Author Topic: ALP v LP/NP  (Read 19207 times)

Offline Alan59

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Re: ALP v LP/NP
« Reply #420 on: May 17, 2022, 07:31:52 PM »
None of these schemes will make any positive difference to housing affordability.
Some statistics.In the early 1990’s the average house price in Sydney was about 5 times the average annual wage.The percentage of home loans given for investment properties had a long term average of about 14%
Then Howard/Costello gave investment property owners a 50% discount on capital gains tax.Within months the percentage of home loans for investors was over 50% and has mostly stayed there or above since.Prices took off like a rocket ship because of the increased demand.On top of that investors receive tax breaks that people buying homes for the purpose of actually living in do not.
Housing went from something designed for social stability and personal security to just another investment vehicle.Howard’s “legacy” is future generations priced out of the housing market while investors rake it in and stop contributing their fair share to the tax base.


Offline Trevor

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Re: ALP v LP/NP
« Reply #421 on: May 18, 2022, 04:44:52 AM »
You sound like you are not a fan of negative gearing?

In case you don't understand, yes there is a tax benefit of about 10% of any out of pocket expenses that are NOT covered by the income received in the form of rent, for example rent received is $400 pw, out of pockets are $420 per week, so 10% of $20 is claimable.  That $20 reduces your taxable income for that period,so you pay less tax, so 30% of $20 is ?????

BUT!!!! and this is a BIG but, when the property is sold you pay 30% of any capital you make, so you make $100,000 'profit' for example, there goes $30k in Capital Gains Tax, so any gain through negative gearing is quickly lost.

Also of GREAT importance, is that up to 80% of all rental houses are owned my 'mum and dad' investors, people who were told there would be NO age pension so that they better look after themselves, so they bought houses to support themselves in retirement

Now if those 'mum and dad' investors didn't own rental houses, who would own them? and what would the rental market look like if the 'mum's and dad's' didn't own them?  Would there be more or less houses available for rent?

I was actually in favour of the Shorten plan of cutting the negative gearing for existing properties and only having it for new properties, this would have slowed down the competition to buy existing houses as the 'mum and dad' investors wouldn't be buying them as much and would have increased the new house market, which increases employment with all its flow on benefits, and increases the rental house market, but that is not to be
« Last Edit: May 18, 2022, 04:47:24 AM by Trevor »
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Offline Trevor

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Re: ALP v LP/NP
« Reply #422 on: May 18, 2022, 06:53:22 AM »
WOW, the L/NP must be worried about retaining Nicholls. I got a recorded phone message from former PM John Howard telling me to vote Lib - sorry Johnny, you are too late I voted last Saturday  ;D  ;D  ;D  ;D
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Offline Alan59

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Re: ALP v LP/NP
« Reply #423 on: May 18, 2022, 07:27:16 AM »
You sound like you are not a fan of negative gearing?

In case you don't understand, yes there is a tax benefit of about 10% of any out of pocket expenses that are NOT covered by the income received in the form of rent, for example rent received is $400 pw, out of pockets are $420 per week, so 10% of $20 is claimable.  That $20 reduces your taxable income for that period,so you pay less tax, so 30% of $20 is ?????

BUT!!!! and this is a BIG but, when the property is sold you pay 30% of any capital you make, so you make $100,000 'profit' for example, there goes $30k in Capital Gains Tax, so any gain through negative gearing is quickly lost.

Also of GREAT importance, is that up to 80% of all rental houses are owned my 'mum and dad' investors, people who were told there would be NO age pension so that they better look after themselves, so they bought houses to support themselves in retirement

Now if those 'mum and dad' investors didn't own rental houses, who would own them? and what would the rental market look like if the 'mum's and dad's' didn't own them?  Would there be more or less houses available for rent?

I was actually in favour of the Shorten plan of cutting the negative gearing for existing properties and only having it for new properties, this would have slowed down the competition to buy existing houses as the 'mum and dad' investors wouldn't be buying them as much and would have increased the new house market, which increases employment with all its flow on benefits, and increases the rental house market, but that is not to be
I am with you on 2 counts.Negative gearing is not the big enemy the capital gains tax discount is.I was also a fan of the Shorten policy as a means of starting to correct the market but as you said it was not to be.
Those “Mum And Dad” investors you are talking about come from an era with both compulsory superannuation and an aged pension fall back that was never going to disappear.Although if you have the means to buy or borrow for a second house the pension was never going to be relevant for you.This added financial security for them has come at the cost of future generations never having the security of home ownership.Another baby boomer windfall.And I am of that generation.If they wanted to invest they should not have been encouraged financially to invest in an area with so many negative social side effects.
Pre Howard/Costello’s great give away they would have had to pay double the amount you listed as capital gains tax.That kept a lot of them out of the market and didn’t push the upwards death spiral in house prices.

