The ScoMo Government

[sptrawler]

Chiffs point exactly, tax reform would see franking credits gone, it would see the need to raise revue for the purpose required of government that means yes heaven forbid the thought, helping those less well off or disadvantaged you know that old Australian-ism no longer held (a fair go) not hand it to the likes of Dick Smith $100,000s every year.
The elephant BTW remains the pension (you can own assets worth millions and still get it)not disability, carer's and NDIS IMHO

The issue wasn't about taking the franking credits off Dick Smith, Twiggy Forrest, it was about taking it of low income people and self funded retirees with minimal income.
But like I said, it is very hard to keep the emotion out of the discussion.
Also recent reports suggest the pension wont be a problem by 2030, as super balances increase.

 

[sptrawler]

The elephant BTW remains the pension (you can own assets worth millions and still get it)not disability, carer's and NDIS IMHO

What I was meaning by the elephant in the room comment was, in reference to the growth trajectory not who qualifies, more the fact that it is increasing and points to a decline in our underlying health.
I didn't actually realise this until you posted up the graph, but having seen the graph it is climbing extremely fast.
With regard owning millions of $ in assets, that can be fixed by introducing a death tax, which isn't a bad idea as it lets those who earnt it enjoy it, but it is taxed when passed on a bit like a defered capital gains tax.
Another tax that keeps being suggested is a land tax to replace stamp duty, that probably has merrit also, another one could be to allow first home buyers to claim a tax deduction on their interest and drop negative gearing on investment properties.
Another suggestion was to cap the amount of franking credit that is claimable, or remove the refund completely, as long as it can be shown it is done equitably I don't think there would be any problem.
The issue Labour had was those on welfare could claim it, those in industry funds could claim it, billionaires could claim it, the only ones who couldn't were self funded retirees in a SMSF and low income people. I really don't know how they expected that to float.
Anyway I'm sure there are lots of things being considered and people will have to vote on them when they are put forward.

 

[Smurf1976]

The issue Labour had was those on welfare could claim it, those in industry funds could claim it, billionaires could claim it, the only ones who couldn't were self funded retirees in a SMSF and low income people.

That’s what it came down to.

It’s rather hard to argue that we can’t afford to not collect a tax from some blue collar worker who was thrown on the scrapheap at age 55 and who earns $30K a year from having invested their own money, which they’ve already paid full rates of Income Tax on when they earned it, but yeah no worries we’ll give actual billionaires an exemption.

That’s where the bit about Labor having abandoned their traditional support base came from. They should have done the exact opposite if there was a need to cut it back - start with the billionaires not the bricklayers.

The trouble with both major parties is they’re stuffed full of people who’ve lived rather comfortable lives doing things which are a very long way removed from the reality of those they supposedly represent.

 

[SirRumpole]

That’s where the bit about Labor having abandoned their traditional support base came from. They should have done the exact opposite if there was a need to cut it back - start with the billionaires not the bricklayers.

I don't really think many with SMSF's are traditional Labor base.

More likely Labor's push for higher renewable energy targets frightened those who are currently struggling to pay their power bills, and those in coal mining electorates like the Hunter wondered if they would still have a job under Labor.

The trouble with both major parties is they’re stuffed full of people who’ve lived rather comfortable lives doing things which are a very long way removed from the reality of those they supposedly represent.

Totally agree there.

Disasters for people like Morrison, Craig Kelly, Fried Burger etc is losing their job and their fat super pension, not bushfires or floods.

 

[sptrawler]

The trouble with both major parties is they’re stuffed full of people who’ve lived rather comfortable lives doing things which are a very long way removed from the reality of those they supposedly represent.

That is why neither Party is addressing the issues, neither has a clue what the reality is like.
It is very much like people who haven't had children, telling those that have, how it should be done.

 

[sptrawler]

I don't really think many with SMSF's are traditional Labor base.

More likely Labor's push for higher renewable energy targets frightened those who are currently struggling to pay their power bills, and those in coal mining electorates like the Hunter wondered if they would still have a job under Labor.
.

I hope the labour Party believe that.

