I would like to read what contributors to this Forum
think of the Federal Budget 2016.

Pleasantly surprised or disappointed?

Thank You.

Both. It wasn't good, but I was expecting worse.

Like all budgets before it, most of us won't see much difference in our daily lives. I'm somewhat disappointed on behalf of young families who will continue to compete in a one sided competition against investors for a home of there own: investors propped up by $8billions of our money via negative gearing etc. While I think of the Labor Party as an abomination, I can understand young people voting for their policies, which might give a better chance of home ownership. And, of course, the current government might be ousted, and even if they are not, all their measures have to get throught the Senate. Budgets, as the Abbott government discovered, don't always remain in their original form.

Surprisingly, I was impressed that this budget was more intelligent than I can remember for past budgets.

All being subject to the national goals, with which I do not identify, this budget should serve them well.

I was pleasantly if mildly surprised that it is a reasonable effort.

However they are never going to get it right until they get rid of the NDIS & Gonski, & at least half of the quangos.

Very much a budget slanted in favor of business and traditional Liberal voters. There is nothing in it that will swing the electorate decisively one way or the other. The sweeteners in the form of business tax cuts, 25% tax rate within 10 years, will cost $2.7 billion and the increase from $80k to $87k for the 32.5% personal tax threshold will cost $4 billion, are a reward for past support, but not much else.
Health and education cop another slug from the government. Surprisingly social services got off relatively unscathed.
Very much a Turnbull/Morrison budget, with none of the divisiveness of an Abbott/Hockey budget, but still no "cigar" for the treasurer.

TTBN, 80 cents out of every income tax dollar is paid out in welfare.

80 PERCENT!

Of the 100% paid, 8 out of every ten contributors get 100% their tax back via welfare, and more in some cases.

How much more do you think the better off should pay, because the two high income earners already subsidize the other 8 and you must remember, negative gearing plays a huge part in providing the home these families live in while trying to save for their own.

How much harder do you think their savings plan would get if rents increased by 5,10,15 or 20%, because that is a real possibility should NG be taken away from older homes.

Some of the much older, run down homes, the ones that rent for so much less, are bought for land value only and land banked. These homes will no longer be bought if labor gets its way, so the rents will skyrocket.

Young families are already getting plenty of tax payer assistance, however, the key to them is, what they choose to do with the CASH. I say cash, because that is the big mistake. Take the cash away and you would see many changes.

Welfare waste plays a bigger role in housing affordability for the poor than negative gearing.

As for the budget, no surprizes however I do think many need a lesson on the meaning of the words 'temporary levy'. But tall poppies will never change.

It is a budget by a government that shows no sign that it knows what
is going on re growth and economies world wide.
They should be repaying as much of the loans as possible.
I note the Exxon has lost its AAA rateing and a number of other straws
in the wind show that the world economy is not in very good form.

I expect that the oppositions reply tonight will continue the illusion.

Only the greens response made sense in that there was no allocation
for alternative energy systems. Mind you the greens do not understand
why it is urgent find a sustainable base load system.

Bazz I agree with the first part of your post, but please tell us "why it is urgent find a "sustainable" base load system".

Anyone who has done the research & math knows there is no reason not to use coal. It is, & will be the best, least polluting, least dangerous & most economical way of generating power for many decades to come. I'm surprised you are not one of them.

Butch, no need to exaggerate "80 PERCENT" On the 2015/16 estimates overall expenditure was set at $434.47 billion with social security and welfare $154 billion, which represents 35% not 80%, Of the $154 billion $60.7 billion was for Aged welfare around 39%. Families $38.1 25%, Disabilities $29.5 19%, Unemployed $11.5 7%, all others combined 10%.

Can you produce your 80% figure?

I think it reflects that a man who understands business, as distinct from a trade union leader, is in charge.

Money to develop the North, encouragement for rich people to invest in start up businesses, so that we too can benefit as America has, are all great concepts, thinking about the future.

These things go right over the heads of your green voters, who somehow seem to think that jobs are created by magic.

Thank You for your comments thus far.

I'm not an economist, however my own reaction and quite
a few economic experts appear to agree that
the budget numbers appear credible. I was pleased that
they're cracking down on multinationals, and being
tough on superannuation for top income earners, that
there are tax cuts for small to medium business, that
they're increasing levies on tobacco. Which are just a
few of the things to come out of Scott Morrison's
budget.

NAB Chief Economist Alan Oster's initial reaction was to
describe this budget as being one set up for an election.
"One that erases just enough of Abbott-Hockey."
Oster, also referred to corporate tax cuts for small and
medium business, stimulating growth, infrastructure, health
and education, cracking down on multinationals, and
increasing tobacco levies, and the fact that the budget
numbers are credible.

