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scruffy1

how crap is this government ?

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3% is pretty good given where inflation is sitting.

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I've got doubts any such accounts exist - ING is usually among the best and is offering 2.55% on their Savings Maximizer account.

 

Fine print:

For customers who also have an Orange Everyday bank account and deposit their pay of $1,000 or more per month and make 5+ card purchases that are settled (not pending) each month. Available on one account for balances up to $100,000 with the additional variable rate applied the month following the deposit.

 

Not bad actually considering plenty of other banks term deposits on large amounts don't match it.

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🙂

 

The heathen in me has never really understood "term deposits."

 

In the end you are basically giving your money to the low life called bankers to do with as they please and they do, and not infrequently fuck up.

 

Eh, money is so removed from reality these days I doubt it will matter for much longer.

 

Cheers

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Posted (edited)
8 hours ago, chrisg said:

🙂

 

The heathen in me has never really understood "term deposits."

 

In the end you are basically giving your money to the low life called bankers to do with as they please and they do, and not infrequently fuck up.

 

Eh, money is so removed from reality these days I doubt it will matter for much longer.

 

Cheers

 

Pretty much what FIAT currency is. Central banks have hoarding physical Gold of recent times, they know the currency devaluation is real.

Edited by Jeruselem

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🙂

 

Don't usually comment on those but the cynicism is strong with this one   🙂

 

In the end Australia made a choice between hopeless and pathetic - not exactly a good look in politics either way.

 

Cheers

 

 

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yeah, fdotm is unnervingly close to my view of the current state of the world, and it's depressingly prescient

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Posted (edited)

Blacktown City Councilworkers strike over use of round-up. I guess if they are forced to use it, they should be worried. In this case, they did ask to use less toxic alternatives ... but NO said the council.

https://www.smh.com.au/national/nsw/sydney-council-workers-protest-roundup-use-forced-to-use-or-leave-20190704-p523ys.html

Edited by Jeruselem
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Quote

 

Thus Spake Mungo: the economy

 

Last week Scott Morrison spelled out what he called his economic policy.

 

But, as usual, it was little more than a series of motherhood slogans about the need for more productivity, less regulation, and a spot of union bashing for good measure — nothing new, nothing of real substance, much like the prime minister himself.

 

Basically it was all about tax cuts, because this is the one and only idea Scott Morrison can convincingly articulate: tax cuts were his election policy and he won the election.

 

So it follows that if he can bully the parliament into legislating them, the economy will spring to life like a startled gazelle, the surplus will be delivered, confidence will be restored, employment will rise, wages will revive, spending will soar and we will all bask in the promise of Australia forever after.

 

Well, putting $20 a week in the pockets of the least wealthy, who will spend that because they must, may help, but it is hard to see how the rest of the package – the bits that will have to wait for another six years – will turn the economy gangbusters. One of ScoMo’s business spruikers said bravely it would give people something to look forward to – the archetypal pie in the sky.

 

Then there is the need to unleash our animal spirits, cruelly entangled in red and green tape, which he defines as ‘the regulatory and bureaucratic barriers to business.’

 

Others might characterise such rules as a bare minimum required to protect the public from exploitation – wasn’t that what the banking royal commission proved, not to mention aged care facilities and of course the construction industry, whose new buildings are being evacuated regularly to ensure basic safety?

 

But hey, we need more animal spirits, nature and free enterprise red in tooth and claw, and so we are inviting the business sector – the exploiters, both real and potential – to give us their agenda. Consumers, environmentalists, and other busybodies need not apply.

 

And as for the unionists – well, hush your mouth. Time for yet another ritual bashing in the name of industrial relations reform, again to be masterminded by the impeccably impartial employers, who have thrown their tired old prescriptions onto the counter as if they had suddenly discovered a cure for cancer.

