Author Topic: #Auspol - Australia Votes 2019!  (Read 43742 times)

Fresh Bread

  • Handlebar Stache
  • *****
  • Posts: 2315
  • Location: Australia
  • Insert dough/bread/crust joke
Re: #Auspol - Australia Votes 2019!
« Reply #150 on: May 19, 2019, 01:13:07 AM »
We'll look, it changed again - 7 seats in doubt and Libs ahead in three.

Clive Palmer, hmm. I think Clive Palmer is only interested in getting Adani approved so the rail line gets built and he can mine the Galilee Basin*. His views on climate action might be almost perpendicular to mine, ha.

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #151 on: May 19, 2019, 01:18:02 AM »
Two of them are independent vs libs.

Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #152 on: May 19, 2019, 02:11:43 AM »
Libs will require some of the Green cross-bench to pass bills so there will be a lot of to-ing and fro-ing. Hopefully this results in some better climate change policies.

The future tax cuts have already been legislated so the Libs have a great ploy for the 2022 election - vote for us, or else these really big generous tax cuts will never come your way!

Labor would need full control of both houses in order to stop those tax cuts, by the way. I doubt cross-benchers would want to be known as the ones who negotiated with a Labor government to block sweeping tax reform.

The great thing about Labor's failure this election is that I think they're less likely to propose higher taxes / more redistribution next time around - which hopefully allows the Libs' tax reform to sail through to the keeper. Best reforms since Howard's 2003-2006 reforms.

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area

Little Aussie Battler

  • Stubble
  • **
  • Posts: 229
Re: #Auspol - Australia Votes 2019!
« Reply #154 on: May 19, 2019, 02:39:23 AM »
Tax cuts are not tax reform.

Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #155 on: May 19, 2019, 02:49:11 AM »
Tax cuts are not tax reform.

They are in my books. When we have one of the world's highest reliances on personal income tax revenue, it's nice to give back to the people who do the most lifting.

$11k a year sounds awful juicy to me.

But the tax cuts are spread well:
https://www.theguardian.com/australia-news/2018/jun/21/coalitions-143bn-tax-cuts-package-passes-in-parliament

By 2024-25, those with taxable income of:

$200,000 will get a cumulative tax cut of $11,815
$160,000 will get a cumulative tax cut of $8,415
$120,000 will get a cumulative tax cut of $6,935
$90,000 will get a cumulative tax cut of $4,685
$80,000 will get a cumulative tax cut of $3,740
$50,000 will get a cumulative tax cut of $3,740
$30,000 will get a cumulative tax cut of $1,400


As you can see, all the way down the ladder, the average tax cut is about 5%. This holds true at every income level.

What could be fairer than a pro rata reduction in everyone's taxes? How is that not reform?

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #156 on: May 19, 2019, 02:56:53 AM »
HAH HAH HAH!!! Who do you think you are trying to kid? The cumulative tax cut a couple of years later won't be 5% because the lower tax brackets get it earlier.  You've just chosen a magic date.

By the way, while you are wrong about the tax bracket creep in the naughties, I have better things to do than to put together the case.

When are you planning to retire? Before the cuts?
« Last Edit: May 19, 2019, 02:59:28 AM by deborah »

Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #157 on: May 19, 2019, 03:09:11 AM »
You have a point, deborah. I thought the figures were each year from 2024-25 onwards; instead, they are cumulative from 2019 to 2025. So I'll need to get an updated set of numbers that examine the annual benefit from 2025 onwards, which is the most important figure.

I didn't realise The Guardian would use such 'magic' stats, but I have let myself be misled.

As for my retirement date, I'm still very young - I graduated from uni at the start of this decade. I won't retire for a while yet, so I'm looking forward to big tax cuts each year, hopefully, from 2024, so that I can build a nest egg.

marty998

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: #Auspol - Australia Votes 2019!
« Reply #158 on: May 19, 2019, 03:14:40 AM »
I agree with @Little Aussie Battler. Tax cuts are not tax reform. What the Liberals have done is hand back bracket creep.

Real tax reform would be resolving the vertical fiscal imbalance between the feds and the states, which would involve drastically cutting income tax rates and correspondingly increasing the GST.

In addition you might have land taxes on all property (including PPORs) and an elimination of stamp duties.

No... we are not getting "reform".

Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #159 on: May 19, 2019, 03:18:57 AM »
I agree with @Little Aussie Battler. Tax cuts are not tax reform. What the Liberals have done is hand back bracket creep.

Real tax reform would be resolving the vertical fiscal imbalance between the feds and the states, which would involve drastically cutting income tax rates and correspondingly increasing the GST.

In addition you might have land taxes on all property (including PPORs) and an elimination of stamp duties.

No... we are not getting "reform".

Marty, I would love every one of those measures. But none of those would be supported by the Greens or Labor, at all. Land tax on PPOR? Increasing GST? That'll just hit low income earners more.

