Unpopular Opinions on Housing, Petrol and Cost of Living

bigpoppa on 30/03/2022 - 09:48
Last edited 30/03/2022 - 09:53

The 2022 budget has been nothing but a blatant attempt to ignore the real problems for another 6 months or so. I'm not an economist but that doesn't stop me from having an opinion lol. So here's my brainstorm of ideas that make more sense to me.

Scrap negative gearing - housing is a necessity and treating it as an investment is shortsighted and a disservice to future generations especially if you're not at the least a mega-millionaire and can afford to purchase all of your kids and their kids a roof to live under. Also, less money tied up to mortgages means more money to spend or to actually invest into business etc
Scrap home buyer grant (but not without scrapping negative gearing first) - not a real solution just an attempt to shift the problem to another day.
Reduce or even scrap capital gains tax from non-housing related investments

Forget about cutting fuel excise and instead provide grants and scrap GST and LCT for electric cars. Maybe even proved interest-free loans for EVs like ACT.
Invest in more EV friendly infrastructure and renewable energy that wouldn't be affected whenever dictators in other countries wake up and choose violence.
Provide incentives/grants/tax benefits to install solar and battery storage for homes and small businesses - this would also reduce cost of energy

These are some of the things I think about a lot - am I wrong?

Financial Federal Budget

Comments

              • rektrading on 30/03/2022 - 15:27
                +2

                @bigpoppa:

                Is it really? Would you buy stocks even though the cost of owning them is more than the profits you get from them?

                Every trade I make I trade with the mindset that it can go -99.99%

                I only trade with the money I can afford to lose.

              • Seraphin7 on 31/03/2022 - 16:28

                @bigpoppa:

                Would you buy stocks even though the cost of owning them is more than the profits you get from them?

                Yes, and have done many times. Negative gearing on stocks (or property) has no fundamental difference to any other asset class.

                I've also neutrally/positively geared stock trading. Whether is negatively, neutrally, or positively geared makes no fundamental difference when it comes to accounting. Income received less expenses paid equals profit made. A percentage of that profit made is then taxable (or the loss is offset against other net income where a loss occurs).

          • dhnqt on 30/03/2022 - 21:58
            +1

            @bigpoppa: Negative gearing can be definitely done for stock and crypto as well. I am doing it right now. It's not a property specific thing. As long as your investment is producing income, and you have operational loss on your investment, you can use negative gearing.

            You need to get a good tax agent.

  • orangetrain on 30/03/2022 - 12:20
    +10

    Instead of negative gearing, impose a vacancy tax of 10% of property value.

    Suddenly all those empty houses, empty wired overgrown land, empty "A SHOP IS COMING SOON!!1!" shops, and empty CBD buildings will see rents and property prices plummeting.

    Those who already lease them out? They fine. Those speculators who hoard land? Will cry.

    • bigpoppa on 30/03/2022 - 12:28

      That's a very interesting proposition but it sounds very hard to police?

      • bongom on 30/03/2022 - 12:40
        +8

        This information is already available by looking at the water, gas and electricity consumption of unoccupied properties which will be close to zero.

        • bigpoppa on 30/03/2022 - 12:54

          2 issues.
          1. you could just turn on a couple of lights and leave the tap open - would still be cheaper than any tax or returns from artificial inflation of prices.
          2. It would actually cost money instead of revenue to police that compared to slashing negative gearing.

          • orangetrain on 30/03/2022 - 13:04
            +4

            @bigpoppa: ATO who can see PPOR and income declared for leases and cross match with property database from the comforts of their computers.

            Someone paying $1 per year in rent or someone claiming CBD blocks as PPOR? I'm sure ATO won't think it looks suspicious..

            In fact, I think we may see a massive tax revenue boom from lease income and business income, etc compared to negative gearing.

            In fact, a billionaire could just sit on a thousand empty properties with negative gearing abolished vs vacancy tax where it could run into millions.