There's an interesting article by Peter Martin in the
Sydney Morning Herald on the budget that's interesting.

"The more you look at it the better it gets."

It's worth a read.

Paul, the 80% was quoted by a senior tax advisor while speaking on the local ABC radio just recently, however, he did say INCOME TAX, which is what I quoted, not total tax revenue.

As for wannabe home owners, if a couple have a combined income of less than $70,000 gross, surely they don't believe they can afford their own home. Unless of cause they drop their standards and accept that home ownership is not measured by the median house price in Sydney, which seems to be the focus point of most discussion lately.

Country towns now have houses under $250K, towns like Caboolture and surrounding areas one can buy a brand new three bedder for under $300K.

How is this not affordable?

Home ownership, like many things is simply a lifestyle choice, so if one chooses to pay $45 per litre for warm milk, or $8 for an egg, well of cause this will make buying a home more difficult. Furthermore, If they choose the drink, smoke, or gamble, or a combination of, then this makes the dream even harder.

But my point is, at what point are the underachievers going to stop whinging and show some appreciation for those they despise as it is they who provide the life blood so many today take for granted.
Which ever way you look at it, Negative gearing is subsidizing their rents, but you would never know given the amount of resentment shown toward their providers.

Bazz, since the Kevin 07 gamble our economy has turned to custard and no amount of tinkering around the edges will do any good, especially if our governments continue to allow freeloaders in to feed of what little funding we have left.

I still think a labor win may be our only option, because if history is any judge, they will finish us off in no time.

Once we find rock bottom, then the doo gooders will have little influence on us and we can set about doing what's best for the nation, and supporting those who wont carry their fair share of the burden will be the first thing that will be cut.

The ridiculous amount of wasted money on climate research will be another one to be ignored, along with the fairy tail that so many believe in, alternative energy. There is only one proven alternative, nuclear power.

80 cents out of every income tax dollar is paid out in welfare.
BUT how much tax is avoided by the corporations and the 1%?
As for the clout this budget has had, well I know that the pollies are sure that us Proles are very stupid and they can hoodwink us most of the time but really, to bring out a budget just before an election , even blind Freddy knows that if the neocons get back in they will hit us with the real budget and THAT will really hurt.

This is a Labor budget for Liberals,
Yes some good points but very much looking at the election and no long term view.

The changes in superannuation are ridiculous. Limiting non concessional contributions to %500k over a life time is madness. How many mums and dads have an investment property that they want to sell to put into their super? How many put extra into their super on a regular basis, how many pre-retirees planned to put a lump sum into super? These changes make super unattractive, which means more people relying on the aged pension rather than be self funded. And this has been back dated to 2007

Reducing the contributions from $35k to $25k is stupid, less money going into super means more people getting the aged pension.

We should be encouraging as many people as possible to be self funded retirees.

Secondly , limiting your super to 1.6 million, it may sound a lot, but many small business owners use their business as their super, when they sell, it could quite easily be over 1.6 million.

And taxing transition towards retirement (TTR) people 15% is wrong, many people due to health cant work fulltime and have a TTR and work part-time. They are now penalised.

Yes tax deductions for extra contributions is good.

But I see more people looking for alternative investments or stopping extra contributions, meaning they will rely more on the aged pension.

Finally, this budget encourages more negative gearing and opens the flood gates for Labor (when they do get into power) to alter super more (reduce contributions to $20k, max in super to one million, increase contributions tax etc)

This budget is all about increasing taxes to middle Australia and no plans for retirees in 5-10 years time.

"Negative gearing is subsidizing their rents"

Sorry, can't let that go. NG is not money in the landlords pocket. It's the tax treatment of an operating loss.

In the long run, it's all the same to the taxman whether the loss is written down against income from work today or against future profits in the future

The budget was for big city persons and business. There certainly very few around here that earn 80,000 / year.

Overall the budget was dosile, no inovation in that lot. Instead of six months without the dole, now they are going to get paid extra.

Is the pensioners $30 rise still coming in January 2017.

Rechtub, we should halt exports of steaming coal and use it for power generation.
This will give us time to build a fleet of nuclear power stations which
are not affordable in the time scale we otherwise would be forced into.

At present the cost of a nuclear build is almost unaffordable.
While our AAA credit rating is under threat, to start borrowing to build
a large number of nuclear power stations, would I suspect be at high interest rates.
I do not believe we can finance a shift to nuclear power except just
one at a time.

That is why research into other base load capable power sources is needed.