Fresh Bread

  • Handlebar Stache
  • *****
  • Posts: 2315
  • Location: Australia
  • Insert dough/bread/crust joke
Re: #Auspol - Australia Votes 2019!
« Reply #160 on: May 19, 2019, 03:22:23 AM »
Is it possible to have a tiered GST where luxury goods have higher GST? Eg electricity to heat home taxed at 10%, Maserati or Louis Vuitton, 15-20%.

Fresh Bread

  • Handlebar Stache
  • *****
  • Posts: 2315
  • Location: Australia
  • Insert dough/bread/crust joke
Re: #Auspol - Australia Votes 2019!
« Reply #161 on: May 19, 2019, 03:26:27 AM »
Another interesting (I think) screenshot. Clive Palmer and Pauline Hanson were the only parties to gain votes.

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #162 on: May 19, 2019, 03:58:12 AM »
I didn't realise The Guardian would use such 'magic' stats, but I have let myself be misled.

As for my retirement date, I'm still very young - I graduated from uni at the start of this decade. I won't retire for a while yet, so I'm looking forward to big tax cuts each year, hopefully, from 2024, so that I can build a nest egg.
It does seem most unlike the Guardian to do so, as I had it pegged as rather left wing.

The real problem with the tax cuts is that they really canít happen, so the government of the time will need to do a lot of contortions (ie tax reform) to make them seem like theyíre happening, when, in fact, taxes are going up. The reason is quite simply demographics.

You may not be aware that I have very elderly parents. Over the last year they have graduated to both needing walkers, which will soon mean that both will no longer be able to drive. They are also some of the increasingly long queue for home care packages. The other day I was thinking about the difference between my experiences with ageing parents and the experiences that they had. I found figures which said that when my parents were my age, only 5% of the population was over 65. Now itís three times that, at about 17% from memory, and the elderly are much older and frailer. My parents (like their generation) had more siblings than I (and my generation) do. So there are more than three times as many elderly people with fewer children to assist with care. In 10 years there will be 5 times as many, and the number of people (other than paid carers) likely to assist will be even fewer, because the number of children per mother declined. This means that there is a huge government expenditure burden that is only getting worse, and that everyone knows about. The elderly at that time will also be the last who didnít have full superannuation benefits because superannuation really started in the 1990s at 3%, so the government wonít be able to start ratcheting down the old aged pension until a few years later.

After that, the elderly will gradually reduce as a huge government expenditure burden because they reduce as a percentage of the population, and they will have more in superannuation.

But, if the government is expecting to reduce taxes in that period, theyíd better be looking for some more magic.

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #163 on: May 19, 2019, 04:00:45 AM »
Another interesting (I think) screenshot. Clive Palmer and Pauline Hanson were the only parties to gain votes.
Iíve been looking at that one too. Someone said that the protest vote in the bush (Queensland, Murray-Darling...) went that way.

Fresh Bread

  • Handlebar Stache
  • *****
  • Posts: 2315
  • Location: Australia
  • Insert dough/bread/crust joke
Re: #Auspol - Australia Votes 2019!
« Reply #164 on: May 19, 2019, 04:04:06 AM »
Another interesting (I think) screenshot. Clive Palmer and Pauline Hanson were the only parties to gain votes.
Iíve been looking at that one too. Someone said that the protest vote in the bush (Queensland, Murray-Darling...) went that way.

I think it was on the SMH that I saw that in fact the Liberals lost 0.9% but the Nats gained a little bit, hence the coalition fairing a little bit better than Labor. I am so confused by this because I had read in lots of places that farmers understood climate change and wanted real action and were not happy with the Nats who would ignore it.

Kyle Schuant

  • Handlebar Stache
  • *****
  • Posts: 1310
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #165 on: May 19, 2019, 05:22:47 AM »
Farmers understand climate change, but they need an option other than "stop farming." No party has really addressed this. This leaves the Nats as at least coming from farming and rural business backgrounds, and caring whether rural towns live or die. It's like how Aboriginals vote for ALP - ALP won't do much for them, but the rest definitely won't help them at all.

The Nats voters may also have been motivated by a desire to strengthen the Nats vs the Libs, at the moment the Nats are a rather slavish sidekick to the Libs. At some point a brave Nats leader may note that the Libs have not been able to achieve a majority on their own for quite some time.

marty998

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: #Auspol - Australia Votes 2019!
« Reply #166 on: May 19, 2019, 03:03:26 PM »
Is it possible to have a tiered GST where luxury goods have higher GST? Eg electricity to heat home taxed at 10%, Maserati or Louis Vuitton, 15-20%.

Luxury car tax is a good example of something that could be expanded if that is the path being chosen.

marty998

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: #Auspol - Australia Votes 2019!
« Reply #167 on: May 19, 2019, 03:09:16 PM »
Another interesting (I think) screenshot. Clive Palmer and Pauline Hanson were the only parties to gain votes.
Iíve been looking at that one too. Someone said that the protest vote in the bush (Queensland, Murray-Darling...) went that way.

