welcome to Finance and Fury, the Say What Wednesday edition.  Today's question comes from Mike - "Hey Louis, Wondering if you think buying Tech shares are worthwhile"  We have the FANG and the WAAAX – US – FANG - Facebook, Amazon, Netflix and Google Aus – WAAAX -...

How much is the economy of regional Australia worth?

Say What Wednesdays How much is the economy of regional Australia worth? Australia's regional workers and their contribution to the economy: Welcome to this week’s ‘Say What Wednesday’ episode! Our question today comes from Anna …who was actually listening to our...

How controlling your time is your path towards freedom?

The ability to get more achieved - learn how to control your time, not just manage it. This is what this episode will focus on, or put bluntly, it’s about Getting Shit Done!   What is time? Time is the indefinite continued progress of existence and events that...

How do you know if fixed rates are for you?

Welcome to Finance and Fury Today we have Jayden with us, and we will be talking about Interest rates. The first Tuesday of every month, the RBA releases the updates on the cash rate. The markets currently appear to be going down, and the cash rate reflects a negative...

Can shares be leveraged as part of a property purchase?

Welcome to Finance and Fury, The Say What Wednesday Edition I would like to start by saying a big thank you for the knowledge you have passed onto myself and the community. My question lies around equity, if you have a considerable amount of money in shares, say 200k,...

Artificial Intelligence and Investing: The future is here

Episode 29 Artificial Intelligence and Investing: The future is here Today’s episode of Finance & Fury we’re talking about Artificial Intelligence taking over the ETF and investment market. The discussion was actually started by one of our listeners, Gabriel who...

Tax and Estonian e-Residency; Anyone can become an e-resident, create a company and operate it in the EU

Episode 15 Tax and Estonian e-Residency; Anyone can become an e-resident, create a company and operate it in the EU Welcome! This week we will be talking about Estonia, which sits right on the Russian border, just below Finland. Anyone can become an e-resident in...

Pin It on Pinterest

Share This