            • bigpoppa on 30/03/2022 - 13:17

              @orangetrain: I see your point. But also wouldn't abolishing negative gearing increase supply from people who really can't afford to have investment properties which will slow price growth or even diminishes inflated value to its true value. This would mean there are more reasons to free up money by selling empty properties and investing it elsewhere. There won't be any reason to be hoarding properties. This could also see a reduction in rent and free up more money for people to spend - which could possibly mean more cash flow for small business owners so more jobs

    • tsunamisurfer on 30/03/2022 - 13:31

      There is already Land Tax on such properties.

      • orangetrain on 30/03/2022 - 13:43

        How much is the vacancy tax?

  • Almost Banned on 30/03/2022 - 12:31
    +4

    It seems that you are claiming that negative gearing should be removed on housing because it is a 'necessity'.
    But why just housing?
    Do you think that farmers shouldn't be able to claim losses because food is a 'necessity'?
    Should doctors not be able to claim losses because medicine is a 'necessity'?
    Should clothing manufacturers not be able to claim losses because clothes are a 'necessity'?
    Or is it just because housing seems to be easier for mums and dads to invest in than other 'necessities'?
    Housing is an asset, and can be an investment just like any other asset. If you start treating investment assets differentially based on whether you consider them a 'necessity', you start to make distortions in the tax system even worse.
    And, as has been mentioned, whenever the tax system is changed, people adjust their behavior to incorporate that change. Millions have made decisions based on the system as it currently stands. Any change needs to consider the impact such a radical change would have on those who invested billions on the basis of the system as it stands.

    • bigpoppa on 30/03/2022 - 12:50
      +4

      The difference between farmers, doctors and cloths manufacturers and your mums and dads is the former being in business is what fulfilling the necessities. They are not hoarding the "necessity" to stay in business unlike your "mums" and "dads". So giving the former more benefits is in the best interest of our societies with not just the "necessity" but also with jobs. The only benefit from your "mums" and "dads hoarding properties is that every next generation gets to spend a greater proportion of their income on housing (be it mortgage or rent) so your "mums" and "dads" can stay in the business of killing housing affordability.

      If a house is an asset then why would you need tax benefits? That's like saying Bilionares have money so all non-billionaires should donate money to them,

      • Almost Banned on 30/03/2022 - 15:22
        +6

        If the asset is simply being 'hoarded', and is not available to be income producing, then it is not being operated with a view to profit and you can't claim your losses.
        If I own one investment property, why am I not in the business of providing housing? If I own two, and I then in a business of providing housing? Three? How many houses do you think I need to be considered in the business of providing housing?
        Investors in any asset class limit supply for others. Housing is no different, but unlike some asset classes, there is an easy way of growing the supply of housing. That is not true of Picassos.
        This whole thing just reeks of envy.

        • bigpoppa on 30/03/2022 - 15:36
          -1

          You could be closed for "business" and still reap the benefit of negative gearing. You say envy, I say foresight to make ethical choices and not trek too far into the inequality territory.

          • Almost Banned on 30/03/2022 - 17:05
            +5

            @bigpoppa: Right - see, that's where you are wrong and it might explain your misunderstanding of the issue.
            Negative gearing is available for all sorts of investments, however they must be available to produce income. If they are not, then you cannot claim a deduction.
            If you are 'closed for business', ie your investment property is not genuinely available to rent, then you do not get the benefit of negative gearing: https://www.ato.gov.au/Individuals/Investments-and-assets/In…

            • bigpoppa on 30/03/2022 - 17:17
              -5

              @Almost Banned: Let's be real. No one buys property just to rent it out as a business. If rent is the main crux of the business then we'd have Amazon Prime Rentals by now. I agree I was wrong about being closed for business and still claiming negative gearing. I could purchase a property and rent it out for $1 and that would still satisfy ATO's requirement. But the real problem is negative gearing makes people think that property is an investment and so they tie all their money into it so they could hoard it and artificially reduce supply to keep the hyperinflation alive. You just need to look at Japan to see what will happen if we don't wake up now and make some serious changes. A house is a commodity and a liability - it's only an "investment" as long as you are willing to leave the wool over your eyes.