From memory a One Nation candidate did particularly well in a Hunter Valley seat (think it was Joel FItzgibbons seat). Pulled together about 20% or so.

I'm surprised the UAP vote is starting from "0%"... did PUP run in 2016 or 2013?  Thought their vote was a little higher back then.


pab88

  • 5 O'Clock Shadow
  • *
  • Posts: 25
Re: #Auspol - Australia Votes 2019!
« Reply #168 on: May 19, 2019, 03:22:40 PM »
I'm a 30 year old first-time Liberal voter. Perhaps this is connected to buying a PPoR in the last 2 years, but the ALP's rhetoric really rubbed me the wrong way.

I guess I've made the normal transition from idealistic left-of-centre uni student to aspirational middle-class worker. Howard was right, Australians are aspirational not redistributive. Shorten's problem wasn't being honest with his policy agenda, it was that his policy agenda was redistributive and punitive to savers, investors and the salaried middle-class.

I was lucky to get 8 to 1 with Betfair on election morning, so I'm feeling pretty good this Monday.

middo

  • Handlebar Stache
  • *****
  • Posts: 1342
  • Location: Stuck in Melbourne still. Dreaming of WA
  • Learning.
Re: #Auspol - Australia Votes 2019!
« Reply #169 on: May 19, 2019, 05:23:53 PM »
Another interesting (I think) screenshot. Clive Palmer and Pauline Hanson were the only parties to gain votes.
Iíve been looking at that one too. Someone said that the protest vote in the bush (Queensland, Murray-Darling...) went that way.

I think it was on the SMH that I saw that in fact the Liberals lost 0.9% but the Nats gained a little bit, hence the coalition fairing a little bit better than Labor. I am so confused by this because I had read in lots of places that farmers understood climate change and wanted real action and were not happy with the Nats who would ignore it.

Having lived in the country, the conversation goes something like this:

Farmer: We are seeding later this year.  Rainfall hasn't been above the long term average since 1975.  We have to plant special varieties of wheat to cope with the changing climate

Me: You know that CO2 emissions are causing the problem?

Farmer:  Yeah.  Why doesn't someone do something about it.

Me:  Maybe you could send a message to Canberra?

Farmer:  Yeah.  I might do that.

Me:  So voting Greens at the next election.

Farmer:  No!  Not those radical #$@*.  I'm voting Nats.  They have my back.

Me:  But they are advocating for more coal, not less, which means more CO2.

Farmer:  But we need the energy to keep the lights on.

Me:  What about the solar panels on your roof?

Farmer:  But we need baseload power. 

Me:  That can be achieved by renewables with the appropriate technology.

Farmer:  Jim says it can't.  What are you anyway, a greenie or something??  Next you'll be shagging my sheep.

Kyle Schuant

  • Handlebar Stache
  • *****
  • Posts: 1310
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #170 on: May 19, 2019, 05:56:14 PM »
The Greens in Parliament are made up of people who grew up in the city and went to uni, like Sarah Hanson-Young having done a Bachelor of Social Sciences. They find it hard to connect to Farmer Bruce in his tractor. There's one with a degree in Agriculture who worked with the WA government, apart from that the closest any of them have come to a farm is their neglected tomato plant in the tiled courtyard of their terraced house.

There are some sensible lower-carbon and more sustainable practices finally creeping into Australian agriculture, which historically has been essentially another version of "dig it up and sell it overseas." Turns out, it's better not to cut down all the trees. Who knew?

https://www.abc.net.au/news/2018-10-29/soaking-up-australias-drought-natural-sequence-farming/10312844

But the Greens are a bit oblivious to this stuff. In trying to grow their parliamentary presence, they've been digging in the rich soil of salaried lefties in the inner city, rather than hacking into the hard clay pan of rural areas. They've been doing that for thirty years with only moderate success (compare the ALP or Libs at 30 years old to the Greens), in their place I'd try a different approach.

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #171 on: May 19, 2019, 06:09:50 PM »
Exactly. And the greens have proved to be so idealistic that they have opposed reforms that would make us more environmentally friendly.

Bob Brown's Adani protest sunk nails in Labor in this election.

We need a real environmental party.

middo

  • Handlebar Stache
  • *****
  • Posts: 1342
  • Location: Stuck in Melbourne still. Dreaming of WA
  • Learning.
Re: #Auspol - Australia Votes 2019!
« Reply #172 on: May 19, 2019, 06:18:14 PM »
All Ords started up 1.3%.

middo

  • Handlebar Stache
  • *****
  • Posts: 1342
  • Location: Stuck in Melbourne still. Dreaming of WA
  • Learning.
Re: #Auspol - Australia Votes 2019!
« Reply #173 on: May 19, 2019, 06:18:53 PM »
Exactly. And the greens have proved to be so idealistic that they have opposed reforms that would make us more environmentally friendly.

