Australian Federal Election - 2019

[basilio]

You certainly seem to be taking a balanced view in terms of acknowledging that there are problems with the Labor proposal etc.

A major concern in any "compensation" sort of proposal is what defines a retiree.

I'll be politically incorrect and straight to the point and say that for anyone employed on the basis of physical strength or appearance, and there are huge numbers of both, well then the superannuation preservation age (60) is unrealistic and the Age Pension age (67) is silly to the point of farce.

It's politically incorrect to say it but I will. If you're applying for jobs facing the public and aren't reasonably good looking then forget it with rather a lot of employers. There's usually the token older person so it all looks legit but such jobs are overwhelmingly skewed toward younger workers particularly women. For most blue collar work it's much the same, there are exceptions but it's very heavily skewed to those under 50 in practice.

So we have a situation where many in their 50's or in a few cases even 40's find themselves in a situation where either they're self funded involuntary retirees, done completely outside of superannuation, or they're going to spend the next ~15 years on the dole jumping through an endless stream of hoops in order to claim a payment that's barely adequate. It's a not uncommon scenario in practice.

Those who've seen it coming tend to be the people who invest most heavily outside of super and that's motivated by fear far more than any desire to actually be rich. Those people have, of course, already paid more tax by choosing this course of action given they'll be paying tax on the returns from those investments at their marginal rate whilst they're working. Plus they won't be claiming welfare, avoiding that being the primary reason they've invested.

So in any "compensation" arrangement I'd want to see it apply to retirees as such with age not forming part of that definition. If someone's a self-funded retiree at whatever age well then they're a self-funded retiree.

Those in this situation tend to be "off the record" almost completely. Not in employment, not on any form of welfare, not drawing on superannuation, paying a bit of tax but not a lot. They largely don't exist from a statistical perspective, they're not captured in anything which records employment, unemployment, pensioners or those living on superannuation since they're doing none of those. As such they're easily overlooked but personally I know a few so it's a real thing most certainly.

I can see Smurfs point about a certain number of people being early involuntary retirees eking out a small income from shares and dividend imputation rebates. How many ? As he points out it is hard to say. I suggest he is more likely to notice these situations because he most clearly identifies with it and seems to live/work in a circle of people in that possible situation.

I have already suggested that in the world of real politics Labour will come under enormous pressure to soften it's stance on this policy and allow a certain about of dividend imputation credits for minor recipients.

But the facts are that a very large amount of the $5-6-7 Billion in tax rebates is flowing to a core of very wealthy people who have structured their investments to exploit this creative tax loophole. This is the tax target.

There has been an analysis of the recipients of these rebates. It's not that long. The highlights are

Of the 0.1% of individuals with credits between A$20,000 and A$40,000, the average cash refund is A$8,743. The average taxable income for the group is just over A$68,000 and the average superannuation balance is just under A$721,000.

For the top group who have credits in excess of A$40,000, the average cash refund is almost A$63,000, over A$1,200 a week. The average taxable income for the group is the lowest of all groups at A$17,735, falling below the lowest income tax threshold. Almost half (45%) have no taxable income. Their average superannuation balance is A$1,344,782.

Allowing the 99% of people who receive minimal rebates (up to $40840k a year average for only a very small number .8%) to keep their rebates would be a small price to pay to target a small group of very wealthy people who have a nice little rort on their hands.
https://www.solepurposetest.com/opinion/labor-dividend-imputation-policy-hit/

 

[chiff]

If anyone is doing it tough...consider living overseas.Much lower living costs.I get a magazine "International living" .They cover a wide range of countries.In our region Thailand,Malaysia,Bali,Vietnam etc.A few other are France ,Spain,Portugal Costa Rica etc.If I were ever to do that,no plans, I would choose Malaysia....English widely spoken,better governance,cheap rent and food.Good services like fast internet.Live on under 25k a year.

 

[Smurf1976]

Are you saying that half of ASF members are ####ing ugly and weak as piss?

I'm just being pragmatic.

Some people are employed for their intellectual abilities.

Some are employed due to having formal qualifications, licences and/or practical experience.

Some are employed due to their physical abilities.

It's very politically incorrect to say it but some are in practice employed due to appearance. The old "include a photo with your application" and it's no secret what that's really about.

Those in the latter two categories have an age limit in practice and this includes those for whom it's only part of the job.

 

[moXJO]

That's a really good point.

Labor is ignoring a lot of the electorate like self employed tradies, professionals, small business owners and just appealing to low paid workers that are typically union members.

Not just ignoring - bending them over the barrel. There are multiple hits to self employed. The reason I wouldn't vote for them. They do have some policies I like as well.

