The Great Reverse Government

[kathryn d]

So their perception is the system is unfair, even though it isn't? That isn't a problem with the system, it's a problem with people's understanding of the system. A problem of the people, not the system.

The 'average person' would always be better off saving for their retirement, as the 'claw back' is never dollar for dollar, it's a small percentage. In most cases, the working poor are simply unable to save any meaningful amounts for their retirement, because they are concerned with paying the mortgage and other bills now.

It's not a matter of 'choosing to do nothing'.

IMO if you've been able to save for retirement, had a good job, worked hard and retired without a pension, you're miles ahead of someone solely reliant on the old age pension.

We are too worried as a society about what others are getting, and why aren't I getting that too.



Well, depends who does the telling. Go and see who introduced paying 30% for everyone's health insurance, and 50% for everyone's child care, and Family Tax Benefit Part B for stay at home spouses, regardless of what their spouse earned.

Don't believe everything you are told!

Perception is very important.
How many times have we heard on SS, that their parents don't want to have too much money at retirement, because they will lose some of their pension.

You may be a high income earner, and you cant fathom thinking like this, I don't know.

EDIT: If the perception means that saving more for retirement is fruitless, it may mean more people will spend more during their working years, or spend their Super as fast as they can on RV, cars, vacations and then rely on the 'universal' pension.

 

[BayView]

The 'average person' would always be better off saving for their retirement, as the 'claw back' is never dollar for dollar, it's a small percentage. In most cases, the working poor are simply unable to save any meaningful amounts for their retirement, because they are concerned with paying the mortgage and other bills now.

What is your description of the working poor?

In your opinion; which demographic is in this group?

I talked about the working poor in another thread.

From my experience; the working poor - folks who are working, but who are broke most of the time -are this way due to their lifestyle choices, lack of financial education and money management.

If someone is working - unless they are earning less than the poverty line amount - they can save money, and if they can't - take on another part-time job or two.

I know this is a bit simplistic; a single mother who has small kids and who has to work, etc for example would slip between the cracks probably..she would find it very hard to work full-time and earn enough to pay for childcare etc.

But; there is welfare to cover part of this problem, too.

For the majority though; it is merely an adjustment in their lifestyle choices and what they choose to spend money on.

Where I live, the demographic is mostly working class families, tradies and pensioners. Lower to middle-income earners.

All day long we see them in our workshop with their cars.

In the vast majority of cases; their lack of money is a self-inflicted wound...poor financial and lifestyle decisions.

 

[LibGS]

Labor spent like crazy, from what I'm told.

Liberals are trying to pull in the reins, getting stonewalled at every turn.
No wonder they need to back track on all their suggestions.
If they can do nothing else, except keep the status quo, it is a hell of a lot better than allowing Labor back in for more reckless spending.

They did. To stop Australia sliding into recession. A recession which would have cost the government much more. Labor has been praised by many countries for doing the right thing during the GFC. Economists globally wonder what the fuss is here.

And now the Liebrals are being knocked back in the Senate because the senators realise that:

a) austerity actually hurts economies

Economist Martin Wolf analyzed the relationship between cumulative GDP growth in 2008?2012 and total reduction in budget deficits due to austerity policies (see chart at right) in several European countries during April 2012. He concluded, "In all, there is no evidence here that large fiscal contractions [budget deficit reductions] bring benefits to confidence and growth that offset the direct effects of the contractions. They bring exactly what one would expect: small contractions bring recessions and big contractions bring depressions." Changes in budget balances (deficits or surpluses) explained approximately 53% of the change in GDP, according to the equation derived from the IMF data used in his analysis.

Similarly, economist Paul Krugman analyzed the relationship between GDP and reduction in budget deficits for several European countries in April 2012 and concluded that austerity was slowing growth. He wrote: "this also implies that 1 euro of austerity yields only about 0.4 euros of reduced deficit, even in the short run. No wonder, then, that the whole austerity enterprise is spiraling into disaster.

b) The LNP lied about what they would do once they got into power

c) The LNP has unfair put the burden of "repairing" the budget on lower income people.

d) Its not really a budget emergency. The LNP has created a sense of crisis that their policies will fix.

e)

Since June this year the Coalition has borrowed $19 billion which, if maintained each quarter from now until December 2015 will double the debt they inherited in 2013.