The solar & wind people keep on about it being capable of base load
but to do that requires a monumental upgrade to a national grid with
major east west connections to take advantage of time differences.
That would also perhaps make tidal in Nth WA viable.
Catch22, probably cost more than several nuclear power stations.
Noting the trouble Tasmania is in the VHV transmission lines would
have to be doubled or trippled.

Are we too late to start such projects ?

Hasbeen, you misunderstood my meaning. I believe we should use our
coal, keeping enough for other than energy usage, until it becomes
uneconomic for steaming purposes.

The ERoEI of coal has fallen quite dramatically from 80 to about 30.
Ours might be a bit better, but it is chewing up a lot of land.
World wide coal will stop being used because the seams are getting
expensive to mine. Note how Peabody is in bankruptcy. I believe that
they were the world's largest coal miner.

The world's energy prospects, except nuclear, are not very good and
too many believe the common statements, "Oh there is enough for X hundred years !"

There would be if you could afford it !

Luc, negative gearing does subsidize rents because it is all part of the mix of return on investment, the very motivator for investing.

Most investors look for at least a 10% return on their investment property, higher in good times, lower in tough times.

You achieve this with net income, capital growth and tax offsets. Removing any of these, or altering them as is Labor's plan could have a serious upward effect on rents.

Investors wont invest if the returns are too low, or the risks are too high, or a mix of both. Its plain simple common sense.

BTW, if not for Ng investors could not use the increased equity in one property to buy another, hence this would increase the demand for existing housing, hence increase rents on existing housing due to demand outstripping supply. So yes, negative gearing definitely subsidizes rents simply by the additional homes it provides.

This is not to say I agree with this logic, but since when is logic a part of governmental planning.

As for top end super, why would anyone invest in super at 30%, when they can pay the company tax of 27.5% (decreasing) then enjoy the benefits here and now.

What governments should be doing is encouraging the top end to save through super, then close the loophole whereby they spend their super then go on the pension.

Changes to super significantly impact on the wealthier. There's too much focus on the rise in the 80K tax threshold and not enough on the overall picture.

On corporate tax, if we swap a zero tax arrangement for international corporates for they setting up their headquarters here, we'd end up with the same tax take as currently (i.e. zero, mwhich I don't see changing much despite the budget). Headquarters jobs would incur income tax here and the flow-on effects into support services would also be great. Beat Singapore and Ireland at their own games.

Butch, NG does not translate into a concessional tax rate that subsidizes rents. It offers the convenience of not having to set up a company to invest.. It facilitates investment, it doesn't subsidize it. Take away that facility on older houses, and individual taxpayers will not invest in them to the current degree. This, together with the CGT change, will completely kill this investment.

Labor is painting NG as a rort, and anyone not across the detail laps it up. Same with the CGT concession, not many grasp that it's nominal gain, not the real gain that is taxed. Hobart house prices have risen 2.3% since 2008, well behind inflation, yet a 2008 investment in a house would draw tax on that 2.3% gain if sold today. Risk is involved in investment, which should all be borne by the investor, not by Gov't providing CGT concessions. Bring back indexation of the cost base.

Luc, your're splitting hairs. NG keeps rents affordable and in do so can be classed as subsidizing rents, because take it away from older homes, all you have are new ones to choose from which of cause will command higher rents than older homes which are used to land bank.

The 4-Corners program began with property spruikers telling punters about the wonders of negative gearing and how the Gov't helps to pay off for your investment, butch. They're BS artists, intent on flogging their product. What they say influences people to buy but doesn't mean they're right.

To some extent you are saying the same, IMO.

The rent you charge is set by the market of supply and demand. If you are saying that the supply side is affected by whether or not NG exists, I'll grant you that. But that doesn't mean NG "subsidizes" rents. That word has connotations that Joe Public misconstrues, and it's what Labor makes it's political advantage.

Imagine all property investment had to be thru' a company to get loss write-downs. Not many PAYE taxpayers would ascribe and rental housing investment would be way down. NG solves what would otherwise be a public housing crisis.

"Imagine all property investment had to be thru' a company to get loss write-downs."

....or, if all operating losses had to be carried forward to write down against future profits, rather than be written down against paid work income.

Same scenario.

The budget reminded me of this classic meme: http://memedad.com/meme/872138

Peter Martin of the Sydney Morning Herald
tells us that - there's a big difference
in the approaches the PM and Treasurer took
with this budget, to what was done previously.
With this budget the Prime Minister
and Morrison have taken ideas from the Henry Tax
Review, The Murray Committee of Inquiry into the
Australian Tax System, the Grattan Institute, the
Committee for Economic Development of Australia and
just about every other inquiry.
And tested them.

