Australia's high personal debt

[sptrawler]

Only thing I've used cash for in the past 6 months is some household goods I sold via Gumtree and then subsequently spending that cash in the shops to get rid of it. Apart from that I simply don't use it all these days although I do keep some on hand just in case.

I'm the same Smurf, I don't think it will be long, before large denomination banknotes start getting phased out.
Just my opinion, I think it will coincide with the finishing of the NBN rollout, when everyone has access to an internet connection be it wireless or fixed line.
The NBN basically becomes an audit of online access, at the moment, it can't be guaranteed that every building has access.
Therefore it could be argued, that it is unfair to expect people to access online banking, when it isn't available. When it is available, the arguments, will be less convincing.
Just my thoughts,interesting times. IMO

 

[moXJO]

Like I said, I believe the cashless society will be upon us sooner rather than later, we just embrace technology.
l

I think its a dangerous thing. Cyber attack can basically bring a country to its knees in a cashless society. All this demonizing of cash by the government seems like a further authoritarian control measure.

 

[Humid]

A credit card will show you exactly where you spent for the month and is a great warranty get out of paying card

 

[sptrawler]

I think its a dangerous thing. Cyber attack can basically bring a country to its knees in a cashless society. All this demonizing of cash by the government seems like a further authoritarian control measure.

I agree, but you think how much extra tax they will get, when all the tradies, lawnmower men, window washers, outback deli's etc all have a tap and go device and have to use it.
It will be quite easy to introduce once you have universal internet access, you just get rid of $20, $50 & $100 notes, then everyone has to handle heaps of $5 & $10 notes or use a tap & go device.
The welfare card is already available and being fine tuned, on small scale sites, so the problems associated with welfare usage will be well and truly sorted out.
I love a conspiracy theory.

 

[bellenuit]

Using Cash doesn't make sense for me, if you are able to control your borrowing. I buy almost everything using a Coles Rewards Platinum Master card which give me 2 points (= 1 cent) per dollar for all qualifying purchases anywhere including overseas (and there are no overseas transaction charges). It's mainly government related and utility payments that don't qualify for points (ATO, Synergy etc.).

The card costs $100 pa, but we put about $35k of qualifying purchases on the card last year. That's $350 in points. They are easily redeemable as you can redeem 2,000 points to get a $10 discount every time you check out at Coles.

Using Cash is just leaving cash on the table (excuse the pun). I am sure there are many other cards that when properly managed can give you back substantially more than the cost of the card. BTW, in case anyone asks, the rate used by Coles for overseas transactions is the Mastercard rate, which is usually less 0.3% off the spot rate, compared to 3% for many bank CCs.

 

[moXJO]

I agree, but you think how much extra tax they will get, when all the tradies, lawnmower men, window washers, outback deli's etc all have a tap and go device and have to use it.
It will be quite easy to introduce once you have universal internet access, you just get rid of $20, $50 & $100 notes, then everyone has to handle heaps of $5 & $10 notes or use a tap & go device.
The welfare card is already available and being fine tuned, on small scale sites, so the problems associated with welfare usage will be well and truly sorted out.
I love a conspiracy theory.

In my opinion it will just push more to welfare. Or make those that are already struggling, do it really tough.

International students are all cash. If they attempt to can it then a lot of universities will suffer along with all the other industries that feed of them.

I don't use cash really. But I'd prefer the option.

 

[HelloU]

Using Cash doesn't make sense for me, if you are able to control your borrowing. I buy almost everything using a Coles Rewards Platinum Master card which give me 2 points (= 1 cent) per dollar for all qualifying purchases anywhere including overseas (and there are no overseas transaction charges). It's mainly government related and utility payments that don't qualify for points (ATO, Synergy etc.).

The card costs $100 pa, but we put about $35k of qualifying purchases on the card last year. That's $350 in points. They are easily redeemable as you can redeem 2,000 points to get a $10 discount every time you check out at Coles.

Using Cash is just leaving cash on the table (excuse the pun). I am sure there are many other cards that when properly managed can give you back substantially more than the cost of the card. BTW, in case anyone asks, the rate used by Coles for overseas transactions is the Mastercard rate, which is usually less 0.3% off the spot rate, compared to 3% for many bank CCs.

can you swipe flybuys card at coles to get points and at the same time pay on card to get Ccard points? (So double points) or does CC act as flybuys card?

 

[bellenuit]

can you swipe flybuys card at coles to get points and at the same time pay on card to get Ccard points? (So double points) or does CC act as flybuys card?

Yes, though you don't need to have a separate flybuys card. On the back of the Coles Rewards Mastercard there is a barcode that is the equivalent to that of your Flybuys card. You just place that in front of the scanner (not the EFTPOS terminal) when it asks and it will record your Flybuys number. When you select pay and have more than 2,000 points it will ask you if you want to use those points to get a $10 discount. You pay using the EFTPOS terminal as you would with any other card. BTW, only one $10 discount per purchase is allowed.

You don't get double points as normal purchase at Coles using the Flybuys card just gives you 1 point per dollar and using the card to pay gives you an additional 2. Each point is worth 0.5 cents.

 

[noirua]

So if Australians have the highest personal debt in the world on mortgages and credit cards, how are they going to spend the money to allow business to grow. The only people making any money in Australia it seems are the banks, Woollies and Coles, the real estate agents, big car dealers and the petrol companies and the government. The mass population is paying top dollar for everything and their houses are sky high expensive. What is going to cause these people to have all of a sudden extra wealth that will then be invested? So how exactly is this going to turnaround and become a prosperous lucky country again? Just asking.

