Inflation

[sptrawler]

400 thousand migrants predicted too.

Yep, the big issues before the last election that got labor in, were Scott Morrison and housing unaffordability.

It wont be long before Morrison is out of the equation and the other issue becomes an even bigger issue IMO, as you say 400,000 migrants adds a lot of upward pressure.
I just don't see any downward pressures on inflation, other than those on the bottom rung of the ladder falling off and they don't spend much anyway.
Everyone further up the food chain, is just charging more, to compensate.
Until the extra influx of skilled labour starts and puts downward pressure on wages, I can't see an end to the spiral.

 

[over9k]

Yep, the big issues before the last election that got labor in, were Scott Morrison and housing unaffordability.

It wont be long before Morrison is out of the equation and the other issue becomes an even bigger issue IMO, as you say 400,000 migrants adds a lot of upward pressure.
I just don't see any downward pressures on inflation, other than those on the bottom rung of the ladder falling off and they don't spend much anyway.
Everyone further up the food chain, is just charging more, to compensate.
Until the extra influx of skilled labour starts and puts downward pressure on wages, I can't see an end to the spiral.

And asset owners/capital win either way.

 

[sptrawler]

And asset owners/capital win either way.

Absolutely, that is why the report said a change to the CGT and negative gearing would cause a fiscal shock.
The reality is, the sooner the better, the longer it is left, the further the distortion becomes.
At the moment the shock would be centered around the Sydney/ Melbourne property market, now what is happening those people are using their equity to start and bid up property in outer areas and so it moves on.
Just dumb policy and it is a bit like when Abbott won office, he said I will call another election if I don't get a clear majority, he won without a clear majority he didn't call a new election and put forward contentious policy and it cost him his job.
The same will happen with Albo IMO, he doesn't want to blow up the ponzi, but not doing so will blow him up IMO.

I can see it now, immigration up 100%, Sydney house prices up 50%, that hopefully doesn't happen, but Lowe can only do so much with one trigger.

 

[divs4ever]

Add to that the Sydney/Melbourne ponzi is kicking off again, so have the rise in interest rates changed much? Well probably at the bottom of the pecking order it has made life much more difficult, but where the Govt wanted to dampen demand it has just kept on keeping on.

Meanwhile the RBA soldiers on with trying to keep a lid on inflation, when 50% of the population live in the ponzi scheme area and everyone wants to get on board. Sooner or later the bubble has to be popped, the longer it is left the bigger it gets.

This is the main issue, that no one wants to address and the answer is buried deep in the article, where it is lost:

Phasing out property tax breaks could save $74b but it also could create 'significant economic shock'

The Parliamentary Budget Office warns phasing out property tax breaks may "trigger a significant economic shock". That's why next week's budget is more focused on increasing the supply of housing rather than trying to make housing affordable by reducing house prices.

www.abc.net.au

Treasury tax statements in 2019-2020 found three-quarters of the tax deductions claimed using negative gearing went to the top 10 per cent of earners.
While that may be the case, the PBO warns that changing the status quo could see some property owners "pushed into negative equity, making it detrimental to sell the property and, potentially, creating risks for the banking system, possibly leading to more defaults".

"A sudden decline in house prices, and higher rents, may also trigger a significant economic shock, and resulting negative fiscal consequences, partly or fully offsetting the additional revenue. For example, lower-than-anticipated capital gains and corresponding tax," the PBO says.
"If the price of the investment property has grown more than twice as fast as CPI over the period of ownership, as has likely been the case over the past few years, then the investor would have a high incentive to sell."

However, Max Chandler-Mather says "the government keeps tinkering around the edges" on housing policy and, over time, the budgetary impact will be beneficial.

"If we do not tackle the scourge of massive tax concessions for property investors — negative gearing, capital gains tax — then we are going to see another generation of people locked out of buying their first home," he says.

