# How to retire early... or simply survive



## basilio (9 March 2018)

Came across two "similar but different" stories today.

The first was an extract from a book on Living Frugally and how to retire (to an idyllic paradise) at 32.

The second was from a blog site on living frugally - just to stay alive.  I wondered what ASF posters would make of the differing slants to the Living Frugally question ?

* Extreme frugality allowed me to retire at 32 – and regain control of my life *
 Money 

Elizabeth Willard Thames abandoned a successful career in the city and embraced frugality to create a more meaningful life. It enabled her to retire at 32 with her family to a homestead in the Vermont woods

Elizabeth Willard Thames

Thu 8 Mar 2018 22.00 AEDT   Last modified on Fri 9 Mar 2018 07.22 AEDT


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The Vermont homestead that Elizabeth Willard Thames shares with her husband and daughter. Just a few years ago, this seemed like an impossible feat. Photograph: Elizabeth Willard Thames
As I write this, I’m sitting on the back porch of the rural Vermont homestead I share with my husband and our daughter, gazing out on the 66 acres of forest, fruit trees, gardens, ponds, and streams that we feel incredibly lucky to call our own.

Just a few years ago, this seemed like an impossible feat. My husband and I were struggling to conceive a baby and attempting to chart a path out of our frenzied 9-5 grind in urban Cambridge, Massachusetts. We wanted to achieve financial independence, quit the cubicle jobs that made us so unhappy, and create a simpler life of purpose in a rural setting.

My husband, Nate, and I are not exceptional people. We’re not rich or famous or geniuses or even particularly good-looking (although we have our moments). We’re just some average, middle-class kids from the midwest who decided we wanted something more out of life than what our consumer culture sells us.

While it’s true that Nate and I are average people, and we’ve never won the lottery or had investment banker salaries or been the beneficiaries of inheritances or trust funds, I’m keenly aware that we are also extraordinarily privileged.

https://www.theguardian.com/money/2018/mar/08/how-to-retire-early-frugal-spending


*     Versus*


Millennial finance
* Living on a budget? How trendy! Frugal bloggers live on the cheap, by choice *
The countless people who document their thrifty lifestyles give readers with money woes emotional support – but they don’t often deal with true poverty

Angelina Chapin

Mon 8 Aug 2016 21.00 AEST   Last modified on Sat 15 Jul 2017 04.55 AEST


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‘If you’re connecting with someone and you relate to their story ... you can learn what you need to do by accident.’ Illustration: Joanna Gniady
On Sunday mornings, Katie practices the same ritual: she sits down on her couch in Toronto with her laptop and a cup of tea, pulls the receipts from her purse and makes a tally: “Groceries: $55.90. Petrol: $43.10. Hospital parking: $0. Total Spend: $99.” Then she hits publish and shares her weekly spending with the world.

Katie, a single mother of two adopted children with special needs, has to keep track of her money. Multiple surgeries over the past year have left her paralyzed from hip to knee, unable to work her healthcare job and saddled with between $15,000 and $20,000 CAD of debt. Once government assistance kicks in, her budget for the year will be just under $17,000.

https://www.theguardian.com/lifeandstyle/2016/aug/08/frugal-bloggers-budget-personal-finance-poverty


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## SirRumpole (9 March 2018)

I guess if you are enjoying living frugally, that's all that counts.

You are not doing much for the economy though.


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## So_Cynical (9 March 2018)

Early retirement can be done, it isn't done often due to many reasons, staying close to the kids, kids living at home into their 20's, i like where i live and don't want to leave etc, basically anyone who owns a house in a capital city and sell and move somewhere at least 4 hours from a capital and buy a house for half or less of what they sold their capital house for, pocketing maybe half a million, thus funding the first 10+ years of frugal retirement.


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## tech/a (10 March 2018)

Early retirement is very alive and well.
Just wander down to any Social Security
Office and you’ll find a whole room full
Of experts.

Sun Surf lazy afternoons 
Work—-why?
Both are a life style choice how good 
IS the lucky country!


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## PZ99 (10 March 2018)

If you don't have a lotto lotta coin then keep $10k and use the rest to pay all your bills a few years in advance. 

Use the $10k for some quick trading 

After that you can live frugally on $50 a week and the bills are paid.


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## Smurf1976 (10 March 2018)

I’m not into sitting in the dark eating baked beans every day but a lot of common consumer spending is completely pointless in my view.

Buying new phones etc for the sake of it.

Designer label anything. Amazing how crap much of it actually is anyway.

Cigarettes. I can’t think of anything more silly than taking $ thousands every year and settling it on fire in a manner that will quite likely kill you.

Voluntary taxation in all forms.

Steer clear of things like that and you’ll gain a decade of actual living.


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## brty (10 March 2018)

The first article rang a bell with me. Being fairly frugal when young and employed, allowed us to get ahead in life. We were able to pay off the first house loan at high interest rates in a relatively quick time. This then allowed for borrowing against the house for investment when young.


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## basilio (10 March 2018)

brty said:


> The first article rang a bell with me. Being fairly frugal when young and employed, allowed us to get ahead in life. We were able to pay off the first house loan at high interest rates in a relatively quick time. This then allowed for borrowing against the house for investment when young.




Thanks for reading the story and offering your experience. I'm wondering if the overall picture of careful and thoughtful spending, far more self reliance and a rejection of our current consumer culture posed some thoughts ?


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## brty (10 March 2018)

Rejection of the current "consumer culture" or put more bluntly, economic system is a double edged sword. It's a case of if 'most people' did likewise, then the economy would really suffer, which would lead to job losses for a lot of those trying to be frugal.

One advantage of being frugal when young, is how it teaches you how to live well later, but at the same time not overspend. For example, we could buy a 'great' wine to be enjoyed with meals/friends, but instead will choose a 'good' one at a quarter of the cost. We can easily afford both, but just got into a habit of not overspending when young.

With the baby boomers now nearing or in retirement, only those that were frugal and got ahead of the pack when young, are likely to have good comfort in being able to spend money on those things that they can no longer do for themselves. 
Basically the older a person is the more likely they are to have too spend money on things that younger people should be able to do themselves.


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## tech/a (10 March 2018)

Brty

I attacked life differently. In the first week of marriage at 21 my wife and I sat down and worked out a budget.
We had $5 surplus. I was certain there was no way I was going to life a life where money inhibited my life style.

My Plan
I worked for someone who gave me incentive to perform.
My commissions doubled my wage but was still limited
The extra cash built up enough to buy my first business.
A lawn round. Realising my income was limited to hrs in a
Day I soon found getting clients was easy and they were worth
More on the open market than cutting them.

So I found another Lawnie who’d also worked it out.
Together we would build up our rounds and combine them together
To make a third round selling it splitting profit,buying new gear and
Keeping only the best clients.

Then we kept the rounds and employed others to run them pocketing 30% 
Of the turn over.
Fast forward 40 yrs ———-
The rest is history a financial life built around leverage of earning capacity and re sale value of 
Assets
Sure I’ve been frugal but I didn’t want it to be a way of life.


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## Trendnomics (10 March 2018)

I'm on track to be semi-retired (part time work - single income) by 35 and fully retired by 40.

There is a strong interest lately in the "FIRE" lifestyle, as per the recent ABC article and appearances on morning shows:

http://www.abc.net.au/news/2018-02-14/why-i-decided-to-skip-home-ownership-to-retire-at-35/9378412
https://au.news.yahoo.com/a/38941088/why-man-30-is-skipping-home-ownership-in-order-to-retire-by-35/

Also some Australian blogs:

https://lifelongshuffle.com/
http://www.aussiefirebug.com
http://firebythirtyfive.blogspot.com.au/

Very handy calculator (for Australia's unique SUPER system):

http://firebythirtyfive.blogspot.com.au/p/superannuation-needed-to-reach.html


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## jjbinks (10 March 2018)

Trendnomics said:


> Very handy calculator (for Australia's unique SUPER system):



that  calculator is a nice reminder about the power of compounding!


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## Miner (10 March 2018)

Honestly I do not want to retire. Simply because I am so workaholic that there is nothing beyond that for me. A real slave. My grown up son some times jokes, dad what will happen when you retire ? Just drop dead ? So I want to work no matter the money is fabulous or not . But that is me


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## Wysiwyg (10 March 2018)

jjbinks said:


> that  calculator is a nice reminder about the power of compounding!





> You can salary sacrifice into your Superannuation account before taxes - *so if you make $1,000 a week* (a nice round number for doing maths with) then you would be paying $162 tax. If you could salary sacrifice half of your income, then you're only paying a measly $28. *By placing half your income into your Superannuation, you get to 'take home' $972 a week, as opposed to $838.*



She could have stated the gross amount earned per week, using the net amount makes the math confusing.


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## tech/a (10 March 2018)

Miner said:


> Honestly I do not want to retire. Simply because I am so workaholic that there is nothing beyond that for me. A real slave. My grown up son some times jokes, dad what will happen when you retire ? Just drop dead ? So I want to work no matter the money is fabulous or not . But that is me




Similar

Once you stop work you lose whatever your worth/expertise was to
Society.
Many feel that as a very real loss.

I enjoy the value I and my people give to those who need our expertise.
I don’t have to retire 
I love what I do and I can choose to work or not work and I do!
So I totally agree money or no money!
We need to have a value and sometimes it’s not monetary.
Often it comes hand in hand


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## Wysiwyg (10 March 2018)

Miner said:


> Honestly I do not want to retire. Simply because I am so workaholic that there is nothing beyond that for me. *A real slave*. My grown up son some times jokes, dad what will happen when you retire ? Just drop dead ? So I want to work no matter the money is fabulous or not . But that is me



Snap out of that dream man. Now! Once you have paid for your waste to be treated, your roads, parks, environment maintained, your treated water supply and your general household usage bills/insurances then you owe society nothing. Feel and be freer dude.  The planet is huge, you should see it.


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## tech/a (10 March 2018)

I suppose Warren Buffett,Bill Gates , Zuckerberg, Rupert Murdock Frank Lowe
Should stop living their dream Wyzzi


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## jjbinks (10 March 2018)

I think there are two reasons to retire
1) You want to move onto do other things in your life. 
2) Quite while you are ahead. As we see with elite athletes (when they are much younger) there comes a time where biology may get the better of you and its better to quit whilst ahead.


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## tech/a (10 March 2018)

(3) When you never worked a day in your life 
(4) When no one wants what you have to offer.


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## Trendnomics (10 March 2018)

I think some of you want big expensive tombstones.....


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## tech/a (10 March 2018)

I think some are too worried to spend it.
That’s what moneys for ——spending!


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## Wysiwyg (10 March 2018)

Trendnomics said:


> Very handy calculator (for Australia's unique SUPER system):
> 
> http://firebythirtyfive.blogspot.com.au/p/superannuation-needed-to-reach.html



I found the calc. had no use. A 'should have" figure based on years and percentage rates and spend numbers put in the boxes. No starting amounts, present age, contributions etc.

I did find Pat the shuffler's blog very good to read, thanks.


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## Smurf1976 (10 March 2018)

Pick a job that you don’t really consider as being work as such. That way the $ just tends to find you and all is happy.

On the other hand there are things like painting. Suffice to say I have absolute respect for anyone doing that for a living. No human should have to endure such misery so I sure hope they’re being paid well and then some.

Smurf hates painting. I say that having spent the whole day painting a house and there’s still more to go. Now THAT is what I call work.....

There ought to be a law against building houses in a way that needs exterior painting. Either that or use it as punishment for something really bad.

Electricity is much more fun.


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## SuperGlue (10 March 2018)

Smurf1976 said:


> Electricity is much more fun.




Until 





Got to post this. Can't help it.
Stay safe.


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## Smurf1976 (11 March 2018)

SuperGlue said:


> Until
> View attachment 86553



Yep, those paint fumes sure are dangerous.....


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## Miner (11 March 2018)

tech/a said:


> I suppose Warren Buffett,Bill Gates , Zuckerberg, Rupert Murdock Frank Lowe
> Should stop living their dream Wyzzi



Good ones Wysiwyg  (damn - have a short name mate  - I will call you Wise Man ) and T/A
Dear Trendnomics - trust me I even do not need any kind of cheap tombstone as my ashes are to be either put into a cascade or thrown into a holy river!  Environment protected and money saved too.


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## McLovin (12 March 2018)

The last time I worked for someone else (finance) I was 29, I'm 36 now. I don't think I could work for anyone else again. My last paying job was high six figures, without going into detail I'll just say that these days I'm comfortably into seven figures, so money isn't a concern. I like the flexibility I have, and I hated having to manage people. I'm definitely not retired, I'm just doing my own thing. There's only so much golf or bridge you can play. What's the point of spending your best years living like a pauper so you can enjoy your fifties?


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## sptrawler (12 March 2018)

brty said:


> The first article rang a bell with me. Being fairly frugal when young and employed, allowed us to get ahead in life. We were able to pay off the first house loan at high interest rates in a relatively quick time. This then allowed for borrowing against the house for investment when young.




I agree with your and smurph's sentiments, being frugal is the only way, for working class people to retire early.
As early as possible, buy a dwelling, if you can't afford to do that, buy a block of land. 
Then as brty says, pay off your dwelling as quickly as possible, then get on with investment.
There's plenty of time to compete with the Jonses, when your investments are making more, than your job.


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## sptrawler (12 March 2018)

McLovin said:


> The last time I worked for someone else (finance) I was 29, I'm 36 now. I don't think I could work for anyone else again. My last paying job was high six figures, without going into detail I'll just say that these days I'm comfortably into seven figures, so money isn't a concern. I like the flexibility I have, and I hated having to manage people. I'm definitely not retired, I'm just doing my own thing. There's only so much golf or bridge you can play. What's the point of spending your best years living like a pauper so you can enjoy your fifties?




I think what you have done, is the way to get ahead, these days.
My S.I.L worked for a company that went broke, he as you did, started a company. To cut a long story short, within five years he has built a mansion.

Back in the 'baby boomer' early years, there was very few people went on to uni, therefore the majority became wage and salary workers. Actually even those that went to uni, usually ended up working for a Government Department.
That was brought about because back in the 1960's - 70's, most large employers were a division of the Government, be that Federal, State or Council, so the opportunity for mega wages was very limited if not impossible.
As the resources sector grew, the outsourcing grew and the population grew. Remember in 1970, Australia's population was 12.5 million, then compounding of supply and demand commenced and since the mid 1980's wages have flourished, Government services have been sold off and the costs have escalated.

The sad part is, as can be seen by the demographics, the percentage of people who become wealthy and self funded, probably hasn't changed much.

In answer to your last statement, what's the point of living like a king in your early years, to live like a pauper from 50 on? 
Having said that, most seem to be choosing it.lol


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## luutzu (12 March 2018)

Smurf1976 said:


> Yep, those paint fumes sure are dangerous.....




I like paint fumes. 

Has a nice smell to it. That and it tells you your work is about to be done... just the lighting, the flooring, the furnishing, the skirting and trims. Come to think of it, it's like spending all that time and money to have a slab done just to see that that's just the beginning.


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## luutzu (12 March 2018)

McLovin said:


> The last time I worked for someone else (finance) I was 29, I'm 36 now. I don't think I could work for anyone else again. My last paying job was high six figures, without going into detail I'll just say that these days I'm comfortably into seven figures, so money isn't a concern. I like the flexibility I have, and I hated having to manage people. I'm definitely not retired, I'm just doing my own thing. There's only so much golf or bridge you can play. What's the point of spending your best years living like a pauper so you can enjoy your fifties?




I take it you don't labour much, you lucky...

There's no point at all in living like a pauper in our best years, just that the majority of people don't have much of a choice. Most skim, save, work long hours, try to stay out of debt, pay their bills, raise a family... and if they're lucky they get to enjoy their fifties or starting in their sixties with some comfort and security.

That's kinda like wondering why a pimply HS geek with braces and no car why he didn't get laid during his best years but wait 'til marriage. Answer would be he'd be lucky to get married and have some at all once those nerdy hours at the library studying for exams paid off.


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## McLovin (12 March 2018)

luutzu said:


> I take it you don't labour much, you lucky...




My parents owned a corporate furniture manufacturing business. From 13 until 20 or so I had to go out and do installations on school holidays (I had enough small businesses on the side that I didn't need the money). It was hard work. Believe me, as a 12 year old or 18 year old, MDF desks are heavy. My old man verbally kicked my arse when I said I didn't want to do it. The time with those guys gave me a very different perspective. 



luutzu said:


> There's no point at all in living like a pauper in our best years, just that the majority of people don't have much of a choice. Most skim, save, work long hours, try to stay out of debt, pay their bills, raise a family... and if they're lucky they get to enjoy their fifties or starting in their sixties with some comfort and security.




Sure they do, they choose not to. Get married and have kids, start in your thirties. Before then, the world's your oyster!


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## McLovin (12 March 2018)

sptrawler said:


> I think what you have done, is the way to get ahead, these days.
> My S.I.L worked for a company that went broke, he as you did, started a company. To cut a long story short, within five years he has built a mansion.




I really just took my savings, which were substantial for someone at that age, and started investing. I've branched out since then, but I'm not the only one on here who has gone full time investing.





sptrawler said:


> In answer to your last statement, what's the point of living like a king in your early years, to live like a pauper from 50 on?
> Having said that, most seem to be choosing it.lol




LOL. You're half dead; you may as well start living it. 

(I've always enjoyed my chats with you, sp. You remind me of an uncle I have)


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## luutzu (12 March 2018)

McLovin said:


> My parents owned a corporate furniture manufacturing business. From 13 until 20 or so I had to go out and do installations on school holidays (I had enough small businesses on the side that I didn't need the money). It was hard work. Believe me, as a 12 year old or 18 year old, MDF desks are heavy. My old man verbally kicked my arse when I said I didn't want to do it. The time with those guys gave me a very different perspective.
> 
> 
> Sure they do, they choose not to. Get married and have kids, start in your thirties. Before then, the world's your oyster!




Dam. That's very impressive. Well done man.


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## sptrawler (12 March 2018)

McLovin said:


> .
> LOL. You're half dead; you may as well start living it.
> 
> (I've always enjoyed my chats with you, sp. You remind me of an uncle I have)




I am enjoying it, always worked for wages, retired at 55 own a Harley, owned a Porsche, going on my 15th cruise.
Be back in mid June, to check my SMSF tax issues.

Having said that, I was the 'black sheep' of the workshop, invest don't spend was my mantra. So I ate my lunch mostly on my own. LOL


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## McLovin (12 March 2018)

sptrawler said:


> I am enjoying it, always worked for wages, retired at 55 own a Harley, owned a Porsche, going on my 15th cruise.
> Be back in mid June, to check my SMSF tax issues.




Nice. I never picked you as a Porsche owner, spiv. 

Who do you cruise with? I'm going on my first with the girl in July to Alaska.


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## sptrawler (12 March 2018)

McLovin said:


> Nice. I never picked you as a Porsche owner, spiv.
> 
> Who do you cruise with? I'm going on my first with the girl in July to Alaska.




I hate flying, so I tend to mix my destination, with an area of the World I want to "see" but not necessarily visit.
So when we were first going to Europe, I looked for a cruise that visited a lot of ports around Africa, that finished in U.K.
Then I looked at what cruise lines offer the places I want to see, then wait until "the price is right".
This time I'm doing the Suez and the Med.
I've cruised with a few cruise lines, and to say which would you cruise with, I think is really dependent on who you are and what you want.
Some cruise ships are great for families eg, wave generators, skydive tubes, bumper cars, video games.
Others are great for pomp and ceremony.
At my age and my personality, the other half and myself, like a quiet cruise, with great ports and a really good gym, we're not there to impress anybody.LOl

So really I can't recommend any cruise line specifically, it really does depend on the type of person you are.
But having said that, cruising is a great way to see the World, at a very reasonable price.


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## sptrawler (12 March 2018)

McLovin said:


> My parents owned a corporate furniture manufacturing business. From 13 until 20 or so I had to go out and do installations on school holidays (I had enough small businesses on the side that I didn't need the money). It was hard work. Believe me, as a 12 year old or 18 year old, MDF desks are heavy. My old man verbally kicked my arse when I said I didn't want to do it. The time with those guys gave me a very different perspective.
> !




You've got a lot to thank your Dad for, firstly he was a business owner, which gave you the frame of mind not to be scared of owning your own business.

Secondly he obviously showed you that owning a business, wasn't all pi$$ and skittles.

Thirdly you had the brains, to work out, you put F all in you get F all out.

There is a lot of people with your background, that blow the family fortune, and there are a lot of people from poor backgrounds that break through the glass ceiling.

The problem is the current crop of idiots, both Labor and Liberal, want everybody to believe they can make it through higher education whether they can or can't.
As long as it keeps them off the dole, it's good.
It is time the Government realised privatisation has been a disaster, and took it back in house, it just means the taxpayer is paying wages rather than the dole.
Let's be honest a lot of failed ex Government businesses, if re established, would be great employers and skill generators.
By the way I'm no spiv, just love nice engineering, never owned a big cube V8 when all my mates did, I drove a 1969 Toyota Crown, that took balls in a mining town.
Now you know the scenario.lol


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## bellenuit (13 March 2018)

McLovin said:


> Nice. I never picked you as a Porsche owner, spiv.
> 
> Who do you cruise with? I'm going on my first with the girl in July to Alaska.




I did the coast of south Alaska (Glacier Bay, Sitka etc) with Princess Cruises (The Emerald Princess) from Vancouver last year. Although the trip was enjoyable (although a lot colder than I expected, which limited time spent on top deck), one thing I would advise with Princess is to not tick the box that says to add you to their mailing list.

I literally spent months afterwards trying to stop unwanted email and snail mail being sent to me (even though I unsubscribed multiple times) which was often 3 or 4 times per week. I sent numerous emails to various US and Australian contact people complaining about the emails. In the end it only stopped when I did a search of every top person with Princess (including their US CEO) and sent them an email demanding that they stop harassing me. That worked.


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## Wysiwyg (13 March 2018)

> In answer to your last statement, what's the point of living like a king in your early years, to live like a pauper from 50 on?
> Having said that, most seem to be choosing it.lol




Most working people are on an hourly rate and all the saving and scrimping and frugality in the world aint going to make all of them wealthy soon. Long time to a million on an hourly rate.


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## sptrawler (13 March 2018)

Wysiwyg said:


> Most working people are on an hourly rate and all the saving and scrimping and frugality in the world aint going to make all of them wealthy soon. Long time to a million on an hourly rate.




Don't think that way, I had a lot of arguement's with my other half in the early days.
She wanted children early, so we had four before I was 30, three before 25.lol
I decided, it was more important to get your money working for you, than spending it on something that doesn't matter in 30 minutes time.
She always complained we lived on the bones of our arse, while all our friends lived the life of Riley, I always said trust me it will get better you only earn so much money in your life.
You either spend it now and have a great time, or invest it and enjoy the time when you can't earn the money, because you are old and unemployable.
The other thing is, the kids don't care what carpet is on the floor, as long as they enjoyed their childhood at home, or the holidays.
What you have to remember is, interest rates aren't staying this low forever, the capitalist system doesn't work that way.
So if you have a loan, get it paid off while the rates are low.
Opportunity will present itself, make sure you're in a position to take advantage of it, and you recognise it.
BHP was $12 not that long ago, now they're closer to $30, not saying it was a given, but it was an opportunity.


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## SuperGlue (27 March 2018)

"Meet the Australians who are retiring early to embrace a fulfilling life of travel — while they still can"

In ABC News today.

http://www.abc.net.au/news/2018-03-27/can-you-afford-to-quit-working/9586530?WT.ac=statenews_qld


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## tech/a (27 March 2018)

sptrawler said:


> Opportunity will present itself, make sure you're in a position to take advantage of it, and you recognise it.
> BHP was $12 not that long ago, now they're closer to $30, not saying it was a given, but it was an opportunity.