The average Aussie is probably 40 years of age and though still in debt has assets, including part value of a house, built up. In addition has contributed to pension plans etc., so the average citizen has higher asset value than debts. Therefore Australians are really quite rich and set to get richer.

 

[Wysiwyg]

You can't protect people from themselves, they have to be allowed to make their own decisions, but with that comes the responsibility for making that decision.

The big R word, responsibility, is not high up on many people's attribute list. It must be a learned thing, not taking responsibility. The laws allow irresponsible people many outs.

 

[Humid]

can you swipe flybuys card at coles to get points and at the same time pay on card to get Ccard points? (So double points) or does CC act as flybuys card?

I shop at Woolies and get Qantas points on the CC and then swipe my woolies card and get Qantas points as well
So double
Just returned from Bali solely using points on Jetstar......cheap holiday

 

[HelloU]

Yes, though you don't need to have a separate flybuys card. On the back of the Coles Rewards Mastercard there is a barcode that is the equivalent to that of your Flybuys card. You just place that in front of the scanner (not the EFTPOS terminal) when it asks and it will record your Flybuys number. When you select pay and have more than 2,000 points it will ask you if you want to use those points to get a $10 discount. You pay using the EFTPOS terminal as you would with any other card. BTW, only one $10 discount per purchase is allowed.

You don't get double points as normal purchase at Coles using the Flybuys card just gives you 1 point per dollar and using the card to pay gives you an additional 2. Each point is worth 0.5 cents.

Thanks, and Humid,
I must have been alseep at the wheel and missed the earlier response.......
all food for thought in the card battles.....
btw....for flybuys (I do not have a CC attached) it stopped asking me quite some time ago if I wanted to redeem at checkout (and do not remember being restricted to $10) but I now have to logon computer and tell it to redeem.......use $100 each hit (lots of those 2500 bonus points things come my way as my local Coles has new local competition).....
what else....if you are using redeemed money for the shop, it (the redeemed money) does NOT count towards the total that is required to hit the target bonus value - if you are trying to hit another bonus value (hope that makes sense).....but nothing will tell u that.....you just never get the bonus points.

 

[PZ99]

The beleaguered Australian dollar faces a growing threat: an addiction to real estate is creating a debt mountain.

After being the worst-performing developed-nation currency in 2018, the Aussie is set to extend losses this year as rising indebtedness at households and the economy overall make it more likely the Reserve Bank of Australia will cut interest rates, according to both HSBC Holdings Plc and Rabobank. HSBC sees a further 7 percent slide to 66 U.S. cents by year-end, while Rabobank tips 68 cents.

“The RBA just sat there watching the housing bubble grow for the past couple of years,” said Michael Every, head of Asia financial markets research at Rabobank in Hong Kong. “You’re in a doom loop. Now that the Federal Reserve is finally on hold, the RBA can finally talk about cutting again -- and they will.”

Australia’s household debt-to-income ratio has skyrocketed to 189 percent from 67 percent in the 1990s, according to data compiled by the RBA. The increase has gathered pace in recent years as a decline in interest rates encouraged households to take on more borrowing, while an easing of constraints on bank lending increased the funds available, RBA Assistant Governor Michele Bullock said in a speech in September.

Australia’s dollar has already tumbled for five straight quarters -- including a decline of 9.7 percent last year -- as the U.S.-China trade war and signs global growth is slowing has sapped demand for the export-reliant currency.

After ending last year at 70.49 cents, the Aussie briefly slid to 67.41 cents on Jan. 3 in a so-called “flash crash” when a holiday in Japan led to disjointed Asian markets. That was the weakest since the depths of the global financial crisis in March 2009. The currency was at 71.37 cents at 5 p.m. on Wednesday in Sydney.

HSBC is bearish on the Aussie due to the country’s debt binge and also the widening yield discount on Australian bonds compared with U.S. Treasuries, according to David Bloom, global head of foreign-exchange research in London.

“What does concern us about Australia is that their interest rates structure is below that of the U.S., and we would argue that the U.S. is a lower risk profile,” he said, referring to the nation’s debt levels. “You’re getting paid less for the Antipodeans, and you get more risk.”

There’s a 39 percent chance the Aussie will touch 66 cents by year-end, according to data compiled by Bloomberg based on option prices. A year ago, the same projection for December 2019 had a probability of only 14 percent.

‘Keep Cutting’

Rabobank sees the RBA cutting the nation’s benchmark rate by another 100 basis points from the already record-low 1.5 percent to help manage the debt burden, Every said.

“When you have an economy that’s piling on debt the way Australia does, the currency gets well supported because everything looks fine and dandy in this growth bubble,” he said. “And then as soon as you reach the end of the rope, the only thing the RBA can do is cut -- and keep cutting.”

While HSBC and Rabobank are bearish, the broader market is more positive. The Aussie will strengthen to 74 cents by year-end, according to the median estimate of currency forecasters compiled by Bloomberg.

Morgan Stanley says the Aussie will decline to 67 cents in the second quarter before recovering to end the year at 71 cents.

“Markets are currently pricing in about a 50 percent probability of an RBA rate cut over the next 12 months, fairly reflecting the economic weakness,” Morgan Stanley strategists including Hans Redeker in London, wrote in a research note. “Under these dynamics, we see further Australian dollar downside.”

https://au.investing.com/news/forex...eatens-to-drag-down-australian-dollar-1368801