Martin explains that Malcolm Turnbull and Scott
Morrison's expenditure review process was very
different from Mr Abbott's and Joe Hockey's.
Whereas Abbott and Hockey latched onto ideas and went
for them, the new team asked questions and tested the
answers. For example, with Superannuation the question was -
"What is its purpose?" The next question was "How do we
most cheaply ensure that it does that and no more?"

Perhaps that's why we don't get unfair punishment of the
weak with this budget and dangerous university
deregulation. No more attempts to strip the dole off
jobless youth for six months either. As Martin points out
in their place in this budget is a commendable program
of internships with a benefit top-up and incentives for
employers. And as Martin states, that alone deserves
praise.

On the subject of being paid extra for work on the dole, I was listening to a few recipients and they said, "there is no way i'm going to work for $5 per hour". Of cause the point they miss is the first $250 per week they already get paid to do nothing.

That's where hasbeens theory would work well, a tent to live in and three cans of beans a day, because with attitudes like this, they don't want a job and should be all but cut off. I wouldn't pay them a single cent in cash, not one red cent.

As for Bill Shortens reply, I thought it was a very impressive load of spin. I say this because at their last attempt they started with billions in the bank and failed, so how can they be trusted to deliver with such a handicapped starting position. Not to mention the axe he wants to take to negative gearing.

He also appears to have changed his mind on the fair work commissions penalty rates outcome. The good times have moved on, and labor and the unions should accept that.

Turnbull and Morrison have fallen into their first budget black hole. Both were unable to put a figure on the cost of cutting company tax to 25% over 10 years, some claim it is as high as $55 billion!
The government cannot use the excuse, 10 years is a long time, as they had a shot at Labor over their use of long term figures on tobacco excise.
Is it a case of I'll see your $20 billion, and raise you $55 billion.

Butch, are you and Hasbeen going soft in your old age "a tent to live in and three cans of beans a day." Indeed, I say; let them live in the open, and eat dirt!
Nothing worse than a pair of bleeding heart liberals.

Butch talks the liberal faction of conservatism, he is all heart.

Malcolm has been ruled by the conservatives to give millionares a tax break. That alone will give Labor the upper hand. He has not followed his own concience.

Lets call an election now, and put an end to conservatism in the Liberal ranks. They need flushing out, and a lesson on how to be a liberal govt;

As usual you are all arguing around the wrong problems.
Worry about 25% company tax and its 10 year cost.
There is every likelihood there will be no profit to tax if it keeps
going the way it is with politicians and economists tightening their blindfolds.

The dogs are barking it in the streets that there is a financial crash
on the way and both parties are celebrating how loverly it will all be
if only you mugs will vote for us.
We will make houses more affordable we will give you speed of light
broadband, we will ensure you have prosperous retirement, every young
person will have a job, we will build in Adelaide 12 submarines,
does not matter if we can't refuel them, we will perform miracles
complete with bread and circuses if and only if you vote for us !

Bazz this not the time for conspiracy theories.

Our economy is growing, and at its best ever GDP. So much for the mining boom, it was a boom in quantity not revenue. Singapore got most of it.

To give 17,000 $ to a millionaire is to pay for his weekends cognac.

That is a directive from the far right faction.

"To give 17,000 $ to a millionaire is to pay for his weekends cognac."

Yeah, earners over 180000 got a temporary tax levied on them that is now expired, so that makes it a tax cut?

On ABC straight after the budget reply speech, Shorten squirmed around on this and showed his true dodgy colours when pressed, deflecting any attempt to have him acknowledge it.

The budget reply speech was perfect, but he's still Billy "Shonk" Shorten.

579;
Conspiracy theories ? What Conspiracy theories ?

Are you suggesting a conspiracy between Labour & Liberal ?
Goodness me, they are too bound up in their own greatness to do that.
No it is not a conspiracy it is just a don't won't to know attitude.
If you could pin them down I think it would just be a "Too hard don't know what to do ".

I tried to pin down my MHR on how they would refuel the 12 submarines
in the even of a major refinery accident or hostile activity and it
was plain that he just could not see it ever happening that there
would be no diesel fuel available. It was incomprehensible.
To quote, "We have good commercial arrangements !". Duuhh !

He did admit that cabinet had discussed a smaller number of nuclear
powered submarines but dismissed it.

A few thoughts that might be worth discussing
at some time...

It appears that in reading many comments on social media
that people are sick of the political establishment -
including the press. When the press slams politicians
it only heightens the "us" and "them" dynamic.
Hence Donald Trump's popularity in the United States.

I'm beginning to wonder - Is it possible to be a conservative
or a progressive, and intellectually honest?

Some people obviously feel that it's not and judge politicians
according to their own personal political agenda
and Party that they support.

