The state of the economy at the street level

[TimeISmoney]

Unfortunately, these are the people that are seen but not seen.
It's not the kids looking for a bit pf pocket money these days, but others trying to make ends meet in a very trying set of circumstances.

A lot of old people end up in this position post 60s, no super, separated or widowed, no profession, most people won't employ them because of their of their age.

The cost of living is taking its toll.

 

[JohnDe]

A lot of old people end up in this position post 60s, no super, separated or widowed, no profession, most people won't employ them because of their of their age.

The cost of living is taking its toll.

I know a couple of retired people that go out collecting cans, one once told me that he has his own area and is careful not to go into certain streets because they belong to other collectors.

Not all are doing it because they are desperate, the ones I know do it because they like the extra cash, and it gives them a positive feeling of having achieved something and watching their savings grow.

Remember that all those older people get a nice government pension, and quite a few subsidies.

I'd be more worried if I started to see a lot of younger adults collecting cans and going through rubbish bins. That is a sign that they can't meet their mortgage and/or HECS payments.

Had a discussion with a young lady yesterday, completed her Uni studies and has a good job earning a nice salary. Purchased a house 3 months ago and finding it tight with the mortgage, HECS fee, car expenses, food, insurance, etc.

I thought that HECS was interest free, it is confusing. Looks like the ATO indexes the amount owed with inflation. Last financial year it was increased to 7.1% (sounds like the true inflation rate), her $3000 that comes out of her pay automatically reduced her debt by $400. The ATO notified her that the new rate is 4.7%

 

[sptrawler]

I know a couple of retired people that go out collecting cans, one once told me that he has his own area and is careful not to go into certain streets because they belong to other collectors.

Not all are doing it because they are desperate, the ones I know do it because they like the extra cash, and it gives them a positive feeling of having achieved something and watching their savings grow.

The wife and I years ago used to to hook up the trailer and take the kids collecting cans, the idea was it would give them exercise and an appreciation for money. we would walk miles then take the cans to Sims metal for the scrap value which was then divided up between them.

The exercise part worked well, the appreciation of the value of money, not so much.

 

[TimeISmoney]

I know a couple of retired people that go out collecting cans, one once told me that he has his own area and is careful not to go into certain streets because they belong to other collectors.

Not all are doing it because they are desperate, the ones I know do it because they like the extra cash, and it gives them a positive feeling of having achieved something and watching their savings grow.

Remember that all those older people get a nice government pension, and quite a few subsidies.

I'd be more worried if I started to see a lot of younger adults collecting cans and going through rubbish bins. That is a sign that they can't meet their mortgage and/or HECS payments.

Had a discussion with a young lady yesterday, completed her Uni studies and has a good job earning a nice salary. Purchased a house 3 months ago and finding it tight with the mortgage, HECS fee, car expenses, food, insurance, etc.

I thought that HECS was interest free, it is confusing. Looks like the ATO indexes the amount owed with inflation. Last financial year it was increased to 7.1% (sounds like the true inflation rate), her $3000 that comes out of her pay automatically reduced her debt by $400. The ATO notified her that the new rate is 4.7%

The pension is OK if you have your own home or have public housing, the people that are in private rentals are a different story.

 

[farmerge]

The wife and I years ago used to to hook up the trailer and take the kids collecting cans, the idea was it would give them exercise and an appreciation for money. we would walk miles then take the cans to Sims metal for the scrap value which was then divided up between them.

The exercise part worked well, the appreciation of the value of money, not so much.

@sptrawler We used to go the same. A couple of 44's on the back of the ute and every Sat arvo. Eldest son put the can money towards his first car with the money garnished from can collecting many years ago.

 

[farmerge]

I know a couple of retired people that go out collecting cans, one once told me that he has his own area and is careful not to go into certain streets because they belong to other collectors.

Not all are doing it because they are desperate, the ones I know do it because they like the extra cash, and it gives them a positive feeling of having achieved something and watching their savings grow.

