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.

 

Fractal property investments: dipping your toe into the property market

Episode 19 Fractal property investments: dipping your toe into the property market It’s no secret that property is expensive in Australia – it can be pretty disheartening for those trying to get into the property market especially if you’re trying to buy your first...

Bonds; How do they work, when do they increase in value and how do they fit into your portfolio?

Episode 20 Bonds; How do they work, when do they increase in value and how do they fit into your portfolio? Today’s episode stems from the question last week from William about investment bonds (an investment vehicle, kinda like a life insurance product). Today...

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...

Furious Friday: Is social media at a tipping point?

Furious Friday Is social media at a tipping point? Today we’re looking at the market environment for Facebook, Google, Twitter, YouTube etc… their costs are going to far outpace what their revenues will be. Are they on their way up, or on their way down? EU copyright...

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...

Leveraging: how the wealthy get wealthy, how the rich get rich!

Episode 7 Leveraging: how the wealthy get wealthy, how the rich get rich! This is how the wealthy get wealthy, how the rich get rich! We’re discussing the two-tiered economy and leveraging – taking something that you don’t have, investing it, and growing that over...

Furious Fridays: The dark side of electricity price capping

Furious Fridays The dark side of electricity price capping Welcome to Furious Friday! I recently saw a news article about Australians being “promised new laws to slash up to $832 from their annual electricity bills” This article outlines; This is a “federal government...

Economic sanctions, tariffs and what they mean for both sides

Say What Wednesdays Economic sanctions, tariffs and what they mean for both sides Welcome to Say What Wednesdays - Where We Answer your finance questions Question from Rhys “I’ve been seeing stories on the news about Trump putting tariffs on China and sanctions on...

Repress, suppress, invest! Check your emotions at the door

Episode 12 Repress, suppress, invest! Check your emotions at the door Welcome – Today we're talking about controlling your behaviours and emotions...when it comes to investing Investing is an action, controlled by behaviours – emotions change your behaviours. Getting...

Say What Wednesdays: Which platform should I choose for investing and trading?

Say What Wednesdays Which platform should I choose for investing and trading? Welcome to Finance and Fury’s ‘Say What Wednesday’. Today’s question comes from Braden, “What are the tools for young people to invest in exchange trading funds or the wider share market?...

Pin It on Pinterest

Share This