Offline Trevor

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Re: ALP v LP/NP
« Reply #424 on: May 18, 2022, 08:18:21 AM »
I am a baby boomer, born in the late '50's. So the tail end.

Both my wife and I have worked full time since we were 15, never unemployed, paid lots of tax

We own an 'investment property', although it was never our intention to own one.  We have a 39yo daughter with a significant physically disability, she is only able to work 16 hrs per week and is receiving the DSP. When she left her husband because he was a lazy prick about 7 years ago, she moved in with us.  We looked at a number of options to help her and decided to build a house about 6 years ago. The biggest issue we had was convincing her 3 siblings that we weren't building her a house but it was a Superannuation top-up for my wife who is a low paid sub-contractor. It is not a big house and not on a big block.  I stated at the time that if you wanted to build a GOOD investment property you wouldn't do it in our town as there was bugger all return possible, well bugger me that has changed in the last 2 years.  We said that all along as soon as we retire we will sell the house as we are subsidising her to about $250 per week, her rent falls well short of our costs are and we can't continue to pay that when we retire.  That is happening soon'ish, she is in a better position now to possibly buy herself a Unit, which is great for her independence.
« Last Edit: May 18, 2022, 08:21:07 AM by Trevor »
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Offline Trevor

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Re: ALP v LP/NP
« Reply #425 on: May 18, 2022, 06:27:54 PM »
I laugh at these ads bagging Independents, these idiots need to read our Constitution. There is no mention of 'Party's' in there, it just talks about individuals.

They are the ones out of touch with what our founding fathers wanted
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Offline Ospif1

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Re: ALP v LP/NP
« Reply #426 on: May 18, 2022, 07:53:02 PM »
The FHO super scheme is an odd one. Currently the only thing FHO can afford is the cheapest "downsized" house on the market, the same "downsized" house that older generations are being incentivised to move into. That creates demand which raises prices further. Nothing positive is achieved apart from current home owners with massive equity after the last couple of years from investing further.


Offline Alan59

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Re: ALP v LP/NP
« Reply #427 on: May 18, 2022, 07:55:49 PM »
I laugh at these ads bagging Independents, these idiots need to read our Constitution. There is no mention of 'Party's' in there, it just talks about individuals.

They are the ones out of touch with what our founding fathers wanted
The point the Coalition and their media arm of the Murdoch press/tv miss is that the teal independents they are obsessed about are in electorates that are full of highly educated people.They are not likely to be panicked by the hyperbolic nonsense.If anything they might drive more people towards the teals.
My preferred result has always been a Labor minority government with the teals holding the balance of power in the Reps and the Greens doing the same in the Senate.(By the way polls show the Greens sitting on a nationwide 15% first preference vote which is now half that of the 2 major parties and around 3 times as much as the Nationals).This result would lead to more action on climate change and a real Federal ICAC .Too much to hope any politicians will have the balls to do anything about housing affordability.

Offline meha

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Re: ALP v LP/NP
« Reply #428 on: May 19, 2022, 05:13:31 PM »
I have looked at a fair bit of detail at what appears to be the only real major policy difference between the two parties is about the housing assistance packages.

The Liberals is effectively a plan that you can use your super to help with the house deposit.

Where as Labor is that the Government will effectively own a portion of your property and you pay them back when you sell.

The Labor plan already kind of exists in Tasmania. It is called a homeshare program and is limited to low income purchases. Typically is it used to purchase blocks of land and to build a basic house on it. You then pay the government back when you sell it. All in all it is not a bad scheme apart from the very limited number of people who actually qualify for it, and not a huge number of people knowing it even exists. Generally, it helps a lot of people who would frankly otherwise have limited chances to purchase a property to enter the property market.