Remember that all those older people get a nice government pension, and quite a few subsidies.

I'd be more worried if I started to see a lot of younger adults collecting cans and going through rubbish bins. That is a sign that they can't meet their mortgage and/or HECS payments.

Had a discussion with a young lady yesterday, completed her Uni studies and has a good job earning a nice salary. Purchased a house 3 months ago and finding it tight with the mortgage, HECS fee, car expenses, food, insurance, etc.

I thought that HECS was interest free, it is confusing. Looks like the ATO indexes the amount owed with inflation. Last financial year it was increased to 7.1% (sounds like the true inflation rate), her $3000 that comes out of her pay automatically reduced her debt by $400. The ATO notified her that the new rate is 4.7%

@JohnDe The brickie who is currently working here has a son who is doing Vet at Murdoch. He said the exact same thing to me only a couple of days ago. The debt is not the crippler it's the on-going interest. When our son finished his Vet degree we made sure he started out debt free.

 

[sptrawler]

The pension is OK if you have your own home or have public housing, the people that are in private rentals are a different story.

Yes there are three sets of pensioners in the 10 unit complex I live in, two couples and one single, all are $hitting themselves about rent.
It's terrible to see old people in the rental situation, I'm the goto person if anything is broken, so they all come and have a chat if I'm outside.
I really can't see how the Govt can fix the issue without making the investment property market less attractive as an investment, giving more rental subsidies just encourages more rent increases, the situation is dire that's for sure.
Another thing on the same issue, when I go for a walk early in the morning there are a lot more old people in the homeless ranks.
A year ago most of the homeless were young to middle aged (20 something to late 30's early 40's), with obvious mental health or drug issues, now there are two groups and they do actually group, the younger ones and now a group of older people mid 50's+ both male and female.
If this escalates, it isn't going to be a good look and will cause a lot of social stress IMO, little kids going to the shops seeing old people living out of a shopping trolley wont be good for the kids belief of what the future could be like. It is a new demographic forming IMO.
Hopefully it gets nipped in the bud and the housing commissions start and take inhouse building social housing, IMO it is the only sensible answer.
Back to the future, social housing, yet another privatisation failure.

 

[TimeISmoney]

Yes there are three sets of pensioners in the 10 unit complex I live in, two couples and one single, all are $hitting themselves about rent.
It's terrible to see old people in the rental situation, I'm the goto person if anything is broken, so they all come and have a chat if I'm outside.
I really can't see how the Govt can fix the issue without making investment property market less attractive as an investment, giving more rental subsidies just encourages more rent increases, the situation is dire that's for sure.

The problem is all the bottom feeders including the Govt, you'll never be able to match public housing prices because of all the costs, even if you own the rental outright. The govt stuck its nose in where it didn't belong with all these rental reforms that increased the costs of running rentals and increased the risks. Only fools are buying rentals these days. The worst is yet to come, the tenants can block the owners from doing their own repairs to keep the costs down basically because they're the owners, and they shouldn't enter the home x amount of times a year due to the tenant's privacy.

 

[sptrawler]

The problem is all the bottom feeders including the Govt, you'll never be able to match public housing prices because of all the costs, even if you own the rental outright. The govt stuck its nose in where it didn't belong with all these rental reforms that increased the costs of running rentals and increased the risks. Only fools are buying rentals these days. The worst is yet to come, the tenants can block the owners from doing their own repairs to keep the costs down basically because they're the owners, and they shouldn't enter the home x amount of times a year due to the tenant's privacy.

Yes I think a lot of new property investors are in for a shock, there is nothing worse than trying to get rent when people have no money, well there is one thing worse trying to get them out when they have nowhere to go.

First they get behind in their rent, then they try looking for alternatives, then they look for what legal options they have, lastly they get very angry.

 

[JohnDe]

It is getting tough to make ends meet out in the real world.

How nice it would be to live in the world of bureaucrats and politicians. No worries about where the money will come from, the tax dollars keep rolling in with bracket creep. levies and indexation.