              • Almost Banned on 30/03/2022 - 17:49
                +10

                @bigpoppa: Again, no. Proving once again that you don't understand this issue, setting the rent at $1 would be an obvious and transparent scheme which the ATO would immediately reject. Bocaz v FCT is a useful illustration. You can rent to relatives for an amount that might have a reduction in market rent, but if the circumstances as a whole raise it to market rent - then you can fully deduct. However, if you rent at less than market rent and there are no other circumstances to lift it to market, you can only deduct to the level of income = no negative gearing.
                You really aren't very good at this, are you? Perhaps you should stick to discussing things you know something about.

                • bigpoppa on 30/03/2022 - 18:16

                  @Almost Banned: Bocaz v FCT Ratio:
                  * rental income is taxable income
                  * rental agreements even to the family is still a contract and not a non-commercial agreement ie enforceable by law
                  * taxpayer entitled to tax deductions.

                  Rental agreements are private contracts. ATO can certainly say it's a transparent scheme but they can't prescribe what mounts to consideration. The court would never interfere with a contract that is not void or null. If I'm bad you're worse. You should take your own medicine and stick to discussing things you know something about.

                  • Almost Banned on 30/03/2022 - 19:43
                    +3

                    @bigpoppa: That wasn't the ratio of the decision - that amounts to a summary of the findings.
                    The ratio of the decision is probably found at [37] and amount to a finding that simply because the rent is below market, a finding that there was a purpose other than income production is not the only possible outcome.
                    Where other factors influenced the decision, and those factors are relevant to the intention to produce reliable income, market rent is only one factor.
                    None of that is the point.
                    The point is that a rent of $1 - which is what you suggested - is almost certain to be disallowed for negative gearing because there is no genuine intention on the part of the landlord to gain income.
                    Courts can and will absolutely declare a private rental agreement a scheme so that deductions need to be apportioned. In fact Bocaz refers to at least four decisions where the Courts did exactly that.
                    Maybe try reading the case. It is quite short and can be found here: http://classic.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/…

  • rektrading on 30/03/2022 - 13:02

    Australians have it pretty good when it comes to taxes on investments.

    You should dread the day some sob lawmaker starts getting the idea to mark to market taxing.

  • MarsTitan on 30/03/2022 - 15:40
    +5

    Scott Morrison says renters should buy a house if they want rent relief. Simples!

    https://www.news.com.au/finance/economy/federal-budget/scott…

    • bigpoppa on 30/03/2022 - 15:47
      +1

      Ok that made me chuckle. Can't wait to watch Scomo at the next comedy festival

      • GG57 on 30/03/2022 - 16:22

        If he did that, could we arise from the audience and slap his face?

        • orangetrain on 30/03/2022 - 16:45

          It looked like an escalated exchange from Scott Morrison, a slap would've have been allowed in USA. Why not try it in Australia?

          • GG57 on 30/03/2022 - 17:10

            @orangetrain: Politicians are protected.
            I'm not so sure about comedians.

            • orangetrain on 30/03/2022 - 17:40

              @GG57: If Scott Morrison went up on stage and slapped Anthony Albanese, would Scott be escorted out?

        • bigpoppa on 30/03/2022 - 17:51
          +1

          On one condition. It should be harder than Will Smith slapping Chris Rock

    • Almost Banned on 30/03/2022 - 17:09
      -3

      That's not really what he said, its what news.com.au lyingly says he said.
      In response to what is he doing to assist renters, he said he was trying to help them buy their own house.
      Now, that isn't going to reduce rents - but the government is very limited in what they can do there (especially what they can do without further inflating rents like giving higher rent subsidies). What it might do is help SOME renters to become owners instead.

    • Herbse on 30/03/2022 - 18:17
      +3

      I remember the good old days when Hockey's advice to the por was to just get a better job and stop being poor.

  • Herbse on 30/03/2022 - 18:16
    +3

    Everything you said is popular and what the majority of the public want.

    The problem is that it is unpopular with the well off, news outlet owners and corporations. And these people are lobbying and advertising against the people who would want to make those changes.