The reality however is somewhat different. We've all met
politicians that we strongly disagree with, but who use data and
honest arguments to support their perspectives. Therefore I find
that politicians who merely attack the "other side" and offer
nothing substantial in its place are really not worth supporting.
I guess that also makes me a member of the people who are sick
of labels (Right wing, Leftie, et cetera), and the political
establishment .

Understand what you mean Foxy.
It is a bind actually. I believe most politicians are pretty genuine in
their beliefs in the best way to run an economy, That however is a
generalisation but their respective organisations force them into
opinions on detail.

Take my MHR, a minister, come hell or high water he will say diesel
submarines are the answer. Because the government has adopted that
policy it must therefore be impossible that they could be out of fuel
otherwise the policy would be wrong.
When all that is wrong is the fuel choice.

In the same way politicians are bound to policies on all subjects.
We, the public, are somewhat to blame for this.
Take my example, say after 20 or 30 $billion had been spent something
happened and Australia had a diesel drought.
The government then decided diesel subs are not viable.
The opposition would be absolutely screaming and stamping their feet.
We the public would be saying what a lot of clowns.
The fact that the opposition would have also been building diesel
subs if they had won the election would be forgotten in the fury.

The public also would be at fault as they had not listened to concern
about fuel.

Some of the public are fed up with the way things are going and like
in the US someone will hear their groaning and offer themselves.

Dear Bazz,

Thanks for your insightful comments.

I'm beginning to learn that I certainly don't have the answers
or know as much as I thought I did.

Things are more complex and I guess we should look at issues
from more than one point of view. But that's not an easy thing
to do. I'm also seeing that I'm more conservative than I
thought I was.

Those subs can run on second hand fish and chip oil. No one can see the future, not even the ones that write the fortune telling that Bazz reads

Bill will fix pollution the right way, and get renewable energy going. We do not need to give millionaires a handout.

579, they are not giving millionaires a hand out, they are simply saying, thanks for the extra you have paid, despite the fact that you didn't cause the problem, be cause after all, it was a TEMPERARY levy was it not.

All you are doing is using labor spin to make out these decent people are receiving some type of gift.

You say nothing about dole bludgers wasting billions, or indigenous welfare being pissed against the wall, no, you just pull out your typical 'tall poppy' hat and have a crack at those who do the heaviest lifting. How typical of you.

If you do get your wish and have a change of government, ill bet you have already rehearsed your excuses speech for why they have once again plunged us deeper into debt.

Just remember, when Kevin 07 came to power he started with funds in the bank, lets see how Bill handles the world he helped create as he is simply a leftover from a failed era.

Personally, it wont matter who we elect as nothing can save us unless we see some very serious reforms, and that is unlikely to happen because there are few votes in such a plan.

I believe that tax reform is going to be on the agenda
soon. Malcolm Turnbull said as much. It's just not the
right time now. There are other priorities especially
with an election on the horizon

I forgot to add that I am very optimistic with the
way the current government is handling things.
So far they have not disappointed. It's a good
team, in my opinion at least.

579, can't you see how silly it is for a country that does not
refine diesel to commit so heavily to diesel submarines when there is an alternative ?
Even if they could get enough fish oil it would be needed to get food
into the cities.

Bazz Diesel is not going away any time soon. We do have a refinery at Geelong.

Oil will not be the end to transport or any other commodity. While there is money to be made there will always be an alternative.

Butch you have your pants on back to front. Millionaires do the heavy lifting, isn't it small business that carries this country.

200 Billion of extra debt in 2.5 years, The levy has fixed nothing. This is not time for tax cuts.

The libs are accusing labor for announcing 100 billion worth of new tax. If that is the case good on them. Someone has to do something for this mountain of debt Abbott and co have accumulated in record time.

Turnbull started out ok but has lost his way with the do nothing budget, it's an elect me budget. 50 Billion worth of gift giving.
Turnbull has lied to the Australian electorate on national tv and disgraced himself.

Good Morning Folks,

I'll be spending this week-end at my mum's nursing home
as a volunteer. So in case I won't have the time to wish
all the mother's on the Forum a Happy Mother's Day, I'd
like to do it now. Happy Mother's Day to you all!
May the new budget have something in it for us all -
especially for the health care of the aged - like my mum -
who's worked hard all of her life and is now suffering from
dementia.

All The Best.

Did I hear it correctly ? Bill Shorten said he would have 50%
alternative energy by 2026 or something ?