 

[SirRumpole]

The trouble with both major parties is they’re stuffed full of people who’ve lived rather comfortable lives doing things which are a very long way removed from the reality of those they supposedly represent.

I hope the labour Party believe that.

Well maybe we could have a quick whip round here as to those who have retired on SMSF's and how often they voted Labor.

 

[sptrawler]

Well maybe we could have a quick whip round here as to those who have retired on SMSF's and how often they voted Labor.

I guess that doesn't matter, what matters is why the affluent areas swung to Labour and the blue collar areas swung away, If you think it was climate change and coal mines fine.

I think it was the loss of franking credits to low income people, be they working or retired and the effect the removal of negative gearing would have had on established home values.

One thing for sure, it wasn't because the Liberals were a brilliant choice for Government.

It is hardly a representitive cross sectional view, polling an investment forum, but as the papers proved polling means nothing, just my opinion.

 

[chiff]

As the argument went on franking credits-there are other opportunities to get a decent return other than franking credits.I get franking credits but I am not in love with them and see them as quasi-rort.I have never been to a financial adviser.A member of my family was a financial adviser and I would not have trusted him with my wheelbarrow or my dog.I am trying to ween myself off franking credits...got an email from a mob that I already have money with NBI ....world wide bonds...pay 6 percent.If they are as safe as Australian Banks time will tell ?...but they are listed on ASX so I can sell pronto if I get worried.With the franking credit arguments, they must all be with financial advisers and need their advice to diversify.Their penury arguments never gelled with me -they never showed their hands.

 

[SirRumpole]

I guess that doesn't matter, what matters is why the affluent areas swung to Labour and the blue collar areas swung away, If you think it was climate change and coal mines fine.

I think it was the loss of franking credits to low income people, be they working or retired and the effect the removal of negative gearing would have had on established home values.

One thing for sure, it wasn't because the Liberals were a brilliant choice for Government.

It is hardly a representitive cross sectional view, polling an investment forum, but as the papers proved polling means nothing, just my opinion.

Labor should know the answers by now after their "listening" trips, let's hope they learned their lesson, whatever that is.

The electorate is basically conservative and Labor doesn't get in without a charismatic leader who can demonstrate he/she is switched on to the modern thinking, and Bill wasn't it. Frankly I'm not sure Albo hits the spot either. Is there anyone else out there ? Not that I can see in the short term, but there are two and a bit years to go.

 

[chiff]

I see Morrison is now an expert on bushfires and hazard reduction.Wonder if he consulted the experts before his announcements-or more likely trying to divert for the rorting .I could see intelligence in Rudd and Turnbull ...but this bloke?

 

[SirRumpole]

I see Morrison is now an expert on bushfires and hazard reduction.Wonder if he consulted the experts before his announcements-or more likely trying to divert for the rorting .I could see intelligence in Rudd and Turnbull ...but this bloke?

A failed marketing boy in a job too big for him imo.

 

[Smurf1976]

I am trying to ween myself off franking credits...got an email from a mob that I already have money with NBI ....world wide bonds...pay 6 percent.If they are as safe as Australian Banks time will tell ?...but they are listed on ASX so I can sell pronto if I get worried.With the franking credit arguments, they must all be with financial advisers and need their advice to diversify.Their penury arguments never gelled with me -they never showed their hands.

Thing is, if you go ahead with this plan then you're achieving the exact same result so far as government tax revenue is concerned as if you invested into shares paying franked dividends.

My point there isn't to have a shot at you personally, I'm just pointing out the maths of the situation. Not paying tax in the first place is ultimately the same as paying tax and then receiving it back, the end result is the same in terms of your contribution to government revenue.

I could put that another way by posing a question: When my neighbour returns my ladder that they've borrowed, does this constitute a gift to me at my neighbour's expense? The argument against franking credits says that yes it does and as such I should pay my neighbour for the ladder they've given me. Never mind that I bought it in the first place......

 

[SirRumpole]

It is very much like people who haven't had children, telling those that have, how it should be done.

Or paying higher taxes so other people can get a baby bonus or Family Tax Welfare.

