Expect Pain on Tuesday

kaf said:
Now that has me worried. So we'll have a whole generation of Australians growing up now whose sole reason for being is an initial payment of 5k??? What does that say about the parents and their motivation? Or their financial literacy more to the point. Can't remember the exact figure but wasn't it something like 300k to raise a child until it's 18?

kaf

kaf
Click to expand...

It should have you worried. There are a lot of low income, benefit recipients who make a career of being parents, not because they love kids & want to look after them, but because of the payments they get.

It costs very little to raise a kid if you are of that mentality. Some food (Macca's will do) a few clothes, public education & nothing else. These kids are left to fend for themselves.

If the mother was not going to work, consider how much better off she is with a couple of kids in tow, than without. Now, I don't know what the dole payment is for a single person, but it isn't much. Add to that the additional benefits you get for each kid (you don't have to spend it on the kid after all), then add the maintenance payments from the multiple absentee fathers. If she is smart, she will go for the ones that are employed too.
 
Ausprop said:
fair enough. We're hardly talking millionaires tho. easier to quit and run your own show!
Click to expand...

ok the Steve McKnight email has clarified a few points, being rule changes:

1) neg gaering disregarded when calculating eligibility for welfare

2) family trusts to be included in family unit calucaltions.

some huge changes there!
 
Ausprop said:
ok the Steve McKnight email has clarified a few points, being rule changes:

1) neg gaering disregarded when calculating eligibility for welfare

2) family trusts to be included in family unit calucaltions.

some huge changes there!
Click to expand...

Also amongst other things Super salary sacrifice is added back. But I thought this still mostly only related to eligibility for welfare. It might affect some who are relying on the so called middle class welfare but unless I'm misunderstanding something that is all it effects?

Cheers - Gordon
 
Apocalypse said:
Is there an opportunity to reduce your work hours a little to lower your income to just under the cut off thresholds. Why earn a $100 more a week if you lose $100 in benefit?
Click to expand...

i'm sorry - but, for me, a statement like that is up there with the oldies scrimping so that they "don't lose their pension". a very negative and defensive mindset.

don't look at what you lose - look at what you gain. try the positive mindset instead.
 
Can anybody shed any light on this from the Steve McKnight newsletter:
" First, that losses from investment property are now to be added back when
calculating your entitlement to welfare payments.

So, if you have a heavily negatively geared portfolio resulting in low taxable
income then you may have previously been able to claim various welfare payments.
These days are now over."


Does anybody know which welfare payments are affected. The low income tax rebate????
 
TheAnalyst said:
It is because it might have affected too many labour MPs if it did.
Click to expand...

This is a ref to removal of NG and CGT concession, to which i dont agree. The announced tax review is where NG and CGT will be analysed. Labour pollies will not influence that.

Labour is simply smart enough this time to realise that you must make wholistic tax decisions, not ad hoc.

They know if they do remove NG or modify they risk a crash in investment and a greater housing crisis. Pulleys and Levers stuff. Do this here and make that happen there.

Is it very likely CGT exemption will be reduced or NG modified but they will not do it until they can find a way to guarantee supply or the demand will cause rents to soar making NG redundant anyhow.

AND adding supply is not simple at all!

Whilst we all know 70% own or are buying so 30% rent this is not the average accross the Country.

In the inner city apartment blocks are 80%+ rental so if your remove incentive to invest then rents will skyrocket. Can young professionals with HECS debt or Uni Student afford to buy units? No way. Do they want to live in the burbs? No. What about aged pensioners, low income casual workers, etc..

And you cannot simply add 1000's of units overnight to the public stock. Takes years to build.

And will the inner city Council and State Gov give up their take on developers becasue they cannot get a high price for units anymore becasue investors have gone elsewhere? I doubt that.

More demand on public transport, increased inflation from rent, less equity in the city and the poor are forced to live in the fringes even more/

It ain't simple stuff IMHO,, Peter.
 
I read Steve McKnights newsletter, interesting as usual (he still expects Interest Rates to hit 10%)

The government is forecasting that the economic party times of quick and easy
profits from appreciating assets are over.

Specifically, Treasury is expecting that capital gains tax income will drop by
$14billion over the next three years as a result of falling share prices and a
slowing housing market.

Furthermore, economic growth is forecast to slow, while unemployment and
inflation are expected to rise. While not mentioned in the budget, the likely
inevitable outcome will be further interest rates rises too. I still expect
interest rates to reach 10% by June 2009.
Click to expand...

$14 Billion is a serious drop in income from Capital Gains Tax (why such a big hole?) and what are they expecting?

With the rebate of $8,000.00 for a 20% discount in rent on "new" dwellings, how are they proposing to implement this?

What do they think is going to happen with rents to offer this incentive is an interesting question (must be expecting more rises).

They are expecting a downturn in the economy a rise in unemployment, but are also looking to increase migration :confused:

more from Steve McKnight

==========
Rule Changes
==========

There are two rule changes to be aware of.

First, that losses from investment property are now to be added back when
calculating your entitlement to welfare payments.

So, if you have a heavily negatively geared portfolio resulting in low taxable
income then you may have previously been able to claim various welfare payments.
These days are now over.

Second, that the family trust rules have been changed so that the family unit is more closely defined. This is technical to explain, but accountant Mark Unwin is preparing a summary that will be posted in the 'Legal & Accounting' forum *Steve's Forum*as
soon as possible.
Click to expand...
 
redwing said:
I read Steve McKnights newsletter, interesting as usual (he still expects Interest Rates to hit 10%)



$14 Billion is a serious drop in income from Capital Gains Tax (why such a big hole?) and what are they expecting?

With the rebate of $8,000.00 for a 20% discount in rent on "new" dwellings, how are they proposing to implement this?

What do they think is going to happen with rents to offer this incentive is an interesting question (must be expecting more rises).

They are expecting a downturn in the economy a rise in unemployment, but are also looking to increase migration :confused:

more from Steve McKnight
Click to expand...

This is NOT new, and has been implemented for years.
 
Sorry I mean the following. I wanted to quote but it was left out.


==========
Rule Changes
==========

There are two rule changes to be aware of.

First, that losses from investment property are now to be added back when
calculating your entitlement to welfare payments.

So, if you have a heavily negatively geared portfolio resulting in low taxable
income then you may have previously been able to claim various welfare payments.
These days are now over.

Second, that the family trust rules have been changed so that the family unit is more closely defined. This is technical to explain, but accountant Mark Unwin is preparing a summary that will be posted in the 'Legal & Accounting' forum *Steve's Forum*as
soon as possible.
 
Have to say I agree with the general gist of the thread re: baby bonus.

If the purpose was to encourage everyone equally to procreate, the benefit should be equal to all. Sure, some people 'need' it less, but that's irrelevant. It already is skewed - $5k to me is worth less than it is to a single mum who doesn't work, for example. It's like my Miliatry leave payments the government gave to my employer.

If it truly was 'an equal payment to all' wouldn't it be a multiple of income, net wealth or something like that? (like paid maternaty leave, like the UK and France, etc). This is equal to all except for those that earn no income - who could then receive a minimum 'bonus amount', although then you get other issues like employers not wanting to take on newly wed females.

If you only pay a subset of society the bonus, then you are only encouraging that subset to procreate. $150k doesn't seem to be a bad level. I'm over that and happy that my massive life decisions like having children are not influenced by a couple of grand. Maybe that's why that was the limit that was chosen? Still, with such a small % of the population above this figure why not pay it to everyone.

Having it paid in installments is great.

All of these systems are massively complex and it doesn't take much to change the equilibrium. Good thing there were no huge changes.
 
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