"I think what the government needs to realise is that they're here to represent every Australian, not just those who currently make billions of dollars off the property system."

well governments ( normally ) want a 'strong economy ' ( no matter how fake it is ) to help their reelection chances now that is partly the fault of the voter who prefer politicians over statesmen .

remember all those tax-breaks were introduced so property investors would take up the risk , and save Governments from perpetually bungling public housing solutions , back in Aunties day ' a property investor ' bought ( or had built ) a three or four bedroom house and brought in a boarder or two , to share the expenses as the mortgage got paid off quickly .

BTW , analyze the ' smart cities ' ( and fifteen minute cities ) to determine how many residents will own their own home in them in say twenty years time .

unless you start voting for independents and minor parties the voter will never be better than 4th in a pollie's priorities ( self and family No. 1 , to the party No. 2 , the large donors No. 3 , and whoever can sort it out themselves ) and worse is coming as the big players devolve into a 'uni-party '

 

[sptrawler]

unless you start voting for independents and minor parties the voter will never be better than 4th in a pollie's priorities ( self and family No. 1 , to the party No. 2 , the large donors No. 3 , and whoever can sort it out themselves ) and worse is coming as the big players devolve into a 'uni-party '

That wont happen and if it did a bipartisan push would happen for a republic, the two party system is ingrained and it bumps along from pillar to post, first labor get in and instigate change then the coalition get in and pay for it.
Then rinse wash repeat.
The big problem is we have a very generous welfare system and we have a very high standard of living, which means both issues cost a lot.

We have to have high taxes too pay for the welfare and we have to have high wages, to be able to take the taxes to pay the welfare.

Not a great situation as the world becomes more overpopulated, poverty is rising and resources are diminishing.

Something has got to change, I don't know what it is, but I'm sure in the near future something will.

 

[Telamelo]

The irony is Australia is very rich & abundant in natural resources & minerals etc. and only has a small population compared to just about any other country on earth - yet they can't get it right here as Australia's living standards have recently dropped to 50 something on the ladder.

We of all countries should be vastly much better off compared to most other places on earth but they've stuffed it up.

 

[over9k]

Meanwhile, everything gets slaughtered, every market, everything. Cash still the best place to be (even more so with this latest rate rise). I'm still not buying a house/lowballing the fcuk out of everything.

Plenty of vendors still in total denial. Real estate agents having an absolute nightmare at the moment.

 

[divs4ever]

That wont happen and if it did a bipartisan push would happen for a republic, the two party system is ingrained and it bumps along from pillar to post, first labor get in and instigate change then the coalition get in and pay for it.
Then rinse wash repeat.
The big problem is we have a very generous welfare system and we have a very high standard of living, which means both issues cost a lot.

We have to have high taxes too pay for the welfare and we have to have high wages, to be able to take the taxes to pay the welfare.

Not a great situation as the world becomes more overpopulated, poverty is rising and resources are diminishing.

Something has got to change, I don't know what it is, but I'm sure in the near future something will.

what if .. the welfare goes away , or at best becomes the minimal safety net it used to be ( except for the select few ' gold cards ' )

i don't want that to happen , but could see a scenario where it does ( hints like the 'creeping pension age' )

if jobs vanish ( AI could wipe out heaps , since we don't manufacture much , and regulations become over-kill ) who will pay the taxes , push up the stock market via super fund injections , pay mortgages , and keep the consumer market afloat

i am planning ( as best my cloudy crystal ball can see ) for a less than luxurious future ( and hope it doesn't get even worse than that )

 

[over9k]

what if .. the welfare goes away

0% probability

 

[farmerge]

0% probability

No welfare cheques for the beach and couch bums. Then the peasants would revolt. Just imagine rent-a-rabble marching down the street to Parliament House. Would be a new experience for them.

 

[over9k]

No welfare cheques for the beach and couch bums. Then the peasants would revolt. Just imagine rent-a-rabble marching down the street to Parliament House. Would be a new experience for them.

Or the politicians, bureaucrats etc getting a real job and doing an honest day's work.

"They're not spending it so well that we should be donating extra".

 

[farmerge]

Or the politicians, bureaucrats etc getting a real job and doing an honest day's work.