Oopsy.

f) Large inequalities in income and wealth also slow economies down.

Jonathan Ostry and Andrew Berg, two of the authors of the IMF paper, also researched the link between income inequality and growth in 2011.

At the time, Ostry said the response was that income redistribution rather than inequality was responsible for hurting growth: some argued that inequality prompted governments to transfer money to the poor, which reduced incentives to work.

Their follow-up paper on Wednesday showed redistribution was not to blame.

"We find that inequality is bad for growth ... in and of itself," Ostry told reporters on Wednesday. "And we can say that redistribution by itself doesn't seem to be bad for growth, unless it's very large."

They said there was evidence that extremely high taxes or transfers to the poor, such as which occurs in some European countries, could hurt growth. But they found that redistribution also helped growth by reducing inequality.

Not all of us suffer Stockholm Syndrome. The LNP are and always will be cheap labour conservatives.

 

[LibGS]

Here's an interesting quote from today....It might not be true though, as it is from the communist ABC. http://www.abc.net.au/news/2015-03-12/dunlop-the-myth-of-coalition-economic-management/6308704

The budget papers ... show that the Howard government was the highest taxing government in Australia's history. In 2004-05 and 2005-06, the tax to GDP ratio reached a record high 24.2 per cent. In addition, there have been only seven occasions where the tax to GDP ratio has been in excess of 23.5 per cent of GDP and all seven were under the Howard government.

In a similar vein, in the last 30 years, there have been 10 occasions when the tax to GDP ratio has been below 22.0 per cent of GDP and all 10 were under a Labor Government. To put simply, the Howard government was a high taxer, while the current Labor Government is a lower taxer.

In terms of government spending, there have been only five years in the four decades leading up to 2012-13 when real government spending was cut in real terms. None of those cuts were delivered by a Coalition government.

 

[Strannik]

Imagine that load on the Gubb coffers; all those prisoners we have to house and feed.

exactly my point.
you'd be spending more of tax payer's funds to deal with the crime compared to just having small percentage of slackers on the dole. unless of course we reintroduce the death penalty, or labor camps like in USSR

 

[lizzie]

unless of course we reintroduce the death penalty, or labor camps like in USSR

Very tempting ... especially for the f*wit that was caught bashing 7 puppies to death in bush land yesterday for the "fun of it". He's now out on bail again due to "have mercy drug, mental issues blah blah blah" ... but apparently, according to friends who went to school with him, he's been a thieving psycho for over a decade now.

Hmmmm - labour camp would be to good ... half the population wants to give him tit for tat.

... rant ended ... back on topic ...

 

[perthguy]

a) austerity actually hurts economies
are the libs trying to introduce austerity measures? Doesn't seem like it. It seems like a standard spendathon.

b) The LNP lied about what they would do once they got into power
Yes. Standard operating procedure to get elected. Have a look at what KRudd promised and then didn't deliver.

c) The LNP has unfair put the burden of "repairing" the budget on lower income people.
Well, firstly there is no budget repair but I agree the lower income people are being slugged. First KRudd slugged them, then Gillard slugged them, now Abbott slugging them... pathetic.

d) Its not really a budget emergency. The LNP has created a sense of crisis that their policies will fix.
Agree there is no budget emergercy but disagree LNP policies will "fix" the underlying budget deficit. I see no policies for addressing the budget balance long term.

e) Oopsy.
Indeed. If we stick to our current policies, Australia is looking at a federal government debt of $1 trillion by 2037. Lucky the adults are in charge

f) Large inequalities in income and wealth also slow economies down.
Agreed and something not addressed by almost a decade of Labor. All they did was slug the poor and give to the rich. Which makes no sense if you think about it.

Not all of us suffer Stockholm Syndrome. The LNP are and always will be cheap labour conservatives.
I don't see KRudd or Gillard as any better than this mob.

AUSTRALIA?S mounting federal government debt will be $1 trillion by 2037 if urgent action is not taken to rein in the federal budget.