Here is the secret.

Become an opportunity hunter.
1 opportunity can alter your entire financial life.


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## sptrawler (27 March 2018)

tech/a said:


> Here is the secret.
> 
> Become an opportunity hunter.
> 1 opportunity can alter your entire financial life.




It certainly can, however if they hammer negative gearing, capital gains and franking credit offsets, it will make it a fair bit harder for the young to climb out of the poverty trap.


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## SirRumpole (27 March 2018)

sptrawler said:


> It certainly can, however if they hammer negative gearing, capital gains and franking credit offsets, it will make it a fair bit harder for the young to climb out of the poverty trap.




It's basically the middle aged well off who benefit from negative gearing.


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## PZ99 (27 March 2018)

sptrawler said:


> It certainly can, however if they hammer negative gearing, capital gains and franking credit offsets, it will make it a fair bit harder for the young to climb out of the poverty trap.



Well not really. People in poverty won't be enjoying the benefits of neg gearing, cap gains and divvies. What they need is better wages, lower taxes and lower living costs. 

When you're earning $700 a week and paying $400 in rent you're going nowhere.


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## sptrawler (28 March 2018)

Yes but without any breaks, most will stay wage slaves. But hey who cares.


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## sptrawler (28 March 2018)

SirRumpole said:


> It's basically the middle aged well off who benefit from negative gearing.



That's not really true, it is any average wage earner, who has their head screwed on.
But you believe what you like, I know from working in a workshop most of my life, all the guys used negative gearing.
The ones who did well, also bought shares in their non working wife's name also.


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## sptrawler (28 March 2018)

PZ99 said:


> Well not really. People in poverty won't be enjoying the benefits of neg gearing, cap gains and divvies. What they need is better wages, lower taxes and lower living costs.
> 
> When you're earning $700 a week and paying $400 in rent you're going nowhere.



People earning $700 per week aren't paying any tax, and are on benefit's, so it would be hard for them to negative gear.
But Im sure you know that already. 
I'm talking about workers on $90,000 a year, like our council waste collection workers. 
 I cant talk for $35,000 a year full time employees, maybe you could tell me what job they are doing? Then it would give your post some credibility.


----------



## PZ99 (28 March 2018)

sptrawler said:


> People earning $700 per week aren't paying any tax, and are on benefit's, so it would be hard for them to negative gear.
> But Im sure you know that already.
> I'm talking about workers on $90,000 a year, like our council waste collection workers.
> I cant talk for $35,000 a year full time employees, maybe you could tell me what job they are doing? Then it would give your post some credibility.



You might like to restudy that one. Anyone on $700 a week is paying around 10% in tax.

The minimum wage is $695 a week - retail employees are around this level, and that's the second biggest sector in the country. I'm using that as an example of the poverty trap you referred to in your earlier post. 

I don't consider people on $90k a year as living in poverty. If they say they are then it's self inflicted and therefore they need to get real.

Neg gearing merely locks low income earners out of the housing market because it distorts the supply /demand ratio in favour of average wage earners reducing their incomes by increasing their debt. Not the sort of thing I want my taxes supporting.


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## PZ99 (28 March 2018)

Ooooh lookie here: http://www.abc.net.au/news/2018-03-28/holiday-home-tax-deduction-rorts-targeted-by-ato/9593834

The ATO's assistant tax commissioner Kath Anderson said too many holiday home owners were claiming deductions for properties which were not genuinely available for rent or were only available to friends and family


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## Bill M (28 March 2018)

I retired early and my wife is also retired. Once you have your own home and it is paid for you don't really need millions of dollars to survive. We are self funded and live life a good life. $500 a week covers all of our living expenses and we could survive on that for ever if we had too. But we like travel and eating out occasionally so need around $1,000 p/w to live a comfortable retirement.

We still watch our pennies like we always have. We don't waste money. Like they say, never spend more than you earn and all will be fine. Although as one gets older it is ok to start consuming some of your capital. We won't live forever, we earn't it so we will spend it, no use being the richest tight arse in the grave. Enjoy life, be good to people and you will be ok. Just keep an eye on the draw downs and inflation as it's got to last you until 90 or so, cheers.


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## sptrawler (28 March 2018)

PZ99 said:


> You might like to restudy that one. Anyone on $700 a week is paying around 10% in tax.
> 
> The minimum wage is $695 a week - retail employees are around this level, and that's the second biggest sector in the country. I'm using that as an example of the poverty trap you referred to in your earlier post.
> 
> ...



I'm not at home ATM, but a mate works for Bunnings, I'll find out what the annual income is, when I get back.
I do agree with you regarding negative gearing, but the point im making is , it isn't only the rich that use the tax breaks.
Somewhat like the backflip Labor is doing, regarding franking credits for small parcels of shares held by low income earners.
The underlying inuendo that only rich people own shares or property, is a deception to aid change, how many Woolies and Westfarmers retail workers own shares? Most of them as part of their work package.
Of course rich people will own more, they have more money. I just get anoyed with the constant demonisation of anyone who owns anything, despite the endeavour and sacrifice they may have gone through to accumulate it.
Anyway I'm obviously out of step with mainstream, spend, spend, spend is the mantra of today, Rudd didn't sell it well at the time, but Billy has certainly got the message through. IMO
I definitely thought Labor's idea of using an income level as a cut off, has much more merit and credibility, than just saying anyone who owns something, ala shares, is rich.


----------



## Junior (28 March 2018)

Agree with the sentiment in this article....by punishing and targeting those with say $1m-$3m in super, they will just encourage more and more to fall into part pension eligibility.

If you've saved enough to avoid being on Government benefits you should be applauded, not insulted!



> *Malcolm Turnbull should defend self-funded retirees*
> Labor backflips on dividend imputations
> 
> by Jennifer Hewett
> ...


----------



## SirRumpole (28 March 2018)

Junior said:


> If you've saved enough to avoid being on Government benefits you should be applauded, not insulted!




Getting tax free super after 60 is a pretty big concession, and yet people still whinge about $1000 here and there.


----------



## PZ99 (28 March 2018)

@sptrawler I can pretty much agree with your comments there. I don't begrudge anyone for being rich - just for as long as they don't expect me to paddle their boat for them, it's all good.

I'll be a self funded retiree in 2020 and I won't be rich but I won't be holding my hand out either.

I just fight my own battles because that's how I was brought up.

Yes, most Woolies and Westfarmers workers are shareholders but I doubt they would qualify for the tax free status required to cash in franking credits. If anything, they were given the shares as a tax reduction strategy in the first place  

In fact most people don't even know what it all means.
Check this out >http://www.news.com.au/national/bre...l/news-story/f04f4064f945dfc21dc1d9e0d92fc514


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## Junior (28 March 2018)

SirRumpole said:


> Getting tax free super after 60 is a pretty big concession, and yet people still whinge about $1000 here and there.




I agree with you on this.  

I don't agree with the language the ALP uses and the insinuation that anyone who owns shares or has a SMSF is rich and therefore should pay more tax.  

The ability to receive a refund of franking credits has been around for 2 decades now and pensioners have planned based on these rules.  Yes, I recognise that it is excessive and needs to be unwound, however for many this is a big hit, so it should be approached cautiously and with consideration for the impact on self-funded retirees.


----------



## Country Lad (28 March 2018)

Well it seems the pensioners are now safe.  However, as a self funded retiree I am mightily pi$$ed off.

Most self funded retirees have worked to an economic strategy, taking into account all the tax and superannuation rules to have sufficient funds for a comfortable lifestyle without needing the public purse for support - no pensions, none of the health benefits pensioners get, no rent assistance etc etc and still pay tax on income.  Now that we are not dependent on government, Shorten wants to change the rules and put his hand deeper in my pocket.

I have always seen the franking credits as a type of withholding tax.  If entitled, we get that tax as a refund, if not entitled they keep it.  That was fair enough in my books.


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## sptrawler (28 March 2018)

Junior said:


> Agree with the sentiment in this article....by punishing and targeting those with say $1m-$3m in super, they will just encourage more and more to fall into part pension eligibility.
> 
> If you've saved enough to avoid being on Government benefits you should be applauded, not insulted!



The thing that really galls me is the smugness of people on a full taxpayer funded pension, criticising self funded pensioners getting a tax break, talk about the kettle calling the pot grimy ar$e.


----------



## Value Collector (28 March 2018)

Country Lad said:


> I have always seen the franking credits as a type of withholding tax.  If entitled, we get that tax as a refund, if not entitled they keep it.  That was fair enough in my books.




Franking credits and 50% capital gains tax discounts are important measures designed to prevent double taxation, Without them the shareholders will be unfairly taxed twice on their earnings.

eg, If a company earns $100, it will pay $30 in tax leaving $70 that can be paid as a dividend to the company owner/share holder, When that shareholder gets the $70 if you tax him on it, he may pay another $31.50 in tax.

Meaning that $100 company profit ends up being taxed at 61.5% by the time the share holder/owner get the profit in their pocket, that is simply not a fair tax rate.

By allowing the share holder to have the franking credit for the tax already paid at the company level it means the company profits just get taxed at the tax bracket of the individual share holder, which is a much fairer system.

-------------
Same with capital gains discount, the "capital gain" is often the result of the company retaining after tax profits and reinvesting them,

eg. IF company earns $100M, pays $30M in tax and retains $70Million, its market cap will probably increase by $70Million, when a long term shareholder sells and gets a "capital gain", its partly due to the after tax profit the company retained which has already been taxed at the company level, charging the investor tax on the full capital gain will result in double taxation.


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## Humid (28 March 2018)

sptrawler said:


> That's not really true, it is any average wage earner, who has their head screwed on.
> But you believe what you like, I know from working in a workshop most of my life, all the guys used negative gearing.
> The ones who did well, also bought shares in their non working wife's name also.




I need a job in this workshop.....

Pay off your own home
Have an investment property
Shares and the Mrs doesn’t have to work 

The time frame you suggest I would think they would of done better on the capital gain on the property rather than the tax break.
Interest only?


----------



## Junior (28 March 2018)

Value Collector said:


> Franking credits and 50% capital gains tax discounts are important measures designed to prevent double taxation, Without them the shareholders will be unfairly taxed twice on their earnings.
> 
> eg, If a company earns $100, it will pay $30 in tax leaving $70 that can be paid as a dividend to the company owner/share holder, When that shareholder gets the $70 if you tax him on it, he may pay another $31.50 in tax.
> 
> ...




I guess the issue which does need addressing is where so many shareholders are on a MTR of less than 30% (0% for pensioners) and claiming refunds.....a proportion of those company profits effectively aren't taxed at all.


----------



## Value Collector (28 March 2018)

Junior said:


> I guess the issue which does need addressing is where so many shareholders are on a MTR of less than 30% (0% for pensioners) and claiming refunds.....a proportion of those company profits effectively aren't taxed at all.




If a person is earning less than $18,000, its true the tax rate would effectively be zero on the portion of the companies profits paid as a dividend to that person.

But that is true regardless of where that persons first $18,000 comes from, if they earned $18,000 mowing lawns it would still be tax free, there is no reason earnings obtained by owning a partial interest in a company should be any different to earnings obtained mowing lawns. So the Franking credits are an efficient way of making sure each person is only taxed at their appropriate tax rate, and not double taxed.

Also, almost no company pays out 100% of earnings as a dividend, Most retain a large portion of after tax earnings, so that portion of earnings still gets the 30% tax paid on it regardless of the shareholders tax bracket.


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## SirRumpole (28 March 2018)

Value Collector said:


> So the Franking credits are an efficient way of making sure each person is only taxed at their appropriate tax rate, and not double taxed.




Double taxation is a bit of a furphy, when normal taxpayers are taxed on both income and spending, we are all double taxed anyway so I don't see why share income is any different.

Remember we are one of only three countries (+ New Zealand and Malta) where full dividend imputation exists at all.


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## moXJO (28 March 2018)

SirRumpole said:


> Double taxation is a bit of a furphy, when normal taxpayers are taxed on both income and spending, we are all double taxed anyway so I don't see why share income is any different.
> 
> Remember we are one of only three countries (+ New Zealand and Malta) where full dividend imputation exists at all.



Its already been explained a few times.


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## Value Collector (28 March 2018)

SirRumpole said:


> 1. Double taxation is a bit of a furphy, when normal taxpayers are taxed on both income and spending, we are all double taxed anyway so I don't see why share income is any different.
> 
> 2. Remember we are one of only three countries (+ New Zealand and Malta) where full dividend imputation exists at all.




1. People earning their money through investing also spend, so if you are saying “normal taxpayers” are double taxed, then without the franking credits the investors would be triple taxed.

Eg, investor would pay company level tax + personal level tax + spending related taxes, while a wage earner only paid the last two.

2. Other countries often have much lower flat rate taxes for dividends and capital gains.

For example I think the USA is 15% for dividends and capital gains, so that would limit total taxation to about our top tax bracket.

Removing franking credits and capital gains discount, in favor of he USA system would just mean low income earners pay more tax, high income earners would pay about the same.

So just remember removing the tax credits only hurts low income earners with investments, eg those trying to build savings or those of limited means trying to be partially self funded.


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## SirRumpole (29 March 2018)

Value Collector said:


> So just remember removing the tax credits only hurts low income earners with investments, eg those trying to build savings or those of limited means trying to be partially self funded.




I'm not saying imputation should be removed, just that taxpayers should be grateful that it exists at all, but that it allows high income earners a significant benefit and in these days of a budget deficit it can be wound back a bit for the sake of a financial saving for the budget.


----------



## Value Collector (29 March 2018)

SirRumpole said:


> I'm not saying imputation should be removed, just that taxpayers should be grateful that it exists at all, but that it allows high income earners a significant benefit and in these days of a budget deficit it can be wound back a bit for the sake of a financial saving for the budget.





Grateful that we don’t get double taxed? (or triple taxed if you include spending taxes).

That’s a bit like saying be grateful we don’t rob you, we should expect not to be robbed.

What do you think is a fair tax rate on earnings?

Just because an asset is owned under a company structure doesn’t mean you should have to pay more tax than some one who operates as a partnership or sole trader. 

People would go nuts if you raised the taxes on an individual to over 60%, or to 30% for a low income earner, yet just because we are organized as a company you expect us to be “grateful”

Not to mention the fact that without franking, if a company was owned by another company, then there would be triple tax,


----------



## tech/a (29 March 2018)

There is of course another way.

Over time become involved in ventures which will return a passive or semi passive income.
The “opportunities “ are endless.


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## SirRumpole (29 March 2018)

Value Collector said:


> What do you think is a fair tax rate on earnings?




A fair tax system is one where people actually pay tax not avoid it.

If more people/companies paid tax the overall rate could be lower.


----------



## Value Collector (29 March 2018)

SirRumpole said:


> A fair tax system is one where people actually pay tax not avoid it.
> 
> If more people/companies paid tax the overall rate could be lower.




Do you not think that many sole traders, partnerships and employees dodge tax? Why single out just the company structure to be double taxed?

the answer to your post is to enforce the tax law, not just say “oh well, better charge more tax to those willing to pay it or that one particular structure”.

Simply charging one lawn mowing group 60% vs 30% for another just because the first was a company structure but the second was a partnership is stupid.

Best way is to have a system where each persons earnings, what ever the source is, flow through to their personal tax brackets, the current system achieves that.


----------



## SirRumpole (29 March 2018)

Value Collector said:


> Do you not think that many sole traders, partnerships and employees dodge tax? Why single out just the company structure to be double taxed?




If you actually read my posts you will see that I said imputation should stay. But getting a refund of taxes you haven't paid is absurd. That it was the discussion is about.


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## Value Collector (29 March 2018)

SirRumpole said:


> But getting a refund of taxes you haven't paid is absurd. .




Who gets a refund for taxes they haven't paid?


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## SirRumpole (29 March 2018)

Value Collector said:


> Who gets a refund for taxes they haven't paid?




http://www.afr.com/personal-finance...es-financial-planners-respond-20180315-h0xj16



> The biggest losers from Mr Shorten's proposals *will be individuals who pay little or no tax, given that the ability to use franking credits to offset taxable income will remain intact.*


----------



## basilio (29 March 2018)

SirRumpole said:


> http://www.afr.com/personal-finance...es-financial-planners-respond-20180315-h0xj16




Very good analysis. Good find


----------



## Value Collector (29 March 2018)

SirRumpole said:


> http://www.afr.com/personal-finance...es-financial-planners-respond-20180315-h0xj16




Your claim was that there are people claiming back tax that they haven't paid, you said this 


> But getting a refund of taxes you haven't paid is absurd.




No one is claiming back tax they haven't paid.

Low income earners are simply claiming back the taxes *they have already paid* at the company level, but don't have to pay because their earnings are lower than the $18,000 tax free threshold.

It works like this.

1, The company earns $100, then pays $30 in tax.

2, The shareholder then gets a dividend of $70 cash + ($30 franking credit).

3, Shareholder declares the full $100 earnings on their Tax form ($70cash + $30 tax credit).

4, Government sees they have only earned $100, which is under the $18,000 tax-free threshold so they refund the $30 they had previously taken from the $100.

So the $30 refund is coming from the $30 tax they have already paid to the government on their $100 of earnings, but aren't required to pay because their total earnings are under the Tax free threshold.


*So your claim that they are getting a refund of money they haven't paid is bogus*


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## SirRumpole (29 March 2018)

Value Collector said:


> So your claim that they are getting a refund of money they haven't paid is bogus




Semantics. Someone over 60 getting $100k in super tax free also gets a refund of franking credits doesn't pass the pub test.


----------



## PZ99 (29 March 2018)

Value Collector said:


> Your claim was that there are people claiming back tax that they haven't paid, you said this
> 
> 
> No one is claiming back tax they haven't paid.
> ...



Thanks for articulating it well VC.

My question is this. What happens if my imputation credit is *lower* than the tax I paid?

I guess I don't get my $30 refund in cash? 

So the only way to get my refund is to avoid paying tax either through not working or from having a very good accountant 

To me that comes across as a message that conflicts with our need to mitigate budget deficits. 

What I'd like to know is why the Howard Govt handed out these cash refunds in the first place?


----------



## Value Collector (29 March 2018)

SirRumpole said:


> Semantics. Someone over 60 getting $100k in super tax free also gets a refund of franking credits doesn't pass the pub test.




if the earnings are meant to be tax free because of some rule regarding their super, then yes they should get a refund for the company tax paid.

I would need I better description of the actual situation you are describing.


----------



## Junior (29 March 2018)

In my view:  It is unfair (unsustainable) that workers might be paying income tax at a rate of up to 49%, whilst others over 60 years old with significant assets (in some cases) not only pay no income/earnings/CG tax AT ALL, they actually receive a cheque from the ATO each year.  Given the state of the Budget and the outlook for the Aus economy, this is simply too big a disparity to have some people on a very high rate and others receiving tax refunds.  This is especially true as the population ages and we have a bigger proportion of people in retirement.

The common rebuttal is that "I paid taxes all my working life, why should I pay any more now".  Nice in theory, but that assumes the Government actually set aside money during those years.  Our Government is incompetent and squandered the lot, so current day workers have to pay for the majority of retirees, unfortunately.


----------



## Value Collector (29 March 2018)

PZ99 said:


> Thanks for articulating it well VC.
> 
> My question is this. What happens if my imputation credit is *lower* than the tax I paid?
> 
> ...




You always get the benefit of the franking credit regardless of your tax bracket.

For example if you are in the top tax bracket of 45% then,

1, The full $100 ($70cash + $30 franking credit) Amount is added to your taxable income,

2, the tax office then says you owe $45 tax (45%) on these earnings.

3, you pay that $45 using ($30 franking credit) + $15 of the cash dividend you got.

------

The whole point is to pass the $100 of company earnings along to the shareholder / owner, and then tax it at that individuals personal tax rate.

Sometimes that personal tax rate is higher than the 30% company tax so they have to add in extra to bring up the total, other times the persons tax rate is lower, so they will get a refund of some of the tax they have already paid.


----------



## Value Collector (29 March 2018)

Junior said:


> In my view:  It is unfair (unsustainable) that workers might be paying income tax at a rate of up to 49%, whilst others over 60 years old with significant assets (in some cases) not only pay no income/earnings/CG tax AT ALL, they actually receive a cheque from the ATO each year.




What would be unfair to me, is if someone could earn up to $18,000 tax free in the form of Wages, Bank interest, distributions from partnerships etc etc and they get to keep the whole $18,000 tax free because its below the tax free threshold.

But, if I happen to earn $18,000 inside a company structure, I have to pay $5,400 tax and am only allowed to keep $12,600 of my $18,000 earnings.

This is the whole point of franking credits.

If my share of my companies profits only amounted to $18,000 I would get a company dividend of $12,600 and a franking credit of $5,400 for the tax I paid, Which I can then use to claim back $5,400 so I end up with my full $18,000 back, just like the people who earned their $18,000 from bank interest, and didn't have to pay tax due to it being below the tax threshold.


----------



## Junior (29 March 2018)

Value Collector said:


> What would be unfair to me, is if someone could earn up to $18,000 tax free in the form of Wages, Bank interest, distributions from partnerships etc etc and they get to keep the whole $18,000 tax free because its below the tax free threshold.
> 
> But, if I happen to earn $18,000 inside a company structure, I have to pay $5,400 tax and am only allowed to keep $12,600 of my $18,000 earnings.
> 
> ...




I understand very well how franking credits work.

I see your two examples as different categories of income.  Wages represent income from personal exertion and are taxed according to personal tax rates.  Dividends represent passive income to a shareholder, and are a distribution of company profits and should be taxed at least at the company tax rate.  

I think society in general would like large corporations in particular, to pay tax on their profits.  Not to pay the tax and have the whole amount paid back out to the individual shareholder.


----------



## Value Collector (29 March 2018)

Junior said:


> I understand very well how franking credits work.
> 
> I see your two examples as different categories of income.  Wages represent income from personal exertion and are taxed according to personal tax rates.  Dividends represent passive income to a shareholder, and are a distribution of company profits and should be taxed at least at the company tax rate.




What about Bank Interest? 

I don't see a difference between a person surviving on interest from a term deposit and a person with a few Woolworths shares.

I mean if you are prepared to let a depositor keep $18,000 of interest tax free, why not allow a shareholder to keep $18,000 of their company profits tax free?




> I think society in general would like large corporations in particular, to pay tax on their profits.  Not to pay the tax and have the whole amount paid back out to the individual shareholder.




Companies are just conduits through which shareholders can group together to invest in assets.

It makes perfect sense to me that the profits of those companies when they flow back through to the investors should be taxed at each investors personal tax rate.

Some share holders are small some are large, each should pay tax based on their personal situation.

*How do you want dividends taxed?
Do you think both the company tax, and the investors personal tax rate should be applied?
*
If so that means that company profits will be being taxed twice, once at the corporate level then again on the personal tax return.


----------



## HelloU (29 March 2018)

OT - Comment on tax free thresholds......for old peeps not on government pension the tax free threshold is about $32000 (this does NOT include any drawdowns from super accounts or earnings inside super). SAPTO.

If you work for a charity your tax free threshold is about $36000. ( $18000 odd of your wage can be put into a credit card that is then tax free cos nil FBT paid by charities.......they get this as well as the normal $18000 tax free threshold)

So even the simple things are not simple.


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## SirRumpole (29 March 2018)

Value Collector said:


> If so that means that company profits will be being taxed twice, once at the corporate level then again on the personal tax return.




So what ?


----------



## Junior (29 March 2018)

Value Collector said:


> I mean if you are prepared to let a depositor keep $18,000 of interest tax free, why not allow a shareholder to keep $18,000 of their company profits tax free?
> 
> 
> *How do you want dividends taxed?
> Do you think both the company tax, and the investors personal tax rate should be applied?*




I'm not opposed to the current system of passing through imputation credits to avoid ''double taxation''.  I think it's excessive where it results in a tax refund to an individual, who doesn't actually pay any earnings tax or income tax in the first place.  