Bob Brown's Adani protest sunk nails in Labor in this election.

We need a real environmental party.

Join them and fix them?  Get involved?

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #174 on: May 19, 2019, 06:34:48 PM »
Everyone Iíve ever met in the Greens has been an idealist. A new party of young people from the bush could really work. After all, traditionally our parties and reforms came from the bush.

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #175 on: May 19, 2019, 07:10:35 PM »
Actually, Clive may have won the election for the Liberals. I was with my parents the week before the election. Every day there were at least 2 pages (front and back cover of The Age) of yellow ads. Labor will pinch your retirement... There are a lot of oldies who get the newspapers these days - I suspect they are almost the entire readership. He'll be happy. He spent the money, and he'll get his free train. A bargain at the price.

I think they'll find that Labor was actually winning for quite a while, but during the election campaign, especially for the last two weeks, the nearer we got, the tighter the margins, and by the day, the Liberals were in front. Every poll looked tighter, but the pollsters weren't looking at the trajectory.

Kyle Schuant

  • Handlebar Stache
  • *****
  • Posts: 1310
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #176 on: May 19, 2019, 07:56:32 PM »
All Ords started up 1.3%.
Naturally. Franking credits are corporate welfare, after all :)


Plus, the banks are probably relieved to have a Lib-Nat govt, ALP might actually have regulated them :)
« Last Edit: May 19, 2019, 08:57:16 PM by Kyle Schuant »

Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #177 on: May 19, 2019, 08:33:33 PM »
I'm a 30 year old first-time Liberal voter. Perhaps this is connected to buying a PPoR in the last 2 years, but the ALP's rhetoric really rubbed me the wrong way.

I guess I've made the normal transition from idealistic left-of-centre uni student to aspirational middle-class worker. Howard was right, Australians are aspirational not redistributive. Shorten's problem wasn't being honest with his policy agenda, it was that his policy agenda was redistributive and punitive to savers, investors and the salaried middle-class.

I was lucky to get 8 to 1 with Betfair on election morning, so I'm feeling pretty good this Monday.

When your policy agenda is going to hit anyone who is financially successful - i.e. those on $90k+, those who are self-funded retirees, those with an investment property who care about its value, those who in the future want to buy IPs, those who in the future want to buy shares for their retirement - then you are dealing with an awful amount of potential blowback. You have to deal with the aspirations of those who are there, and also those who someday want themselves or their children to be there.

Shorten also was dishonest with his policy agenda. He said his policies will benefit "working Australians". I didn't realise that earning more than $120,000 made you a "non-working Australian". He should have just said that he's happy to take from the top quintile to give to the middle 2 quintiles. That would have been at least honest.

middo

  • Handlebar Stache
  • *****
  • Posts: 1342
  • Location: Stuck in Melbourne still. Dreaming of WA
  • Learning.
Re: #Auspol - Australia Votes 2019!
« Reply #178 on: May 19, 2019, 10:32:39 PM »
I'm a 30 year old first-time Liberal voter. Perhaps this is connected to buying a PPoR in the last 2 years, but the ALP's rhetoric really rubbed me the wrong way.

I guess I've made the normal transition from idealistic left-of-centre uni student to aspirational middle-class worker. Howard was right, Australians are aspirational not redistributive. Shorten's problem wasn't being honest with his policy agenda, it was that his policy agenda was redistributive and punitive to savers, investors and the salaried middle-class.

I was lucky to get 8 to 1 with Betfair on election morning, so I'm feeling pretty good this Monday.

When your policy agenda is going to hit anyone who is financially successful - i.e. those on $90k+, those who are self-funded retirees, those with an investment property who care about its value, those who in the future want to buy IPs, those who in the future want to buy shares for their retirement - then you are dealing with an awful amount of potential blowback. You have to deal with the aspirations of those who are there, and also those who someday want themselves or their children to be there.

Shorten also was dishonest with his policy agenda. He said his policies will benefit "working Australians". I didn't realise that earning more than $120,000 made you a "non-working Australian". He should have just said that he's happy to take from the top quintile to give to the middle 2 quintiles. That would have been at least honest.

While Australian's are largely aspirational, there is still a very large taxpayer funding of "self funded retirees".  Sooner or later that will have to be reigned in, or our budget will go further and further into the red.  It's great to know that those with lots of assets can live off them.  I still fail to see why they should get handouts.

I would also point out that the basis of MMM - save enough to live off, means your SWR will require you to occasionally sell some of the asset base you are holding.  The rhetoric espoused by Scomo clearly said that retirees shouldn't need to sell their shares at all.  Without any generational redistribution (death taxes) then we need to be sensible about our handouts to those with substantial assets.  Otherwise we are institutionalising the worst parts of class, and we will end up with class warfare. 

Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #179 on: May 19, 2019, 10:36:32 PM »
They get handouts because if prevents the double-taxation of company profits. While I don't particularly care for franking credits, it at least makes good sense from an economic point of view.