Australian insolvencies hit record high in May as industry warns worse is yet to come

Business failures have surged to levels not seen before as deteriorating economic conditions combined with poor consumer spending and stubborn inflationary pressures, including higher operating expenses, damage the fortunes of many companies.

And insolvency experts expect the number of company failures may not slow until the Reserve Bank announces interest rate relief.

Figures from the Australian Securities & Investments Commission show there were 1245 insolvency appointments in May, a 44 per cent increase on the 866 appointments made a year ago, and 122 per cent more than 2022.

May 2024 now holds the record for the most insolvency appointments since the corporate regulator first started to publish figures in 1999. It has surpassed the previous high of 1137 set in March, which in turn broke the long-running record of 1123 in February 2012.

There were 3.37 million businesses registered in Australia in May compared to 1.13 million in 1999 and 1.88m in 2012, according to ASIC

The current financial year is all but certain to eclipse the 2010-11 financial year, which was affected by the Global Financial Crisis, to have the highest rate of external administration and controller appointments on record. That year saw 10,757 businesses go under.



Gayle Dickerson, KPMG’s national leader, turnaround and restructuring, said that there was likely to be a lag effect in insolvencies similar to what was seen during the GFC when the number did not peak until more than two years after the collapse of Lehman Brothers.

“We haven’t hit the peak yet and how long until we do remains a question, which will be driven by broad economic circumstances,” she said.

“At the moment it is very evident at the small to medium enterprise level where we are seeing the impact of cost of living, discretionary spending and inflationary pressures. There is no doubt, we’re in a tough economic cycle, and some of those pressures will start to shift up to larger companies towards the back end of the year.”

Construction had the highest number of insolvencies at 313 in May, which was also a record for the sector this cycle. Accommodation and food services insolvency appointments continued to grow at a faster rate with 177, and retail trade appointments surged 61 per cent in May to 92.

NSW Tier 2 commercial construction company Stevens Construction was among the big casualties in May after it went into voluntary administration on May 27 owing several million dollars and leaving many projects in limbo.

Brisbane-based BCN Events Group, which operated seven venues including Lumiere Culinary Studio in Newstead and King Street Bakery in Bowen Hills, entered liquidation.

Chinese variety retailer Miniso appointed Jirsch Sutherland as administrators last month after it collapsed for the second time. The administration affects 140 employees and 21 stores including Parramatta, Sydney Central, Pacific Fair in Queensland and DFO South Wharf in Melbourne.

CreditorWatch chief executive Patrick Coghlan told The Australian that its forward-looking payment default data suggested that records were likely to continue to be set each month for the rest of 2024.

“It’s hard to find an industry that hasn’t been significantly affected. You’ve got reduced discretionary spend, you’ve got inflation, which has pushed up all of their input costs. A lot of industries will struggle to increase their pricing to levels that make them profitable,” he said.

BCN Events Group, which operated the King St Bakery at Bowen Hills in Brisbane, went under last month. Picture: Annette Dew

NSW and Victoria, which are home to the lion share of Australian businesses, had new highs of 535 and 314 insolvencies respectively, while Queensland had its highest number since October 2015 at 228.

Mr Coghlan said it was unclear whether cost of living relief and the stage 3 tax cuts might have an impact on insolvencies, but expected that most households would instead put those savings towards the mortgage, rent and bare necessities.

“What will start to make a difference is the first interest rate cut and confidence in a second one will give businesses confidence to invest and consumers to spend more,” he said.

Insolvency rates have surged since Covid-19 support measures and flexibility from the Australian Taxation Office were eased, with the ATO chasing more than $34bn worth of debts owed by small businesses that had been on hold.

HLB Mann Judd partner and restructuring and insolvency specialist Todd Gammel said that the involvement of the ATO was key given that many operations had not been sustainable for years and had only survived because of the initial spike in demand after the pandemic.