As the population ages, and more and more of us are holding shares in a zero tax environment, the value of company tax being paid back out as refunds to individuals & SMSFs will continue to grow, to unsustainable levels in my view.


----------



## Value Collector (29 March 2018)

SirRumpole said:


> So what ?




Then it means that people whose businesses are organised as companies pay a lot more tax than people who are under other structures, eg sole operator or partnership, or earn interest from term deposits etc which isn't fair.


----------



## Value Collector (29 March 2018)

Junior said:


> I'm not opposed to the current system of passing through imputation credits to avoid ''double taxation''.  I think it's excessive where it results in a tax refund to an individual, who doesn't actually pay any earnings tax or income tax in the first place.
> 
> .




So you are just against the tax free threshold in general?

because giving an investor a $5400 refund of the franking credit on their $18,000 of company earnings, is no different to allowing a depositor to keep $18,000 of interest tax free.

eg. $18,000 tax free interest is exactly the same as $12,600 cash dividend + $5400 refund of franking credits.

Both options are simply allowing the person to receive their first $18,000 of earnings tax free.


----------



## Junior (29 March 2018)

Value Collector said:


> So you are just against the tax free threshold in general?




Absolutely not!!!

I don't think anyone here has proposed to completely remove the imputation credit system.  The discussion is around the situation where an individual (usually retired or not working) or SMSF receives a tax refund of excess franking credits.

Where someone receives $18,000 of interest or dividends, neither one of those individuals would pay any income tax, which is as it should be.  The discussion is around whether the shareholder should receive a tax refund of franking credits for tax already paid by the company, at company rates.

As Sir Rumple pointed out, it's all in the semantics.  You see it as though company tax is one and the same as personal tax...but it's not.  They are a different set of tax rates.  Companies pay a flat rate and individuals pay based on thresholds.


----------



## Value Collector (29 March 2018)

Junior said:


> Where someone receives $18,000 of interest or dividends, neither one of those individuals would pay any income tax, which is as it should be.  The discussion is around whether the shareholder should receive a tax refund of franking credits for tax already paid by the company, at company rates.




You just don't understand how the calculation is done, that may be why you are against it.

When you receive a $12,600 fully franked dividend it comes with a $5,400 franking credit,

$12,600 + $5400 franking = $18,000.   

The Full $18,000 is added to your tax return as taxable income.

Then because the total amount of your earnings is only $18,000, the tax office declares that you don't need to pay any tax, So they hand you back the $5,400 they had already deducted from you.

you then have the $12,600 cash from dividend, + the $5,400 refund from the franking credit which together = $18,000

So you end up in exactly the same situation as a person who earned $18,000 interest and didn't get charged tax, you aren't getting anything extra, you are only getting your tax free threshold allotment just like anyone else

-----------------------

If you don't want people to be able to claim back a refund for their franking credits, you are basically saying that $18,000 earned inside a company is some how different to $18,000 earned as bank interest, business partnership, wage etc.


----------



## macca (29 March 2018)

Hi VC,
I admire your persistence, it is obvious that you are the only one in this discussion that actually knows what they are talking about.

The bottom line is that income from all sources for the tax year is pooled, the total tax payable is calculated, the total tax already paid by the tax payer, whether it is paye, provisional tax or dividend franking is totalled.

The tax payer is then either given a refund or sent a bill, simple really.


----------



## Value Collector (29 March 2018)

macca said:


> The bottom line is that income from all sources for the tax year is pooled, the total tax payable is calculated, the total tax already paid by the tax payer, whether it is paye, provisional tax or dividend franking is totalled.
> 
> The tax payer is then either given a refund or sent a bill, simple really.




Exactly, Most armchair observers fail to see that when you receive $70 in your bank from a fully franked dividend, they don't add $70 to your taxable income at the end of the year, they add the full $100 ($70 + $30 franking credit) to your taxable income.

of course when it comes time to pay that tax owing they deduct the franking credit you have already paid, which for low income earners may result in a refund, for higher income earners the franking credit only partially offsets the tax liability owing.

As I have said, its just about putting the $100 onto the investors tax return and paying what ever rate that person is at.

-----------

Also, this is only for earnings paid out as dividends, the government will keep the full 30% company rate for any earning that are retained and not paid as dividends,


----------



## SirRumpole (29 March 2018)

Value Collector said:


> Then it means that people whose businesses are organised as companies pay a lot more tax than people who are under other structures, eg sole operator or partnership, or earn interest from term deposits etc which isn't fair.




Do you really think that someone getting tax free super of say $100k per year (no dependents) should get a refund on franking credits when someone working, trying to raise a family and earning $100k would pay $24k in tax is fair ?


----------



## Wysiwyg (29 March 2018)

The thing with the fairness bit is it was okay and not unfair up until now when Labor claims it is now unfair. That is unfair.


----------



## Value Collector (29 March 2018)

SirRumpole said:


> Do you really think that someone getting tax free super of say $100k per year (no dependents) should get a refund on franking credits when someone working, trying to raise a family and earning $100k would pay $24k in tax is fair ?




The question isn't whether they should get their franking credits, the question is whether they should qualify for the $18,000 tax free threshold and lower tax brackets at all. 

If you are allowing people to keep the $18,000 tax free threshold for other sources such as bank interest, there is no reason not to allow a refund for franked dividends.

eg. if you are ok with some one keeping $18,000 of bank interest tax free, you shouldn't have a problem with a person that received a franked $12,600 dividend getting the $5400 tax the paid back.

Both of them end up with $18,000 of earnings tax free.

------------------------

I am not an expert on super, but Super is taxed isn't it? (albeit at low rates), They probably were taxed on the money they contributed when they made contributions, and have been taxed on the supers earnings over the years.

Not all of that "$100K per year" is earnings, a chunk of it is generally principle, if they are simply withdrawing principle why would they be taxed? you don't get charged tax to withdraw money from a bank account, you only get taxed on the earnings.


----------



## Value Collector (29 March 2018)

Wysiwyg said:


> The thing with the fairness bit is it was okay and not unfair up until now when Labor claims it is now unfair. That is unfair.




I just think they don't understand the system, or they see it as easier to demonise "share holders" earning dividends, rather than "depositors" earning interest.

but as I explained both situations are identical.


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## SirRumpole (29 March 2018)

Value Collector said:


> eg. if you are ok with some one keeping $18,000 of bank interest tax free, you shouldn't have a problem with a person that received a franked $12,600 dividend getting the $5400 tax the paid back.




Someone earning $18,000 in bank interest as their only income qualifies as a low income earner and pays no tax because they earn very little money.

That's a lot different to someone earning $100k and paying no tax.


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## Junior (29 March 2018)

Value Collector said:


> You just don't understand how the calculation is done, that may be why you are against it.
> 
> When you receive a $12,600 fully franked dividend it comes with a $5,400 franking credit,
> 
> ...




I know the calculation very well, thanks VC.  And yes, that would be the situation for an individual if all they had was either dividend income OR interest income, at that exact level you have quoted.  The reality is that the majority of shareholders would also have some interest income or other income as well, and the imputation credits would still be of value, as they would still count as 'tax paid' and therefore allow the individual to generate income over and above the $18,000 before they would need to pay any income tax on top of tax the company has already paid.

To answer your last question, Yes, I think that those two types of income are different, as the dividend represents a portion of company profits, and should be taxed at the company rate of 30% (hopefully lower in future).

Interest income is interest paid to you by the bank, on the balance of your cash savings.....nothing to do with company profits, it is income generated by a different type of asset.  It is taxed at MTR of the individual, or whichever entity earns the interest.


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## Junior (29 March 2018)

The confusion is where you originally stated someone receives a dividend of $18,000.....well they haven't received $18k.  They have received $12,600.  

The $5,400 is an imputation credit which they won't necessarily receive, in terms of a cash payment.....this is what we are discussing!


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## tech/a (29 March 2018)

SirRumpole said:


> Do you really think that someone getting tax free super of say $100k per year (no dependents) should get a refund on franking credits when someone working, trying to raise a family and earning $100k would pay $24k in tax is fair ?




Yes of course it’s fair.

He was in the same place as struggle street at some time!


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## SirRumpole (29 March 2018)

tech/a said:


> Yes of course it’s fair.
> 
> He was in the same place as struggle street at some time!




Can't really make generalised comments on an issue like this. If you earn $x from whatever sources you should pay tax on it.


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## Value Collector (29 March 2018)

SirRumpole said:


> That's a lot different to someone earning $100k and paying no tax.




I am saying two people in the same situation 

eg Identical people drawing the same superannuation,  

Person A - earns $18,000 bank interest pays no tax

Person B - Earns $18,000 inside a company, gets $12,600 dividend with a $5,400 franking credit.

*Would you allow person A to keep the full $18,000 Interest tax free, while refusing to allow person B to claim back their $5,400 tax credit?*

If you do, you are allowing person A to have $18,000 to spend, while only allowing person B to have $12,600.

That would be crazy considering they are in identical positions.


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## Wysiwyg (29 March 2018)

Now I feel I am working more for society rather than myself more than ever. Remember the harder one works and as a duh, byproduct of harder work the more money earned, the more you owe society. I don't know what fair is anymore. Better off sittin' on ur ass and get other people to provide for you.


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## tech/a (29 March 2018)

SirRumpole said:


> Can't really make generalised comments on an issue like this. If you earn $x from whatever sources you should pay tax on it.




Why not?

If you can take advantage of the law which is current why shouldn’t you.
Super is based on the premise that eventually we have many self funded.
If over time you place yourself in that position then why shouldn’t you be able to maximise your position.


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## Value Collector (29 March 2018)

Junior said:


> and the imputation credits would still be of value, as they would still count as 'tax paid' and therefore allow the individual to generate income over and above the $18,000 before they would need to pay any income tax on top of tax the company has already paid.




That paragraph makes we think you don't really understand the process?





> Interest income is interest paid to you by the bank, on the balance of your cash savings.....nothing to do with company profits, it is income generated by a different type of asset.  It is taxed at MTR of the individual, or whichever entity earns the interest.




whats the difference? 

Both are just earnings you get by deploying capital productively.

-----------------------

If you don't think company profits should be taxed based on the investors MTR, then how do you propose to get around double taxation?

The only way would be to make dividends not taxable at the personal level, so they pay the 30% company rate and then any dividends paid from Net profit after tax get passed onto the investor tax free.


----------



## Value Collector (29 March 2018)

Junior said:


> The confusion is where you originally stated someone receives a dividend of $18,000.....well they haven't received $18k.  They have received $12,600.
> 
> The $5,400 is an imputation credit which they won't necessarily receive, in terms of a cash payment.....this is what we are discussing!




I never said they received a dividend of $18,000. I said their share of the companies distributed earnings were $18,000.

the process works like this.

1, Company earns $18,000 in share holder profits.

2, Company pays $5,200 in tax

3, Company pays $12,600 as dividend with $5,400 franking credit = $18,000

4, Investor declares $18,000 income on tax return.

5, tax office says no tax is payable on the $18,000

6, Tax office hands back the $5,200 franking credits

7, Investor now has $18,000 to spend, just as if they earned $18,000 in bank interest.


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## SirRumpole (29 March 2018)

> If over time you place yourself in that position then why shouldn’t you be able to maximise your position.




People can always maximise their position according to the law, that doesn't mean the law can't or shouldn't be changed in different economic conditions. Tax law has changed many times over time.


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## Skate (29 March 2018)

Value Collector said:


> I never said they received a dividend of $18,000. I said their share of the companies distributed earnings were $18,000.
> 
> the process works like this.
> 
> ...




A simple explanation that's spot on the mark..

An extract from: https://www.fool.com.au/2018/03/16/why-shorten-is-wrong-and-right-on-dividends/ explains it in a little more detail.

Consider three people, all of whom have SMSFs in pension phase, and who — according to the current tax rules — pay 0% tax: 

1. Banking Betty, 
2. Rental Richard and 
3. Dividend Davina.

(a) Banking Betty deposits $100,000, and earns $2,000 each year in interest. Betty doesn’t pay any tax.

(b) Rental Richard has a $100,000 property that pays him $2,000 each year in rent. Richard doesn’t pay any tax.

(c) Dividend Davina buys $100,000 worth of shares that earned a profit of $2,000. The company paid tax of $600, so Davina gets $1,400. Davina doesn’t pay any tax.

See the difference here? 

Because Davina’s investment is in the form of shares in a company, she gets less than the other two. Even though she’s not supposed to pay any tax, the company paid tax, so she gets less.

Under current rules, she’d get the $600 back, delivering on the current government policy of a 0% tax rate, and equalising the return for each of those investors.

*CONCLUSION:* Bill Shorten, in effect, is penalising people for owning shares.


----------



## SirRumpole (29 March 2018)

Skate said:


> *CONCLUSION:* Bill Shorten, in effect, is penalising people for owning shares.




Based on your analysis I'd say you are correct. But Shorten is obviously playing to his electorate who most likely aren't big share owners just like the Libs played to theirs by wantonly extravagant schemes like 15% tax on super contributions and tax free super for over 60's and the franking rebate.


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## Wysiwyg (29 March 2018)

SirRumpole said:


> Based on your analysis I'd say you are correct. But Shorten is obviously playing to his electorate who most likely aren't big share owners just like the Libs played to theirs by *wantonly extravagant schemes like 15% tax on super contributions and tax free super for over 60's and the franking rebate*.



Resorting to humour in this debate or do you seriously believe that everyone should be government supported after their working life?


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## SirRumpole (29 March 2018)

Wysiwyg said:


> Resorting to humour in this debate or do you seriously believe that everyone should be government supported after their working life?




Of course not but an income of $100k + super tax free is putting an unnecessary burden on those still working to pay for it.


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## Bill M (29 March 2018)

Skate said:


> *CONCLUSION:* Bill Shorten, in effect, is penalising people for owning shares.



Yes 100% correct. Currently the wife and I are self funded, maybe we should put all of our $$$ into cash and get a measly 2%. Then draw it down, spend up big on holidays, buy new cars and blow the lot. When we turn 65 put our hands out and get free public money and health coverage for the rest of our lives at the publics/governments expense, is this what that D!CKHEAD SHORTEN wants? No brains that bloke, sorry.


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## lindsayf (29 March 2018)

Bill M said:


> Yes 100% correct. Currently the wife and I are self funded, maybe we should put all of our $$$ into cash and get a measly 2%. Then draw it down, spend up big on holidays, buy new cars and blow the lot. When we turn 65 put our hands out and get free public money and health coverage for the rest of our lives at the publics/governments expense, is this what that D!CKHEAD SHORTEN wants? No brains that bloke, sorry.



No need to apologise for stating a fact


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## Toyota Lexcen (29 March 2018)

yes you should Bill M, i think the pension for couple about 850/wk


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## luutzu (29 March 2018)

sptrawler said:


> You've got a lot to thank your Dad for, firstly he was a business owner, which gave you the frame of mind not to be scared of owning your own business.
> 
> Secondly he obviously showed you that owning a business, wasn't all pi$$ and skittles.
> 
> ...




I drives a Suzuki Swift. Grey, plain model. And I like it too. Dam it! 

It's a manual so there's some manliness in it I guess. 

btw, why so against higher education? I know it's mostly shite but it does do a lot of good, especially for those from working class/poor background. And for those luckier ones who doesn't really need it to get a higher paying job, they might enroll into one or two electives, get assigned a weird book or two and could change their life (for the better). 

The cost is practically nothing. It's a lot cheaper than a year in juvee. And the worst that could come from sending kids there is that they end back on a "lowly" job but would have learn a thing or two, read a few good books and put it to use here and there.


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## Wysiwyg (29 March 2018)

SirRumpole said:


> Of course not but an income of $100k + super tax free is putting an unnecessary burden on those still working to pay for it.



Okay I do see your point that at a certain level, income doesn't need tax relief. Introducing  thresholds would work do you think?


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## SirRumpole (29 March 2018)

Wysiwyg said:


> Introducing thresholds would work do you think?




Yep.


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## luutzu (29 March 2018)

SirRumpole said:


> So what ?




I'm beginning to think you're a commie Rumpole. 

Reading the ABC for news... now this thing against corporate (no)taxes.

Was going through an annual report where another company made "a loss" for the year. But its operating cash, cash that it collects for Goods and services, was positive... really, massively positive. 

So why or how is it making a loss and the gov't will now have to refund the tax it collected during the year. 

It's in the non-cash "impairment" of its assets. Are the assets damaged? Got stolen, burnt down? How the heck do you claim $800,000,000 in "impairment"? 

Because business aren't as good lately and those assets don't earn as much so they're worth less, i.e. "impaired". 

I'm pretty sure I understand and interpret that negative "expense" correctly.


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## SirRumpole (30 March 2018)

luutzu said:


> I'm beginning to think you're a commie Rumpole.




Not as much as you comrade.


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## Sir Burr (30 March 2018)

Value Collector said:


> the process works like this.
> 
> 1, Company earns $18,000 in share holder profits.
> 
> ...




How about:
3, Company pays $18,000 as dividend with $0 franking credit = $18,000


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## Junior (30 March 2018)

Value Collector said:


> That paragraph makes we think you don't really understand the process?




I understand the process very well.  You are ridiculing me to strengthen your point of view.

You've decided all income is the same and all income should be taxed at an individual's marginal tax rate.  It is not that simple in reality, and you are ignoring this fact to support your personal view.

- Corporate profits are taxed at 30%
- Individual tax rates operate in tax brackets, plus medicare levy, less tax offsets in some instances
- Super in accumulation is taxed at 15%
- Super in pension phase, taxed at 0%
- Trust income; distributed to beneficiaries and taxed based on the individual or entities tax rate

My point is, your persistent argument that all income is the same and is all taxed at a personal level is simply not based on how our tax system works.  It's more complicated than that, as you know.

As it stands, yes, all imputation credits pass through to the individual or shareholding entity, and where that entity is on a marginal rate below 30% they are refunded the tax already paid.  This is unique to Australia and is not generally how company tax is treated in the majority of jurisdictions.


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## moXJO (30 March 2018)

Junior said:


> .  This is unique to Australia and is not generally how company tax is treated in the majority of jurisdictions.



Other jurisdictions have vastly differing taxes and incentives.


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## Bill M (30 March 2018)

moXJO said:


> Other jurisdictions have vastly differing taxes and incentives.



Exactly, like New Zealand for example. It doesn't matter how much assets you have accumulated in your lifetime, the NZ Govt. will still pay you a pension at retirement.


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## Value Hunter (31 March 2018)

Scumbag politicians talking about fairness is the height of hypocrisy. They gouge the public purse for extravagant pensions for only a very brief period of service https://www.smh.com.au/politics/fed...figure-pensions-for-life-20160304-gna6c1.html while meanwhile they want to clamp down on franking credit refunds to self funded retirees who typically have a fraction of the income their fat cat political pension provides. If they want to plug the deficit why don't they set an example and start with their own fat cat public pensions which are costing taxpayers tens of millions.

Besides measures like this never raise the forecast tax revenue numbers they expect because they never accurately model the markets counter-reactions. Its not like people and companies will sit there and take it lying down. If the proposed labour changes are implemented a combination of things could happen including:
-An increase in share buybacks and capital returns by companies
-Bringing forward dividend payments by paying large special one off dividends before the implementation date of such changes.
-A lowering of dividend payout ratios in favour of reinvesting more profits for growth.
-Investors shifting their investment allocations and weighting more towards other asset classes such as property (pushes up house prices further), international shares (capital that could be going to Aussie companies), debt securities, etc.

Labour's proposal is one of the dumbest and most short sighted ideas I have seen for a while.


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## McLovin (31 March 2018)

Junior said:


> As it stands, yes, all imputation credits pass through to the individual or shareholding entity, and where that entity is on a marginal rate below 30% they are refunded the tax already paid.  This is unique to Australia and is not generally how company tax is treated in the majority of jurisdictions.




Bingo. The purpose of franking credits was to ensure that shareholders were *not taxed twice*, not to make it possible for companies to pay no tax on a portion of their profits, which the current system in effect does.


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## Value Hunter (31 March 2018)

Income taxes (especially corporate income taxes) are an economically distortive, difficult to define and easy to cheat and generally idiotic taxes to begin with. To the extent that we should even have taxes (a debate for another day) they should be focused on consumption (put up the GST), financial transactions (every bank transfer or credit card payment for example could have a 0.25% levy that goes to the government), the unimproved value of land, etc. 

Besides McLovin if you push self funded retirees into poverty by taxing them more, guess who they are going to go to for a handout? That's right, they will be lining up at centrelink (a.k.a. asking the taxpayers for a handout), as for rich people no longer getting the franking credit refunds, they will just shift their investment mix away from australian dividend paying shares into other investments. Do you really think its going to provide much revenue to government coffers? It reminds me about Kevin Rudd's projections about the mining super profits tax. After it got watered down to the MRRT how much did actually raise? The answer is peanuts.


----------



## SirRumpole (31 March 2018)

Value Hunter said:


> they will just shift their investment mix away from australian dividend paying shares into other investments.




For every seller of Aus shares there must be a buyer. Zero sum game. A chance for others to get good value.


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## willy1111 (31 March 2018)

Thinking about the whole concept a bit further.

The most affected would be those with an SMSF in pension mode. Say $1m in shares so don't qualify for any gov pension, receiving say 4% full franked dividends, so about $40k which  would come with about $17k of franking credits which currently get refunded but won't  under Billys proposal.

It is one train of thought that the SMSF could sell down $17k worth of shares at tax time to replace the loss from the franking credit refund. Assuming no capital growth this would take about 58 yrs to deplete the capital, which  would be beyond the life expectancy.

With long term capital growth rates about 4-5%, 1.7% could be sold down each year and the capital and dividends would still continue to grow each year.

Not popular but just an alternate view.


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## Smurf1976 (31 March 2018)

Thinking about all this from the perspective of what to invest in, it would seem to be a definite negative for Australian shares which provide a large portion of returns via franked dividends. They become a less attractive investment.

It might increase demand for growth stocks although that seems less certain given the alternatives of real estate or international markets.

So whilst I’m not running a SMSF and  my marginal tax rate is am more than the company tax rate there’s still an effect in that I’d be wise to avoid Aussie dividend paying stocks due to political risk.

In a broader sense I see the negatives but it might turn out well if (and that’s a big “if”) it leads to a greater focus on growth rather than dividends in terms of how companies go about their real business.


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## Value Hunter (31 March 2018)

SirRumple for every seller there must be a buyer yes, but those buyers might be in a different tax situation, they could be overseas investors, or they could be investors on high income tax rates who are not affected by the proposed legislation, etc therefore my point stands that the government may not raise the tax revenue they expect. 

Also its only a zero sum game when referring to the secondary market, if we are looking at the market for raising capital (i.e. IPOs and rights issues) this proposed change could lead to a decline in the total amount of capital being raised in the stock market via rights issues, share placements and IPOs.


----------



## SirRumpole (31 March 2018)

Value Hunter said:


> SirRumple for every seller there must be a buyer yes, but those buyers might be in a different tax situation, they could be overseas investors, or they could be investors on high income tax rates who are not affected by the proposed legislation, etc therefore my point stands that the government may not raise the tax revenue they expect.
> 
> Also its only a zero sum game when referring to the secondary market, if we are looking at the market for raising capital (i.e. IPOs and rights issues) this proposed change could lead to a decline in the total amount of capital being raised in the stock market via rights issues, share placements and IPOs.




You may be right but it seems a small issue that people will adjust to over time.


----------



## Bill M (31 March 2018)

willy1111 said:


> With long term capital growth rates about 4-5%, 1.7% could be sold down each year and the capital and dividends would still continue to grow each year.