    Negative gearing is a complete kick in the guts to the public.
    Billions of dollars in handouts to people who can afford multiple houses whilst those houses also earning hundreds of thousands of dollars in increased value. That's billions of dollars that could go to hospitals, schools, naitonal debt.
    Instead it goes to line the pockets investors and overseas developers, all while pushing the property market to unsustainable levels and locking people out from ever owning a house.

    Judging by how it's going. It will probably crash during a Labor leadership and the libs will blame them for poor management.

    • smog on 30/03/2022 - 19:38
      +2

      Judging by how it's going. It will probably crash during a Labor leadership and the libs will blame them for poor management.

      But the Libs told us they're the better economic managers so nothing can go wrong under their leadership. They've been blaming Labor for the budget deficit for the past decade even though they had no control in government since 2013 so there's nothing new about that. Sadly, once the crash does happen under Labor, the general public will believe it's their fault.

  • ECE on 30/03/2022 - 19:36

    Survival of the fittest 💪🏿

    • blehgg on 31/03/2022 - 12:27

      so scrap Centrelink handouts?

    • yokel on 01/04/2022 - 08:26
      +1

      This is not the USA or any other third world country

  • pogichinoy on 30/03/2022 - 19:40
    +1

    Residential property will always be treated as an investment.

    Even if you limit property purchases, it will always be considered as an investment vehicle.

    Negative gearing is supposed to make RE investment more attractive as the private rental burden is passed to private citizens instead of the govt as we all know the govt will mess it up. Just look at how bad public housing is.

    • Typical16-bitEnjoyer on 30/03/2022 - 22:25

      Switzerland, Germany and France all prove negative gearing is BS.

      • pogichinoy on 31/03/2022 - 02:52
        +3

        Switzerland - able to offset negative rental income against your salary and also carry it forward
        Germany - able to offset negative rental income against your salary
        France - tax losses can offset every year against all personal income up to €10,700.

        • Typical16-bitEnjoyer on 31/03/2022 - 11:36
          -1

          Wrong, wrong and wrong.

          They only allow PARTIAL and it is strictly limited, and for good reason.

          • pogichinoy on 31/03/2022 - 11:54

            @Typical16-bitEnjoyer: Do you need me to link the sources here?

            • Typical16-bitEnjoyer on 31/03/2022 - 12:15

              @pogichinoy: You've completely missed my point. Those countries have proved negative gearing is BS by:

              Switzerland - rent control / mortgage reference rate
              Germany - regulated rent
              France - losses limited and amortised

              Kick the Libs out, and boot negative gearing like the UK or heavily restrict it like the above.

  • Bystander on 30/03/2022 - 19:59
    +4

    Step 1.

    BAN ALL POLITICAL DONATIONS.

    That means everything including anonymous trusts paying a politicians legal fees.

    • Typical16-bitEnjoyer on 30/03/2022 - 22:22
      +4

      100% agree. But it won't happen.

      How about publicly declaring all donations….

      …..The current Federal Liberal government voted against this, lol

      • Bystander on 31/03/2022 - 16:44
        +1

        And they currently delay reporting donations as well. So many loopholes that really I think it's time to just ban it outright.

    • orangetrain on 31/03/2022 - 10:06

      How does this solve the current 10k donations with 400k post gov jobs?

      How does it solve a billionaire spending millions for his party?

      Do you want to prevent minor parties from getting any money too?

      How does this solve bribery with overseas transactions?

      With your idea, there's no more 10k donations.

      • Bystander on 31/03/2022 - 16:41

        I'm not saying that it would fix everything at the flick of a switch but it would be a good start, ie. step 1. There's plenty more that needs to be done.

        To answer your q's, yep, no more $10k, one billionaire has spent a truckload of cash and gotten nowhere, there needs to be other provisions for minor parties, bribery w os transactions is bribery and that's illegal. Like I said this is just the beginning but the overarching principal is that the major 2 parties should not be receiving public donations at all as it can be seen to be used to buy influence.