 

[Smurf1976]

I can see Smurfs point about a certain number of people being early involuntary retirees eking out a small income from shares and dividend imputation rebates. How many ? As he points out it is hard to say. I suggest he is more likely to notice these situations because he most clearly identifies with it and seems to live/work in a circle of people in that possible situation.

Basically yes.

Of all people I've known (ever) who've retired, the majority did so not under circumstances of their choosing and would have gone at a different time if not for some trigger event which caused it to happen when it did. Corporate restructuring or cutbacks, being transferred a long way away at the age of ~60, project comes to an end and so does their job, health, etc.

So thinking about that, well I've known more forced early retirees than I've known people who retired when they wanted to or who are disabled, openly gay or who attend church (to pick random examples).

Exactly how common it is I don't think anyone really knows since from a statistical perspective such people fall through the cracks, They're not employed but they're not officially unemployed either. They're not drawing on superannuation, they're not self-employed in a business and they're not on any sort of welfare. They're off the radar basically.

At a personal level, I've only been unemployed once but I've never claimed the dole. Yep, I was one of those self-funded people during that time. Apart from a Tax Return I wouldn't have showed up in any statistic for anything. Not employed, not on the dole, not running a business. Nobody basically. For what it's worth, no I didn't have much in the way of franking credits at the time, since most of what I was invested in didn't pay franked dividends, but that doesn't mean that others will have made the same choices given that the biggest and most well known companies listed on the ASX do pay franked dividends.

That experience did however teach me something about people. Taught me quite a bit actually.

Meet someone for the first time and pretty soon the conversation turns to "what do you do for a living?". Tell them you're unemployed and it gets a certain response. A response that in most cases changes dramatically if you simply add the words "but I'm not on the dole". Now all of a sudden disdain turns to curiosity. Hmm....

There's a lot of prejudice out there against those doing it tough yes, especially if they're claiming welfare despite being legally entitled to do so. It's a strange world where someone wants to be your friend only once you've confirmed that you're not claiming a relatively trivial sum of taxpayers' funds. Interesting.

Back to this policy of Labor's, well I'm fine with the idea of stopping anyone rorting this or anything else but I cannot support a "blunt" approach which brings with it innocent victims who've done all the right things until they suffered whatever misfortune has caused them to now have a genuinely low income and be relying on their own funds for however long.

I'm using the same logic there as saying yes I fully support the idea that murderers and so on should be dealt with. Good idea yes. No way however will I support locking up innocent people as well just because that's easy and makes sure we get the bad guys. Nope - do it properly and if it costs $$$ for court trials to ensure we don't lock up innocent people well then so be it, as a society we need to wear that cost rather than be locking people up for no good reason.

Same with this one. Labor needs to use a sharp knife not a blunt hacksaw to cut out the rorts. With the amount politicians are paid, and the resources government or major opposition parties have at their disposal, it's not unreasonable to expect them to do so.

 

[sptrawler]

I haven't had a lot of access to the internet recently, so I'm sitting in a hotel room and just reading the latest posts.
The problem with labor, is they bring out awe inspiring big ticket wow factor policy, that usually ends up unraveling and becoming a financial nightmare.
It is somewhat like letting your teenage kids, run the household budget and set the goals and parameters.
There is no doubt IMO, their proposals will end up causing a massive sugar hit to the budget, but the fall out will no doubt cause a budget problem at a later date.
IMO:The incentive to save will diminish, the welfare bill will blow out and the gap between rich and poor will increase.
The franking credit, negative gearing and CGT changes require a progressive component added, or else the only ones who benefit from the changes will be the rich.
Franking credits, only available to those who earn over 30% tax threshold.
Negative gearing, only available to those who can afford to build a new investment property.
Those who can afford to build a new investment property, not only can negative gear, but also get rental assistance to top up rent.
I would assume the CGT changes, will have less effect on developers, who probably pay on company tax rates, as opposed to PAYE tax rates.
The money taken, which will be mainly from the middle class, will be handed to the welfare sector. This in turn will just disenfranchise the middle class, and cause a reduction in productivity, which will in turn reduce investment.
Interesting times ahead I think, unfortunately tax increases are slower to be removed than applied and by the time the penny drops it will be way too late. IMO

 

[PZ99]

Smurf1976, agree with everything else you've said but just on this...

I'm using the same logic there as saying yes I fully support the idea that murderers and so on should be dealt with. Good idea yes. No way however will I support locking up innocent people as well just because that's easy and makes sure we get the bad guys. Nope - do it properly and if it costs $$$ for court trials to ensure we don't lock up innocent people well then so be it, as a society we need to wear that cost rather than be locking people up for no good reason.

Our tax system has never worked the way you're advocating. You are generally overtaxed, and then you spend a lot of time /effort/ money to prove you are owed a refund once a year

 

[sptrawler]

Smurf1976, agree with everything else you've said but just on this...