 

Get rid of unfair dismissal laws, they chorus – let us sack more people, that should boost jobs and growth. And remove the provision that replacing new awards must include a ‘better off over all’ standard – ‘no disadvantage’ is more than sufficient, until we can get around to actually slashing terms and conditions as true free enterprise demands.

 

Scott Morrison’s propagandist powerhouses, the Murdoch press and the Institute of Public Affairs, have already made it clear that their real nirvana will be the re-introduction of the feudal system. But why be politically correct, let’s get out of the bubble and be fair dinkum: how good is slavery?

 

And just for starters, we want laws that allow us to deregister unions we don’t like (meaning just about all of them, but in particular the hated CFMMEU). That should get productivity going gangbusters.

 

The unions have always been a convenient whipping boy for the coalition, but using them in their traditional role at this moment in history is even more opportunist than usual – it is based purely on the embarrassment of John Setka.

 

In fact the union movement has seldom been more impotent. Not only has its membership dwindled to the point where it is seriously endangered, but its real influence is minimal. This is why we have wage stagnation, now conceded by everyone from the Reserve Bank to struggling employees as the major and most urgent problem confronting the floundering economy.

 

And it is why industrial disputes – strikes – have diminished to insignificance. The bogey men, the big bad union bosses now exist only in the fantasies of the right wing warriors who cannot face the reality that actually a lot of the mess is their own fault – and they have absolutely no idea how to fix it.

 

And the irony is that their tentative solutions are firmly against their own neoliberal ethos. Energy prices too high? Government intervention, control, regulation, more red tape to restrain the animal spirits of the power companies.

 

It probably won’t happen and if it does it almost certainly won’t work. But such is Morrison’s desperation to provide an agenda – any agenda – that the contradictions entailed in his manifesto have to be overlooked in the hope that someone, somewhere, will take him seriously.

 

What is actually needed is, as the RBA Governor Phillip Lowe wearily repeats, stimulus – interest rates by themselves can no longer suffice to end the malaise.  A more ambitious program of infrastructure might help. To which Morrison replies we already have one – it’s just not stimulating yet. In fact, actual construction went backwards last year. But eventually it might  work – when it trickles down…

 

And then there was innovation – we have to be daring, smart, in the forefront of developments – except, of course, if they involve the biggest challenge and opportunity of all, climate change, which Morrison could not bring himself to mention. Ah, yes, we remember innovation, way back in 2015, when Malcolm Turnbull became prime minister and was innovating like buggery, being agile and nimble all over the place.

 

Admittedly not a lot happened – the business community decided that there was no point in taking risks when the government was already depressing wages and pushing profits up quite nicely, thank you, and could be relied on to keep doing so. The likelihood of some Damascene conversion, however miraculous Morrison pretends, is at best minimal. But Morrison is relying on the business community for guidance and direction – he is their leader, so he must follow them.

 

However, perhaps not just yet – first he had to jet off to the G20 to tell Donald Trump and Xi Jinping how to run their economies. Of course they won’t take any notice of him either, but there could be a decent photo opportunity in it. And there was plenty of time for shmoozing the Donald, and even inviting him to come to a game of golf in Melbourne.

 

Now that should get the economy moving. Or at least the headlines, which are what really matters.

 

https://www.echo.net.au/2019/07/thus-spake-mungo-economy/

Thus Spake Mungo: the economy

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The immediate effect would likely be for new home buyers to benefit through lower prices but ultimately people who can only rent will suffer through lower supply and ultimately higher prices.

 

If you take away the incentive to buy or build investment housing, then who's going to supply rental properties?  And don't say "the government".

 

We've got our own problem at the moment, a national disease of spreading apartment complexes.  So ultimately that'll have it's crash that will probably propogate through other types of housing.

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11 hours ago, Rybags said:

The immediate effect would likely be for new home buyers to benefit through lower prices but ultimately people who can only rent will suffer through lower supply and ultimately higher prices.

 

If you take away the incentive to buy or build investment housing, then who's going to supply rental properties?  And don't say "the government".