  • tyarrhea on 30/03/2022 - 20:49
    +1

    Negative gearing on investments needs to be quarantined against future investment income, not offset personal income. This will mitigate speculation on property. But I think the real driver of property price increase was when the rules changed that allowed SMSFs to borrow money to invest in property; effectively they are only paying 15% on any gains and income.

    In the UK, they’ve have phased out mortgage interest deductions on investment properties as a way to curb house prices.

    Personally, all these handouts needs to stop. Not just to Centrelink recipients but also all the offsets and write offs to small businesses. The complexity is mind boggling.

    To drive real growth, the government needs to increase the tax free threshold so people are getting more after tax pay. But at the same time, bring down the highest marginal tax threshold to protect the tax revenues.

  • dammit on 31/03/2022 - 08:18
    +1

    Negative gearing in Australia is like the gun laws in the US. Just can’t get it fixed.

    It needs to go. Phase it out, cold Turkey, transition it slowly- whatever. Marlow’s hierarchy of needs - the basic human needs first are shelter (air water etc). Make property investing unappealing, more people can buy, be happier (less landlord favoured laws) and have stability not having to move frequently or be exposed to rent increases.

    Old people on the pension cannot sell their houses now worth millions because they will lose their pension. That needs to be fixed. They will not downsize and then tie up large properties which increases urban sprawl. They also don’t want to sell and buy again and pay stamp duty because they think it’s unfair and expensive.

    If no one has the balls to delete negative gearing and reduce tax incentives for owning an investment property …….here’s a stellar idea:

    RENTERS: can claim the rent they’ve paid as a tax deduction on their tax return to lower their income and get tax incentives too. :D

    • Brianqpr on 31/03/2022 - 11:06
      +1

      Very hard to get rid of it now when the wealth of so many depends on property values. The time to address this was about 20-25 years back when prices first started taking off and the govt of the day, led by John Howard, thought the thing to do was put free money in the hands of prospective buyers, with entirely predictable results.

      It makes me laugh when people praise Howard and even more so when Peter Costello is held up as some sort of financial genius. They had the opportunity to make a genuine difference and failed.

      The idea Bill Shorten took to the last election was probably the most palatable, retaining it for new builds on help increase supply but removing it for established homes. That as shot down by a scare campaign and we've ended up with Morrison.

      Any changes now would have to be very gradual to not be political suicide and that's the problem. Its been left too long.

    • akashra on 31/03/2022 - 12:58

      RENTERS: can claim the rent they’ve paid as a tax deduction on their tax return to lower their income and get tax incentives too. :D

      Man, this would be such a win if things were just completely flipped overnight. Cold turkey completely abolish NG on IPs in a single day - and change the laws so that you can NG a PPOR - but only if you ONLY own a PPOR. As soon as you own an IP, you can no longer NG a PPOR.

      • trapper on 01/04/2022 - 13:29

        Do you think this would reduce or increase the number of houses being built?

        Prices are high because there are not enough houses to meet demand.

    • trapper on 01/04/2022 - 18:46

      They will not downsize and then tie up large properties which increases urban sprawl.

      Mainly because of stamp duty. Why would you move when it's going to cost you $40k+ in tax lol, especially as a pensioner.

    • drfuzzy on 01/04/2022 - 19:20

      Renters get a tax deduction and home owners pay more tax? You are insane.

  • Victorg2486 on 31/03/2022 - 08:29
    +1

    We need an OzBargainer in Parliament ASAP

  • Nebargains on 31/03/2022 - 09:01
    +4

    I don't see how removing negative gearing would make housing more affordable. Everyone seems to think that the problem is people 'hoarding' houses but the way I see it the problem is everyone wants to live close to the city and there are only so many houses there.

    The story is the same here, reddit, whirlpool, no one wants to live beyond 30 minutes commute to the city. In Melbourne, assuming that commute is by train, that probably puts your limit out at Mitcham or so or probably closer if you drive. This naturally drives up prices the closer you get to the city (or the cheaper they get the further out you go).

    People generally also want houses to be 3-4x the median salary or some magical number. So basically everyone wants houses that are 400-500k max within 20km of the city. This will never happen regardless of how you tax gains or negative gearing etc.