Financial modelling by global auditing firm Pricewaterhouse Coopers proves just how dire our debt crisis has become, with key economists now openly labelling our burgeoning debt load as a ticking time bomb.

http://www.dailytelegraph.com.au/ne...illion-nightmare/story-fnpn0zn5-1227217818739

 

[Angel]

Hi Property Girl

I do not expect the government to do anything for "me". It is their job to look after the country and to support the economy and if the economy is going well, then I will be able to look after myself.

 

[hugh72]

Kathryn and Angel, I understand why you vote Liberal. You come from a different point of view--"pull your boot straps up, stop whining, work and save". I get it. My parents think like that and they are Liberal voters. It is the same reason the bulk of middle class in the States votes Republican--they don't like bludgers; they think that anybody can make something of themselves. But take it from someone who has worked with pollies for the last 20 years or so--the Libs don't actually care about people like you or my parents. They don't care about people with 'some' money; they only care about people with 'lots' of money. And when I say 'lots' I mean the people with large networks of trusts, money in overseas tax havens--the really big boys. The people who are the movers and shakers, and the people who pull government strings. I was a Liberal voter until I started working with politicians. WHen I saw how things worked, I started voting Labor.

I would suggest that if you had seen the workings of any Trade Union close up you would come to the same conclusion and not want to vote Labor
There are competent and incompetent members on both sides of politics IMO and there is actually very little separating either side, the over riding objective is to please the masses not do what is right

 

[property_girl]

I would suggest that if you had seen the workings of any Trade Union close up you would come to the same conclusion and not want to vote Labor
There are competent and incompetent members on both sides of politics IMO and there is actually very little separating either side, the over riding objective is to please the masses not do what is right

Hugh, I know what you mean. I have seen them up close.

I would hazard a guess that a reason why we have a fair minimum wage is because of those unions though. Minimum wages would be impossible to live on (as they are in the US, where trade unions have little power) had it not been for our trade unions.

 

[Mr. Fabulous]

How can we expect annual salary increases without marked improvement in efficiency at a lower cost of production?

Hi Scott, not sure your argument holds water. In the U.S., middle income jobs are heading overseas at a rapid clip and their wages are horrendous compared to ours. A reduction in wages here is no guarantee of future job security. The days of walking out of Uni into a job are dead and buried.

Regardless of wage levels, if corporations can access cheaper labour overseas, they're gone (jobs). It's happening here, too. Whereas even just a few years ago, I only knew of a handful of firms that were sending work overseas (legal, accounting, etc.). Nowadays examples are springing up all the time. The Government even changed the privacy laws not long ago to accomodate all the information going overseas.

I listen to a financial planning podcast and at least half the interviewees are sending their back office stuff to Phillo to BPO firms, where the wages are about 30% of what they are here. They have a staff member in Australia to check over the work, but where does that leave the people that used to have a job? It's gotten to the point where I am considering looking into it myself - just to remain competitive. Up until recently, I was adamant about using local talent, but...

Problem is, there are no full time jobs being created to replace the ones that are lost. Guess what that's going to do to house prices in the long term...

 

[Mr. Fabulous]

What is your description of the working poor?

In your opinion; which demographic is in this group?

The working poor are people whom earn a wage that is at or below the poverty line.

 

[hugh72]

Hugh, I know what you mean. I have seen them up close.

I would hazard a guess that a reason why we have a fair minimum wage is because of those unions though. Minimum wages would be impossible to live on (as they are in the US, where trade unions have little power) had it not been for our trade unions.

No argument regarding the US or the past and they are still relevant but in many cases they have past their use by date and are self serving organizations aligned with a criminal element in many cases and the Labor Party. I could stomach voting Labor on occasion when the other side needed to be removed if this wasn't the case

 

[property_girl]

... are self serving organizations aligned with a criminal element in many cases ...

Won't argue with you there. Unfortunately some are.

 

[kathryn d]

living on minimum wage

my 4 children all make minimum wage in Canada.
Our country is more similar to Australia, than USA is.