Sounds good but this is not happening. The All Ords is where it was 11 years ago, has not moved for so long. A passive investment in that option means you are depleting capital very fast rate. Aussie shares under the Labor proposal will plummet because who in their right mind would take on such a high risk with a new much lower return? No Thanks.


----------



## willy1111 (31 March 2018)

Bill M said:


> Sounds good but this is not happening. The All Ords is where it was 11 years ago, has not moved for so long. A passive investment in that option means you are depleting capital very fast rate. Aussie shares under the Labor proposal will plummet because who in their right mind would take on such a high risk with a new much lower return? No Thanks.




Oh Bill, but when you run out of capital then you can get the aged pension 

Its a scary proposition eating into the capital, its like giving up part of your security blanket especially with the unguaranteed returns shares offer...but they suggest the capital is meant to be consumed during retirement, not passed on as part of ones estate.


----------



## McLovin (31 March 2018)

Value Hunter said:


> Income taxes (especially corporate income taxes) are an economically distortive, difficult to define and easy to cheat and generally idiotic taxes to begin with. To the extent that we should even have taxes (a debate for another day) they should be focused on consumption (put up the GST), financial transactions (every bank transfer or credit card payment for example could have a 0.25% levy that goes to the government), the unimproved value of land, etc.
> 
> Besides McLovin if you push self funded retirees into poverty by taxing them more, guess who they are going to go to for a handout? That's right, they will be lining up at centrelink (a.k.a. asking the taxpayers for a handout), as for rich people no longer getting the franking credit refunds, they will just shift their investment mix away from australian dividend paying shares into other investments. Do you really think its going to provide much revenue to government coffers? It reminds me about Kevin Rudd's projections about the mining super profits tax. After it got watered down to the MRRT how much did actually raise? The answer is peanuts.





...And companies shouldn't pay tax because...


----------



## Value Hunter (1 April 2018)

Actually McLovin I am not only opposed to company tax I am opposed to all income taxes. I think profits, wages, etc should not be taxed. Why tax productivity? If you tax something you tend to get less of it, tax income and you will get less of it being generated.

Assuming for a minute that any form of tax should exist in the first place (we will leave aside the anarachy debate for now), if you increase land taxes (put up the land tax on the unimproved value of land) you will get less property speculation and if you increase consumption taxes (e.g. put up the GST to 20%) people might consume less. If people consume less they will save more, higher savings in the long term leads to higher production and higher growth and then flowing from that higher consumption. 

Why punish people for being industrious and generating more income?


----------



## SirRumpole (1 April 2018)

Value Hunter said:


> and if you increase consumption taxes (e.g. put up the GST to 20%) people might consume less.




Oh yes, that will be great for business won't it  ?


----------



## Value Hunter (1 April 2018)

SirRumpole you ignored the part where I said income taxes and corporate taxes should be scrapped so most people and businesses would still have more money to spend despite higher GST.


----------



## willy1111 (1 April 2018)

McLovin said:


> ...And companies shouldn't pay tax because...




A company is an ownership structure.

They are owned by shareholders, so should only be taxed at the tax rate of the share owner when passed through to the shareholder when a dividend is paid.

Companies are taxed at the company tax rate to prevent the owners hoarding money in the company without paying tax. Otherwise owners could just compound earnings tax free indefinitely. The penalty for not distributing all the profit is the company tax rate...aka 30% ish or slightly less for small business, this puts revenue in the government coffers now which is what the government want.

Trusts are taxed at the highest marginal rate if all the profit isn't distibuted, so it pretty much always is distributed and taxed in the hands of the beneficiaries, for an individual beneficiary they get the marginal rate and tax free portion is a benefit. If one has to pay PAYG instalments through out the year, this is refunded if the instalments exceed the tax obligation.

A business run as a sole trader or partnership, the profit is taxed at the marginal rate of the owner of the business who can take advantage of the tax free portion. If one has to pay PAYG instalments through out the year, this is refunded if the instalments exceed the tax obligation.

Employees who have tax witheld from their income through out the year are entitled to a tax refund if they have had more witheld than their obligation.

If Bills proposal comes in, the company structure looks to me to be disadvatageous from a tax perspective as opposed to the other structures, as the owner isn't refunded the excess tax witheld if their tax obligation is less, ie they get no benefit from the tax free portion or lower marginal rates.


----------



## Toyota Lexcen (1 April 2018)

noel whittaker has a good write up in age on 3 scenarios 

full pension looking good


----------



## McLovin (1 April 2018)

willy1111 said:


> A company is an ownership structure.
> 
> They are owned by shareholders, so should only be taxed at the tax rate of the share owner when passed through to the shareholder when a dividend is paid.




No. A company is a legal person. It's far more than an ownership structure. When it makes a profit or buys an asset, it belongs to the company, not to the shareholder. No liability to shareholders exists for accumulated profits until a dividend is declared. If the argument that it is nothing more than an ownership structure had any weight, then the company's profits should be taxed at the shareholder's tax rate regardless of whether they are paid out as a dividend, in the way a unit trust is taxed.


----------



## willy1111 (1 April 2018)

A


McLovin said:


> No. A company is a legal person. It's far more than an ownership structure. When it makes a profit or buys an asset, it belongs to the company, not to the shareholder. No liability to shareholders exists for accumulated profits until a dividend is declared. If the argument that it is nothing more than an ownership structure had any weight, then the company's profits should be taxed at the shareholder's tax rate regardless of whether they are paid out as a dividend, in the way a unit trust is taxed.



A Company is not a person.

It is a separate legal entity, at its core created as an ownership structure for the BENEFIT of the owners/shareholders and has the advantage of limited liability etc, etc.

When the company sells the asset/makes a profit or the company is wound up, who does the money ultimately go to. The shareholders/owners at the discretion of the directors who are elected by the shareholders/owners.

A trust is another ownership structure, the trustee controls the asset/business for the benefit of the owner.


----------



## SirRumpole (1 April 2018)

willy1111 said:


> When the company sells the asset/makes a profit or the company is wound up, who does the money ultimately go to.




What about shares that have been bought back by the company ? How can they be returned to people who no longer own them if the company is wound up ?


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## McLovin (1 April 2018)

willy1111 said:


> A
> 
> A Company is not a person.




*legal person*
Legal person refers to a non-human entity that is treated as a person for limited legal purposes--corporations, for example. Legal persons can sue and be sued, own property, and enter into contracts.  In most countries, legal persons cannot vote, marry, or hold public office. Most countries also excluse legal persons from holding natural or constitutional rights, such as the freedom of speech.


----------



## willy1111 (1 April 2018)

SirRumpole said:


> What about shares that have been bought back by the company ? How can they be returned to people who no longer own them if the company is wound up ?




Ummm...shares can't be bought back from a company that has been wound up. Once wound up, thats it it's finished.

If a company was to be wound up, all the assets would be sold/turned into cash and then remaining cash distributed to share holders as return of capital creating a capital gain for shareholders. Or it might be paid as dividends.


----------



## willy1111 (1 April 2018)

S


McLovin said:


> *legal person*
> Legal person refers to a non-human entity that is treated as a person for limited legal purposes--corporations, for example. Legal persons can sue and be sued, own property, and enter into contracts.  In most countries, legal persons cannot vote, marry, or hold public office. Most countries also excluse legal persons from holding natural or constitutional rights, such as the freedom of speech.




Good technical definition...personally I prefer to refer to it as entity as it can't do anything on its own, it has to be controlled by a real natural person to do any of the things you describe.


----------



## willy1111 (1 April 2018)

McLovin said:


> If the argument that it is nothing more than an ownership structure had any weight, then the company's profits should be taxed at the shareholder's tax rate regardless of whether they are paid out as a dividend, in the way a unit trust is taxed.




With a 100% payout ratio that is exactly what would happen.

It would be a further administrative  burden on the company to apply individual tax rates to each shareholder,  much easier to apply a flat rate of tax, less call it company tax.

Apply no witholding to the dividend and let the ato sort it out when individual returns are lodged...how many would say they didn't have the cash to pay the tax bill. So how about we get the company to withold some, same as we do with employees and payg instalments. Exactly what company tax does now.

With 100% payout ratio, the company doesn't have any retained earnings to grow/invest in the business, so they could do a capital raising.

I like the system the way it is and think it is much fairer than the proposals. 

The tax free pensions for those over 60 is what I believe needs addressing, that could be 20-50 years of income untaxed. Which is probably the ones going to be most hit by the proposals, but why not go after it directly rather than indirectly.


----------



## McLovin (1 April 2018)

willy1111 said:


> S
> 
> 
> Good technical definition...personally I prefer to refer to it as entity as it can't do anything on its own, it has to be controlled by a real natural person to do any of the things you describe.




It's not a definition it's a real legal concept that's been in use for the better part of 200 years. The whole principle of limited liability flows from it. It's the difference between prosaic discussions on the internet and the real world.


----------



## willy1111 (1 April 2018)

McLovin said:


> It's not a definition it's a real legal concept that's been in use for the better part of 200 years. The whole principle of limited liability flows from it. It's the difference between prosaic discussions on the internet and the real world.




It was always referred to as entity rather than person when I studied it at Uni.

I understand that limited liability is a major benefit of company structures but it is for the benefit of limiting liability of the shareholder's/owners of the company which comes back to my point that companies are an ownership structure for the benefit of the shareholders/owners.


----------



## Junior (2 April 2018)

willy1111 said:


> The tax free pensions for those over 60 is what I believe needs addressing, that could be 20-50 years of income untaxed. Which is probably the ones going to be most hit by the proposals, but why not go after it directly rather than indirectly.




Agree with this. Should have done this instead of the $1.6mill cap which has just added more complexity to the system.


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## SirRumpole (2 April 2018)

Junior said:


> Agree with this. Should have done this instead of the $1.6mill cap which has just added more complexity to the system.




Imagine the outrage if Labor tried this though ? It already a national disaster that they want to claw back a few refunds from the mostly well heeled, if they proposed taxing super the media outcry would be heard on the moon.


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## McLovin (2 April 2018)

willy1111 said:


> It was always referred to as entity rather than person when I studied it at Uni.
> 
> I understand that limited liability is a major benefit of company structures but it is for the benefit of limiting liability of the shareholder's/owners of the company which comes back to my point that companies are an ownership structure for the benefit of the shareholders/owners.




It doesn't matter what you call it – company, corporation, enterprise, concern – it's a legal person in the eyes of the law. That is a legal concept that can extended to all sorts of structures.

The assets and liabilities of the company are owned by the company, not shareholders. Company tax on profits is a liability that falls on the company, not shareholders. If the intent was to create look-through taxation to the shareholder, which seems to form the basis of what's being argued, then profits would be distributed, regardless of whether cash is paid out, and there would be no need for company tax at all.

The imputation system was created to prevent double taxation, not to prevent taxation.


----------



## Value Hunter (2 April 2018)

Like I said before I'll take Labour's argument seriously when they eliminate their fat cat political pensions, which in other words is never. 

We need to encourage people to be financially self sufficient in old age. If we keep attacking the super system (which the proposed reform does in an indirect way) people are less likely to save for retirement and more likely to rely on the government aged pension, thereby negating the impacts of any potential extra tax revenue raised. Most young people already have no confidence in the super system and refuse to make extra voluntary contributions to their super because they expect continual government tampering. This latest labour proposal further undermines confidence in the superannuation system as well as undermining confidence in capital markets and the economy more generally. 

Besides Australia's problem does not stem from a lack of tax revenue (there is more than enough tax revenue), rather it stems from waste, corruption and overspending. We need to slash government spending rather than choking the economy by imposing even more taxes on an already highly taxed society.


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## SirRumpole (2 April 2018)

Value Hunter said:


> If we keep attacking the super system (which the proposed reform does in an indirect way) people are less likely to save for retirement and more likely to rely on the government aged pension,




Living in poverty on the aged pension ? I don't think that is attractive to most people.


----------



## luutzu (2 April 2018)

McLovin said:


> ...And companies shouldn't pay tax because...




"jobs"


----------



## luutzu (2 April 2018)

Value Hunter said:


> Actually McLovin I am not only opposed to company tax I am opposed to all income taxes. I think profits, wages, etc should not be taxed. Why tax productivity? If you tax something you tend to get less of it, tax income and you will get less of it being generated.
> 
> Assuming for a minute that any form of tax should exist in the first place (we will leave aside the anarachy debate for now), if you increase land taxes (put up the land tax on the unimproved value of land) you will get less property speculation and if you increase consumption taxes (e.g. put up the GST to 20%) people might consume less. If people consume less they will save more, higher savings in the long term leads to higher production and higher growth and then flowing from that higher consumption.
> 
> Why punish people for being industrious and generating more income?




Taxing productivity, profit is not a punishment. It's getting a share of the profit society made possible.

Who train the workforce that are readily available to work for the company? Who make laws, have courts to settle dispute; built infrastructure and utilities; have defences, the police and Big Brother watching and securing the goods etc. etc.

So unless the entrepreneurs and capitalist exists and create all that wealth by themselves... paying tax from profit is not a punishment, but protection money. 

To raise tax on consumption but lessen tax on "investment"/speculation... that's just class warfare. 
Rich or poor, most people need to spend on the essentials. Most can't eat more than 3 full meals a day; can't drink more water or use that much more power or fuel...

So when consumptions are taxed, they tax the poor and working class - those that have very little, if any, left after paying off their essential consumption... tax those a lot more than taxing the well to do.

And if you think about it, taxing consumption is to depress spending. And it is spending that stimulate investment.

Savings and investment capital without much demand will inflate asset prices and lead to financial speculation and bubbles. 

That's unless we reckon all investable savings/capital goes towards the Elon Musks and other adventures to save humanity. Even then, that's still speculation. 

Proper investment, ones with a greater chance of real return, ones that create real value for both the investor and the consumer... such investment are found in businesses that create/produce goods and services that are in demand.


----------



## Value Collector (4 April 2018)

Wysiwyg said:


> Okay I do see your point that at a certain level, income doesn't need tax relief. Introducing  thresholds would work do you think?



But why would you only target dividends?


----------



## Value Collector (4 April 2018)

Sir Burr said:


> How about:
> 3, Company pays $18,000 as dividend with $0 franking credit = $18,000




That would mean you would have to abolish the company tax, and only tax dividends, I wouldn't be for that either, It would be good for me, because I could compound earnings inside a company tax free until the day I wanted to pay myself a dividend, but I don't think that is good.


----------



## Value Collector (4 April 2018)

Junior said:


> - Corporate profits are taxed at 30%




Thats the rate that should apply to profits being retained by the company and reinvested/compounded inside the company.

thats fine.



> - Individual tax rates operate in tax brackets, plus medicare levy, less tax offsets in some instances




Thats the rate that should be applied to company profits paid out to shareholders, eg the larger share holders pay more tax than the smaller ones, and the smallest shareholders pay no tax if their share of profits paid out is under the $18,000 mark, just like every other source of income.

putting the dividend income into the tax brackets without allowing franking credits, causes the small share holders who should be tax free to be charged 30%, and the larger ones to be charged 70%.

If you wanted to get rid of franking credits you would have to have a lower tax rate for dividends, not add them to the tax brackets.



> - Super in accumulation is taxed at 15%




Yep, thats the rate that is charged to earnings inside super, so they get a refund of half their franking credits, reducing the tax on the company profits paid to them to the 15%.

(If they don't get the refund their tax will be 40.5% on company earnings, vs 15% for their friend invested in property or bonds)



> - Super in pension phase, taxed at 0%




Yep, you can change that is you want, I would be happy to have thresholds in their bringing it up to a maximum of say 15% tax, for people with really high balances.



> - Trust income; distributed to beneficiaries and taxed based on the individual or entities tax rate




Yep thats all good



> My point is, your persistent argument that all income is the same and is all taxed at a personal level is simply not based on how our tax system works.  It's more complicated than that, as you know.




No, your argument is that different tax rates should apply to investors depending on whether their earnings come from Property, bonds or shares in a company.


> This is unique to Australia and is not generally how company tax is treated in the majority of jurisdictions.




Other countries use lower tax rates for dividends to get around the problem, eg USA taxes dividends at 15% fixed rate, because they recognise its double dipping,

A 15% flat tax on dividends would limit taxes on company profits to about the top marginal tax rate, which is fine for the large share holders, how ever charging the smaller share holders at the top marginal tax rate isn't fair in my opinion, especially when other sources of income get the tax free threshold.


----------



## Value Collector (4 April 2018)

McLovin said:


> not to make it possible for companies to pay no tax on a portion of their profits, which the current system in effect does.




How does it do that?


----------



## Value Collector (4 April 2018)

SirRumpole said:


> For every seller of Aus shares there must be a buyer. Zero sum game. A chance for others to get good value.




Yeah, and the buyers that will come in to fill the vacuum will be foreigners, most Aussies already complain about to much foreign ownership, taking away a chunk of the retirement savings will just make it easier for more companies to be sold to foreigners


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## SirRumpole (4 April 2018)

Value Collector said:


> Yeah, and the buyers that will come in to fill the vacuum will be foreigners, most Aussies already complain about to much foreign ownership, taking away a chunk of the retirement savings will just make it easier for more companies to be sold to foreigners




So remove dividend franking for foreigners.


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## Value Collector (4 April 2018)

McLovin said:


> ...And companies shouldn't pay tax because...




Companies are just conduit from which individuals can make investments.

I think charging a 30% tax on profits retained by the company and reinvested to maintain or grow the company is Fair.

While I also think the portion of those profits that get paid out to the individuals as dividends should be tax at the persons tax rate, which ranges from 0% to 45% depending on that persons situation.

The current system achieves exactly that, the profits paid out are taxed at the individuals tax rate, while those retained are taxed at 30%.

I really see no difference between a bond holder taking advantage of his $18,000 tax free threshold and a share holder doing the same.


----------



## Value Collector (4 April 2018)

SirRumpole said:


> So remove dividend franking for foreigners.




thats not my point.

My point is that if you do something that makes a large amount of Aussie investors turn away from owning companies, then naturally the vacuum will be filled by foreigners, meaning the company tax might stay here, but the rest of the dividend will flow over seas, funding the retirements of foreigners.

Imagine that, the government having to spend more to fund pensions, while those pensions are spent at Coles and woolies, where the profits are funding the retirement accounts in USA, China and Europe.


----------



## PZ99 (4 April 2018)

SirRumpole said:


> So remove dividend franking for foreigners.



I thought they weren't entitled to them anyway? 

They just get paid the unfranked amount and make their own arrangements


----------



## Junior (4 April 2018)

Value Collector said:


> Companies are just conduit from which individuals can make investments.
> 
> I think charging a 30% tax on profits retained by the company and reinvested to maintain or grow the company is Fair.
> 
> ...




Genuine question:
Do we want our public companies to reinvest the majority of profits, to invest in people and expand their operations, or provide incentive to pay profits out to dividend-hungry shareholders who want the tax credits?


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## McLovin (4 April 2018)

Value Collector said:


> How does it do that?




By handing back tax paid by the company to shareholders.


----------



## Value Collector (4 April 2018)

Junior said:


> Do we want our public companies to reinvest the majority of profits, to invest in people and expand their operations, or provide incentive to pay profits out to dividend-hungry shareholders who want the tax credits?




It still makes sense for earnings to be retained if sound investments are available, because money can be compounded inside the company at 30% tax rate, where as the largest shareholders will still pay 45% tax even with franking credits.

But,

Ask the woolies shareholders if they would have preferred dividends instead of the company sinking Billions into Masters, incentivising investments over dividends might not work out either, as I said a balance is needed, the current system provides that.


----------



## Value Collector (4 April 2018)

McLovin said:


> By handing back tax paid by the company to shareholders.




Thats only to low income earners below the $18,000 tax free threshold.

As I said I would be ok getting rid of the tax free threshold if thats what the government wants to do, but only targeting one source of earnings is silly to me.

do you really think its fair to treat a bond holder differently from a shareholder?


I think my statement from above is correct.


> Companies are just conduit from which individuals can make investments.
> 
> I think charging a 30% tax on profits retained by the company and reinvested to maintain or grow the company is Fair.
> 
> ...


----------



## McLovin (4 April 2018)

Value Collector said:


> Companies are just conduit from which individuals can make investments.
> 
> I think charging a 30% tax on profits retained by the company and reinvested to maintain or grow the company is Fair.
> 
> ...




If a company makes $1b/year, why should it pay no tax because it happens to be owned by a bunch of retirees? It's a for profit enterprise that uses all the public services afforded by the state (roads, rails, ports and on and on), relies on the education system to turn out a literate workforce, benefits from the rule of law and the enforcement of contracts.


----------



## McLovin (4 April 2018)

Value Collector said:


> do you really think its fair to treat a bond holder differently from a shareholder?




How are they being treated differently? Both receive the tax free threshold.


----------



## Value Collector (4 April 2018)

McLovin said:


> If a company makes $1b/year, why should it pay no tax because it happens to be owned by a bunch of retirees? It's a for profit enterprise that uses all the public services afforded by the state (roads, rails, ports and on and on), relies on the education system to turn out a literate workforce, benefits from the rule of law and the enforcement of contracts.




let me change three words and see if you can understand my point.

If a *Bond* *issue* makes $1b/year in *interest*, why should it pay no tax because it happens to be owned by a bunch of retirees? It's a for profit enterprise that uses all the public services afforded by the state (roads, rails, ports and on and on), relies on the education system to turn out a literate workforce, benefits from the rule of law and the enforcement of contracts


----------



## Value Collector (4 April 2018)

McLovin said:


> How are they being treated differently? Both receive the tax free threshold.




Bond holder earns $18,000 in interest - Pays zero tax

Shareholder earns $18,000 in profit - pays $5,200 in tax


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## McLovin (4 April 2018)

Value Collector said:


> let me change two words and see if you can understand my point.
> 
> If a *Bond* issue makes $1b/year in *interest*, why should it pay no tax because it happens to be owned by a bunch of retirees? It's a for profit enterprise that uses all the public services afforded by the state (roads, rails, ports and on and on), relies on the education system to turn out a literate workforce, benefits from the rule of law and the enforcement of contracts




Your point makes no sense.


----------



## Junior (4 April 2018)

Value Collector said:


> let me change two words and see if you can understand my point.
> 
> If a *Bond* issue makes $1b/year in *interest*, why should it pay no tax because it happens to be owned by a bunch of retirees? It's a for profit enterprise that uses all the public services afforded by the state (roads, rails, ports and on and on), relies on the education system to turn out a literate workforce, benefits from the rule of law and the enforcement of contracts




A bond issue is not a for-profit enterprise.  It's a means by which to raise capital.  If the bond-issuing company uses that capital and generates a profit using those funds, then company tax will apply.  If it uses some of those funds to pay wages, then income tax will apply also.


----------



## McLovin (4 April 2018)

Value Collector said:


> Bond holder earns $18,000 in interest - Pays zero tax
> 
> Shareholder earns $18,000 in profit - pays $5,200 in tax




Did the shareholder earn it or did the company earn it? You can push the ridiculous argument that they are one and the same, and I'll believe it when I see a shareholder on the hook for a company's liabilities.


----------



## Value Collector (4 April 2018)

McLovin said:


> Your point makes no sense.




It makes perfect sense.

The Bond holders of Woolworths, would be able to pay 0% tax on their portion of the companies output paid to them as Bond interest if they are below the tax free threshold.

Where as the share holders of Woolworths have their share of the companies output taxed at 30%, even if they were below the tax free threshold.


----------



## McLovin (4 April 2018)

Value Collector said:


> It makes perfect sense.
> 
> The Bond holders of Woolworths, would be able to pay 0% tax on their portion of the companies output paid to them as Bond interest if they are below the tax free threshold.
> 
> Where as the share holders of Woolworths have their share of the companies output taxed at 30%, even if they were below the tax free threshold.




Why would a company pay tax on an expense? It's getting stranger and stranger.