 

We've got our own problem at the moment, a national disease of spreading apartment complexes.  So ultimately that'll have it's crash that will probably propogate through other types of housing.

Negative gearing only hapens when you're renting out a property at a loss.  If property prices fall, doesn't that make it less likely to need to negatively gear?

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The entire point of an "investment property" is that you make money on it, reduce your tax, and maybe use it to retire to later on.

 

The "need" of negative gearing is to make the investment worthwhile, the purchase price doesn't really have a lot to do with it.

There's even interest only loans that some people use, often that's in conjunction with the speculation that you can sell later on and take profit on the margin of sell vs buy price.

 

The bottom line though is that if you take away incentive for people to buy housing with the intent of renting to someone else and make money out of the exercise, they why the hell will people continue to do it?

They won't - they'll invest money elsewhere in more profitable ventures.

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Posted (edited)

that's really simplistic rybags

 

the intent is to make a capital gain on the property as "investment"

 

negative gearing as presently organised, plus the reduced capital gains tax after a period, is entirely to motivate speculators, and it has worked far too well for the property market to function like any other market

 

 

if you can't make money on an investment without it being courtesy of a bubble inflated by unrealistic expectation of returns, then you are buying a dream, not an investment

 

the ability to claim deduction beyond the cost of servicing a loan and upkeep is a completely unreasonable, and the facile belief that it's okay because "anyone can jump on the bandwagon" is economic stupidity

 

 

the entire presumption of an investment property is a  manufactured ponzi scheme

 

 

Edited by scruffy1
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wiki says ...

" Negative gearing is a form of financial leverage whereby an investor borrows money to acquire an income-producing investment and the gross income generated by the investment (at least in the short term) is less than the cost of owning and managing the investment, including depreciation and interest charged on the loan (but excluding capital repayments). The investor may enter into a negatively geared investment expecting tax benefits or the capital gain on the investment after it is sold to exceed the accumulated losses of holding the investment. The investor would take into account the tax treatment of negative gearing, which may generate additional benefits to the investor in the form of tax benefits if the loss on a negatively geared investment is tax-deductible against the investor's other taxable income and if the capital gain on the sale is given a favourable tax treatment. "

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The simplistic thing is that end of story you have more money in your pocket.

 

As Leo would put it, that's Capitalism at work.

 

As a socialist would put it, the so-called "rich investor" should be emptying their pockets and providing someone poorer than themselves with somewhere to live.

 

As a realist would put it, if -ve gearing was abolished the supply of rentals would fairly quickly sag well below demand and ultimately the people seeking cheap rent would be the worst sufferers.

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Remember when an investment property meant you made money from rent?  Rather than losing money from rent and praying the market kept bubbling away so you'd make a profit at the sale?

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Generally rent will be 0.1% per week of the value of the property.

So, a $130,000 house in 1990 would have pulled in about $130 a week.  A $500,000 house in 2015 pulled in $500 a week.

In 1990 the interest rate would have been about 13% vs maybe 5.5% in 2015.

 

So based on 80% borrowing in both cases, $13,520 PA vs $22,000 (simple calculation so expect a bit of error).

Translates to interest expense of $260 vs $423 per week.

 

Without even bothering to do the exact maths, you have the 1990 investment having double the interest vs rental income.  And the 2015 investment costing less in interest than the rent coming in.

Actually, my interest rate for 1990 is likely understated, so the expense claimable would have been even higher back then.

 

So, "remember when" scenarios will likely see you making less money in times past.

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11 hours ago, Rybags said:

As Leo would put it, that's Capitalism at work.

Really? What in effect is a Government subsidy specifically for one market is Capitalism at work? Bullshit Rybags, unmitigated bullshit.

 

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It's not a subsidy, it's simple accounting for an investment of expenses vs income.

Compared to what the corporate world can pull it's trivial.

 

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