Minimum wage in our province is $10.50 (give or take a few pennies)
Net wage each week is $320.
=$1386 month
=$21, 840 yr

On this wage, they can live in a decent apt and also save 35% of their income.

One bedroom apts are available for $600 a month including heat and lights.
150 food
25 laundry
100 cable, internet, phone etc
26 misc
=$901
485 @ 35 % savings

With this 35%, they can put 18% into their RRSP (similar to a SUPER)
In this example, that would be
$3931 RRSP

Since this is on net income, that means they will get an additional $1000 income tax return

Now if a couple were both sharing this apt, and also making minimum wage
the extra expenses would be
$150 food
$25 laundry
=$175 month

they could save an additional $1211 month which is 87 % of their income.
so $1696 a month or $20,352 yr.

In one year, they would have a down payment on a house.
In 5-7 yrs, they could pay cash for one.

As always, living on minimum wage, is doable
Choices just need to be made about how to spend your money

 

[BayView]

The working poor are people whom earn a wage that is at or below the poverty line.

Can you give me some examples of folks in Aus who are in casual, part-time or full-time employment that earn below minimum wage?

I don't know of any industries where this occurs..

Of course; if one works and only earns the amount that is the poverty line...that is their choice.

But, they have the choice to work a shidd-load of hours to get ahead - like everyone I know who has made it.

Not boasting at all; just illustrating what is required - I currently work a minimum of 50 hours per week in my workshop. I should work on Saturdays as well if the truth be known, but I've done that for 29 years already in my previous career, and enough is enough.

Now; ask every single person you know who is a "battling" worker if they would be happy to work 50 hours per week in order to get ahead, and weekends as well..

I would guarantee you that most of them would tell you to frack off...."too hard, too many hours, not enough money, lose too much in tax" and all sorts of other whinges.

Meanwhile, virtually every single person I have met in my life who has "made it": has made huuuge sacrifices of time, energy, study, work, travel and so on to get where they are.

 

[Mr. Fabulous]

Can you give me some examples of folks in Aus who are in casual, part-time or full-time employment that earn below minimum wage?

You mean everyone or just those on the books?

There's a very hefty number of people working for cash that get below minimum wage. Especially in hospitality. You ever go to a Chinese restaurant and wonder how they make money charging such low prices? Well, guess what...

Of course; if one works and only earns the amount that is the poverty line...that is their choice.

To me, this point of view is a cop out. We, as a society, rely very heavily on minimum wage workers doing what they do.

What do you think would happen if they all suddenly decided they wanted better paying jobs and stopped doing the ones they're doing now?

This is akin to people on this forum that denigrate people that spend all their money on 'stuff' and are forced to continue renting.

You sneer at them, but you all are 100% reliant on them continuing their habit of spending everything in order to achieve your goals.

Instead of looking down on them from your high horses, you should be thanking them for all the assistance they provide you in building your portfolios.

Meanwhile, virtually every single person I have met in my life who has "made it": has made huuuge sacrifices of time, energy, study, work, travel and so on to get where they are.

Where did I suggest that wasn't the case? Success is a finite commodity. It's impossible for everyone to be 'successful'. We can't all run businesses and invest in rentals. If that were the case, all businesses would fail and property values would fall through the floor. If I meet someone that says 'Geez, I'd really like to start my own business, but it's just too hard.' I say to them 'Yeah, absolutely! It's super hard work getting a business off the ground, you shouldn't do it if you're not 100% certain.' That's one less person I have to compete against.

 

[BayView]

There's a very hefty number of people working for cash that get below minimum wage. Especially in hospitality.

That is a choice.

I did a 4 week TAFE course (at Caulfield Hospital) to become a PSA, and then started on $18 per hour immediately. After putting my hand up to do the best paying shifts, working all the weekends, public holidays, and so on; I was able to milk out a $50k per year wage from that pathetic job.

We had a 1 year old boy and 2 IP's at that stage.

To me, this point of view is a cop out. We, as a society, rely very heavily on minimum wage workers doing what they do.

Again; all a choice. I used to work for a pathetic sum of money as an apprentice. That was my choice. But I had a dream, and I was not going to give it up until I had made it to the end of my 3 years..