Let me lay it out really easy; imputation is a form of dividend tax, not company tax. It's a tax on shareholders, not a tax on company profits. They're separate taxes that are, in very limited jurisdictions, related through imputation. You need to stop looking at the form of imputation and concluding that it represents some sort of merging or union between shareholders and the company.


----------



## Junior (4 April 2018)

Value Collector said:


> It makes perfect sense.
> 
> The Bond holders of Woolworths, would be able to pay 0% tax on their portion of the companies output paid to them as Bond interest if they are below the tax free threshold.
> 
> Where as the share holders of Woolworths have their share of the companies output taxed at 30%, even if they were below the tax free threshold.




The debate isn't about shareholders receiving franking credits and using those credits to ensure they aren't taxed twice.

The debate is about whether shareholders, including SMSFs, should be able to receive a tax refund of excess franking credits or not.


----------



## Value Collector (4 April 2018)

Junior said:


> It's a means by which to raise capital.




So are shares.

Both Bonds and Shares are securities issued to investors to raise capital for a company, both are stake holders in the company.

Bonds take a share of the companies out put as fixed interest.
Shares take a share of the companies out put as a variable dividend.



> If the bond-issuing company uses that capital and generates a profit using those funds, then company tax will apply.




I have no problem with that.



> If it uses some of those funds to pay wages, then income tax will apply also.




Employees get a tax refund if their personal earnings end up being below $18,000.

Do you have a problem with employees getting a tax refund?


----------



## Value Collector (4 April 2018)

McLovin said:


> Why would a company pay tax on an expense? It's getting stranger and stranger.
> 
> Let me lay it out really easy; imputation is a form of dividend tax, not company tax. It's a tax on shareholders, not a tax on company profits. They're separate taxes that are, in very limited jurisdictions, related through imputation.




Look at it from the investors perspective.

Bond holder puts $100,000 of capital into a company
Share holder puts $100,000 of capital into company

Company has $200,000 total capital and it earns $12,000 EBIT.

It pays 6% interest to Bond holder = $6000, the bond holder pays zero tax.

It then pays $1,800 in company tax, 

Share holder gets $4,200 in dividends.

Both the share holder and the bond holder contributed into the enterprise, however the bond holder can take his share of the output tax free, while the share holder pays 30% unless he can get a refund


----------



## Junior (4 April 2018)

Value Collector said:


> Look at it from the investors perspective.
> 
> Bond holder puts $100,000 of capital into a company
> Share holder puts $100,000 of capital into company
> ...




This is true.  

There are other differences too.  The shareholder owns a portion of the company, the bond holder does not.  Dividends are a distribution of company profits, coupon payments are not - hence different tax treatment.  The shareholder may benefit from a growing stream of dividends, and capital growth in the form of share price growth.  The bondholder does not.

They are very different.


----------



## McLovin (4 April 2018)

Value Collector said:


> Look at it from the investors perspective.
> 
> Bond holder puts $100,000 of capital into a company
> Share holder puts $100,000 of capital into company
> ...




In such a hypothetical, I would take the debt. It's a no-brainer. Security over the company's assets and the same after tax return on my marginal rate with either debt or equity. If you know a real world example where this has happened, I'd love to see it. Dare I say, the equity would be trading substantially cheaper (so would the debt) than $100k, which is the difference between hypotheticals and the real world. But that was the point right? To create a hypothetical that is so removed from what actually happens as to make the current system look like a ruse on shareholders.

Of course the big thing for the equity investor is that the bond investor has no recourse to the equity investor's family home if the company can't pay. What's that protection worth?


----------



## Value Collector (4 April 2018)

McLovin said:


> In such a hypothetical, I would take the debt. It's a no-brainer.




You are missing the point, the point is both investors (bond holders and share holders) have their capital invested in the same organisation, Both could be in exactly the same situation otherwise, except the bond holder will get to keep their interest tax free, where as the share holder will have a minimum 30% tax on the productivity of his capital if he is not allowed to get a refund of the franking credit.

I ask the same question you asked here of company profits.


> why should it pay no tax because it happens to be owned by a bunch of retirees? It's a for profit enterprise that uses all the public services afforded by the state (roads, rails, ports and on and on), relies on the education system to turn out a literate workforce, benefits from the rule of law and the enforcement of contracts




-------
I see no difference between a bond holder and a share holder, they are basically in partnership in the enterprise and just have a contract that lays out who gets what share of the companies earnings and how its calculated, one is taking a fixed interest and senior claim, while the other just takes whats left.

I can't see a reason why one should target the shareholder to have a minimum tax.


----------



## Value Collector (4 April 2018)

Junior said:


> This is true.
> 
> There are other differences too.  The shareholder owns a portion of the company, the bond holder does not.  Dividends are a distribution of company profits, coupon payments are not - hence different tax treatment.  The shareholder may benefit from a growing stream of dividends, and capital growth in the form of share price growth.  The bondholder does not.
> 
> They are very different.




None of that means they should be taxed differently,



> The shareholder owns a portion of the company




So does the bond holder, the share holder only owns the equity, the bond holder has a senior claim on all the companies assets, the share holder just owns what is left after the bond holder has been paid all interest and recovered their principle.


----------



## McLovin (4 April 2018)

Value Collector said:


> You are missing the point, the point is both investors (bond holders and share holders) have their capital invested in the same organisation, Both could be in exactly the same situation otherwise, except the bond holder will get to keep their interest tax free, where as the share holder will have a minimum 30% tax on the productivity of his capital if he is not allowed to get a refund of the franking credit.
> 
> I ask the same question you asked here of company profits.
> 
> ...




Both investors are paying 0% tax. The company's profit available to shareholders after it pays tax is $4,200. It is not paying tax on behalf of shareholders.


----------



## Value Collector (4 April 2018)

McLovin said:


> Both investors are paying 0% tax. The company's profit available to shareholders after it pays tax is $4,200. It is not paying tax on behalf of shareholders.




Thats just semantics, 

The fact is the government taxes the earnings of the shareholders equity both at the company level, then again at the shareholders level.

If it doesn't allow franking credits to be used, the tax burden on people taking a capital position in a company via a shareholding is going to be unfairly higher than those taking a capital position via a bond holding.


----------



## McLovin (4 April 2018)

Value Collector said:


> Thats just semantics,





I think it's more that you just don't like it because it doesn't fit into your world view.



Value Collector said:


> The fact is the government taxes the earnings of the shareholders equity both at the company level, then again at the shareholders level.




What were you saying about semantics?

Companies are taxed, shareholders are taxed. Australia is the only country in the world that hands cash back at the shareholder level that was paid by a company. So every other country has the incorrect interpretation of the relationship between companies and their owners it would seem.



Value Collector said:


> If it doesn't allow franking credits to be used, the tax burden on people taking a capital position in a company via a shareholding is going to be unfairly higher than those taking a capital position via a bond holding.




I won't hold my breath waiting for the stampede out of equities and into fixed interest if this change gets up. Was there a big rush into equities in 2000 from fixed interest when the change was implemented? I seem to remember it being a pretty bad year...


----------



## bellenuit (4 April 2018)

SirRumpole said:


> So remove dividend franking for foreigners.




Imputation Credits on franked dividends are only available to Australian tax payers.


----------



## PZ99 (4 April 2018)

It's also worth pointing out that in the same year 2000 the 45 day rule was implemented where franking credits were forfeited if the shares were sold in that time frame.

I'll ask Bill Shorten to roll that one back


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## Value Collector (4 April 2018)

McLovin said:


> Companies are taxed, shareholders are taxed.




Yes, thats the problem. without a tax system that has some allowance for it, the same profits will be taxed twice.

once when the company earns the profits, and then again when it hands those profits to the company owners.



> Australia is the only country in the world that hands cash back at the shareholder level that was paid by a company.




The other countries have lower rates of taxes for dividends.

USA for example only charges 15% tax on dividends regardless if they are a high income earner or not.

So that caps the tax on company profits to a little under 37%,

However, Australia has a higher company tax rate, and puts dividends onto the Marginal tax rate, which would means the company profits that hit a high income earners tax return ends up paying more than 60% tax.

I think a system that taxes the company profits at 45% on a high income earners tax return, while allowing the lower income earners to claim lower tax returns (perhaps even a refund) is fair.


----------------------
*Any way I will leave the conversation here, as I have explained I see nothing wrong with allowing company profits that are paid out to flow through to the individual investors tax return and be taxed at whatever rate that is.

even if it means a low earner gets a refund.*


----------



## McLovin (4 April 2018)

Value Collector said:


> Yes, thats the problem. without a tax system that has some allowance for it, the same profits will be taxed twice.
> 
> once when the company earns the profits, and then again when it hands those profits to the company owners.




Double taxation does not happen under the current system, nor will it happen under the proposed reform.



Value Collector said:


> However, Australia has a higher company tax rate, and puts dividends onto the Marginal tax rate, which would means the company profits that hit a high income earners tax return ends up paying more than 60% tax.





?





Value Collector said:


> The other countries have lower rates of taxes for dividends.




So does Australia. The effective rate of tax is between 0%-~24% depending on the shareholder's marginal tax rate.


----------



## Value Collector (4 April 2018)

> Double taxation does not happen under the current system, nor will it happen under the proposed reform.




Without franking credits it would though, thats my point.



McLovin said:


> So does Australia. The effective rate of tax is between 0%-~24% depending on the shareholder's marginal tax rate.




If it wasn't for franking credits, an Australian tax payer could pay up to 45% on their dividends, on top of the 30% company tax.

Meaning the a Company profit of $100 triggers a $30 Tax at the company level.

Then when the owner gets paid the remaining $70, it would trigger another tax of 45%.

Meaning that $100 of company earnings would have an effective tax rate 61.5% for the high income earner.

While the low income owner would have an effective rate of 30%, if he were no allowed to claim back his refund.

------------
either way I am not really interested in the discussion any more I have said my piece, I know you seem to think company profits are different, and should be separated from the taxes of the owners, but I just don't see it like that.

To me a company is just a conduit, I don't think the guy that mows my lawn under a company structure should pay more tax than the guy who mows my lawn as a sole trader, just because one chose to use the company structure.

I am fine with distributed profits flowing to peoples personal tax returns and being taxed there, even if that means a refund of some company tax to the low income earners.


----------



## McLovin (4 April 2018)

Value Collector said:


> If it wasn't for franking credits, an Australian tax payer could pay up to 45% on their dividends, on top of the 30% company tax.




More hypotheticals. I don't see anyone on here suggesting franking be scrapped.


----------



## sptrawler (5 April 2018)

willy1111 said:


> Oh Bill, but when you run out of capital then you can get the aged pension
> 
> Its a scary proposition eating into the capital, its like giving up part of your security blanket especially with the unguaranteed returns shares offer...but they suggest the capital is meant to be consumed during retirement, not passed on as part of ones estate.



You really think the pension will be in the form it is now, when everyone is on it?
That is very unlikely, as has happend to the qualification age for seniors cards, the whole pension handout will be reviewed.


----------



## willy1111 (5 April 2018)

sptrawler said:


> You really think the pension will be in the form it is now, when everyone is on it?
> That is very unlikely, as has happend to the qualification age for seniors cards, the whole pension handout will be reviewed.




It was tongue in cheek, hence the smiley face afterwards.

I have no idea what the future rules will be with regard to the age pension. At a guess I would say the country couldn't afford it as it is now at some point in the future, as you say it will be reviewed and further means tested or the qualifying age most likely pushed out further, or they will need to raise more taxes and will probably go after the tax free Super pensions after age 60 for self funded retirees.

I can almost hear Shorten now, these self funded retirees with all this money in Superannuation are receiving a tax free income for the rest of their lives, this could be another 10-40 years of not paying income tax. This loop hole being rorted by the rich (Shortens term for anyone with assets of more than a $100k) needs to be stopped now. That will be Shortens next tax grab. I really hope he doesn't get into power.


----------



## Wysiwyg (5 April 2018)

The Super fund numbers will add up quickly for people nowadays forward with higher average wages and the minimum contribution goes higher to 12%. The inflation bogey inescapable.  Ultimately aiming for as many self funded retirees as possible.


----------



## tech/a (6 April 2018)

When inflation does come along
How would people here invest to avoid the erosion
of purchasing power if held in cash?


----------



## Value Collector (6 April 2018)

tech/a said:


> How would people here invest to avoid the erosion
> of purchasing power if held in cash?




Owning Assets that generate income that increases with inflation.

Over time rents and house prices increase along with inflation, so good real estate provides inflation hedged income, same with companies that produce many other goods, services and commodities, eg the price of coke will increase with inflation, so will the reported profit of the coca cola company and their dividends.

Think about it, the thing that worries people about inflation is increasing prices, But this means that the companies and assets whose prices are increasing (which is nearly all of them), will probably be maintaining profit margins.

High inflation over a short period can make things wobbly, but the long term holder will be fine. eg no one is sitting there upset because their rental property is stuck earning 1977 based rent, but term deposit holders have lost alot of spending power if they have had term deposits since 1977.



> When inflation does come along



It's always present.


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## Value Collector (6 April 2018)

If some one wishes to maintain spending power while still investing is fixed dollar investments, they must choose cash based investments that will produce an after tax return higher than the prevailing inflation rate and then reinvest a portion of these after tax profits equal to the decline caused by inflation.

eg. if the tax rate is 30% and inflation is 3% and you have $100 to invest, you have to be earning a rate of 4.29% to breakeven against the inflation and tax.

The $100 will earn $4.29 interest, but the government will take $1.29 tax (30%) and you have to reinvest $3 back to maintain the spending power, because it now costs $103 to purchase what you could have purchased for $100 12 months earlier.

The only way around this is to invest your cash where it will earn a rate above 4.29%, every 1% you earn above 4.29%, will create 0.70% real spending power for you and 0.30% additional taxes.

Offcourse you need to risk adjust though, as you move higher in interest rate your risk increases, So moving to say 7.29% interest while taking on a 3% risk of loss, is really still just a break even investment.


----------



## Skate (19 June 2018)

Resurrected from an old thread from 21st February 2016 that is still relevant: *"Why do Australian stocks provide higher dividends compared to rest of the world?"*

------------------------------------------------------------------------------------------------------
_*systematic posted:*

Dividend imputation.

This is a nice brief paper 
http://bettertax.gov.au/files/2015/06/Fidelity_Worldwide_Investment.pdf_

_Hope this helps..._
------------------------------------------------------------------------------------------------------

*This PDF helps immensely:* Myth-busting dividend imputation

I've listed just 2 of 11 myths published by 'Fidelity Worldwide Investment' that explains why Bill Shorten's plan to alter the Franking Credit Refund is fundamentally flawed.

*Myth 7:* *Abolishing franking would boost government revenue.
Reality:* Franking creates integrity in the corporate tax base. Removing franking would give rise to behavioural changes that could significantly erode the corporate tax base, leaving the national accounts – and retirees – worse off.

*Myth 9:* *Franking creates a risky equity-market bias for retirees.
Reality:* Franking does create a bias toward high-quality, well-managed, cash-generating equities; this will help keep self-funded retirees off the aged pension.

Skate


----------



## sptrawler (19 June 2018)

tech/a said:


> When inflation does come along
> How would people here invest to avoid the erosion
> of purchasing power if held in cash?




If inflation comes along, as VC  says it is always with us, but fortunately due mainly to technology, some things have come down in real terms.
As inflation kicks in, so do interest rate rises, to keep a cap on the inflation.
10 or so years ago, interest rates on savings, were 10%. During the late 1980's interest rates were 18%, though I doubt we will ever see that again.
But I would expect, once the Financial Crisis fallout runs its course, interest will go back to about 7%, the long term average.


----------



## sptrawler (20 June 2018)

willy1111 said:


> It was tongue in cheek, hence the smiley face afterwards.
> 
> I have no idea what the future rules will be with regard to the age pension. At a guess I would say the country couldn't afford it as it is now at some point in the future, as you say it will be reviewed and further means tested or the qualifying age most likely pushed out further, or they will need to raise more taxes and will probably go after the tax free Super pensions after age 60 for self funded retirees.
> 
> I can almost hear Shorten now, these self funded retirees with all this money in Superannuation are receiving a tax free income for the rest of their lives, this could be another 10-40 years of not paying income tax. This loop hole being rorted by the rich (Shortens term for anyone with assets of more than a $100k) needs to be stopped now. That will be Shortens next tax grab. I really hope he doesn't get into power.




The really scary thing is, Shorten will get a tax payer funded pension, that is indexed for the rest of his life.

Then he has the audacity to say, people who have saved to pay for their old age, without claiming an age pension need to be stripped of their savings.

Absolute FW, every working person who hopes to be an independent retiree, should tell him where to go.
He has absolutely no humility, just an outrageous, smug, deceitful person IMO.
Last election, it was tax superannuation incomes over $100k, now the pot has shrunk due to the new caps, it is take 30% of their earnings.
Nasty piece of work, who shows he doesn't give a rats ar$e, about workers who do it tough to get ahead.
Maybe he should say, I will lead by example, all Labor politicians past and present will get a pension linked to their final average salary as a lump sum.
No pensions indexed for life, then when they vote for that, I'll vote for him.
Untill then he is just another one in the trough, trying to tell everyone he is honest, with his mouth full.
Just my opinion.
Actually I thought Chris Bowen, may have been a glowing light for Labor, but seeing him in every picture being glared at by Shorten, indicates he has been brought to heal as I see it.
Shame really, in the past he did show some promise, as a moderate thinker.


----------



## PZ99 (20 June 2018)

Oohh look... a contrary view.

A self funded retiree earning $1900 a week can't spare $72 a week to sponsor Australia's future?

Tax free super is a structural deficit burdened on future generations bequeathed by the Howard govt in a burning desire to stay in office for just one more term.

Spare me the entitlement eulogy, fabians


----------



## SirRumpole (20 June 2018)

sptrawler said:


> Then he has the audacity to say, people who have saved to pay for their old age, without claiming an age pension need to be stripped of their savings.




Why should someone getting $100k super pay no tax on it when a tradie getting the same pays $24,000 ?

A free income for doing nothing is not what built Australia.


----------



## tech/a (20 June 2018)

SirRumpole said:


> Why should someone getting $100k super pay no tax on it when a tradie getting the same pays $24,000 ?
> 
> A free income for doing nothing is not what built Australia.




Because they won’t be a burden on the tax payer claiming a pension.
The tradie can also take advantage of the same situation as I did back
In the day —— tradie with Property ——- .I and my company pay Tax plenty of tax.
Personal tax
Company tax
Payroll tax
Fringe benefits tax 
GST
PAYE tax
Plus a number of Duties 
Just paid $12000 Stamp duty on a truck
Which my staff use as a tool of trade.

Bugger all help for business 
The guys who employ everyone. We aren’t the enemy we are the guys who put EVERYTHING on the line 
We stuff it up and we go Broke. Everyone we employ get another job!
Who’s got most at risk?
Oh all my staff are $ 3-8 per hr above the award because I want to keep the best
8 of 26 employees have been with me for 6+years
And I’m pretty dumb only passed year 10 after repeating it!

End of rant.


----------



## SirRumpole (20 June 2018)

tech/a said:


> Because they won’t be a burden on the tax payer claiming a pension.




OK so they can get a tax free threshold equivalent to the pension.


----------



## PZ99 (20 June 2018)

tech/a said:


> Because they won’t be a burden on the tax payer claiming a pension.
> The tradie can also take advantage of the same situation as I did back
> In the day —— tradie with Property ——- .I and my company pay Tax plenty of tax.
> Personal tax
> ...



Sounds to me like you are supporting the notion that Australia is not a free ride.

Exactly what I've been saying.

How about a retiree on $100k p/a pays $4K a year tax to help eliminate your payroll tax ?

Gotta be good for business, yeah ?


----------



## tech/a (20 June 2018)

SirRumpole said:


> OK so they can get a tax free threshold equivalent to the pension.




So am I going to last 70 yrs or 95 yrs are my savings going to be eroded by inflation at 1% or at times 
4%.
So I'm not able to take all this risk look for a better lifestyle.
According to you and others like you I should just be no more comfortable than any PAYE.
Your entirely happy with the two major parties gouging all of us of $1,000,000s and mis appropriating funds with hair brained stupidity like the NBN which would have gone broke 10x in private enterprise or the Pink Bat rubbish.

Give me a break people get off your ARSE and take a risk
DO SOMETHING to better your life.
Don't wait for some hand out and dont complain when others who do ---take advantage of whats available.

Stir me up ---Love it!


----------



## tech/a (20 June 2018)

PZ99 said:


> How about a retiree on $100k p/a pays $4K a year tax to help eliminate your payroll tax ?
> 
> Gotta be good for business, yeah ?




How about pay roll tax is eliminated and I use it to pay my staff better wages
or employ more people 
or purchase more equipment
How about I'm *NOT PENALIZED* for employing *MORE* staff!

How about you drop Fuel tax on my Trucks,Excavators and company utes
So I can pay my staff better wages
or employ more people 
or purchase more equipment.
How about I'm *NOT PENALIZED* for building this Country --Literally!


----------



## SirRumpole (20 June 2018)

The NBN has nothing to do with superannuation. 

I'm a self funded retiree myself, but I see no difference from earning $X from a superannuation account vs earning the same from personal exertion from a taxation point of view.

If more people who can afford it pay tax , the rates for everyone can be reduced.


----------



## SirRumpole (20 June 2018)

tech/a said:


> How about I'm *NOT PENALIZED* for building this Country --Literally!




How about I'm not penalised for buying the goods and services that people like you produce ?


----------



## PZ99 (20 June 2018)

tech/a said:


> How about pay roll tax is eliminated and I use it to pay my staff better wages
> or employ more people
> or purchase more equipment
> How about I'm *NOT PENALIZED* for employing *MORE* staff!
> ...



Great ideas - all of them.

Of course, your $100k p/a super retiree would have to be taxed @ $40k a year instead of $4k 

At the moment... they pay ZERO


----------



## tech/a (20 June 2018)

SirRumpole said:


> The NBN has nothing to do with superannuation.
> 
> I'm a self funded retiree myself, but I see no difference from earning $X from a superannuation account vs earning the same from personal exertion from a taxation point of view.
> 
> If more people who can afford it pay tax , the rates for everyone can be reduced.




It has everything to do with Govt mis using the funds I GIVE them.



SirRumpole said:


> How about I'm not penalised for buying the goods and services that people like you produce ?




How so.



PZ99 said:


> Great ideas - all of them.
> 
> Of course, your $100k p/a super retiree would have to be taxed @ $40k a year instead of $4k
> 
> At the moment... they pay ZERO




Why?


----------



## PZ99 (20 June 2018)

You mean why do they pay zero ?

Or why should they pay tax?

Either way, the money has to come from somewhere.

BTW, the NBN is off budget. It isn't payed for by taxpayers.


----------



## SirRumpole (20 June 2018)

https://www.aussiestockforums.com/goto/post?id=985864#post-985864


> How about I'm not penalised for buying the goods and services that people like you produce ?
> How so.




I pay gst on everything I buy, if that was eliminated I would probably buy more which increases the profits of businesses.


----------



## tech/a (20 June 2018)

PZ99 said:


> You mean why do they pay zero ?
> 
> Or why should they pay tax?
> 
> ...




Why 40% tax
Money comes from more people employed, higher wages.

Where do the Funds come from then?



SirRumpole said:


> I pay gst on everything I buy, if that was eliminated I would probably buy more which increases the profits of businesses.




Other than food.
Imagine a royal Commission into the Government parties of Australia.
Would make the Bank Royal Commission look like Prep school.

The waste is Phenomenal.


----------



## PZ99 (20 June 2018)

tech/a said:


> Why 40% tax
> Money comes from more people employed, higher wages.



Because there aren't enough taxpayers to fund the welfare state Australia has put itself into.

Because more people employed doesn't translate to higher wages anymore and even if it did, with 5.5% unemployment, there are only a finite number of jobs.