    • akashra on 31/03/2022 - 12:57
      +1

      I don't see how removing negative gearing would make housing more affordable. Everyone seems to think that the problem is people 'hoarding' houses but the way I see it the problem is everyone wants to live close to the city and there are only so many houses there.

      If negative gearing were such a positive thing, the business-advocate LNP would be pushing it as hard as they can for commercial property to help businesses. Possibly even abolish it for residential property and make it only available on commercial real estate.

      We know very well it's not, and that it makes things more expensive - so of course they're not doing to do something like this that would hurt their voters, and lose them votes.

      • cheng2008 on 01/04/2022 - 14:27

        You've misunderstood him, he's not saying that negative gearing is a positive thing, he's saying that negative gearing is a distraction from the main issue of housing affordability, and removing it will not have a great effect on the end result.

    • brendanm on 31/03/2022 - 18:45

      Supply and demand, as usual.

    • trapper on 01/04/2022 - 13:33
      +3

      Yeah I really don't get this logic.

      If we want lower house prices and lower rents then we need more houses being built. Supply must go up.

      Discouraging investors will reduce demand for new houses, so less will be built. Also it will reduce the total rental stock, pushing rents up.

  • TEER3X on 31/03/2022 - 09:16
    +2

    Rates just need to go up, inflation is out of control.
    Instead they are making the problem worse with cash hand outs.

    Cutting the fuel excise only prolongs our reliance on fossil fuels.

    All band aid fixes while making the long term problem worse.

    • TheOneWhoKnows on 01/04/2022 - 09:15

      The Budget fails to address anything that might, or will, happen beyond the end of May.

      But that's not important right now, is it?

    • trapper on 01/04/2022 - 18:44
      -1

      Fuel excise tax has nothing to do with our reliance on fossil fuels.

      It's just an economic drag that makes everything cost more.

  • OzzyOzbourne on 31/03/2022 - 09:40

    You got my vote

  • BlackMonk on 31/03/2022 - 10:05
    -4

    ok, let's talk something that the government can do straight away that can help the economy, slowdown inflation a bit. Rather than keep throwing cash.
    we will be for the first time at 31% of GDP debt, and our interest on our debt will be like 15billion.

    The lockdowns and vaccine mandates are still causing damage economically.

    I'm not vaccinated and neither is my family, and we don't intend to be. that's my choice for a number of medical and other reasons. I'm pro choice.

    Now as of today 31/03, I can't leave the state of NSW for any other state for work/holidays, neither leave the country. There are still a number of mandates requiring 2 doses to stay in accomodation/restaurants/etc in almost all states except for NSW.

    There is still about 5% of nationwide population that are still on the same boat. What's the cost to the economy to this 5%? many whom will have children, so we're talking about a spending for few million people nationwide.
    This same rules applies to tourism, investment, etc. there are billions of people un-vaccinated in the world that can't and won't come into Australia. (case in point, the Djokovic saga sent the message loud and clear)

    From the risk perspective of contracting/transmitting/dying form covid, what's the difference between someone unvaccinated vs someone that got vaccinated 10 months ago? it's almost the same.

    A number of countries in Europe and all over the world have lifted all restrictions and all mandates, case in point, the UK.

    That's something internally that can happen right away to help with the economy without getting into larger conversations such as negative gearing, tax reform, etc.

    • Jolakot on 31/03/2022 - 15:17
      +3

      You're totally right, this country has way too many selfish morons…

    • whatgift on 31/03/2022 - 22:52
      +1

      Lol

  • johnwinds on 31/03/2022 - 10:08

    I agree with all your points about EVs.

    Regarding negative gearing, while I don't particularly like it, I can't see a valid ethical justification for excluding a particular category of "business" from being allowed to claim their costs. If the government is going to take a piece of the "success" of a venture, they also need to acknowledge the cost incurred.

    Housing being a necessity doesn't mean everyone must own their own house. Public transportation is also a necessity but people don't own the transportation system in order to use it. Europe has a much higher ratio of renters, mainly due to stable, decades-long leases.