It looks to me taking off peak timing into account that the sun would
have to be high in the sky for 20 hours a day if there was no wind.
What if the sun doesn't shine ?
What storage is proposed ? Surely to make such a promise he MUST have
an idea how much storage and of what type would be needed.
The amount of storage required just to keep NSW going for a few days
would be absolutely colossal. Dams, if we had enough locations would
not be allowed by the greenies.

Or the logical conclusion is that he has gone stark raving mad ?

Turnbull has lost the plot. Two supply ships to be built in Spain, while Adelaide shipbuilder sheds another 640 jobs.

Pine says the need is urgent. Sounds like something we have heard before.

579 said;
Bazz Diesel is not going away any time soon. We do have a refinery at Geelong.

Wrong, it has closed and is up for sale as a distribution terminal.

It only would take one tanker to be sunk on the way to Australia and
the rest would be stopped by the insurance companies.
Or a major accident in the Singapore and/or the Korean refineries.
Or a terrorist attack.
Or ??

I suggest you read the NRMA report to the Senate enquiry on fuel supply.
Our supply depends on the goodwill of someone giving us what they also need.

Yes Bazz, Bills picked up a few tips from Gillard, with his 'pluck a number out of a barrel' type planning.

If anyone thinks we can produce 50% less energy from regular sources, and keep our jobs and economy growing, not going, GROWING they are simply dreaming. Unless of cause he is thinking nuclear but is too afraid to say it.

As for the 640 jobs lost in south oz, its simply another example of ourselves outpricing ourselves.

You want the best pay rates and conditions, sure, no problems, except of cause that while we may be well paid, there is no job.

We have spent the past twenty years self destructing, but the workers and unions just couldn't see what was coming. Pity, but hey, they were all warned, time and time again.

People have to understand that doing business and providing jobs is a voluntary act, and if the odds don't stack up, why bother.

Butch you are bordering on conspiracy like Bazz. How do you know things that are going to happen, do you have super powers or something else.

579 said;
Butch you are bordering on conspiracy like Bazz.

Conspiracy ! Conspiracy ? Where did I suggest that ?
Not even bordering on it.
Tell me where did the NRMA get it so wrong ?
A number of other submissions are along the same lines.

If you are talking about the coming economic crash, problem, downturn
or whatever name you want to give it you are sitting in the middle of
it and cannot see it.

There is no conspiracy there either, although many are blaming the banks.
The majority of banks, politicians, economists etc seem to think
that they can just fiddle with numbers, budgets etc and she'll be right.

The cause of collapse is diminishing returns.
In just one part of the whole civilised machine, energy, we are
seeing the influence of falling ERoEI, ie diminishing returns.
Rechtub suggests the same effect of diminishing returns on property.
It is everywhere, including mining.

It is not a conspiracy, it is just a natural progression that has
taken down most previous civilisations such as Rome.
Unless our politicians, economists etc get to grips with this basic
cause of our problems we will progress through repeated crashes and wars.
I do not have any magic bullet solutions except perhaps retracting
into smaller disconnected economies. If that is a solution and I
cannot be certain it is, then widespread trade treaties will make it worse.

No, political parties are not to blame any more than the rest of us.
In a retracting system it seems that debt makes things much worse.

I suggest that you read "The Collapse of Complex Societies" by Joeseph Trainter.

I am not surprised Butch will agree with you. When is this collapse going to happen and why.

I prefer more stabil news. The world is full of wiskids mainly to sell books. They do have an audience.

I think you may find changing consumerism is behind any world slowdown. And there is no prediction in that, it has been happening for a few years now.

Election 2016: Reserve Bank worried about negative gearing, capital gains tax concessions

"The Reserve Bank has expressed concern about negative gearing and the tax concession for capital gains, saying any change that discouraged negative gearing might be "a good thing" from a financial stability perspective."

"....an internal bank memo released under freedom of information laws runs counter to Prime Minister Malcolm Turnbull's warnings that Labor's proposal to ban negative gearing except for new properties would deliver "a massive shock" to the property market.

Mr Turnbull repeated those warnings on day one of the campaign, saying that Labor's policy would hold back the Australian economy.
The Reserve Bank memo says negative gearing and capital gains tax rules affect property more significantly than other investments "as it can be purchased with higher leverage than shares"."

"A move against negative gearing, the memo says, would trigger a large-scale sale of negatively-geared properties "only if the changes were not grandfathered".

Labor's policy plan would grandfather its changes, meaning properties that are negatively geared would remain so until they were sold, preventing a rush of sales as negative gearers offload homes.