Where do the Funds come from? They come from more tax revenue and less cash handouts.

Then they come from more budget surpluses and less deficits.

That's what's happening in NSW. They are running ridiculous surpluses and spending it on employment with infrastructure. Which is what they should be doing. Not splashing it on deadwood.

If you've built up a business to the point of enjoying a comfortable retirement then that's great. It's something for others to inspire to. But it's not a ticket for a free ride on the back of taxpayers in a country running up debt and deficits and mortgaging our future.


----------



## Junior (20 June 2018)

tech/a said:


> Imagine a royal Commission into the Government parties of Australia.
> Would make the Bank Royal Commission look like Prep school.
> 
> The waste is Phenomenal.




Agreed.  The stories from RC are like watching A Current Affair.  Might make a few people feel better but it won't change much.

RC into the Healthcare industry would be far more revealing IMO.


----------



## tech/a (20 June 2018)

PZ99 said:


> Where do the Funds come from? They come from more tax revenue and less cash handouts.




Sorry I meant where are the funds for the NBN coming from.



PZ99 said:


> Because there aren't enough taxpayers to fund the welfare state Australia has put itself into.




Waste.
If the Govt were serious about eliminating a great deal of the pension debt they would make payments to the pension better and easier with less tax burden for everyone. Rather than 3% being self funded get that to 50%.

Stop handing our welfare to people who wont work for it.
Put them into the armed forces
or
Building infrastructure.
There are 1000s of ways.
or business pays 70% and Govt pay 30%
for an extended period.
Better 30% drain than 100%
and they get the tax.
*How competitive would manufacturing be then!
How much un employment would you have?*


----------



## PZ99 (20 June 2018)

Oh, sorry. The NBN is off budget because it's a "financial asset investment".

The funds come from investment - super funds have diversified interests in the NBN for a small return. They buy govt bonds and that money goes to NBNCo.

Which means the intention is to either pay for itself or sell it off. The same thing happens with nation building projects like roads etc. We have around $80b in an off budget fund as a "headline deficit". Most of it from the Abbott/Turnbull govts I might add 

It's not part of our federal budget quagmire - so technically it's not paid for by taxpayers.

As for stop handing our welfare to people who wont work for it, I agree completely - save for the people who really need it.


----------



## tech/a (20 June 2018)

Learnt something

Thanks.

So in a worst case scenario and there is a global meltdown of Western Commerce
the Billions invested would not be returned to the Funds and Super would be for ever lost.
OR
It doesn't make a profit or *becomes obsolete* --- which is *most likely* making it unsaleable and worthless.
How are the Billions paid back into Super?


----------



## tech/a (20 June 2018)

See above again.PZ99


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## PZ99 (20 June 2018)

The billions (it's not that much) that's invested is earning a return based on the bond rate.

They will get their money back - I'm paying $60 a month for my NBN. Some of that goes to the investors. When a sizable population are connected (compulsorily unless they go wireless or offline) the return is greater. They could sell it for a song in ten years and still get the money back and more simply from inflation. They could have sold it now had it not been for the fact that the rollout was sabotaged by short term hysteria about costs. The flustercluck of fibre and cable for a few dollars today is a fair way to devalue it tomorrow and thereafter.

That's what happened with Telstra. Sold off and started a future fund that now has $150 billion in it.


----------



## sptrawler (20 June 2018)

PZ99 said:


> Oohh look... a contrary view.
> 
> A self funded retiree earning $1900 a week can't spare $72 a week to sponsor Australia's future?
> 
> ...




I will be interested to hear your comments, when you reach the position, by then the goal posts will be well and truly moved.
This is only the first step, in what I feel, will end up a completely different scenario for future retirees. 
But hey, if everyone is like you, we can look forward to a glowing benevolent future. 
Where your savings in retirement are distributed, for the greater good, as they have been your whole working life.


----------



## sptrawler (20 June 2018)

SirRumpole said:


> Why should someone getting $100k super pay no tax on it when a tradie getting the same pays $24,000 ?
> 
> A free income for doing nothing is not what built Australia.




Why should a couple who have saved nothing, their whole working life, get $35,000 free + free medical + cheap rates + all the other perks that come with a pension card?

How many people are getting $100k, think about it, if you have $800k invested you lose the last $1 of pension and perks.
So if that person is earning 5% on that $800k, they are getting $40k a year.

It's o.k for the smug to sit back and quote the 2% of people who are getting $100k, what about quoting the 40%, who are getting $40k and being screwed over for saving all their working life?


----------



## PZ99 (20 June 2018)

sptrawler said:


> I will be interested to hear your comments, when you reach the position, by then the goal posts will be well and truly moved.
> This is only the first step, in what I feel, will end up a completely different scenario for future retirees.
> But hey, if everyone is like you, we can look forward to a glowing benevolent future.
> Where your savings in retirement are distributed, for the greater good, as they have been your whole working life.



I will reach that position at the end of next year and from that point, I will be a self funded retiree. They can move the goalposts anywhere they like. But they can't stop me from earning money and paying the same tax that everyone else does. 

The worst thing the Govt can do is bring back something like workchoices where workers ultimately earn just enough for dog food and dunny paper and then retire at 70 with nothing other than a hefty medical bill and a maxed out credit card.


----------



## sptrawler (20 June 2018)

PZ99 said:


> If you've built up a business to the point of enjoying a comfortable retirement then that's great. It's something for others to inspire to. But it's not a ticket for a free ride on the back of taxpayers in a country running up debt and deficits and mortgaging our future.




But blowing all your money, on piss, gambling and holidays your whole working life, does entitle you to a comfortable retirement on the public purse?


----------



## sptrawler (20 June 2018)

PZ99 said:


> I will reach that position at the end of next year and from that point, I will be a self funded retiree. They can move the goalposts anywhere they like. But they can't stop me from earning money and paying the same tax that everyone else does.
> 
> The worst thing the Govt can do is bring back something like workchoices where workers ultimately earn just enough for dog food and dunny paper and then retire at 70 with nothing other than a hefty medical bill and a maxed out credit card.




Well, firstly congratulations, I hope it all goes well for you.
You will need to have a considerable amount, to remain as upbeat as you appear, and if you have that well done.

By the way, it was Labor who increased the retirement age, and no doubt it will be them who move it up again.


----------



## SirRumpole (20 June 2018)

sptrawler said:


> But blowing all your money, on piss, gambling and holidays your whole working life, does entitle you to a comfortable retirement on the public purse?




That's a pretty pathetic comment. Before Keating bought in super the pension was the only way of funding retirement. Not everyone has the cash to spend on shares or negative gear other people's houses. Paying off the mortgage took a lot of those "savings".


----------



## PZ99 (20 June 2018)

sptrawler said:


> Why should a couple who have saved nothing, their whole working life, get $35,000 free + free medical + cheap rates + all the other perks that come with a pension card?



Because the cost of living in this country has blown out to a level where anything less than the above is considered a less than decent quality of life. 

But, if you go through some of my previous posts... I'm not advocating a free ride either.



> How many people are getting $100k, think about it, if you have $800k invested you lose the last $1 of pension and perks.
> So if that person is earning 5% on that $800k, they are getting $40k a year.



Fine with me. But if people are earning 5% and $100k a year they must have a 2 million dollar investment. Why can't someone with 2 million dollars pay just $4000 a year? 



> It's o.k for the smug to sit back and quote the 2% of people who are getting $100k, what about quoting the 40%, who are getting $40k and being screwed over for saving all their working life?



There's nothing smug about it. If anything the majority of the smugness is coming from people with incomes way over what you are quoting and paying little or no tax in the process.


----------



## PZ99 (20 June 2018)

sptrawler said:


> But blowing all your money, on piss, gambling and holidays your whole working life, does entitle you to a comfortable retirement on the public purse?



Of course not. Who is advocating this? And how prevalent is it?



sptrawler said:


> Well, firstly congratulations, I hope it all goes well for you.
> You will need to have a considerable amount, to remain as upbeat as you appear, and if you have that well done.
> 
> By the way, it was Labor who increased the retirement age, and no doubt it will be them who move it up again.



Cheers 

Yes, it was Labor who increased the retirement age, to 67.

But it's the Libs who want to increase it to 70 which is another three years of hard slog.

That is still their policy and thanks to Bill Shorten and the ALP for blocking it in the senate.


----------



## Value Collector (20 June 2018)

SirRumpole said:


> Why should someone getting $100k super pay no tax on it when a tradie getting the same pays $24,000 ?
> 
> A free income for doing nothing is not what built Australia.




If thats the deal that the government made with the guy to convince him to build up his super over the years, then they should honour it.

It is pretty crap if the government gives you an incentive to get you to fund your own retirement, then 30years later when its time to start collecting the benefits after doing what the government wanted for 30 years they change the rules.

It's like playing UNO with my 7 years old nieces, since when did you get to put down after you picked up,  just because I ended up with 2 draw fours and a wild card suddenly the rules are changing.

if you want to change the rules, change them when a new game starts, not half way through my game.


----------



## sptrawler (20 June 2018)

PZ99 said:


> Of course not. Who is advocating this? And how prevalent is it?



It is easy enough to find out how many are on pensions, I'm only talking from personal experience and my knowledge of my workmates, their spending habits and the situation most find themselves in today.[/QUOTE]



PZ99 said:


> Yes, it was Labor who increased the retirement age, to 67.
> 
> But it's the Libs who want to increase it to 70 which is another three years of hard slog.
> 
> That is still their policy and thanks to Bill Shorten and the ALP for blocking it in the senate.




Let's see if they block it when they are in office.


----------



## PZ99 (20 June 2018)

sptrawler said:


> It is easy enough to find out how many are on pensions, I'm only talking from personal experience and my knowledge of my workmates, their spending habits and the situation most find themselves in today.
> 
> 
> 
> Let's see if they block it when they are in office.



They are funded through the unions so the chances of it happening are zero.

If they attempt to do it they will commit political suicide and for the sake of populism you can bet the Libs will block it citing some irrelevant scenario like crappy climate change 

Labors' policies are out there and clearly defined... tax on high income super, check neg gearing, abolish franking credit refunds, restore penalty rates. If these things are bad, vote Liberal.

A lot of my workmates are in a dire position. They're paying $400 a week in rent and they're over 50 and will no doubt go on the age pension if their body doesn't break first. We do a lot of heavy lifting in my job and I have the scars to prove it 

But I saved my dough and it will serve me until I'm on the other side of the grass. Which is why I really don't worry too much about what other people are earning or spending and I don't quite get why so many people get fascinated by it to be honest.


----------



## sptrawler (20 June 2018)

SirRumpole said:


> That's a pretty pathetic comment. Before Keating bought in super the pension was the only way of funding retirement. Not everyone has the cash to spend on shares or negative gear other people's houses. Paying off the mortgage took a lot of those "savings".




I'm not talking about those who had meagre incomes, or disabilities.
I'm talking tradies on the same money as me, who saved nothing had a great life and now find themselves in there 60's with diddly squat.
I don't mind paying my fair share, but I certainly wouldn't have gone so long and so hard, to get where I am, if I had known the goal posts were going to get moved like is being suggested.
My intention was to be fully self funded, my whole life, well that is out the window now, I'll spend and enjoy not be frugal as I have been all my life.
Maybe that fits in better with Labor ideology, where everyone goes to the lowest common denominator, except the politicians themselves. lol


----------



## sptrawler (20 June 2018)

PZ99 said:


> But I saved my dough and it will serve me until I'm on the other side of the grass. Which is why I really don't worry too much about what other people are earning or spending and I don't quite get why so many people get fascinated by it to be honest.




You sound very much like myself, i certainly hope your savings see you through, with the suggested changes Labor are talking about mine won't. lol
With inflation, erosion of capital will be accelerated. 
I know people will suggest the pension will kick in, but my call is the next move will be that you have to spend your capital before qualifying for a pension, as it is with the dole.


----------



## SirRumpole (20 June 2018)

Value Collector said:


> It is pretty crap if the government gives you an incentive to get you to fund your own retirement, then 30years later when its time to start collecting the benefits after doing what the government wanted for 30 years they change the rules.




Super is now compulsory, so there is no tax incentive.

Howard made super tax free to maintain the support of the upper incomes and give himself a nice fat retirement package into the bargain.


----------



## sptrawler (20 June 2018)

PZ99 said:


> Fine with me. But if people are earning 5% and $100k a year they must have a 2 million dollar investment. Why can't someone with 2 million dollars pay just $4000 a year?




If you look back to the my posts, when Labor suggested the taxing of super incomes above $100k, I fully supported it and still do.

What I dissagree with is, the removal of the franking credit, takes 30% of much lower incomes.
Therefore those, as I who are trying to achieve an income above inflation, are going to be screwed.
Shares are paying about 5% give or take, with the franking credit that goes to about 7%, without the franking credit and with the ever increasing minimum drawdown, shares will have to be sold to fund it.
That is o.k, while inflation is low, but becomes a real issue as inflation increases.
Rates in our location have gone from $1,400 to $2,000 in the last 2 years. Electricity has gone from 12c/unit to 25c/unit in the past 8years, the supply charge doubled last year.
It is only the fact that there is a supermarket war on, that the cost of food has had a lid on it, for the last few years.
Like I said, there will be a huge problem, when inflation in the Western World kicks off, and all Governments are pushing for it to kick off.
Also the ATO has introduced a reporting requirement, that any large sums removed from super, have to be immediately reported. Make of that, what you will.


----------



## Value Collector (20 June 2018)

SirRumpole said:


> Super is now compulsory, so there is no tax incentive.
> 
> Howard made super tax free to maintain the support of the upper incomes and give himself a nice fat retirement package into the bargain.




The minimum contribution is compulsory, the government is still actively providing incentives to get people to invest more over and above the minimum.

--------

Also, just because someone is withdrawing $100K per year from their super doesn't mean the super is earning $100K per year, Some of that is capital that is already been taxed when it was originally earned.

If I earn $100, pay $15 in super contribution tax so my super account is raised by $85 when it comes time to withdraw it I shouldn't have to pay tax on it, its my money after tax, you don't pay tax when you withdraw your after tax wages form you account


----------



## PZ99 (20 June 2018)

sptrawler said:


> If you look back to the my posts, when Labor suggested the taxing of super incomes above $100k, I fully supported it and still do.
> 
> What I dissagree with is, the removal of the franking credit, takes 30% of much lower incomes.
> Therefore those, as I who are trying to achieve an income above inflation, are going to be screwed.
> ...



That's an interesting comment about the ATO reporting requirement.

I'm assuming it's aimed at people withdrawing their super illegally ?


----------



## sptrawler (20 June 2018)

Value Collector said:


> The minimum contribution is compulsory, the government is still actively providing incentives to get people to invest more over and above the minimum.
> 
> --------
> 
> ...




Add to that, a lot of the money in super, has been put in after tax.
I think the Government will have to, at some offer people the option of removing their after tax contributions, as they are constantly changing how it is treated.
If for example you had $200k in after tax contributions, its earnings are being taxed at 15%, if it was outside super the first $18k of earnings is tax free.


----------



## sptrawler (20 June 2018)

PZ99 said:


> That's an interesting comment about the ATO reporting requirement.
> 
> I'm assuming it's aimed at people withdrawing their super illegally ?




My guess is it a precursor, to bringing back max-min withdrawls, as people make a run on super.
Just pull it out and spend it as you wish, take the first $36k tax free, split with your wife.
Why leave it in super, having them tell you how you can spend it, while constantly changing how they treat it?
The point of super is being completely lost by Labor, it was introduced to improve your retirement, Labor now see it as a pool of money they want.
Anyway probably enough been said, time will tell which of us is right, best of luck with your retirement. congratulations


----------



## SirRumpole (20 June 2018)

Value Collector said:


> Also, just because someone is withdrawing $100K per year from their super doesn't mean the super is earning $100K per year, Some of that is capital that is already been taxed when it was originally earned.




I'm sure that could be accounted for.


----------



## Value Collector (20 June 2018)

SirRumpole said:


> I'm sure that could be accounted for.





The current system does account for it, as far as I understand the bulk of super is taxed

eg. the money you put in from your wages over your life is taxed, and the earnings that are earned during the life of the super fund are taxed, and its only right at the end of the super funds life during the pension phase that the earnings become tax free, but by then the bulk of the funds are after tax capital.


----------



## HelloU (20 June 2018)

PZ99 said:


> Oh, sorry. The NBN is off budget because it's a "financial asset investment".
> 
> The funds come from investment - super funds have diversified interests in the NBN for a small return. They buy govt bonds and that money goes to NBNCo.
> 
> ...




off topic but for clarity to see taxpayer involvement.......
initial $30B was done this way (as no more than $30B was allowed). Interest on bonds is paid each 6 months by the government and comes from revenue including NBN receipts. This initial capital amount is/was to be repayed to taxpayers when the NBN is sold at a future unknown time (not sure who buyer will be but anyway). 

Then govt scrapped the $30B limit cap cos NBN needed $19B more and could NOT find any commercial funding, so another $19.5B was given by govt as a loan (Nov16) but on 'çommercial terms' so no need for the taxpayer to panic (3.71%). This will be paid off in 2021 by NBN refinancing commercially....(hence the panic to get peeps signed up at higher speeds as NBN makes more money so can look better on the books)....no idea what happens if they cannot refinance.


----------



## HelloU (20 June 2018)

sptrawler said:


> ................
> Also the ATO has introduced a reporting requirement, that any large sums removed from super, have to be immediately reported. Make of that, what you will.



can you provide info here please.......I am currently thinking that this is a long standing requirement to do with access prior to 60 years of age (65yrs) type scenarios ..........but happy to learn


----------



## sptrawler (20 June 2018)

Value Collector said:


> The current system does account for it, as far as I understand the bulk of super is taxed
> 
> eg. the money you put in from your wages over your life is taxed, and the earnings that are earned during the life of the super fund are taxed, and its only right at the end of the super funds life during the pension phase that the earnings become tax free, but by then the bulk of the funds are after tax capital.




During the accumulation phase, as you say, the earnings are taxed at 15% even if you aren't working. the $18,000 tax free threshold doesn't apply.
But the majority of people including Bill Shorten, would have you believe it hasn't been taxed at all. 
They also like to include the after tax contributions, in there misinformation, as it adds BS to their figures.
A worker would have to be crazy, to put their own money into super, pre Bill Shorten I would have encouraged people to put extra money in. Now the cat is out of the bag, so to speak, it has become obvious the Government will class super as their money, not yours. IMO


----------



## sptrawler (20 June 2018)

HelloU said:


> can you provide info here please.......I am currently thinking that this is a long standing requirement to do with access prior to 60 years of age (65yrs) type scenarios ..........but happy to learn




As far as I'm aware, as from July1 it applies to funds in the pension phase. Junior or one of the other specialists, can probably give the exact provisions.
I wouldn't want to state something that isn't accurate, as I have no qualifications, regarding finance or tax.


----------



## HelloU (20 June 2018)

sptrawler said:


> As far as I'm aware, as from July1 it applies to funds in the pension phase. Junior or one of the other specialists, can probably give the exact provisions.
> I wouldn't want to state something that isn't accurate, as I have no qualifications, regarding finance or tax.



thanks, googled already and will have another whilst waiting...

Aside, if u r not prepared to just make stuff up then i am afraid the internet has no place for people like you.




lol


----------



## sptrawler (20 June 2018)

HelloU said:


> thanks, googled already and will have another whilst waiting...
> 
> Aside, if u r not prepared to just make stuff up then i am afraid the internet has no place for people like you.
> lol




Here is a link to the new reporting system, I think it is called event based reporting.

https://www.hlb.com.au/event-based-reporting-impacts-smsfs/

It is to do with anything, that affects your transfer balance cap.


----------



## Tisme (20 June 2018)

tech/a said:


> Early retirement is very alive and well.
> Just wander down to any Social Security
> Office and you’ll find a whole room full
> Of experts.
> ...


----------



## Toyota Lexcen (20 June 2018)

spot on spitrawler, if you 45yrs +up, own your home or close too it the pension is no brainer for a couple


----------



## PZ99 (20 June 2018)

sptrawler said:


> Here is a link to the new reporting system, I think it is called event based reporting.
> 
> https://www.hlb.com.au/event-based-reporting-impacts-smsfs/
> 
> It is to do with anything, that affects your transfer balance cap.



So this is for SMSF's with balances over 1 million then. That's fair enough.

Must be tempting for someone to quietly borrow from the fund for black magic 

Are they doing it for fear of Bill Shorten confiscating it or something ?


Toyota Lexcen said:


> spot on spitrawler, if you 45yrs +up, own your home or close too it the pension is no brainer for a couple



You just wanna hope that it's still there when you reach 67.

Because if everyone does it - it'll only be paid to them after they've died.

Personally I can't wait that long. I got fings to do


----------



## Toyota Lexcen (20 June 2018)

cool, spend it all,  and the pension there for you


----------



## PZ99 (20 June 2018)

But what if Bill Shorten gets in?

We've already read in post 228 that Labor want to increase the pension age - apparently.

What happens if he abolishes it altogether?


----------



## Toyota Lexcen (20 June 2018)

guess that depends on peoples age and individual circumstances


----------



## PZ99 (20 June 2018)

The individual circumstances are that I've taken your advice and blown all my dough on a Lamborghini and a fridge with 6G internet to qualify for the pension. So has everyone else. The age of entitlement is alive and well. Then the pension has to be rolled out to the entire aged population.

Enter Labor. We can't afford it so it gets abolished. WhatdoIdo ? lol


----------



## sptrawler (20 June 2018)

Toyota Lexcen said:


> spot on spitrawler, if you 45yrs +up, own your home or close too it the pension is no brainer for a couple




I would definitely keep saving, just wouldn't use super as the vehicle, employer contributions fine just wouldn't put my own money in.

It is a shame the Government years ago raided the pot, and decided to pay pensions from consolidated revenue.

If we had a system(which I believe we had), like U.K, NZ and Canada, everyone gets the pension, your super is taxed as income.
Therefore everybody gets the minimum pension, and it is up to you if you want to save for a better retirement.
It sounds a whole lot fairer, than the system we have.
From memory,I think it was Keating who removed the statutory 6% levy on income tax, that was meant to be set aside for welfare.
Ah, how history has a way of changing.


----------



## sptrawler (20 June 2018)

PZ99 said:


> The individual circumstances are that I've taken your advice and blown all my dough on a Lamborghini and a fridge with 6G internet to qualify for the pension. So has everyone else. The age of entitlement is alive and well. Then the pension has to be rolled out to the entire aged population.
> 
> Enter Labor. We can't afford it so it gets abolished. WhatdoIdo ? lol




No, No, enter Labor, we can't afford it, everyone who has anything spend it, those who have nothing increase the pension.
It's equivalent to having $800k in the bank already.


----------



## PZ99 (20 June 2018)

_Increase_ the pension... that's a good one. Greece is the word!


----------



## Toyota Lexcen (20 June 2018)

Just work your way through it all like people doing now


----------



## sptrawler (20 June 2018)

PZ99 said:


> _Increase_ the pension... that's a good one. Greece is the word!




The pension is indexed every 6 months, guaranteed. 

Don't know what you're on, but it isn't reality.


----------



## PZ99 (20 June 2018)

sptrawler said:


> The pension is indexed every 6 months, guaranteed.
> 
> Don't know what you're on, but it isn't reality.



Indexed to... Telstra? LOL

I'm just adding to all the other conspiracy theories about the Boogie man from the ALP and super disappearing into the ether. Got any more?


----------



## sptrawler (20 June 2018)

PZ99 said:


> Indexed to... Telstra? LOL
> 
> I'm just adding to all the other conspiracy theories about the Boogie man from the ALP and super disappearing into the ether. Got any more?




No it's indexed to CPI or average weekly wages, whichever is the greater.
I thought you would be better researched, before you started hurling insults?
Funny how I miss read you.