  • macrocephalic on 31/03/2022 - 12:16
    +2

    I never understood negative gearing (the reason for it, not the mechanics of it). If I have a job, but also have a small business on the side, I can't claim the loss on my small business against the income from my job. How come someone investing (whether property or equities) can claim the losses on their investment against their income from other sources?

    I admit I take advantage of this myself on a small scale with stock investments, but it still doesn't seem right.

  • akashra on 31/03/2022 - 12:55
    +1

    Home buyers grants of every format have done nothing over the course of history but just provide an extra $x,000 that sellers can charge, immediately inflating the cost of property by whatever amount they create a grant for. The government know this - it's just a cheap way of passing on money to their donors/voters without paying them directly.

    If they were serious about helping home ownership, they would change the way stamp duty is calculated to be based on the value of existing property owned by that entity. Effectively, a person owning zero existing property would pay 0 stamp duty. Own a $600k property? Your stamp duty for property 2 would be based on the value of that existing property. Might be 20%. Might be 50%. I don't care what the figure is. Property 3 might then be based on 600k+500k. 4 might be 600k+500k+900k. And so on, it getting progressively more and more expensive the more properties you own. You would aim it so that having ONE IP is feasible, kinda, but owning 2 or 3 would just be absurd.

    • duchy on 31/03/2022 - 15:21
      +1

      Everyone would buy through companies and trusts. This would achieve exactly nothing.

    • trapper on 01/04/2022 - 13:37

      Stamp duty needs to go altogether.

      It's insanity to be paying tens of thousands in extra tax just because you bought a house. What possible justification is there for this crazy tax?

  • Drj55 on 31/03/2022 - 13:55
    +1

    I'm surprised no one is discussing the ideas about EV any further. I think they're great and obviously the way of the future. However, there will become a tipping point where there are not enough petrol guzzling vehicles on the road to provide enough fuel tax to support the roads and bridges. I haven't looked into it much but doesn't fuel tax raise billions which has to be spent on roads? At present EV vehicles, which let's face it, are mostly owned by more wealthy people, are essentially getting the infrastructure for "free" (tolls noted). At some point the tax money will need to be raised another way.

    • Jolakot on 31/03/2022 - 15:18

      They're not getting them for free, in VIC there's a per/km tax applied, that for some reason applies even to Hybrids running on petrol…

      Roads are a public utility, even if you don't have a car you're still buying food delivered on trucks, should be funded from the general tax pool as a result

  • zoombie on 31/03/2022 - 17:05
    +4

    I just came to say that if you think Aussie/Australia will make any hard decision that have long term benefits, you're mistaken.

    We are not a country that do things with vision or imagination. We want short term benefits over long term visions any day of the week. The politicians knows this and they deliver what we want. Take a look at the NBN, coal mining, immigration, infrastructure or housing affordability. Short term rhetorics win over long term thinking in everyone of them.

    Australia is conservative, not progressive. Aussie want things to stay the way they are, even if that means the future generation is screwed, well so be it.

  • Eeples on 31/03/2022 - 17:11
    +1

    The discussion regarding pensioners' 'family home' being exempt from the asset test for the pension needs to be had.

    I think we need carrots for pensioners to downsize their homes. (rather than a stick).

    One such idea: if they downsize to a cheaper house then the price difference is exempt from the pension asset test. (Also could be applied to pensioners who downsize to truck/caravan or motorhome as their 'cheaper house'.)

    I am sure there are better ideas but without the discussion, they will never be heard.

  • Cluster on 31/03/2022 - 17:55
    +2

    Cutting the fuel excise is a temporary measure that's deeply flawed.

    People will quickly adjust to the new lower price level (Hedonic treadmill) and when September comes around there'll be people screaming they can't afford to feed their children because the excise has returned back to its normal level.

    It also blows out the deficit by another $2 billion. The money is never really paid back. We just have to pay interest on it, in perpetuity, until the dollar collapses and the debt gets written off. Could be another 50 to 100 years before that happens. Your grandchildren will be paying for the temporary tax cut.