The memo is a "Q&A" brief dated December 2014, meaning it was written before Labor announced its policy to wind back negative gearing and before the government pledged to continue it

The Coalition has positioned itself as the protector of Australia's existing negative gearing and capital gains tax regime, which it argues is largely used by average, "mum and dad" wage earners, and signalled its willingness to launch a scare campaign over the issue."

http://www.theage.com.au/federal-politics/federal-election-2016/election-2016-reserve-bank-worried-about-negative-gearing-capital-gains-tax-concessions-20160509-gopt4v.html#ixzz489GQtdvU

Perhaps our resident negative gearing experts would like to comment?

The paper supports the view that CG tax treatment is the first matter at issue and that NG is a lever.

The sharp rises in Melbourne and Sydney, that were founded upon supply and demand, were accelerated by the tax treatment. The same did not occur in other cities. Clearly tax does not determine the direction of property values, only the rate.

Take away the CGT carrot, problem solved. Return to the no concession and CPI indexed cost base.

RBA also asks, (rhetorically?) about a "Potential increase in rents?" So what's the answer? I think it knows.

There would be no "Large-scale sale of negatively geared properties?" simply because changes are grandfathered. Hardly rocket-surgery.

Taking away NG on older property will do away with many M&D aspirants to invest in rental property. Fine, Gov't will have to dream up other ways to outsource/promote housing supply.

On the psyche of the currently negatively geared housing investor:

Does he hold and wait to see the election outcome, or does he sell now? LNP could still move on NG by promising to cap it, grandfathered of course.

If he holds and Labor wins, many investors will avoid property until the market sorts itself out. Less buyers equals lower prices. This may already be happening.

Nobody will invest in new homes with the immediate depreciation caused by an uncertain resale market and rents where they stand. So rental housing supply will not grow with demand.

Rents will rise until the business case for investment in used/older houses becomes attractive without NG. The increase in rents may entice some investors to build new rentals but, IMO, they'll invest in more certain enterprise.

Gov't can either build and manage more public housing or lay out incentives (tax concessions?) for investors.

The stupidity in all of this lays in that the ultimate Gov't tax take is no different with NG in place than with other ways that operating losses might be written down, such as through a company structure, for example.

The RBA paper's focus on financial stability is a concern over the way tax treatment accelerates a housing bubble founded on demand exceeding supply. The focus should be on the overly generous CGT concessions, not NG. Bring back full CGT at the marginal tax rate with a CPI indexed cost base.

Correction to first line of last post, "On the psyche of the currently negatively geared housing investor:"

Replace with "On the psyche of the current housing investor"

The post applies to all current investors, not just negatively geared ones.

On ABC Lateline last night the point that NG is time-shifting of an operating loss was made by Sinclair Davidson. http://www.snappytv.com/tc/1896915

Also, the fact that the LNP has failed to argue that housing supply is the fundamental issue where prices have risen sharply (i.e. Sydney and Melbourne), was noted.

Also on ABC this week, Duncan made quite a name for himself on Q&A drawing 10K or so far through crowd funding. A few points:

Carbon tax compensation was not withdrawn from him when the CT was abolished.

The GST he pays at the supermarket is not on fresh food, and, his disability pension was adjusted for the introduction of the GST, so any GST he does pay is already in his wallet.

The budget repair levy on high earners was for a fixed term that is ended. It is not a tax cut.

So Duncan's song "What About Me", while he gave a good rendition of it, was not backed with any recognition that his concerns have been met in the past and are are not necessarily addressed in every budget.

A third of Australian families receive more in welfare than they are taxed (it's true, I heard it on the ABC). Try to reduce that proportion and you're up for the political fight of your life.

Unless the LNP comes out all guns blazing, with facts that I've been harping about and Sinclair Davidson points out, it has lost the politics on NG. It should retreat to capping it, with losses beyond the cap able to be carried forward to future financial years.

It should also reverse Costello's largess on CGT, as it has on superannuation in this budget and a point Duncan failed to mention

The individual wage earner or person on a fixed income who is trying to provide for his retirement and education of children, does not enjoy the advice and structures available to others for example, those who can incorporate themselves to lessen their tax.

One has to question why Saul Eslake and others must put a negative spin on what they call 'negative gearing' and remove one of the very, very few ways a private person of relatively low nett worth and low liquidity can invest in the very large property sector.

As far as the chattering classes of the faux left (include the ABC) are concerned, those despicable property owners and landlords are all wealthy and shouldn't be investing in property anyhow. They certainly must NOT be allowed to make a profit. So, NONE of that disgusting 'positive gearing' either. That just shows how the landlords profit from the 'vulnerable'.

It is the federal government that is withdrawing the availability of a paid retirement, the aged pension and aged care, from the aged and it is the feds who are forcing everyone who doesn't have a lucrative golden handshake to look forward to as politicians do, to sacrifice their quality of life for all of their years of employment and squirrel away money, taking risks too, for later.