Also you may laugh at the Mum and Dad Telstra investors, but not only have they lost their capital, Silly Billy wants to take their franking credit.
But I can see you're sympathetic. LOL


----------



## Toyota Lexcen (20 June 2018)

That's good. Do they do public housing for seniors also?


----------



## IFocus (20 June 2018)

tech/a said:


> Because they won’t be a burden on the tax payer claiming a pension.
> The tradie can also take advantage of the same situation as I did back
> In the day —— tradie with Property ——- .I and my company pay Tax plenty of tax.
> Personal tax
> ...




I am dead against the big end getting tax breaks but happy for the gov to throw money at small business


----------



## PZ99 (20 June 2018)

sptrawler said:


> No it's indexed to CPI or average weekly wages, whichever is the greater.
> I thought you would be better researched, before you started hurling insults?
> Funny how I miss read you.
> 
> ...



What insults?

The reality is it's the Coalition that are a threat to your super - not Labor.
Look at the record > 2007 increased the preservation age.
2013 scrap the $500 super rebate for low income earners.
2016 caps super contributions.

But it's all Bill Shorten's fault, as usual.

So let's cut the crap mate


----------



## Humid (20 June 2018)

If you own your own home on a full pension is it really that good a life style?
I honestly have know idea


----------



## sptrawler (20 June 2018)

PZ99 said:


> What insults?
> 
> The reality is it's the Coalition that are a threat to your super - not Labor.
> Look at the record > 2007 increased the preservation age.
> ...




Nice change of subject, you didn't know the pension was automatically indexed, made it a personal insult.
Now try and backfill the hole, you dug.
I thought you had more talent than that.


----------



## sptrawler (20 June 2018)

Humid said:


> If you own your own home on a full pension is it really that good a life style?
> I honestly have know idea




Yes it is I know plenty of pensioners, and if they don't have a gambling problem and don't smoke. They can still afford the cruising.


----------



## sptrawler (20 June 2018)

Toyota Lexcen said:


> That's good. Do they do public housing for seniors also?



As far as I know, elderly get housing priority, as do single mothers etc.
People in a real disadvantaged position, can jump the queue for public housing.


----------



## PZ99 (20 June 2018)

sptrawler said:


> Nice change of subject, you didn't know the pension was automatically indexed, made it a personal insult.
> Now try and backfill the hole, you dug.
> I thought you had more talent than that.



I know very well how the pension works. But your sense of humour evaporated when I posted some satire not unlike yours. There's no point in accusing me of a personal insult when I've done no such thing. It now appears this debate has been hijacked by yourself for the sake of some good ole fashioned Labor bashing. I haven't changed the subject, my posts have been on topic all the way.

Maybe I should use your logic and pull you up for insulting pensioners who smoke and gamble ?

But I'm more interested in the topic and my comment stands - the Coalition were against superannuation from the start and they had every opportunity to improve the model during the Howard years by increasing the contribution as originally planned by Keating. Instead they gave us inflation and several interest rate rises in a row after promising to keep them low. This is in addition to their continual attack on penalty rates for weekend workers.

If you want to retire, or simply survive, you are better off avoiding another three years of a Turnbull Govt sabotaged by a back-bench-has-been who was the worst PM this country has ever seen.


----------



## Toyota Lexcen (20 June 2018)

when you get 2 pensions for 1 household its pretty good.

when you down to 1 pension it can be "survive" only, but can always get pension loans scheme or reverse mortgage


----------



## sptrawler (20 June 2018)

PZ99 said:


> I know very well how the pension works. But your sense of humour evaporated when I posted some satire not unlike yours. There's no point in accusing me of a personal insult when I've done no such thing. It now appears this debate has been hijacked by yourself for the sake of some good ole fashioned Labor bashing. I haven't changed the subject, my posts have been on topic all the way.




If you know how the pension works, then the crack about TLS wasn't required. Also the crack about the increase in the pension wasn't true, ala Greece insinuation.
I'm not hijacking anything, just stating the issues as I see them, that is what a debate is.
I'm not against Labor at all, if they could come up with viable sensible policy, that encouraged endeavour and effort, I would be onboard in a flash.
Just because you feel I'm making adverse comment against Labor, doesn't mean it is incorrect.
If you can tell me some of the good policy, they enacted, when in Government I will concede to it. But all I've witnessed is policy on the run, and what policy is enacted is poorly implemented. IMO Unfortunately I'm allowed to have that opinion. 



PZ99 said:


> Maybe I should use your logic and pull you up for insulting pensioners who smoke and gamble ?



You can pull me up on that issue as much as you like, how can you justify the public funding smoking, which adds billions to our health budget, or the public purse funding gambling which destroys families.
I can certainly say I don't want my tax paying for smoking or gambling, with a clear conscience 



PZ99 said:


> But I'm more interested in the topic and my comment stands - the Coalition were against superannuation from the start and they had every opportunity to improve the model during the Howard years by increasing the contribution as originally planned by Keating. Instead they gave us inflation and several interest rate rises in a row after promising to keep them low. This is in addition to their continual attack on penalty rates for weekend workers.




Believe it or not, I think it was Hawke/Keating who removed the statute from the books, that 6% of tax will be with held for welfare including pensions. Then they introduced the super system, weird how things change over time.



PZ99 said:


> If you want to retire, or simply survive, you are better off avoiding another three years of a Turnbull Govt sabotaged by a back-bench-has-been who was the worst PM this country has ever seen.




You obviously haven't lived through many P.M's, Turnbull isn't my idea of a P.M, but god help us if Bill gets in. IMO


----------



## Humid (20 June 2018)

So basically my choice is take the franking credits or the pension 
Both come from the same place is that right?


----------



## sptrawler (20 June 2018)

Humid said:


> So basically my choice is take the franking credits or the pension
> Both come from the same place is that right?




No, the pension will be there.
Not so the franking credits. lol


----------



## PZ99 (20 June 2018)

sptrawler said:


> If you know how the pension works, then the crack about TLS wasn't required. Also the crack about the increase in the pension wasn't true, ala Greece insinuation.



The Greece comment was if everyone blew their money to qualify for the pension this country would go broke. There's no mystery to that scenario. It's a recipe for joining the unsustainable debt burden that other countries have done. That's why the super system was set up in the first place.

As for the TLS comment, basically, get a grip. You would have to very PC to be offended by that remark. What happens if it goes up 10 - 15% next year? Peace out, Bro.



> I'm not hijacking anything, just stating the issues as I see them, that is what a debate is.
> I'm not against Labor at all, if they could come up with viable sensible policy, that encouraged endeavour and effort, I would be onboard in a flash.
> Just because you feel I'm making adverse comment against Labor, doesn't mean it is incorrect.



It doesn't mean it's correct either - have a look at your post #203 and feel free to dissect the truth from the bull. Just how is this smug, deceitful, FW with no humility Bill Shorten planning to strip away your savings? The franking credit policy is being restored back to its original model. Anyone with their eggs in one basket who are grossly affected by a reverse change need to look hard at their situation. We were warned 3 years ago that it's busting the budget so it needs to be dealt with. Or everyone will just have to pay more tax to pay for it.

Who knows? It might even grow your capital if the companies invested more in the business instead of giving away their entire EPS on dividends.



> If you can tell me some of the good policy, they enacted, when in Government I will concede to it. But all I've witnessed is policy on the run, and what policy is enacted is poorly implemented. IMO Unfortunately I'm allowed to have that opinion.



Encouraging endeavour and effort. OK. Dropped workchoices for starters. Whether that means anything to you I don't know. What I do know is workchoices cost a lot of workers a truck load of their income and one guy I know lost his accommodation because of the $300 a week that was stripped from his income. He couldn't pay his rent anymore.
Medicare surcharge tax relief for workers over $50K was another policy they got right.
There's probably others but those two suit this topic the best.



> You can pull me up on that issue as much as you like, how can you justify the public funding smoking, which adds billions to our health budget, or the public purse funding gambling which destroys families.
> I can certainly say I don't want my tax paying for smoking or gambling, with a clear conscience



That's an overreaction. Most people don't destroy their family with gambling. Smokers and the Crown Casino add billions to the budget every year with tax. Banning these people from the pension citing the above is just utopian and a bit too Kommy for my liking. I noticed you left out the drugs and alcomohol 



> Believe it or not, I think it was Hawke/Keating who removed the statute from the books, that 6% of tax will be with held for welfare including pensions. Then they introduced the super system, weird how things change over time.



And? The super accounts have 2.5 trillion invested. Could've been a lot more if not opposed by the Liberal Party. If they had their way we would have nothing. We know this because, as previously mentioned, they are still attacking it.



> You obviously haven't lived through many P.M's, Turnbull isn't my idea of a P.M, but god help us if Bill gets in. IMO



That's what people said about Hawke, Keating and Howard. I've lived through more prime ministers than I care to remember.


----------



## sptrawler (20 June 2018)

PZ99 said:


> The Greece comment was if everyone blew their money to qualify for the pension this country would go broke. There's no mystery to that scenario. It's a recipe for joining the unsustainable debt burden that other countries have done. That's why the super system was set up in the first place.




Most will blow their money, that is a fact, doesn't mean you should punish pensioners that saved, maybe you should reward them that would be novel.

You are correct, the super system was set up to make sure Australia had savings, but it was because our banks nearly went broke after the 1987 stock market crash.
Because we had no savings, the banks were overly exposed to overseas lending, that was called in.


PZ99 said:


> As for the TLS comment, basically, get a grip. You would have to very PC to be offended by that remark. What happens if it goes up 10 - 15% next year? Peace out, Bro.




Well you say that, but I find it offensive, believe it or not a lot of Mum and Dad investors bought Telstra, and they did get a nice little dividend + they got a franking credit.
Which was a nice little plus for them. Their money has gone down the toilet, their dividend is going down the toilet and initially, before Bill got a slap around the ears, their franking credit was going down the toilet also.
While those on a full pension enjoy indexing, free this, free that. Maybe I'm too PC or maybe you are just showing no empathy, who knows?
If TLS goes to 10-15% those Mums and Dads have done there money, and they will be on the pension, as most will.



PZ99 said:


> It doesn't mean it's correct either - have a look at your post #203 and feel free to dissect the truth from the bull. Just how is this smug, deceitful, FW with no humility Bill Shorten planning to strip away your savings? The franking credit policy is being restored back to its original model. Anyone with their eggs in one basket who are grossly affected by a reverse change need to look hard at their situation. We were warned 3 years ago that it's busting the budget so it needs to be dealt with. Or everyone will just have to pay more tax to pay for it.




Well it took me a while to get back to that post, it wasn't to you it was to willy1111, shame you couldn't keep things on track with posts we interacted with.
However I will post to it, because I don't have any problem with my personal beliefs.

The franking credits are being restored back to its original policy, the original super policy was enacted to get Australians saving, because they weren't.

To replace a welfare policy, that had already been ripped off by Government.

Then was put forward as a way of replacing wage rises, to supplement peoples pensions, *now they have to change the words from supplement, to supplement and or replace.*
Get off the grass, there's only one person here who needs to get a grip. IMO and it isn't me. lol




PZ99 said:


> Encouraging endeavour and effort. OK. Dropped workchoices for starters. Whether that means anything to you I don't know. What I do know is workchoices cost a lot of workers a truck load of their income and one guy I know lost his accommodation because of the $300 a week that was stripped from his income.
> Medicare surcharge tax relief for workers over $50K was another policy they got right.
> There's probably others but those two suit this topic the best.




Workchoices lost the Howard Government the election, so how you can say it had a major effect is nonsense, Labor were in for two terms after that.
Now everyone is complaining about the "fair work commission" which is stacked with union representation.
So the other claim to fame, for the Labor Party after two terms of office, with a complete majority is medicare surcharge relief for workers over $50k.




PZ99 said:


> That's an overreaction. Most people don't destroy their family with gambling. Smokers and the Crown Casino add billions to the budget every year with tax. Banning these people from the pension citing the above is just utopian and a bit too Kommy for my liking.




Well I'm not going to give that a response, which may give it some credibility.



PZ99 said:


> And? The super accounts have 2.5 trillion invested. Could've been a lot more if not opposed by the Liberal Party. If they had their way we would have nothing. We know this because, as previously mentioned, they are still attacking it.




Which obviously could be stolen by the Government, or the retail funds, or the financial planners, or the union based industry funds. Who knows, it looks like everyone wants a piece of the action.
If I was still working, I would be saying fluck the 12% in super, give me a pay rise, at least then it is my pocket and I can decide what happens to it.
Bill has made super, the most shakey investment ever, put your money in now, and maybe you will get it back later. FFS absolute dick.



PZ99 said:


> That's what people said about Hawke, Keating and Howard. I've lived through more prime ministers than I care to remember.




Obviously you've learnt FA in the process, best you ignore me. LOL


----------



## PZ99 (20 June 2018)

sptrawler said:


> Most will blow their money, that is a fact, doesn't mean you should take from pensioners that saved.
> You are correct, the super system was set up to make sure Australia had savings, but it was because our banks nearly went broke after the 1987 stock market crash.
> Because we had no savings, the banks were overly exposed to overseas lending, that was called in.



No the system was set up because the Keating Govt knew the aged population would be an increasing burden on the budget. Which is exactly what's happening.



> Well it took me a while to get back to that post, it wasn't to you it was to willy1111, shame you couldn't keep things on track with posts we interacted with.



Ahh OK. I'm not allowed to respond unless you are quoting me.
Show me the rule stipulating that, please.



> The franking credits are being restored back to its original policy, the original super policy was enacted to get Australians saving, because they weren't.
> To replace a welfare policy, that had already been ripped off by Government.
> Then was put forward as a way of replacing wage rises, to supplement peoples pensions, *now they have to change the words from supplement, to supplement and or replace.*
> Get off the grass.



Get off the grass yourself. It has always been supplement and /or replace because as previously mentioned, the pension is being funded by a dwindling pool of workers.



> Workchoices lost the Howard Government the election, so how you can say it had a major effect is nonsense, Labor were in for two terms after that.
> Now everyone is complaining about the "fair work commission" which is stacked with union representation.
> So the other claim to fame, for the Labor Party after two terms of office, with a complete majority is medicare surcharge relief for workers over $50k.



Workchoices was rolled back in Labor's first term and workers got their penalty rates back.

How is that nonsense?




> Well I'm not going to give that a response, which may give it some credibility.



Smart move. Pity you didn't think of that when you made the below dumb comment.



> Obviously you've learnt FA in the process, best you ignore me. LOL



That's a good idea - but not before I ram your insult back to where it came from. LOL


sptrawler said:


> Well you say that, but I find it offensive, believe it or not a lot of Mum and Dad investors bought Telstra, and they did get a nice little dividend + they got a franking credit.
> Which was a nice little plus for them. Their money has gone down the toilet, their dividend is going down the toilet and initially, before Bill got a slap around the ears, their franking credit was going down the toilet also.
> While those on a full pension enjoy indexing, free this, free that. Maybe I'm too PC or maybe you are just showing no empathy, who knows?
> If TLS goes to 10-15% those Mums and Dads have done there money, and they will be on the pension, as most will.




The irony is that when I made the TLS comment it was in response to a pot shot from yourself and you've gone and thrown several more prepubescent style insults since then. So either you can't see the double standards in your comments or you're just trivialising for the sake of nothing.

It's an own goal either way.


----------



## Smurf1976 (20 June 2018)

sptrawler said:


> Bill has made super, the most shakey investment ever, put your money in now, and maybe you will get it back later. FFS absolute dick



I'd lost confidence in it long before Bill was on the scene.

Far too many changes to something that if done correctly shouldn't require ongoing tinkering at all.


----------



## sptrawler (20 June 2018)

PZ99 said:


> No the system was set up because the Keating Govt knew the aged population would be an increasing burden on the budget. Which is exactly what's happening.
> 
> 
> Ahh OK. I'm not allowed to respond unless you are quoting me.
> ...




Sorry can't respond to that rant. lol
Get your facts straight, then post something that can be responded to.
Look back through my posts, then google them, then correlate the facts.
That would be a good start, rather than writing a novel, of how you think the world is, or was.


----------



## PZ99 (20 June 2018)

sptrawler said:


> Sorry can't respond to that rant. lol
> Get your facts straight, then post something that can be responded to.
> Look back through my posts, then google them, then correlate the facts.
> That would be a good start, rather than writing a novel, of how you think the world is, or was.



I suggest you take your own advice when it comes to getting facts straight. And that won't happen by going through your posts. I'm fairly confident of my view of the world, simply because it isn't distorted by prejudiced disdain for the contrary opinions of others


----------



## sptrawler (20 June 2018)

PZ99 said:


> I suggest you take your own advice when it comes to getting facts straight. And that won't happen by going through your posts. I'm fairly confident of my view of the world, simply because it isn't distorted by prejudiced disdain for the contrary opinions of others




Well I guess that's up to the other members to decide.


----------



## PZ99 (20 June 2018)

sptrawler said:


> Well I guess that's up to the other members to decide.



Sure is. 

Meanwhile Sunday workers will get another cut to their penalty rates after next week which is opposed by all sides of parliament except the Govt that lobbied for it. Gotta love that empathy


----------



## sptrawler (21 June 2018)

PZ99 said:


> Sure is.
> 
> Meanwhile Sunday workers will get another cut to their penalty rates after next week which is opposed by all sides of parliament except the Govt that lobbied for it. Gotta love that empathy



I worked shift work all my working life, did you worry about me?
I worked Saturdays, Sundays, Public holidays, had to roster our holidays, so if two people wanted the school holidays off they couldn't have it two years in a row.
Wow, did that really happen, oh no, I can't believe it.
Grow a pair and get over it, like I said don't ask my opinion, you won't like it.
It isn't fairy floss and hundreds and thousands.
We were always on an annualised salary.
All workers in the mines get paid the same, whether it is a flucking weekend, public holiday or ramadan. No one,other than office workers in the City, give a $hit.
You Chardonnay socialists, really need a dose of the real world, that pays your bills. lol


----------



## PZ99 (21 June 2018)

sptrawler said:


> I worked shift work all my working life, did you worry about me?
> I worked Saturdays, Sundays, Public holidays, had to roster our holidays, so if two people wanted the school holidays off they couldn't have it two years in a row.
> Wow, did that really happen, oh no, I can't believe it.
> Grow a pair and get over it, like I said don't ask my opinion, you won't like it.
> ...



Chardonnay socialists? And you're whinging about Telstra and dividends and pensions?

What a hilarious comment. Grow a pair yourself.

And what exactly are you offering for me to want to worry about you anyways?

Who cares what a salary earners gets? It's irrelevant. 

I too have to roster my holidays. And I've worked Saturdays and Sundays for around 40 years. And most of that was *without* penalty rates. Some of it was for no money at all because I was running my own business.

So don't talk to me about socialism when it has zip to do with what I'm talking about.

I don't give a rats backside what workers in the mines get. But you can bet your brass balls to a monkey they earn a hell of a lot more than retail workers. And it's retail workers that are getting attacked.

Oh, yeah. No one other than office workers give a $hit? Wrong.

Almost every poll that's been done shows overwhelming support for penalty rates. DYOR.


----------



## sptrawler (21 June 2018)

PZ99 said:


> Chardonnay socialists? And you're whinging about Telstra and dividends and pensions?
> 
> What a hilarious comment. Grow a pair yourself.
> 
> ...




They may earn a lot more than a retail worker, but they work 60 hrs a week and work five weeks of night and days, then get one week off, flying in their time.
Maybe some of the retail workers should try it.

Retail workers, who work more than 37.5 hours a week, probably still get penalty rates if they work the weekend.
You will probably find that the penalty rates, are only being cut on those workers, who only work the weekends.
But you're probably not interested in that, it wouldn't suit your argument.


----------



## PZ99 (21 June 2018)

sptrawler said:


> They may earn a lot more than a retail worker, but they work 60 hrs a week and work five weeks of night and days, then get one week off, flying in their time.
> Maybe some of the retail workers should try it.
> 
> Retail workers, who work more than 37.5 hours a week, probably still get penalty rates if they work the weekend.
> ...



It's a pity you didn't read the original comment.

"Sunday workers will get another cut to their penalty rates"

It has nothing to do with overtime or any other shift or roster.

It has nothing to do with miners or whatever EBA they've negotiated. Do they work Christmas day, Boxing day and Easter too? Don't bother answering that, because like I said, it's irrelevant.


----------



## sptrawler (21 June 2018)

PZ99 said:


> It's a pity you didn't read the original comment.
> 
> "Sunday workers will get another cut to their penalty rates"
> 
> ...




So now you reduce the post to dribble. 
Like I said earlier, don't post to me, if you don't want an honest answer.
Find a poster, that is sympathetic to your dribble.


----------



## PZ99 (21 June 2018)

sptrawler said:


> So now you reduce the post to dribble.
> Like I said earlier, don't post to me, if you don't want an honest answer.
> Find a poster, that is sympathetic to your dribble.



Since when did I ask for your sympathy? The decision doesn't affect me personally.
You said earlier, don't post to you. So why are you still at it? It's obvious you've lost interest in the topic and now it's just girl sheets and giggles. Did you want me to help you irrigate the mines with all the denial dribble from your keyboard or something?


----------



## sptrawler (21 June 2018)

PZ99 said:


> Since when did I ask for your sympathy? The decision doesn't affect me personally.
> You said earlier, don't post to you. So why are you still at it? It's obvious you've lost interest in the topic and now it's just girl sheets and giggles. Did you want me to help you irrigate the mines with all the denial dribble from your keyboard or something?




Is this really what trolls are like, jeezus is there any wonder they drive people mad. Lol


----------



## SirRumpole (21 June 2018)

sptrawler said:


> Is this really what trolls are like, jeezus is there any wonder they drive people mad. Lol




Pity this discussion has descended into petty vindictiveness, it was going well for a while.

The purpose of the cuts to penalty rates was to create more employment. Has it worked ? No one has released any data to back that up as far as I can see.


----------



## PZ99 (21 June 2018)

sptrawler said:


> Is this really what trolls are like, jeezus is there any wonder they drive people mad. Lol



There, see ?

We could've had a reasonably intelligent discussion about working life, incomes, and how some people can retire with a modest sum of money. That's the conversation I was trying to start with the penalty rates. But in disagreeing with my opinion you attempted to regain credibility by throwing pointless insults around. That's exactly what trolls do and it says far more about yourself than me or anyone else. Predictably boring.

Cutting penalty rates won't increase employment IMO. Just increases profits.
They were abolished completely from the IR laws under workchoices and it did nothing for employment and this latest cut will achieve even less than that.

Hey @SirRumpole 10,000 posts. Well done mate


----------



## sptrawler (21 June 2018)

There you go, Rumpy throws you a life Bouy and you're up there like a rat up a drain pipe.
Time for bed, I'll talk to you tomorrow.
Meanwhile get your facts straight, Rumpy has just put up a argument that will prove itself, many businesses don't open due to penalty rates.
When the stats come in, I bet it will show an increase in employment.
Jumping on his lifeline just shows the shallowness of your argument.


----------



## PZ99 (21 June 2018)

sptrawler said:


> There you go, Rumpy throws you a life Bouy and you're up there like a rat up a drain pipe.
> Time for bed, I'll talk to you tomorrow.
> Meanwhile get your facts straight, Rumpy has just put up a argument that will prove itself, many businesses don't open due to penalty rates.
> When the stats come in, I bet it will show an increase in employment.
> Jumping on his lifeline just shows the shallowness of your argument.



So getting it back on topic is running up a drain pipe? What kind of idiotic comment is that?
I was just happy to talk to someone decent for a change.

See ya, wouldn't wanna be ya


----------



## SirRumpole (21 June 2018)

PZ99 said:


> Hey @SirRumpole 10,000 posts. Well done mate




Ta PZ.