“The ATO has more of a responsibility now to focus on the bad actors and remove repeat offenders from the market,” he said.

The administrators have been called for more than 20 Miniso outlets. Picture: Hamish Blair

“There probably is a lot of businesses that need to be washed out of the economy such as start-ups where people piled into them when the cash rate was zero, but haven’t been able to mature enough to reach profitability.”

Mr Gammel said that businesses that had a sound funding structure and were still able to make money would emerge from the current environment in better shape. He said that there were still plenty of opportunities for these businesses to lay the groundwork to benefit on the other side.

“Those that have good funding structures and advisers are still able to get access to equity to take advantage of opportunities to build and grow their business once these headwinds pass,” he said.

 

[TimeISmoney]

Yes I think a lot of new property investors are in for a shock, there is nothing worse than trying to get rent when people have no money, well there is one thing worse trying to get them out when they have nowhere to go.

First they get behind in their rent, then they try looking for alternatives, then they look for what legal options they have, lastly they get very angry.

The young people with money can't even get into rentals, there just isn't enough.

Turning people away from investment properties is going to make things worse.

 

[farmerge]

We have had over the years 3 rental properties with the one on the farm still vacant through choice.
One was sold and the second was burnt to the ground by drug crazed tenants.
In our endeavors to oust them, which took nearly nine months, the end result was a few thousand dollars in owed rent and the house destroyed.
Never ever again for us.
We do get a lot of inquiry about renting out this last house, but a divorce would be instigated if that happened.

 

[TimeISmoney]

We have had over the years 3 rental properties with the one on the farm still vacant through choice.
One was sold and the second was burnt to the ground by drug crazed tenants.
In our endeavors to oust them, which took nearly nine months, the end result was a few thousand dollars in owed rent and the house destroyed.
Never ever again for us.
We do get a lot of inquiry about renting out this last house, but a divorce would be instigated if that happened.

Sorry to hear that farmage, some people are just arseholes.

 

[farmerge]

Sorry to hear that farmage, some people are just arseholes.

@TimeISmoney To quote one or two persons of dubious fame "Such Is Life".
A learning curve that won't be repeated in the near or distant future.
A lesson learnt.
The income was not worth the hassle or the grief, nor the episode in the Local Court.

 

[TimeISmoney]

@TimeISmoney To quote one or two persons of dubious fame "Such Is Life".
A learning curve that won't be repeated in the near or distant future.
A lesson learnt.
The income was not worth the hassle or the grief, nor the episode in the Local Court.

I've had a few like that over the years and was able to get them out with not much damage. I tell you, follow your gut feeling when you first meet people because it's worked for me most of the time.

I'd never had a problem with the electricity in this rental with multiple tenants, and they called out an electrician because the safety switch kept on tripping, they decided to leave before the electrician had arrived and they are the ones who called him out, the electrician changed me double for going to real estate to get the key and return to the house. That BS started before they had even moved in.


I used to do all the minor repairs myself and I had organised a time with the agent to enter the house and a lady came to the door with just a towel wrapped around her, then dressed herself in a walk-in closet while I was basically working in the ensuite of the same bedroom. The next callout was a blocked sink with solidified fat inside the drain pipes, and I noticed rum and beer bottles scattered throughout the house. The next callout they somehow broke a pullout clothesline, when I turned up to the house it looked like a cyclone had hit it, sheets and blankets just randomly thrown in the garage with a car parked over the top, strange furniture placed throughout the house up against the walls in walkways, new pictures strung up everywhere.

At this stage, I thought to myself it was time to get rid of them. After they vacated, behind the shelf they had placed up against the hallway was a huge hole in the wall, behind the pictures of their kids the same thing. The house smelt of urine where their dog had urinated everywhere. One of the gutters looked a bit bent when I looked in the gutter there were drug utensils hidden in there. The letter box was chock full of letters after they left and the rain had gotten into the box. When I pulled the letters out of the letterbox some of them had fallen apart so I read them, the lady had every govt department chasing her, spurs, police, centrelink, child services. Luckily I got them out of the house in a hurry.