The real issue that I see from the programs offered by both parties is that they will do absolutely nothing to assist home ownership for those trying to enter the market. All of these sort of programs end up doing is to drive up the price by what is effectively the government assistance and then it drops once the program ends. What genuinely is needed is there to be more land available to build on, together with the cost to actually build a basic house to be reduced. People also need to be a little bit more realistic for what they purchase for a first house. You do not need a place with everything that open and closes, with the games rooms, the toys that go with it, just go with something basic and it will be perfect for you. Worry about the toys with the next or the next place not the first place.

Also, taking money out of super while it sounds like a great idea for some there will be few that actually have that level of savings, plus it will be money that they have lost for use in their retirement. To me it is a very short sighted idea that will end up costing a future generation and the government who will have more people relying on a pension rather than being potentially self funded retirees.

The idea of some who mention negative gearing ignores the reality that it is mum and dad's who typically have got such an investment property and do it for a variety of reasons. I myself own a property that I rent out. It is rented out for $120 a week and the rent has been the same for the last 10 years. I have no intention of increasing it as I know that my tenant is not in a position to pay much more given she lives on her own. I also purchased the property to one day build a home to live on if I can afford it one day so the rental income is more about giving someone a home than it is about the actual rental return from it.

Offline Ospif1

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Re: ALP v LP/NP
« Reply #429 on: May 19, 2022, 06:38:34 PM »
will end up costing a future generation and the government who will have more people relying on a pension rather than being potentially self funded retirees.
The same pension that the Morrison himself said in 2015 he wishes to abolish? https://www.smh.com.au/business/banking-and-finance/treasurer-scott-morrison-says-to-forget-about-relying-on-the-age-pension-20151127-gl9q2i.html

The LNP exists to appease the over 50's at the cost of everyone else in almost every single policy.  Housing affordability, superannuation and climate change being the big ones.  Shouldn't be surprised given the demographic of the majority of conservatives and the Murdoch empire but still very concerning for anyone who will still be around in 40 years.

Offline stp01

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Re: ALP v LP/NP
« Reply #430 on: May 19, 2022, 07:57:32 PM »

Also, taking money out of super while it sounds like a great idea for some there will be few that actually have that level of savings, plus it will be money that they have lost for use in their retirement. To me it is a very short sighted idea that will end up costing a future generation and the government who will have more people relying on a pension rather than being potentially self funded retirees.

I look at the super-funded housing in another way - you get to choose how a portion of your super is invested. If your house doubles in value when you sell, the portion of super you've used has also doubled and will be put back in the fund. And you get to choose the proportion you put in (up to the Gov's cap). Of course if you never sell your first house, the money never goes back, but that would be a small percentage of the population.

Offline Trevor

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Re: ALP v LP/NP
« Reply #431 on: May 20, 2022, 06:39:18 AM »
Both Parties need to look after ALL Australians, not just the ones who will likely vote them in next time.  Labor is further ahead in this than the Coalition.
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Offline Ospif1

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Re: ALP v LP/NP
« Reply #432 on: May 20, 2022, 09:55:00 AM »
Best economic managers.  Let's not pretend this isn't simply corruption though.

https://www.abc.net.au/news/2022-05-20/millions-in-jobkeeper-went-to-private-schools-that-grew-surplus/101075098

Quote
Hundreds of millions of dollars in JobKeeper went to a group of private schools that grew their surpluses to almost $1 billion

Offline meha

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Re: ALP v LP/NP
« Reply #433 on: May 20, 2022, 10:13:03 AM »
Both Parties need to look after ALL Australians, not just the ones who will likely vote them in next time.  Labor is further ahead in this than the Coalition.

I agree with you Trev on the need to look after all Australian's however, it appears that it is al short sighted about the next election cycle and what those in the marginal seats want. It should not matter if you are in the most marginal seat in the country or if you are in a seat that is a safe as houses you should be treated as the same regardless.

Offline Alan59

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Re: ALP v LP/NP
« Reply #434 on: May 20, 2022, 02:15:53 PM »
Both Parties need to look after ALL Australians, not just the ones who will likely vote them in next time.  Labor is further ahead in this than the Coalition.

I agree with you Trev on the need to look after all Australian's however, it appears that it is al short sighted about the next election cycle and what those in the marginal seats want. It should not matter if you are in the most marginal seat in the country or if you are in a seat that is a safe as houses you should be treated as the same regardless.
This.
We now have politicians in the major parties who have been climbing the political ladder since they left education or even sooner.It is all they know and their own job preservation is their highest aim.