It was not enough to live on, so I got a job as a barman at night. Big deal; I wanted more money which my PAYE wan't providing.

What do you think would happen if they all suddenly decided they wanted better paying jobs and stopped doing the ones they're doing now?

I don't know; hopefully before they give notice, they might look for another part-time job to supplement their income, or look for a better paying one, and/or do more study to get a qual for a job that might pay more.

This is akin to people on this forum that denigrate people that spend all their money on 'stuff' and are forced to continue renting.

I don't know how old you are, or where you've worked and lived, but in my experience as a 54 year old who's done a bit; that's what many do. It's their choice.

Fine; don't whine about it, or begrudge the Boss his millions, or call rich people "rich c*nts", or grizzle that the Gubb doesn't help them more....which many of them do.

You sneer at them, but you all are 100% reliant on them continuing their habit of spending everything in order to achieve your goals.

Yes, I do sneer at those - who cry about their circumstances.

I was a renter for a number of years too...paying off someone elses' mortgage. Good luck to them - I needed a roof; they gave me one for a fair price.

Do you think I miraculously finished school and bought a PPoR at aged 18?

I left home and school at 17 and travelled interstate to start a career. My choice.

Like most folks here who have done well; I decided I was not going to be poor, a victim, a loser and a sook.

I got off my @rse, went hell for leather and did ok. Not blowing a trumpet; just explaining the process required.

Was it hard? F*cking oath it was hard.

Instead of looking down on them from your high horses, you should be thanking them for all the assistance they provide you in building your portfolios.

You really don't understand me, or anyone who has got to this point. You have never walked a mile in our shoes by the sounds of this.

Where did I suggest that wasn't the case? Success is a finite commodity. It's impossible for everyone to be 'successful'.

It is possible for anyone to be successful. It does not require education at Uni level (although it will help) - it requires a lot of work ethic, a lot of dedication and sacrifice, a lot of self-discipline and a lot of hard fracking work.

If I can do it with poor parents with no education, no financial education, without a Uni education, or a high paying job, or this website to help me at aged 25; anyone can. It is all choice to decide your path.

Success is in your mind. So is failure.

We can't all run businesses and invest in rentals.

We can. When I was 18, I was earning $55 per week, working 50 hours per week as an apprentice (no Union back then) and renting a bedroom in someone else's house. I had less than nothing, and no assistance from any family or friends. I finished my apprenticeship with a total of $800 cash and a cr@p car.

I immediately went out to try my luck on the Aus PGA Golf Tour and lost the lot in less than 6 months, and hit a kangaroo on the way back to Melb, so the car was lost too.

Began work again as an assistant Pro in a ProShop earning $15 per hour, with no money, no car, and renting a room in someone's house...at aged 22.

If I meet someone that says 'Geez, I'd really like to start my own business, but it's just too hard.'

These are the folks in the 95%. There's nothing wrong with staying as an employee for your whole working life - I know folks who have done it, they love it and they have become financially well off after several years...

Most folks don't want to take the risk of leaving the PAYE, to go outside their comfort zone, do the hard yards etc to accumulate the funds to buy a business, or start one from scratch.

That's fine - don't whine about not getting a better life.

End of "Four Yorkshireman" waffle.

 

[property_girl]

Can you give me some examples of folks in Aus who are in casual, part-time or full-time employment that earn below minimum wage?

.

If you're making less than $400 per week and you're single, you're living below the poverty line. If you're a couple with two children and your income is less than $841.00, you're living below the poverty line.

People living below the poverty line are those generally on government assistance and those unemployed, for whatever reason.

About 14 per cent of Australians live under the poverty line. Of those, more than 33 per cent come from households with wages as their main income. So, if a man on a low income has to support a family, they will have it tough.

 

[gottabespotless]

if a man on a low income has to support a family, they will have it tough.

They would need to be very careful with their spending, yes. But all the 'top-ups' provided to them from Centrelink such as Family Tax Benefits A and B, rent assistance, health care card, etc, are very generous as far as I'm concerned. But again, as long as they are careful with their spending - I work with many people who fall into this category, and most are not, unfortunately.