Quantity or quality or both ? 

Some of us just like seeing our monickers in print.


----------



## Humid (21 June 2018)

sptrawler said:


> They may earn a lot more than a retail worker, but they work 60 hrs a week and work five weeks of night and days, then get one week off, flying in their time.
> Maybe some of the retail workers should try it.
> 
> Retail workers, who work more than 37.5 hours a week, probably still get penalty rates if they work the weekend.
> ...




Your a bit out of touch on mining rosters mate


----------



## sptrawler (21 June 2018)

Humid said:


> Your a bit out of touch on mining rosters mate



Yes I know.
They have improved a lot, and they vary from site to site, but the guys still put in a huge amount of hours.


----------



## basilio (21 June 2018)

This topic has certainly moved a bit since I kicked it off.
I opened the discussed on two different stories which explored  how a frugal living style enabled some people to retire early and others ... just to survive.
I think there is a good discussio around  how much money do we need to live well . The irony of a wealthy lifestyle is that in many  cases the extra spending makes people more miserable or unhealthy.

_Came across two "similar but different" stories today.

The first was an extract from a book on Living Frugally and how to retire (to an idyllic paradise) at 32.

The second was from a blog site on living frugally - just to stay alive. I wondered what ASF posters would make of the differing slants to the Living Frugally question ?_


----------



## SirRumpole (21 June 2018)

basilio said:


> This topic has certainly moved a bit since I kicked it off.
> I opened the discussed on two different stories which explored  how a frugal living style enabled some people to retire early and others ... just to survive.
> I think there is a good discussio around  how much money do we need to live well . The irony of a wealthy lifestyle is that in many  cases the extra spending makes people more miserable or unhealthy.
> 
> ...




Some links might help.

Once people become used to the trappings of modern society it's hard to give them up. eg would we all go off grid and live without electricity or spend oodles making ourselves power self sufficient with solar, wind and batteries, and how "frugal" is that really once you add up the capital expenditure ?


----------



## PZ99 (21 June 2018)

basilio said:


> This topic has certainly moved a bit since I kicked it off.
> I opened the discussed on two different stories which explored  how a frugal living style enabled some people to retire early and others ... just to survive.
> I think there is a good discussio around  how much money do we need to live well . The irony of a wealthy lifestyle is that in many  cases the extra spending makes people more miserable or unhealthy.
> 
> ...



On your last sentence.. living frugally is something I've done pretty much all my working life.
I had to. Even though I started with nothing I was determined not to pay rent so I bought this crap box in the Blue Mountains where it was cheap but it meant I had to travel a long way to work. When the interest rates shot up to 17% there were several times when I had to make a choice between filling up the car for the next week and skipping food or sleeping in the car and eating. That's about as crappy as it gets. Getting a second job was the only escape.

The point to the above is retiring early (which is what I'm doing) is possible, even today. There are many things people can go without if they really needed to. As to my first post in the thread I pay all my bills 12 months in advance and keep just $10k for myself which I struggle to spend. Everything else just goes into the retirement fund.

I have two guys at work that are in their 20's and want to retire early. I asked them what sacrifices they were making, then told them to double the list


----------



## tech/a (21 June 2018)

PZ99 said:


> Sure is.
> 
> Meanwhile Sunday workers will get another cut to their penalty rates after next week which is opposed by all sides of parliament except the Govt that lobbied for it. Gotta love that empathy




So if I want to work without penalty why can’t I 
If an employer is offered labour without penalty why can’t he accept it?

If you work 40 hrs a week and don’t wish to work more unless your paid a penalty 
You should be able to.
If I’m an employer and think that my people are more productive than others 2hy can’t I pay them above award rates and penalty rates.

If I’m wanting to prove myself to an employer and become one of those special employees why can’t I work at a fair wage and choose not to work for penalty why can’t I?


----------



## PZ99 (21 June 2018)

tech/a said:


> So if I want to work without penalty why can’t I
> If an employer is offered labour without penalty why can’t he accept it?
> 
> If you work 40 hrs a week and don’t wish to work more unless your paid a penalty
> ...



Because changing the rate penalises other workers who simply can't afford a further pay cut. They already copped it last year and will cop a more severe one this year.

Your choice to work for a lower rate is fine. But not if affects other people.


----------



## SirRumpole (21 June 2018)

tech/a said:


> So if I want to work without penalty why can’t I
> If an employer is offered labour without penalty why can’t he accept it?




Because that would be a race to the bottom, and you wouldn't get any labour because they'd rather get the same money on the dole for nothing.


----------



## basilio (21 June 2018)

SirRumpole said:


> Some links might help.
> 
> Once people become used to the trappings of modern society it's hard to give them up. eg would we all go off grid and live without electricity or spend oodles making ourselves power self sufficient with solar, wind and batteries, and how "frugal" is that really once you add up the capital expenditure ?




Links were in the original post

https://www.theguardian.com/money/2018/mar/08/how-to-retire-early-frugal-spending
https://www.theguardian.com/money/2018/mar/08/how-to-retire-early-frugal-spending

https://www.theguardian.com/lifeandstyle/2016/aug/08/frugal-bloggers-budget-personal-finance-poverty


----------



## tech/a (22 June 2018)

PZ99 said:


> Because changing the rate penalises other workers who simply can't afford a further pay cut. They already copped it last year and will cop a more severe one this year.
> 
> Your choice to work for a lower rate is fine. But not if affects other people.




So affecting others is the premise
So I can’t discount goods as that could be putting competitors out of Business
Or I couldn’t work as a volunteer because I’m taking a job that should be paid.
Or I’m more desperate to get THAT job than anyone else 

I was a pump jockey Ist week no pay 
Ist month made more in commission from selling product,tyres,services etc than my wage.
Did A years apprenticeship as a mechanic. Made my own wage through worth to employer.



SirRumpole said:


> Because that would be a race to the bottom, and you wouldn't get any labour because they'd rather get the same money on the dole for nothing.




Ha ha 
You presume everyone would accept a dole payment if it was at the average wage.
People want a sense of worth and most get that from their work
Most hate boredom most release that from work
Most want social integration and they get that from work.
Most want to better their lives and those of their family that too from work.

I’ve had guys off work due to long term illness
The one thing they beg me is to get them back to work
Even when 5hey are being paid a full wage !


----------



## Humid (22 June 2018)

tech/a said:


> So if I want to work without penalty why can’t I
> If an employer is offered labour without penalty why can’t he accept it?
> 
> If you work 40 hrs a week and don’t wish to work more unless your paid a penalty
> ...




I think most would be happy if they could get 40 hours a week.
It’s the lack of hours penalties make up for.


----------



## PZ99 (22 June 2018)

tech/a said:


> So affecting others is the premise
> So I can’t discount goods as that could be putting competitors out of business
> Or I couldn’t work as a volunteer because I’m taking a job that should be paid.
> Or I’m more desperate to get THAT job than anyone else
> ...



What's your point? I was a flaggie at Amaroo Park for no pay when Allan Moffatt won a touring car race in a Holden Torana of all things.

Penalties are a compensation for people who work on what is communally accepted as a day off.

Most large discount retailers are open on Sundays + pay penalties and still putting competitors out of business. Are you saying discount retailers should now have an even bigger advantage from paying lower penalties?

If you want to work as a volunteer that's fine. What's so special about doing it on Sunday?

You appear to be saying if you work as a volunteer then everyone else should do it too.

How do they pay their rent?


----------



## PZ99 (22 June 2018)

tech/a said:


> Ha ha
> You presume everyone would accept a dole payment if it was at the average wage.
> People want a sense of worth and most get that from their work
> Most hate boredom most release that from work
> ...



Most people don't want to work weekends.
Most people believe they should get a higher pay rate for working on weekends.
Most people believe penalties add to their sense of worth.
Most people don't agree with cutting penalties.


----------



## SirRumpole (22 June 2018)

PZ99 said:


> Most people don't want to work weekends.
> Most people believe they should get a higher pay rate for working on weekends.
> Most people believe penalties add to their sense of worth.
> Most people don't agree with cutting penalties.




I would image that most of the recipients of penalty rates are casuals or part timers for whom the extra rates make up for less security and less hours of work.


----------



## PZ99 (22 June 2018)

SirRumpole said:


> I would image that most of the recipients of penalty rates are casuals or part timers for whom the extra rates make up for less security and less hours of work.



That's more the job of casual loading - a higher dollar rate, no benefits, no regular work.

In the case of a large business weekend workers are usually on a permanent roster such as a Tuesday to Saturday or a Sunday to Thursday. You see a lot of that in the retail industry because shops are open 7 days a week. That also then extends to workers in the supply chain as well.

But it's the retail workers that are being targeted here. And it's under the false logic that lowering the Sunday rate will somehow create extra employment. It won't.

What will happen is a weekend retail worker will simply earn less money every week for doing the same work and the business will enjoy extra profits which are then dispersed as director profits or dividends for shareholders.

That's the real game that's being played here and it's the business community that have been lobbying (and donating to) the Liberal Party to get it done. They've been doing it since 1991. It was part of the fightback package and it remains on their platform today. That's why they hit us with workchoices in the first place.

Taking money off workers has always been part of the Liberal DNA.


----------



## tech/a (22 June 2018)

PZ99 said:


> What's your point? I was a flaggie at Amaroo Park for no pay when Allan Moffatt won a touring car race in a Holden Torana of all things.
> 
> Penalties are a compensation for people who work on what is communally accepted as a day off.




Ok if they work the other 40 hrs.
The penalty is an enticement. But if it was a flat rate across the board then people could
(1) Say no
OR
(2) Be enticed by employers who could
(a) Afford it
(b) Pass it on to their clients so they could afford it.
EG add a gratuity to weekend work on the food industry.
or *add a weekend surcharge of X% capped at $x if in other industries.*



> Most large discount retailers are open on Sundays + pay penalties and still putting competitors out of business. Are you saying discount retailers should now have an even bigger advantage from paying lower penalties?




Yes. They may fit in (a) or (b). But there may also be many smaller Cafe's, Fashion stores, Shoe shops
the list is endless who would love to take the opportunity to open on peak shopping times but cant afford to due to having to pay staff higher rates while their clients aren't willing to pay higher prices to cover them. *See some alternate suggestions above*



> If you want to work as a volunteer that's fine. What's so special about doing it on Sunday?




Nothing.



> You appear to be saying if you work as a volunteer then everyone else should do it too.
> 
> How do they pay their rent?




No but just as you have an argument there are other counter arguments on the opposite side to the 'Accepted view"
Everyone on each side has an agenda.
That's why penalty rates are looking at being repealed.--- for the other side of the argument.



PZ99 said:


> Most people don't want to work weekends.
> Most people believe they should get a higher pay rate for working on weekends.
> Most people believe penalties add to their sense of worth.
> Most people don't agree with cutting penalties.




(1) Those that want more than a 40 hrs of pay will and do as that's all they can offer is their time.
(2) If they are sacrificing time and don't want the money
(3) As does higher pay --period and a secure job.
(4) Most people don't want any reduction in anything they already have---even if there is valid argument as to how it will help others if they do.--US GUN LAWS.

_


SirRumpole said:



			I would image that most of the recipients of penalty rates are casuals or part timers for whom the extra rates make up for less security and less hours of work.
		
Click to expand...



Could be true for unskilled.





_


----------



## PZ99 (22 June 2018)

tech/a said:


> Ok if they work the other 40 hrs.
> The penalty is an enticement. But if it was a flat rate across the board then people could
> (1) Say no



No they can't. An employer has every right to re-roster a full time employee onto weekend work as part of their normal roster. If they force you to do it, and you say no, you have no job.



> OR
> (2) Be enticed by employers who could
> (a) Afford it
> (b) Pass it on to their clients so they could afford it.
> ...



They could do all of the above and some do. Which is why there's no need to change the system.

There's one other thing they could do - they could simply put their employees on a salary that has no penalty rates at all. So again, there's no need to change the laws



> Yes. They may fit in (a) or (b). But there may also be many smaller Cafe's, Fashion stores, Shoe shops
> the list is endless who would love to take the opportunity to open on peak shopping times but cant afford to due to having to pay staff higher rates while their clients aren't willing to pay higher prices to cover them. *See some alternate suggestions above*



See my response above. They have that very opportunity now. Put their salaried workers on a weekend roster. That's what they do at the Woolies petrol shops.



> No but just as you have an argument there are other counter arguments on the opposite side to the 'Accepted view"
> Everyone on each side has an agenda.
> That's why penalty rates are looking at being repealed.--- for the other side of the argument.



The other side of the argument needs to have a case that stacks up to community expectations. The vast majority can see that cutting rates is unfair which is one reason why this Govt will probably lose the next election. Even the vast majority of the senate can see it's unfair. When you have people like Pauline Hanson, Hinch, Katter saying it's unfair to cut rates you know the case for doing it is fundamentally flawed.



> (1) Those that want more than a 40 hrs of pay will and do as that's all they can offer is their time.
> (2) If they are sacrificing time and don't want the money
> (3) As does higher pay --period and a secure job.
> (4) Most people don't want any reduction in anything they already have---even if there is valid argument as to how it will help others if they do.--US GUN LAWS.



If someone is doing more than 40 hrs they get paid an overtime rate. That has nothing to do with Sunday penalty rates.

They are already sacrificing time and not getting money. Have you worked in a shop? Most people stay behind after closing time to clean the shop and count the till etc: and they don't usually get paid for that - I never did.

Higher pay will never happen for as long as we have a Govt running the country with a grudge against workers. NSW is running budget surpluses yet they still refuse to pay anything higher than 2.5% P/A for public servants. That's BS in any language.

Most people don't want any reduction in their pay quite simply because they have bills to pay and those bills are going up. It's not as if people can cop it because they have a truckload of money. They don't. Retail workers are among the lowest paid workers in the country already and this cutting rates is just another kick in the guts.


----------



## tech/a (22 June 2018)

PZ99 said:


> Taking money off workers has always been part of the Liberal DNA.






PZ99 said:


> No they can't. An employer has every right to re-roster a full time employee onto weekend work as part of their normal roster. If they force you to do it, and you say no, you have no job.




This is something that could be at time of employment---an agreement.




> They could do all of the above and some do. Which is why there's no need to change the system.
> 
> There's one other thing they could do - they could simply put their employees on a salary that has no penalty rates at all. So again, there's no need to change the laws




Salary is one option but only helpful if people are full time.
If Casual or part time there is no option for employers with regard to Penalties.



> See my response above. They have that very opportunity now. Put their salaried workers on a weekend roster. That's what they do at the Woolies petrol shops.




In most cases they get time in lieu of penalties so still a cost.
My supervisors on salary wont work weekends with out penalties. I wouldn't either if I was sacrificing my weekend but our employers pay the extra. But if I need a labourer who wants to work un skilled on a weekend I have to pay. The café isn't in the same position as we are.




> The other side of the argument needs to have a case that stacks up to community expectations. The vast majority can see that cutting rates is unfair which is one reason why this Govt will probably lose the next election. Even the vast majority of the senate can see it's unfair. When you have people like Pauline Hanson, Hinch, Katter saying it's unfair to cut rates you know the case for doing it is fundamentally flawed.




Clear indictment.



> If someone is doing more than 40 hrs they get paid an overtime rate. That has nothing to do with Sunday penalty rates.
> 
> They are already sacrificing time and not getting money. Have you worked in a shop? Most people stay behind after closing time to clean the shop and count the till etc: and they don't usually get paid for that - I never did.




It does if your working a Sunday.
Yes I have and I was paid for every hour worked.



> Higher pay will never happen for as long as we have a Govt running the country with a grudge against workers. NSW is running budget surpluses yet they still refuse to pay anything higher than 2.5% P/A for public servants. That's BS in any language.
> 
> 
> 
> ...


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## PZ99 (22 June 2018)

tech/a said:


> This is something that could be at time of employment---an agreement.
> 
> Salary is one option but only helpful if people are full time.
> If Casual or part time there is no option for employers with regard to Penalties.



The option is you just don't put casuals or part timers on weekends. If a small business with just casuals doesn't have the confidence to employ full timers then they need to look at whether it's worth trading on Sunday or not. Banks don't, Schools don't, the ASX doesn't. It's not compulsory. 

A coffee shop owner needs to explain why retail workers who don't work for that business should cop a pay cut so he can sell coffee on Sundays. Good luck with that.



> In most cases they get time in lieu of penalties so still a cost.



Not in my circle of friends. They get paid the flat rate and they work every weekend.
No extra benefits.



> My supervisors on salary wont work weekends with out penalties. I wouldn't either if I was sacrificing my weekend



Neither would I. You and your supervisors obviously value your weekends. So do the vast majority of workers including me. If I'm sacrificing my weekend to work I expect compensation.



> but our employers pay the extra. But if I need a labourer who wants to work un skilled on a weekend I have to pay.



Damn straight. Your labourer probably values their weekend as much as you do.



> The café isn't in the same position as we are.



The competent café owner would have started that business knowing full well that Sundays attract penalties. If they can make more money for the business by pulling an employee away from their family on a Sunday then it's fair, in the eyes of most, that they should be adequately compensated.




> Clear indictment.



It's all on the record.



> It does if your working a Sunday.
> Yes I have and I was paid for every hour worked.



I wasn't. We traded from 10am to 4pm. But I was there from 9 to 5pm and didn't get paid. I had to be there to set up the shop and close it down again.


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## tech/a (22 June 2018)

PZ99 said:


> The option is you just don't put casuals or part timers on weekends. If a small business with just casuals doesn't have the confidence to employ full timers then they need to look at whether it's worth trading on Sunday or not. Banks don't, Schools don't, the ASX doesn't. It's not compulsory.
> 
> A coffee shop owner needs to explain why retail workers who don't work for that business should cop a pay cut so he can sell coffee on Sundays. Good luck with that.




I don't have a problem with this if he can charge more to cover the expense.




> Not in my circle of friends. They get paid the flat rate and they work every weekend.
> No extra benefits.




Other than a salary which covers the weekend
There would be an amount included.
If they didn't work a weekend--ever Ill bet the salary would be less.




> Neither would I. You and your supervisors obviously value your weekends. So do the vast majority of workers including me. If I'm sacrificing my weekend to work I expect compensation.




But if I don't have any job and want some money and am prepared to work weekends and have every other day off Id be happy to take a job without penalty rates.




> Damn straight. Your labourer probably values their weekend as much as you do.



See above.




> The competent café owner would have started that business knowing full well that Sundays attract penalties. If they can make more money for the business by pulling an employee away from their family on a Sunday then it's fair, in the eyes of most, that they should be adequately compensated.




In certain circumstances as we have discussed.
But in others an opportunity to survive and even thrive if there are no penalty rates.



> It's all on the record.




Nutters.




> I wasn't. We traded from 10am to 4pm. But I was there from 9 to 5pm and didn't get paid. I had to be there to set up the shop and close it down again.




Did you leave because of this?
Rare these days perhaps some could learn by this.

My guys wont even stay back to clean their utes/trucks and excavators I supply for their work without being paid---through the week!!!


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## PZ99 (22 June 2018)

tech/a said:


> I don't have a problem with this if he can charge more to cover the expense.
> 
> Other than a salary which covers the weekend
> There would be an amount included.
> If they didn't work a weekend--ever Ill bet the salary would be less.



Of course. They would be selling their weekend for a higher salary. Another reason the system should stay as is.



> But if I don't have any job and want some money and am prepared to work weekends and have every other day off Id be happy to take a job without penalty rates.



Which brings me back to my first point. Other workers shouldn't be affected by your desire to work without penalty rates.



> In certain circumstances as we have discussed.
> But in others an opportunity to survive and even thrive if there are no penalty rates.



Most people starting a small business fail within two years. That will never change.
Starting a small business isn't for people who don't know what they're doing. If they can't survive they should work for someone who can. Meanwhile other workers can continue paying their rent because.. it's not their problem.



> Nutters.



They're all nutters 




> Did you leave because of this?
> Rare these days perhaps some could learn by this.
> 
> My guys wont even stay back to clean their utes/trucks and excavators I supply for their work without being paid---through the week!!!



Well I did it out of common sense. Having the shop ready for business before it opened was a sure way to make more money on the day. Your situation would be different though. Are they union members?


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## tech/a (22 June 2018)

No they don't want to be!


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## PZ99 (22 June 2018)

Fairy nuff


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## sptrawler (22 June 2018)

My wife, always worked weekends, I could look after the kids, and she earned as much as everyone else who worked Monday to Friday.
It was a no brainer. she worked 12hrs Saturday and Sunday.
Didn't have to worry about child care, after school care, it worked for us.


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## Smurf1976 (23 June 2018)

SirRumpole said:


> how "frugal" is that really once you add up the capital expenditure ?



Using a variant of your solar panels example and applying it to heating water, at this risk of stating the obvious, hot water is hot water is hot water. The end product is _exactly_ the same regardless of how you put the heat into the water. So long as the method does not involve ongoing effort (eg as a wood or coal fire would) there's no difference in that regard.

A rational person would thus choose the cheapest system, over its lifespan, which is practical to install at their property and to which they have no ideological objections.

I don't see that as penny pinching, just commonsense. End result is exactly the same so pick the cheapest way of getting it.


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## SirRumpole (23 June 2018)

Smurf1976 said:


> End result is exactly the same so pick the cheapest way of getting it.




Which may be to stay on the grid, shop around for providers, buy energy efficient appliances and use smart meters to reduce consumption.

I wonder if that occurs to some of the mavericks who install the Powerwalls and spend the next 20 years paying off the capital expense.


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## IFocus (23 June 2018)

SirRumpole said:


> The purpose of the cuts to penalty rates was to create more employment. Has it worked ? No one has released any data to back that up as far as I can see.




More jobs was always the trojan horse, the idea of leaving the lowest pay who have the least power to bargain wages to market forces is very much a US institution we can well do without.


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## fiftyeight (23 June 2018)

Help me quit the rat race early 

I need a side hustle non trade related and online. Not after a get rich scheme (that's what trading is for ).  Something to generate a steadyish income of about $50k would be ideal.

Current transferable skills for the online world are minimal, but happy to up skill if I find something suitable.

Any suggestions???


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## Smurf1976 (23 June 2018)

SirRumpole said:


> I wonder if that occurs to some of the mavericks who install the Powerwalls and spend the next 20 years paying off the capital expense.




If someone "just wants" something for whatever reason then that's fine. Not everyone wants the cheapest car or cheapest furniture etc.

I do think however that there's a major lack of knowledge on the part of consumers when it comes to this sort of stuff. It only needs high school maths and physics to work it out from scratch, you certainly don't need to be an engineer or electrician to do the calculations, but reality is that apart from those who are in that line of work pretty much nobody will even try. 

On most houses solar panels for electricity generation will provide a return on investment somewhere between outstandingly good to at least being worth considering. There are exceptions but for the majority that is the situation.

As for batteries, well I'm yet to find any normal household situation where a battery will beat interest on cash in the bank if grid power is connected. If you don't have grid power then obviously it's all very different and a solar + battery system will usually beat running a generator all the time. Other than that, a battery also stacks up if you are willing to pay to have a backup power supply either because you just want it and accept the cost or because you're running a business where losing power supply would cost serious $ in which case the battery is a form of insurance. For normal households though it's not a way to save money under present circumstances.


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## basilio (5 July 2018)

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*Join the $300 a month food challenge.....*
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Each week Wendy offers Platinum Cheapskates Club members a new money saving grocery challenge, and shows them just how she manages to feed her family of four on just $300 a month (and keep her home and family clean too - that $300 includes toiletries and cleaning supplies).

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## sptrawler (5 July 2018)

fiftyeight said:


> Help me quit the rat race early
> 
> I need a side hustle non trade related and online. Not after a get rich scheme (that's what trading is for ).  Something to generate a steadyish income of about $50k would be ideal.
> 
> ...




Start a solar panel cleaning business.


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