Our tax system has never worked the way you're advocating. You are generally overtaxed, and then you spend a lot of time /effort/ money to prove you are owed a refund once a year

The Government should only tax enough to run the Country, not tax as much as possible, then try and work out what to spend it on.

 

[PZ99]

Speaking of tax....

"Obtained under freedom of information laws, a senior NSW Treasury official in October 2015 wrote: "The Commonwealth appears more willing to consider broader tax reform.

"The Commonwealth Treasurer has indicated that all options need to be considered, including superannuation, capital gains tax and negative gearing."

Mr Morrison in February 2016 said there were "excesses" in negative gearing and that the government was considering changes."

https://www.abc.net.au/news/2019-05...nterest-overhauling-negative-gearing/11105830

Woops.

 

[sptrawler]

Speaking of tax....

"Obtained under freedom of information laws, a senior NSW Treasury official in October 2015 wrote: "The Commonwealth appears more willing to consider broader tax reform.

"The Commonwealth Treasurer has indicated that all options need to be considered, including superannuation, capital gains tax and negative gearing."

Mr Morrison in February 2016 said there were "excesses" in negative gearing and that the government was considering changes."

https://www.abc.net.au/news/2019-05...nterest-overhauling-negative-gearing/11105830

Woops.

I don't think anyone disputes it, just the ham fisted approach Labor is suggesting, is what the uproar is about.
Which is part for course when Labor try to implement anything.

 

[PZ99]

It looks more like a lost opportunity to me and it speaks volumes of how sponsorship determines policy rather than betterment of the community.

 

[Toyota Lexcen]

Hopefully next election we can vote a party which will introduce a mining tax.

Long overdue.

 

[SirRumpole]

I don't think anyone disputes it, just the ham fisted approach Labor is suggesting, is what the uproar is about.
Which is part for course when Labor try to implement anything.

When it comes to negative gearing reform , I can't think of a more non intrusive way to reverse it than what Labor is suggesting, ie grandfathering existing investments, retaining NG on new houses etc.

I think your comment is based on the fact that you just don't like Labor, rather than on the merits of the proposal.

 

[Macquack]

It looks more like a lost opportunity to me and it speaks volumes of how sponsorship determines policy rather than betterment of the community.

I yearn for the good old days when pretty much all people earnt roughly the same wage. A friend of mine does not work at all because the absolute best he can earn is less than 1/3 of his wife's salary.

I yearn for when most people retired on the pension, and the pension was a rock solid benchmark for gauging real cost of living pressures and comparison to average incomes across the board. Today, people are petrified that they will run out of money in retirement because the Jones's next door have more money and they are also scared they will run out of money.

I am sick of class warfare where the current political agenda of all parties is to divide and conquer and stuff the average person.

 

[chiff]

I yearn for the good old days when pretty much all people earnt roughly the same wage. A friend of mine does not work at all because the absolute best he can earn is less than 1/3 of his wife's salary.

I yearn for when most people retired on the pension, and the pension was a rock solid benchmark for gauging real cost of living pressures and comparison to average incomes across the board. Today, people are petrified that they will run out of money in retirement because the Jones's next door have more money and they are also scared they will run out of money.

I am sick of class warfare where the current political agenda of all parties is to divide and conquer and stuff the average person.

I spoke to a childhood friend of mine...I put forward that we were happier as boys when we were all riding around on our bicycles...noone cared who had the better bike or the best brand etc.
He didn't agree with me...

 

[Smurf1976]

I am sick of class warfare where the current political agenda of all parties is to divide and conquer and stuff the average person.

This plus a substantial % of the population seems similarly obsessed with the whole “status” thing.

 

[wayneL]

I yearn for the good old days when pretty much all people earnt roughly the same wage. A friend of mine does not work at all because the absolute best he can earn is less than 1/3 of his wife's salary.

I yearn for when most people retired on the pension, and the pension was a rock solid benchmark for gauging real cost of living pressures and comparison to average incomes across the board. Today, people are petrified that they will run out of money in retirement because the Jones's next door have more money and they are also scared they will run out of money.

I am sick of class warfare where the current political agenda of all parties is to divide and conquer and stuff the average person.

Things weren't perfect back then either of course, but I agree, Australia was a better place in those days.

 

[wayneL]

I've been getting up to speed on Labor's gender policy. To be honest, I think it is terrifying and actually very counterproductive for those folks so afflicted.

 

[Junior]

I've been getting up to speed on Labor's gender policy. To be honest, I think it is terrifying and actually very counterproductive for those folks so afflicted.

Hi Wayne, what is their gender policy?

 

[wayneL]

Hi Wayne, what is their gender policy?

This of course has a bit of a conservative slant to it, but I think is a fair discussion on some of the concerns