The Australian Elections Can Be Positive
The house of representative in Canberra
Talking about the elections
Welcome to our article (93) The Australian election can be positive
I believe that The Australian elections in May 2019, can be positive, if the party that runs the economy better wins the election. To run a country, even if it is a large country like Australia, it is like to run a family or a business, everything goes well, when there is enough money around, once there is no money to spend, nobody is happy and all sorts of problems pop up. So, whoever forms government must be careful to budget the economy the right way? Well this is my personal point of view.
Anyhow, I was waiting for better news and better policies, but in these elections, there is nothing to gain for the middle-income families that own properties; you see nobody cares, if you can look after yourself, even if what you do is good for everybody. Here I am talking about those people that are not rich, they only have a second house, they bought it in the hope that they could earn some money in their old age, but today everything is turned against them, as we have said in our article, Assets and pension cuts
The present government with is coalition policies don’t want to do anything, because they made the mistake when they have changed the assets test. So, the owners that have a second house try hard to earn some money from their properties, but it is impossible for them to earn the amount of money that they lose from the government pension; so, it would have been better for them to have spent their money on themselves, because today they would have been better off financially. When they changed the assets test, they should have known that it was a negative policy, because it does not encourage saving for the future.
Here I must point out to the politicians; they must understand that it is this group of people that keeps the housing market at the right level. You see, they don’t buy and sell to make a quick buck, they buy and keep their properties hoping that they can gain something from it, and above all they hope to have a bit extra money when they retire. But today all their efforts have been in vain, because they are losing money, instead of gaining it, as we have explained. Now, this has been done from the coalition, which is supposed to be in favour of these small investors, but it is not. Anyhow, now let us look at the Labour Party policies that are even worse for this type of investment.
The main players and leaders of their parties
The Labour Party positive policies
In these elections the Labour Party has some positive policies, the only problem with these policies, is that they need to spend more money. This has always been the problem with the Labour Party, they spend more money than they can afford. Then they must borough money, which they must pay interest, this ruins the economy.
Now, let us go back to the Labour Party policies on properties for the small investors; I believe that they are worse than the coalition, I have only one word to describe it, and it is DESTRUCTIVE. Look they not only voted in favour of changing the assets test, and a lot of pensioner lost their government pension, or they receive a smaller pension, which is a terrible thing to do, to those people that have worked hard all their lives; but not only that, today they want to change the gain tax to a higher level, which again is going to be negative for those people that have invested in properties, because they cannot sell, they will lose too much money.
In my opinion, this gain tax should be made illegal in most cases. So, we can say that the small investors are being robbed from the government, because what they are taxing should be illegal, because of the following explanation. If you have a second house that today is worth $500,000, you sell the house to buy another property somewhere else of the same value, you cannot do that, because you must pay the gain tax to the government, which is a lot of money, plus other taxes end expenses, it can cost the small investor $100,000 dollars, if the gain tax is higher, like what the Labour Party wants to introduce; then the loss is greater, say $120,000 dollars, that the small investor cannot afford to lose.
So, this is negative for the economy, it cannot be sustained. Because of this unfair gain tax on properties, especially if it is increased, the family man the small investor has no other choice, but to keep away from investing in properties. So, the housing market will be run from big companies that push the price up, and when the market cannot take it any more the prices will crash down. The big companies don’t care that much, because if one year they make no money, they pay no taxes.
All this can happen, because there are no small investors that can help to keep the market steady. But I believe that the politicians are not going to see this coming, until it happens. You see, the small investors buy another property, as if they are buying their first house, they buy to keep it; this can help to keep the market steady. Now let me see what other news we have in the elections that affects tax and properties.
These are useless policies
I believe that the Labour Party policy on negative gearing is useless, because it is made only to stop the very rich people to buy properties at a loss. But then I may be wrong; anyhow, the way that I understand it is this; you have to buy a property that runs at a loss, then that money that you are losing can be deducted from your other earning before they are taxed. The question here is; how many people want to buy a property that loses money; if we use common sense, nobody wants to buy a property that makes no money, unless there is another reason for buying it. So, this policy is almost useless. But the Labour Party wants to change it anyhow, so that you cannot claim your loss, buy deducting what you lost from your other earnings. You see, they just want to grab as much money as they can, but above all, they want to show the worker and other poor people that they are taxing the rich. This is the only reason I can see, because the government will not collect very much from them, owing to the fact, that there are only a small number of people that will be affected.
Anyhow, we are waiting for the elections, to see how the people vote, the we will see what happens.
So, good luck to all parties involved, and remember that we all deserve a fair go. See you after the elections, when we will write other articles about future problems.