If we are to rein in largesse, I'd much prefer that we force existing pensioners to sell off their house before getting the age pension. That would also help house prices moderate. Giving someone a free pension despite sitting on a $500k or $1000k asset is the height of waste, if you ask me.

Kyle Schuant

  • Handlebar Stache
  • *****
  • Posts: 1310
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #180 on: May 19, 2019, 10:52:14 PM »
It's not clear to me why they should be able to sit on $500k of shares, but not $500k of house.

For my part, I would just tax income the same regardless of its origin. $50,000 in wages, $50,000 in rent payments, $50,000 in share dividends, $50,000 in profit after selling your house $500k house for $550k, $50,000 coming from $20,000 pension and $30,000 super, $50,000 inherited from your dear old gran... it's all $50k. And no deductions whatsoever :)

A few years back Simon Crean was our local member. He was out during a community festival, and I asked him, "If the average person is taxed at a rate of, for example, 20%, but then get deductions taking it to 5% - if virtually everyone does this, why not just abolish all deductions and tax them at 15%? It can still be progressive, of course."

He looked thoughtful for a moment, and then said in genuine confusion, "But what would the tax accountants and lawyers do?" and went on to talk to the next person.

So there you have it from a former Treasurer and leader of the Opposition: the taxation system is a Keynesian employment scheme for accountants and lawyers.

middo

  • Handlebar Stache
  • *****
  • Posts: 1342
  • Location: Stuck in Melbourne still. Dreaming of WA
  • Learning.
Re: #Auspol - Australia Votes 2019!
« Reply #181 on: May 19, 2019, 10:55:41 PM »
They get handouts because if prevents the double-taxation of company profits. While I don't particularly care for franking credits, it at least makes good sense from an economic point of view.

If we are to rein in largesse, I'd much prefer that we force existing pensioners to sell off their house before getting the age pension. That would also help house prices moderate. Giving someone a free pension despite sitting on a $500k or $1000k asset is the height of waste, if you ask me.

No - The return of taxpayer $ to the retiree's who have paid no tax does not prevent the double-taxing of profits.  Having franking credits and allowing those who have paid tax to claim the credit back does this. 

What you have just argued goes to the heart of the basic dishonest of Scomo's rejection of the policy.  Giving taxpayer $ to someone who didn't pay any tax is a handout.  Just like the aged pension, or welfare.  It is just not called one.

As for selling houses, in one sense I don't think this is a bad idea.  But - the ability to sell a house and move becomes less so as people get older.  Their ability to manage complex financial transactions also reduces.  Shares are a simpler investment tool, or even money in the bank, as pulling some out can be done without them ending up homeless.  This again is a continuing problem for governments, who use it against each other even though fixing it would benefit both sides in terms of fiscal ability to follow their own agendas.

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #182 on: May 19, 2019, 11:00:32 PM »
They get handouts because if prevents the double-taxation of company profits. While I don't particularly care for franking credits, it at least makes good sense from an economic point of view.

If we are to rein in largesse, I'd much prefer that we force existing pensioners to sell off their house before getting the age pension. That would also help house prices moderate. Giving someone a free pension despite sitting on a $500k or $1000k asset is the height of waste, if you ask me.
If you can work out a way for people to sell their house, and still live in the same community, with the same neighbours, that might work. Of course, there would still be the problems of adjustment to a new dwelling. Many older people lose an incredible amount of their cognitive ability when they move. Social interaction keeps us happy and healthy. When you take that away, people become miserable stressed shells of their former selves, and everyone I know who has gone into a nursing home was significantly further on in cognitive decline the day after they were forced there. Currently the economics of moving house is also against older people selling.

Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #183 on: May 20, 2019, 12:19:35 AM »
It's not clear to me why they should be able to sit on $500k of shares, but not $500k of house.

For my part, I would just tax income the same regardless of its origin. $50,000 in wages, $50,000 in rent payments, $50,000 in share dividends, $50,000 in profit after selling your house $500k house for $550k, $50,000 coming from $20,000 pension and $30,000 super, $50,000 inherited from your dear old gran... it's all $50k. And no deductions whatsoever :)

The can't sit on $500k of shares. They won't get the pension if they have $500k of shares. Someone can sit on $500k worth of house and still get a full pension (and have more assets besides) despite having the benefit of imputed rent.

They get handouts because if prevents the double-taxation of company profits. While I don't particularly care for franking credits, it at least makes good sense from an economic point of view.

If we are to rein in largesse, I'd much prefer that we force existing pensioners to sell off their house before getting the age pension. That would also help house prices moderate. Giving someone a free pension despite sitting on a $500k or $1000k asset is the height of waste, if you ask me.
If you can work out a way for people to sell their house, and still live in the same community, with the same neighbours, that might work. Of course, there would still be the problems of adjustment to a new dwelling. Many older people lose an incredible amount of their cognitive ability when they move. Social interaction keeps us happy and healthy. When you take that away, people become miserable stressed shells of their former selves, and everyone I know who has gone into a nursing home was significantly further on in cognitive decline the day after they were forced there. Currently the economics of moving house is also against older people selling.