 

[sptrawler]

Or paying higher taxes so other people can get a baby bonus or Family Tax Welfare.

Absolutely, the tax system is there to fund what the Government of the day feel works, whether that is to support mothers going to work or to increase the population by other means than immigration.
It is up to the voters of the day to decide if they agree or disagree, there will never be a time that 100% agree or 100% disagree, that is how a democracy works.

 

[Smurf1976]

I don't really think many with SMSF's are traditional Labor base.

I should perhaps clarify that my primary concern on the franking credits issue has always related to money held outside of superannuation.

Thinking of all those whose circumstances I'm aware of, most of those in blue collar (and many other) fields of work do realise that their exit from the workforce most likely won't be voluntary.

Perhaps it's due to health, perhaps it's due to injury, it could be actual family reasons, it could simply be a change of management, business loses a contract or depending on the employer the election of the "wrong" party to government. Regardless of the reason the reality is that odds are you'll be gone before you reach the superannuation preservation age which for those born after 1 July 1964 is age 60.

It's just a practical reality. The job you have the day you turn 50 will very likely be your last ever job. Ageism starts to set in after 40 and becomes a real problem after 50 unless you've got specialised skills in high demand by others which won't be the case for most.

Most I've either worked with or otherwise know their circumstances had some sort of plan, the only ones who didn't were generally still fairly young (under 30 mostly). For the rest, they've generally got some sort of plan and most fit into the categories of:

1. Go into some office-based line of work. Either management within the same industry, or even the same employer, or a career change into something else that involves sitting in front of a computer not crawling around in roofs.

2. Non-superannuation investments of some sort. Most won't be trading shares etc, it'll just be passively investing in managed funds or index funds, or it'll be property etc but invest in something outside of super. That means with money that you've already paid full rates of tax on and with Income Tax at marginal rates paid on dividends whilst you're still working.

3. Become self-employed. There's a reason why so many sole trader handyman type businesses are run by those aged 50-something. Ask them and they'll mostly tell you the same story that they worked for whoever, thought it would last until retirement but it didn't and they got made redundant, couldn't get another job so they started this business. And by the way, you said you're paying cash right? Don't need a receipt do you?

4. Newstart. Doable if you've got a fully paid off house and a cheap lifestyle. Small chance you'll get a job but the odds are you won't. Give it a go though, not much choice really.

Now what I'm struggling with is the idea that those choosing option 2 ought to be the only group in society denied the $0 - $18,200 and $18,201 - $37,000 tax brackets at 0% and 19% respectively. Even actual billionaires get those and neither side of politics has suggested ending that.

 

[sptrawler]

I see Morrison is now an expert on bushfires and hazard reduction.Wonder if he consulted the experts before his announcements-or more likely trying to divert for the rorting .I could see intelligence in Rudd and Turnbull ...but this bloke?

He must be an expert, because there wouldn't have been a fanfare when he was away, if he wasn't. At the very least it proved the Country can't function without him, so he should be a shoe in next election.

 

[sptrawler]

I don't really think many with SMSF's are traditional Labor base.
.

I bet there will be plenty of blue collar workers, who have retired, sold their house in the City and downsized or moved to a country town and are self funded.

 

[Smurf1976]

Or paying higher taxes so other people can get a baby bonus or Family Tax Welfare.

If anyone needs an example of middle class welfare, that's it right there.

 

[SirRumpole]

I should perhaps clarify that my primary concern on the franking credits issue has always related to money held outside of superannuation.

Thinking of all those whose circumstances I'm aware of, most of those in blue collar (and many other) fields of work do realise that their exit from the workforce most likely won't be voluntary.

Yes, very good points.

One wonders how the people who used to work in the car industry got on after it shut down.

Did they get retraining that enabled them to get decent jobs ?

As much as the sharemarket looks good at the moment, a lot of people got wiped out in the GFC. Nothing beats a secure job imo which is why the rise of the gig economy and insecure work, plus the continual failure of retailing will eventually reduce us to third world status imo.

There really should be more concentration on trades. It's very hard to get robots to come round to your place to fix taps or a wiring problem. Gutting TAFE as has been done is a disaster.