"They're not spending it so well that we should be donating extra".

I have a thing about being over taxed. Kerry Packer was the man

 

[over9k]

I have a thing about being over taxed. Kerry Packer was the man

TBH it's not really the paying of taxes I have an issue with, it's the squandering of them.

 

[divs4ever]

0% probability

we are in 'uncharted territory ' the impossible suddenly becomes thinkable , sure society might explode into a civil war , or rampant crime ,.. but when 'the carrot ' keeps on being tied the increasingly longer sticks , one must consider the outcome

remember Keating hoped ( compulsory ) super to replace the aged pension for retired workers , sure that seems to have gone pear-shaped , but is the plan absolutely dead , and not going to become some grotesque hybrid ( say super + food stamps/ration books ) , because you can bet defense spending won't be cut ( or parliamentary salaries )

 

[divs4ever]

No welfare cheques for the beach and couch bums. Then the peasants would revolt. Just imagine rent-a-rabble marching down the street to Parliament House. Would be a new experience for them.

that would certainly test the loyalty of the SAS ( back the pollies , or their families and mates )

 

[over9k]

Absolutely, that is why the report said a change to the CGT and negative gearing would cause a fiscal shock.
The reality is, the sooner the better, the longer it is left, the further the distortion becomes.
At the moment the shock would be centered around the Sydney/ Melbourne property market, now what is happening those people are using their equity to start and bid up property in outer areas and so it moves on.
Just dumb policy and it is a bit like when Abbott won office, he said I will call another election if I don't get a clear majority, he won without a clear majority he didn't call a new election and put forward contentious policy and it cost him his job.
The same will happen with Albo IMO, he doesn't want to blow up the ponzi, but not doing so will blow him up IMO.

I can see it now, immigration up 100%, Sydney house prices up 50%, that hopefully doesn't happen, but Lowe can only do so much with one trigger.

Thing is trawler, going after housing (taxing it) would get you crucified at the next election.

Reality is that a housing tax of any kind would effectively be an inheritance tax by proxy at this point - you'd have boomers up in arms saying "I want to leave this behind to my kids and you're going to take it" and you'd have gen Y'ers going "Inheriting this is the only way I'm ever going to get ahead in life" so you'd have both generations wanting your head.

It's political suicide at this point. Ergo, something's gotta give somewhere else, and that something is going to be gen X's income taxes.

With howard & co selling off everything not welded down back in the 90's/early 00's there's simply nothing else left to plunder.

 

[over9k]

On an unrelated note, what the hell are you lot doing up at 2-4am? This is normally my witching hour of sh!tposts.

 

[divs4ever]

Thing is trawler, going after housing (taxing it) would get you crucified at the next election.

Reality is that a housing tax of any kind would effectively be an inheritance tax by proxy at this point - you'd have boomers up in arms saying "I want to leave this behind to my kids and you're going to take it" and you'd have gen Y'ers going "Inheriting this is the only way I'm ever going to get ahead in life" so you'd have both generations wanting your head.

It's political suicide at this point. Ergo, something's gotta give somewhere else, and that something is going to be gen X's income taxes.

With howard & co selling off everything not welded down back in the 90's/early 00's there's simply nothing else left to plunder.

taxing housing ( a defacto inheritance tax ) would also crush any incentive to buy a home ( for most people/families ) and there goes one of the few Australian industries left banking/construction

the something that 'will give' will be Government expenditure , one way or another ( unless they resort the unlimited QE/MMT )

https://yewtu.be/watch?v=msf1TJ8RpLI

 

[divs4ever]

On an unrelated note, what the hell are you lot doing up at 2-4am? This is normally my witching hour of sh!tposts.

waiting for sh*t to hit the fan , for me , the US was down about 1.5% last time i looked .. about 1.3% now .. will it drop near the end or will the PPT come to the rescue

 

[divs4ever]

OZL paid me out i have some cash i would like to park , if given a nice opportunity ( spend it before they freeze it )