It is all very right for Eslake and Shorten to cast the 'landlord' as the whipping boy for alleged high house prices (prices are only 'high' because of over-population in the highly desirable cbds of capitals - through immigration), but have either come up with recommendations as to how those ordinary investors might prepare themselves for a future that the federal government itself refuses to provide?

Do either recommend that government should be taking up its responsibility for social housing and how?

Shorten is about new taxes and big spending promises. No way he will rein in known wastages of taxpayers' money.

My, "prices are only 'high' because of over-population in the highly desirable cbds of capitals - through immigration)"

should be (omitting 'cbds'),

"prices are only 'high' because of over-population in the highly desirable capitals - through immigration)"

Noticed on the ABC Lateline Business Sauk Eastlake pontification on
but in a separate interview another commentator expressing the
realisation of the "End of Growth" !
This is I think the first time the ABC has even let it be mentioned.
The commentator pointed out that the low interest rates have not helped.
That there is a low growth condition everywhere, and nothing that we
do seems to fix it.
Yet the politicians are repeating Jobs, Jobs, Growth, Growth ad infinitum.
By the time of the next budget the losing party will be screaming
"Where are the jobs and growth you promised ?"
Well I am here to tell you there won't be any. What we have is all there is.
If we are lucky.

The banks have stopped lending to overseas borrowers, read Chinese,
because they have been caught offering up forged annual income
statements and the difficulty in getting money at settlement time.
That may have a bigger effect than any fiddling with NG & CGT.
It seems that there might be a glut of apartments heading for the market, offered up by the banks and/or agents.

I'd like to have a beer with Duncan, and help him with his family budget, so he can afford more picture outings.

http://www.theaustralian.com.au/business/media/broadcast/the-truth-about-my-father-duncan-storrar-the-q--a-hero/news-story/ecf8f9d4eebbd54f9899697053fb445b

Q&A, you've done it again!

Once again I would like to Thank all of the contributors
to this discussion. So much food for thought as always
on this Forum.

Thank You.

Luciferase,

Good one, but your link is U/S.

Recently, the ABC finally admitted in its own defence that Q&A is entertainment, not news. Sure could have fooled the audience who were led to another view entirely.

If it was to 'fact check' itself, the ABC could add that Q&A is full of the proverbial too.

Duncan
<Q&A 'battler' Duncan Storrar undeserving of cash, says son
ninemsn May 12, 2015

Geelong truckie Duncan Storrar has been hailed Australia's "new national hero" for his appearance on Q&A, but to his son he is a deadbeat fraudster undeserving of sympathy.

Aztec Major, 20, says he is in disbelief his estranged father has received more than $50,000 in donations after claiming on the ABC panel program he was a low-income earner who deserved a tax cut "to take his kids to the pictures".

"He doesn’t deserve it … It's ridiculous," Mr Major told The Australian.

"He’s used drugs. He’s not the person he’s making himself out to be."

Mr Major, who works as an apprentice spray painter in Geelong, says he lived with his father until he was four-years-old.

When he turned nine his mother Susan passed away from breast cancer, after which he lived with his grandparents.

He tried to reconnect with Mr Storrar when he was 17, only to realise he "was the kind of person I don't want to be".

"I came to the conclusion the best solution was to cut all the crap out of my life. I had to cut him out," he said.

Tamika Drew, the daughter of Mr Storrar's ex-partner, Cindy-Lee, agrees.

"I saw things as a kid living with him from when I was seven that I shouldn’t have to see," she said...>
http://www.9news.com.au/national/2016/05/12/09/29/qa-battler-duncan-storrar-undeserving-of-cash-says-son

I wonder if the twits of the Twitterati (and OLO has a few who lay claim to be Big Swinging Twits) will ever wake up to themselves. Heh, heh, not likely.

Waleed Aly was awarded the "Golden Logie," by the
Australian public. Noni Hazelhurst explained that
it was because - :He makes people, think, feel, and
listen." (and of course - entertain).

Noni Hazelhurst did the same with her 2016 Logies speech.
And so does "Q and A," with their weekly TV program.

Still, it is all a question of attitude, as to what we
like or don't like and how we interpret events and issues.
Who determines a good or bad attitude?

It is us - and how we relate to our world since it covera
personal beliefs, feelings, and values. It is an extremely
subjective topic.

Hopefully, as we grow older we learn how to deal with these
attitudes much better. Having a mum with dementia is teaching
me not to dwell on the situation. Don't let negativity set in.
Talk with friends. Breathe and move on and above all - stay
positive. It doesn't always work - but it's worth trying
at least.

See you all on another discussion.

All The Best.