 

[sptrawler]

I heard an interesting conversation this morning, when on my early morning walk.
I stopped to buy a coffee and was having a chat with some elderly ladies, one asked me if I knew anything about reverse mortgages, I said I've never researched them but that they aren't for everyone.
As the conversation moved on two of the three elderly ladies were looking at getting reverse mortgages as they were finding it hard to make ends meet. None were smokers and being in their 80's they certainly didn't look like hardened drinkers.
I suggested they talk to centrelink and share the cost of a local financial adviser.
But obviously things are tough for single pensioners.

 

[sptrawler]

I've had a few like that over the years and was able to get them out with not much damage. I tell you, follow your gut feeling when you first meet people because it's worked for me most of the time.

I'd never had a problem with the electricity in this rental with multiple tenants, and they called out an electrician because the safety switch kept on tripping, they decided to leave before the electrician had arrived and they are the ones who called him out, the electrician changed me double for going to real estate to get the key and return to the house. That BS started before they had even moved in.


I used to do all the minor repairs myself and I had organised a time with the agent to enter the house and a lady came to the door with just a towel wrapped around her, then dressed herself in a walk-in closet while I was basically working in the ensuite of the same bedroom. The next callout was a blocked sink with solidified fat inside the drain pipes, and I noticed rum and beer bottles scattered throughout the house. The next callout they somehow broke a pullout clothesline, when I turned up to the house it looked like a cyclone had hit it, sheets and blankets just randomly thrown in the garage with a car parked over the top, strange furniture placed throughout the house up against the walls in walkways, new pictures strung up everywhere.

At this stage, I thought to myself it was time to get rid of them. After they vacated, behind the shelf they had placed up against the hallway was a huge hole in the wall, behind the pictures of their kids the same thing. The house smelt of urine where their dog had urinated everywhere. One of the gutters looked a bit bent when I looked in the gutter there were drug utensils hidden in there. The letter box was chock full of letters after they left and the rain had gotten into the box. When I pulled the letters out of the letterbox some of them had fallen apart so I read them, the lady had every govt department chasing her, spurs, police, centrelink, child services. Luckily I got them out of the house in a hurry.

Been there seen that, renting out property is for the young at heart, it isn't an old person's game. Good tenants tend to move onward and upward, crap tenants tend to hang on to the bitter end.

 

[sptrawler]

This doesn't sound good for those living in Southern Cross, the Yilgarn mines including Koolyanobbing have been supplying business to the town since the mid 1960's. I would think it will be a big hit to the local economy.
From memory the transcontinental railway line was realigned to facilitate transporting iron ore down to Perth, to feed the blast furnace, when Koolyanobbing was opened.
Sad days, but life with a mining based economy.

MinRes to shut Yilgarn iron ore operations, impacting 1,000 jobs

Reasons for the closure include limited remaining life of operating mines and substantial capital costs to develop new resources.

finance.yahoo.com

 

[JohnDe]

I heard an interesting conversation this morning, when on my early morning walk.
I stopped to buy a coffee and was having a chat with some elderly ladies, one asked me if I knew anything about reverse mortgages, I said I've never researched them but that they aren't for everyone.
As the conversation moved on two of the three elderly ladies were looking at getting reverse mortgages as they were finding it hard to make ends meet. None were smokers and being in their 80's they certainly didn't look like hardened drinkers.
I suggested they talk to centrelink and share the cost of a local financial adviser.
But obviously things are tough for single pensioners.

Are they renters? Or do they enjoy the pokies?

Through my work I know quite a few people on a pension, singles get $510 per week plus a load of concessions.

https://www.servicesaustralia.gov.au/how-much-age-pension-you-can-get?context=22526

 

[divs4ever]

singles get $510 per week plus a load of concessions.

hmmm , i get less than that , but maybe i have a few shares

( just in case Centrelink runs out of money , while i am still alive )