Perhaps some sort of government-managed reverse mortgage scheme, with a stamp duty/mortgage registration waiver?  The advantage of this is that despite losing some home equity (from where the pension is drawn), you don't have to move house, or sell up, until after your death.

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #184 on: May 20, 2019, 12:49:36 AM »
Actually, they can get the pension - not the full pension though. The cutoff for the pension is quite high.

There already is a government managed reverse mortgage scheme.

Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #185 on: May 20, 2019, 12:57:32 AM »
So just include the PPOR in the pension assets test and if someone doesn't want to sell up, put him or her onto the reverse mortgage scheme.

There's no policy justification to allow a retiree with a $1m house to draw a full pension.

Kyle Schuant

  • Handlebar Stache
  • *****
  • Posts: 1310
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #186 on: May 20, 2019, 01:00:04 AM »
You keep doing this, Bloop. Research before speaking. Also, by the by, research before making plans for FIRE.

https://www.humanservices.gov.au/individuals/services/centrelink/age-pension/eligibility/assets-test/assets#assetstestlimits

Pensions reduce if you're single and a non-home-owner with $465,000 in assets. You're proposing that this asset test include a home, which it already does indirectly, since the asset test for a home owner is $258,500. But this could be a $100k home or a $10 million home, it makes no difference currently.

Note: I am not proposing that the asset test include homes. That was Bloop's idea. I am merely pointing out that other assets do not reduce the pension immediately or as much as Bloop thinks.

I would merely tax income as income, regardless of its source, and have no deductions at all. And this tax should be progressive, anyone on full-time minimum wage equivalent or less should pay no income tax; most effectively pay zero net tax because of things like pension rent assistance, discounts with healthcare cards, family tax benefit, low income tax offset, etc.

marty998

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: #Auspol - Australia Votes 2019!
« Reply #187 on: May 20, 2019, 01:44:16 AM »
Definitely need to include the home in the assets test. The oldies are not innocent here, they know exactly what they are doing to milk the taxpayer.

Everyone would be paying substantially less tax if downsizing were to be the norm. Instead of an inheritance, the oldies' poor grandchildren would get a boost from not having to fund the age pension through higher taxes.

As a country we all support self reliance, until we turn 65 (or 67 now, as the case may be).

marty998

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: #Auspol - Australia Votes 2019!
« Reply #188 on: May 20, 2019, 01:48:13 AM »
You keep doing this, Bloop. Research before speaking. Also, by the by, research before making plans for FIRE.

https://www.humanservices.gov.au/individuals/services/centrelink/age-pension/eligibility/assets-test/assets#assetstestlimits

Pensions reduce if you're single and a non-home-owner with $465,000 in assets. You're proposing that this asset test include a home, which it already does indirectly, since the asset test for a home owner is $258,500. But this could be a $100k home or a $10 million home, it makes no difference currently.

Note: I am not proposing that the asset test include homes. That was Bloop's idea. I am merely pointing out that other assets do not reduce the pension immediately or as much as Bloop thinks.

I would merely tax income as income, regardless of its source, and have no deductions at all. And this tax should be progressive, anyone on full-time minimum wage equivalent or less should pay no income tax; most effectively pay zero net tax because of things like pension rent assistance, discounts with healthcare cards, family tax benefit, low income tax offset, etc.


I see the point you are making here. I'll suggest again that instead of the franking policy, there should have been a 15% tax on pension earnings. That would strike the right balance between "everyone paying a fair share" and "not punishing* retirees".

*Paying tax is not a punishment, and it should never have been allowed to be framed as such. Who are you going to tax if you aren't going to tax people who are wealthy or have high income? You can't squeeze tax out of people who have no money.

Kyle Schuant

  • Handlebar Stache
  • *****
  • Posts: 1310
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #189 on: May 20, 2019, 01:48:47 AM »

You can tax people who have little money, it's called the GST.
Plibersek won't put her hand up to lead the ALP. This is good to know. Now someone like Albanese, Fitzgibbon or Bowen can have a go. Speaking as a middle-aged white guy, I do feel underrepresented in the leadership of this country.

These guys have also said the party is too lefty. Between swinging right and having a middleaged white guy in charge, we can see that it is important for the ALP to ensure it has no points of difference with the Liberal Party.

Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #190 on: May 20, 2019, 01:50:59 AM »
Kyle, the link establishes that a PPOR reduces your assets cap by $207,000. In other words, the imputed value of a PPOR is $207,000. Which over-values rural PPORs and drastically under-values urban PPORs. Why not just go by the actual value - like how rates are calculated?

You propose to tax income as income, in which case, unless you tax imputed rent, you are giving wealthy PPOR owners a free pass for the pension when they don't need it. You're entrenching the idea of a society where you don't have to save up for retirement - the government will pay it for you - but you still get to keep all of your family home.

