What is the real state of the economy?

[clogged]

Here we go:

http://m.theage.com.au/federal-poli...to-enter-property-market-20150306-13xe3l.html

Not at all surprised.

 

[clogged]

Cant have people deciding what to do with their own money can we? It could cost the super industry (gravy train) fee income

"But the idea has been slammed by Labor, the Grattan Institute, and the superannuation industry, who warn it would make homes less affordable for younger people and contribute to the transfer of wealth from younger to older Australians."

Knew you would say that. Utterly unsurprising and boring. If Labor proposed this you'd be off your tree against it.

It's not letting people decide what to do with their money. It's shovelling more money into an overinflated housing market.

Next up, tax deductions for mortgage repayments on owner occupied houses.

 

[medusala]

Knew you would say that. Utterly unsurprising and boring. If Labor proposed this you'd be off your tree against it.

Have always been against Super. Its a huge rort. Anything that lets people invest their own money how they see fit is a good thing.

It's shovelling more money into an overinflated housing market

As opposed to the Dow?

 

[clogged]

Have always been against Super. Its a huge rort. Anything that lets people invest their own money how they see fit is a good thing.

Super is not the issue. The issue is pumping more money into the housing market under the guise of helping first home buyers.

Of course it is completely unsurprising you would obfuscate the true intention of the policy.

As opposed to the Dow?

What.

 

[Long Live HFC]

Have always been against Super. Its a huge rort.

i sure do prefer greater welfare payments for the aging population.

 

[medusala]

What.

Plenty of stock markets are at/near record highs.

Its not a hard argument to make that the S&P is more overvalued than Australian property

Super industry couldn't give a rats clacker, they just want fee income

i sure do prefer greater welfare payments for the aging population.

The cost of super tax concessions is approaching the cost of the pension. Super has done little to increase the household savings rate.

See below, Australia has highest tax expenditure in the OECD of 7.5% of gdp.

http://www.aph.gov.au/About_Parliam...y/FlagPost/2014/January/tax-expenditures-2014

 

[Long Live HFC]

Super industry couldn't give a rats clacker, they just want fee income

how is this different to any business ever?

 

[medusala]

how is this different to any business ever?

Super is compulsory.

 

[clogged]

Plenty of stock markets are at/near record highs.

Its not a hard argument to make that the S&P is more overvalued than Australian property

Super industry couldn't give a rats clacker, they just want fee income

Who cares about the super industry? It was completely unpredictable that faced with a property price explosion (in Sydney especially) that the proposal would be to change the regulations either around tax or super to allow it to continue. One of: Keating's idea to allow super to invest in RMBS, super to be accessed by FHBs or allowing mortgage repayments to be deducted. The other two will probably be seriously proposed in the next 10 years as well.

None of them fix the structural problems in the real estate industry at all. Australia's entire future will be bet on its housing.

 

[medusala]

None of them fix the structural problems in the real estate industry at all.

I am all for free markets, however, I don't think there is much doubt that os buyers of residential property can impact prices. I don't think its unreasonable to charge an os buyer an additional $25k per dwelling. Its even worse in London, 2/3rds of sales in Chelsea are supposedly now to foreign residents. Australia is lucky that foreigners cant buy existing houses. The situation would even be worse then.

 

[Long Live HFC]

Super is compulsory.

but, say, having a bank account or using energy are electives in 2015?

say what you want about super but it was a direct response to a lack of saving and preparation in the preceding century (the free market outcome). expecting everyone to be savvy enough to invest wisely is just stupid ideological bollocks and these undeserving investors cause negative externalities for the rest of us. like higher pension payments.

old age pensions took most of my tax dollars according to the ATO.

 

[clogged]

I am all for free markets, however, I don't think there is much doubt that os buyers of residential property can impact prices. I don't think its unreasonable to charge an os buyer an additional $25k per dwelling. Its even worse in London, 2/3rds of sales in Chelsea are supposedly now to foreign residents. Australia is lucky that foreigners cant buy existing houses. The situation would even be worse then.

They can, the rorts are massive.

 

[medusala]

expecting everyone to be savvy enough to invest wisely is just stupid ideological bollocks and these undeserving investors cause negative externalities for the rest of us. like higher pension payments.

Yes people are too stupid, they cant be trusted to think for themselves.

They can, the rorts are massive.

Yes, good point. I wonder how carefully that is policed?

 

[Long Live HFC]

The cost of super tax concessions is approaching the cost of the pension. Super has done little to increase the household savings rate.

i really don't see how super as a system = less than 0.

See below, Australia has highest tax expenditure in the OECD of 7.5% of gdp.

but in this analysis tax expenditure = deductions, yeah? aren't you generally in favour of low taxes?

 

[medusala]

i really don't see how super as a system = less than 0.