As for my own FIRE plans, I won't retire till my after-tax passive income equals my future family's living expenses. Probably won't retire till my 40s, because it takes time to earn that money. But with hopefully an extra $11k a year from 2025, that will prove a significant help. (At the very least, Labor isn't going to be proposing any more envy taxes, so the worst case scenario seems to be the present status quo.)

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #191 on: May 20, 2019, 02:04:06 AM »
Definitely need to include the home in the assets test. The oldies are not innocent here, they know exactly what they are doing to milk the taxpayer.

Everyone would be paying substantially less tax if downsizing were to be the norm. Instead of an inheritance, the oldies' poor grandchildren would get a boost from not having to fund the age pension through higher taxes.

As a country we all support self reliance, until we turn 65 (or 67 now, as the case may be).
I do agree with most of what you say, Marty, and I would be happy if the government ended up owning all the houses.

However, given my recent interactions with my parents driving me batty, and the conversations Iíve had with my peers about their parents driving them batty, the elderly who are at that stage donít quite grasp things that you expect them to. For instance, I would really appreciate the income test and assets test being simpler, after spending several months arguing with my mother about these, and her peppering Centrelink with every piece of information they didnít want.

One major problem is that people should downsize the moment they retire, but they leave it far too late, and only think about doing so when they are battling a big house that they cannot maintain and that makes life difficult for them. The people who do change houses when they retire build their dream house in a sea change location thatís no good when youíre old and decrepit. If you move to somewhere easy to manage and maintain, with facilities close by that youíll use into old age, ten years before you need to, you will build your community, otherwise youíre lost.

marty998

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: #Auspol - Australia Votes 2019!
« Reply #192 on: May 20, 2019, 02:13:45 AM »
Definitely need to include the home in the assets test. The oldies are not innocent here, they know exactly what they are doing to milk the taxpayer.

Everyone would be paying substantially less tax if downsizing were to be the norm. Instead of an inheritance, the oldies' poor grandchildren would get a boost from not having to fund the age pension through higher taxes.

As a country we all support self reliance, until we turn 65 (or 67 now, as the case may be).
I do agree with most of what you say, Marty, and I would be happy if the government ended up owning all the houses.

However, given my recent interactions with my parents driving me batty, and the conversations Iíve had with my peers about their parents driving them batty, the elderly who are at that stage donít quite grasp things that you expect them to. For instance, I would really appreciate the income test and assets test being simpler, after spending several months arguing with my mother about these, and her peppering Centrelink with every piece of information they didnít want.

One major problem is that people should downsize the moment they retire, but they leave it far too late, and only think about doing so when they are battling a big house that they cannot maintain and that makes life difficult for them. The people who do change houses when they retire build their dream house in a sea change location thatís no good when youíre old and decrepit. If you move to somewhere easy to manage and maintain, with facilities close by that youíll use into old age, ten years before you need to, you will build your community, otherwise youíre lost.

I was just about to suggest this, you put it better than I did. Move when you are 65 and capable, not when you are 85.

But this requires forward planning, and many have been proven not to have or choose to disregard that capability.

middo

  • Handlebar Stache
  • *****
  • Posts: 1342
  • Location: Stuck in Melbourne still. Dreaming of WA
  • Learning.
Re: #Auspol - Australia Votes 2019!
« Reply #193 on: May 20, 2019, 02:34:36 AM »
Definitely need to include the home in the assets test. The oldies are not innocent here, they know exactly what they are doing to milk the taxpayer.

Everyone would be paying substantially less tax if downsizing were to be the norm. Instead of an inheritance, the oldies' poor grandchildren would get a boost from not having to fund the age pension through higher taxes.

As a country we all support self reliance, until we turn 65 (or 67 now, as the case may be).
I do agree with most of what you say, Marty, and I would be happy if the government ended up owning all the houses.

However, given my recent interactions with my parents driving me batty, and the conversations Iíve had with my peers about their parents driving them batty, the elderly who are at that stage donít quite grasp things that you expect them to. For instance, I would really appreciate the income test and assets test being simpler, after spending several months arguing with my mother about these, and her peppering Centrelink with every piece of information they didnít want.

One major problem is that people should downsize the moment they retire, but they leave it far too late, and only think about doing so when they are battling a big house that they cannot maintain and that makes life difficult for them. The people who do change houses when they retire build their dream house in a sea change location thatís no good when youíre old and decrepit. If you move to somewhere easy to manage and maintain, with facilities close by that youíll use into old age, ten years before you need to, you will build your community, otherwise youíre lost.

I was just about to suggest this, you put it better than I did. Move when you are 65 and capable, not when you are 85.

But this requires forward planning, and many have been proven not to have or choose to disregard that capability.

Oh my god yes.

I have a father who should have moved 15 years ago.  Now he will move into a nursing home instead of some sort of assisted care.

Yes. Downsize early.  Have holidays.  Everyone here downsize early. 

deborah

  • Senior Mustachian
  • ********
  • Posts: 12073
  • Location: Australia or another awesome area
Re: #Auspol - Australia Votes 2019!
« Reply #194 on: May 20, 2019, 02:54:43 AM »
Actually, downsize when you (both if you're a couple) turn 65, and have owned your PPOR for 10 years.

Dropbear

  • 5 O'Clock Shadow
  • *
  • Posts: 85
Re: #Auspol - Australia Votes 2019!
« Reply #195 on: May 20, 2019, 07:42:04 AM »
Sure, downsize if you want to, by all means.

But these arguments for forced downsizing neglect the mental health aspect of ageing in place.  Homes are where people have families, friends, neighbours, communities, pets, and memories.  These things can become even more important to an elderly person after the passing of a lifelong partner.

Beware that there are health risks (and broader economic risks for the nation, too, I might add) from physical dislocation that can result in social isolation, dementia, and a potential drop in regular physical activity.

A much better solution is that we provide support for the elderly who need a little help sometimes, but are otherwise reasonably fit and mobile.  A spare bedroom in an old house could be a great rental proposition for a young university student!

marty998

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: #Auspol - Australia Votes 2019!
« Reply #196 on: May 20, 2019, 03:12:01 PM »
Must be a new record.... 2 days in and the first election promise has already been broken.

ScoMo admits it's unlikely parliament can be recalled in time to pass the legislation to amend the tax tables for 2019, meaning the additional Low and Middle Income Tax Offsets proposed in the budget cannot be handed out this years tax returns.


happy

  • Walrus Stache
  • *******
  • Posts: 7110
  • Location: NSW Australia
Re: #Auspol - Australia Votes 2019!
« Reply #197 on: May 20, 2019, 04:08:40 PM »
Sure, downsize if you want to, by all means.

But these arguments for forced downsizing neglect the mental health aspect of ageing in place.  Homes are where people have families, friends, neighbours, communities, pets, and memories.  These things can become even more important to an elderly person after the passing of a lifelong partner.

Beware that there are health risks (and broader economic risks for the nation, too, I might add) from physical dislocation that can result in social isolation, dementia, and a potential drop in regular physical activity.

A much better solution is that we provide support for the elderly who need a little help sometimes, but are otherwise reasonably fit and mobile.  A spare bedroom in an old house could be a great rental proposition for a young university student!

Agree, I've already spelt out all the issues with forced downsizing in a post on another Aussie thread. Apart from the individual cost, there is a cost to society if we start creating age-related ghettos. Somewhere like the Eastern suburbs of Sydney would have no old people at all. In fact if you take the assertion that a $500k or $1mm house is too much largesse from the taxpayer, there would be practically no elderly homeowners in the whole of Sydney. And elderly renters are much worse off in many ways.

I do think a govt sponsored reverse mortgage system would work, provided the loan interest is minimal - say CPI or similar, like HECS.

I find the most distressing part of this conversation is the youthful denigration of the elderly. "Those rich old folks who are financial leeches and a burden"  and so forth.  Older citizens offer much to our society in many ways and it saddens me that we live in a society that by and large does not appreciate that...unlike some others where the elderly are treated with special respect.

That being said we do need to wean folk off the expectation of the aged pension as an entitlement rather than a safety net. In the circles I move in there is an increasing awareness in all age groups that relying on the pension is foolish, but maybe this is not typical. In the lower SES area I worked there was a widespread expectation that mum and dad's Sydney house would allow the next gen to pay off their Sydney house and/or be their fall back position for retirement and so on.


Bloop Bloop

  • Handlebar Stache
  • *****
  • Posts: 2139
  • Location: Melbourne, Australia
Re: #Auspol - Australia Votes 2019!
« Reply #198 on: May 20, 2019, 05:17:12 PM »
"In fact if you take the assertion that a $500k or $1mm house is too much largesse from the taxpayer, there would be practically no elderly homeowners in the whole of Sydney. "

Are you suggesting that there is no one in Sydney who is a self-funded retiree, i.e. who has enough super or other savings to, gasp, pay for his or her own retirement?

happy

  • Walrus Stache
  • *******
  • Posts: 7110
  • Location: NSW Australia
Re: #Auspol - Australia Votes 2019!
« Reply #199 on: May 20, 2019, 07:00:13 PM »
Ha-Ha, got me! No I'm not of course and I don't know the data on the proportion of self-funded retirees in Sydney, but I'm guessing its not high and concentrated in the more well off suburbs.

I was referring really to the price of houses in Sydney...500k doesn't buy anything much, let alone extravagant, so if you haven't saved enough to self-fund, you would need to dip into the equity in your home. The more I chew it over, its an interesting notion because it might create better incentives for personal responsibility ( or a lot of old folk in little units in the lower SES suburbs).