See below. Paper says added 2% to savings rate. Other argue closer to zero. Treasury paper said 1.5%. compare that to tax deductions as % of gpdp

http://www.rba.gov.au/publications/rdp/2004/pdf/rdp2004-01.pdf

but in this analysis tax expenditure = deductions, yeah? aren't you generally in favour of low taxes?

There are transaction costs in paying tax as well as having a super fund managed. Better to eliminate those costs and have lower personal income tax rates.

 

[Long Live HFC]

Yes people are too stupid, they cant be trusted to think for themselves.

haha, yeah i know you guys think such concerns are all lefty paternalism, but i just gave you a century of data for the free market outcome, and it wasn't pretty. don't pretend that those people making really bad "free" decisions can't or don't impact the rest of us.

the super system is no different (conceptually) to, say, motor vehicle requirements. a minimum standard.

 

[Long Live HFC]

See below. Paper says added 2% to savings rate. Other argue closer to zero. Treasury paper said 1.5%. compare that to tax deductions as % of gpdp

http://www.rba.gov.au/publications/rdp/2004/pdf/rdp2004-01.pdf

http://www.rba.gov.au/publications/rdp/2004/pdf/rdp2004-01.pdf

is 2% more than zero?

The model suggests that compulsory superannuation is expected to increase the saving rate if there are households that are not able or not willing to offset the superannuation contributions through reduction in other saving or increased borrowing. This effect is expected to dissipate over time, as contributing cohorts become withdrawing cohorts – although the effect can last for several generations.

In contrast, thepositive effects on net household wealth and retirement incomes are permanent. We then estimated a saving equation for Australia to gauge how much of the compulsory superannuation has – on average – been offset by reductions in other saving. We estimate that around 38 cents of each dollar in superannuation contributions are offset, or in other words, 62 cents in each dollar are saved additionally. We use these estimates to construct a counterfactual saving rate, which suggests that compulsory superannuation may have increased the household saving rate by up to 2 per cent in recent years. Overall, our results suggest that government policies encouraging superannuation have added to both household saving and wealth.

not necessarily the worst thing ever?

 

[medusala]

haha, yeah i know you guys think such concerns are all lefty paternalism, but i just gave you a century of data for the free market outcome, and it wasn't pretty.

Bollocks. If I don't save, then why should it be a concern of the state? What is the biggest thing wrecking savings rates now? QE. The state.

http://www.bbc.co.uk/news/business-27717594

The European Central Bank has introduced a raft of measures aimed at stimulating the eurozone economy, including negative interest rates and cheap long-term loans to banks.

.

is 2% more than zero?.

Its arguable, ie Treasury says less and others less still (hard to work out ceteris paribus). Nonetheless any increase comes at a huge price in terms of higher income tax rates

 

[Elroo]

Have always been against Super. Its a huge rort. Anything that lets people invest their own money how they see fit is a good thing.

As opposed to the Dow?

Ever heard of Self Managed Super Funds which allows people to invest their own money?

 

[Eagle87]

Here we go:

http://m.theage.com.au/federal-poli...to-enter-property-market-20150306-13xe3l.html

Not at all surprised.

Haha ... Yes, this should hold up prices another few years

 

[Long Live HFC]

Bollocks. If I don't save, then why should it be a concern of the state?

well it isn't, til you start putting your hand up for a pension payment?

 

[Eagle87]

I am all for free markets, however, I don't think there is much doubt that os buyers of residential property can impact prices. I don't think its unreasonable to charge an os buyer an additional $25k per dwelling. Its even worse in London, 2/3rds of sales in Chelsea are supposedly now to foreign residents. Australia is lucky that foreigners cant buy existing houses. The situation would even be worse then.

With respect meds there's the rules and what's actually happening.

I have a Malaysian client with 26 Australian properties of which 21 were bought as second hand houses in the residential market. He hadn't even heard of the FIRB before we informed him.

The reality is huge chunks of certain areas of all the bigger cities are owned by wealthy outsiders and no one at government level seems to really care that much.

 

[clogged]

With respect meds there's the rules and what's actually happening.

I have a Malaysian client with 26 Australian properties of which 21 were bought as second hand houses in the residential market. He hadn't even heard of the FIRB before we informed him.

The reality is huge chunks of certain areas of all the bigger cities are owned by wealthy outsiders and no one at government level seems to really care that much.

Why would they care, really?

 

[RightorKhan]

The economy's ****ed guys.

Just saying, I hope a lot of rich tax cheating pricks endure hardship in the times ahead.

 

[madmug]

The economy's stuffed guys.

Just saying, I hope a lot of rich tax cheating pricks endure hardship in the times ahead.

No they'll just go & hide in corrupt places, like Malaysia.