    Cutting the excise makes EVs less attractive. Combine this with Victoria and SA imposing a 2.5c/km EV tax, and we're literally driving backwards in trying to wean ourselves off imported oil. 90% of our daily oil use is imported. It wouldn't matter if we had enough refineries to make our own petrol and diesel, as almost all oil is imported anyway. We like to think of ourselves as an energy rich country due to abundant resources of coal, gas, and uranium, but we're actually really poor when it comes to liquid fuels.

    • plmko on 31/03/2022 - 20:41

      I think you missed the glaring part where treasury projects oil prices to stabilise in 6 months time. The 6 months date wasn't chosen at random.

    • trapper on 01/04/2022 - 13:39

      Fuel excise tax is another one that should not exist at all, get rid of it entirely.

  • this is us on 31/03/2022 - 19:41
    +1

    I agree with your unpopular opinions.

  • MessyG on 31/03/2022 - 20:32
    +1

    I think there needs to be limits on the number of investment properties one can own…housing is an essential service and when your privatise essential services everything goes up shit creek.

  • gimli on 31/03/2022 - 21:54

    lol straight to the political penalty box

    • bigpoppa on 01/04/2022 - 17:42

      😉

      • gimli on 01/04/2022 - 22:00

        you escaped!!

  • dylan345 on 31/03/2022 - 23:40
    +1

    I'd recommend

    1. Grandfathering current negative gearing to avoid a sudden crash, while allowing new negative gearing only on new builds in new areas to increase supply of homes.
    2. Imposes a 20 to 50 year foreign ownership maximum time period before property is forced sold to citizens or permanent residents meaning other countries will still invest in us but eventually that investment is returned to us.
      3.Keep first home buyer/builder incentives but focus more on non overpopulated areas.
      4.Review land holding expenses to ensure that people don't waste land options
      5.Yes more EV's on the road mean cheaper fuel due to less demand for fuel, win win
    • bigpoppa on 01/04/2022 - 17:41

      I agree but I add to 2. only residents should be allowed to purchase property. And if you are not a citizen or a permanent resident then you could only purchase off the plan.

  • dlakers3peat on 01/04/2022 - 01:07
    +1

    Sorry but lucky you are not our treasurer.

  • yokel on 01/04/2022 - 08:24
    +2

    The tax on 30x can blocks of tooheys new & TED should be abolished. Scumo shouldn’t just lower the tax on beer on tap at pubs & clubs.

  • ajdj10 on 01/04/2022 - 10:45

    If you can't afford to rent just buy a house…….

  • visca on 01/04/2022 - 11:25
    +2

    One point that seems to be missing in these, housing negative gearing discussions, is the one reason the government has supported these policies is that it shifts the provision of (social) housing from the government to the private sector. Once upon a time the gvts ran sizeable housing departments to build and maintain social housing stocks. Some suggest that running a single property costs in the order of $50k per year. Compare that to say an investor assuming all the risks of the property (buying it with a loan usually secured against main house) and getting a tax break for making a loss and you can see that the gvt wins hands down. Adding to that is the revenue that is generated by the capital gains tax when the property gets sold, assuming there is a profit.

    Now, remove the incentives and the hosing as an investment disappears, where are the long term renters going to live? You think they will all of a sudden be able to buy their own place, think again. Some correction in the house prices could occur but there are generally many more factors to house prices than investment.

    Second point is around the negative gearing used in the Stock markets. Essentially the same provisions exist and I would suggest more Australians are connected to this than to housing investments through either directly or indirectly though our superannuation system but this does not seems to be a discussion point.

    • bigpoppa on 01/04/2022 - 17:35
      -1

      I get your point. Removing incentives wouldn't remove rental properties entirely - but there probably will be a lot more abandoned properties. Also, removing incentives is bad short term but is probably way better for the long term. I believe its a horrible tasting medicine we just need to take.

  • trapper on 01/04/2022 - 13:24
    -1

    Scrap negative gearing.

    You understand that there is only a tax deduction when a property is losing money for the owner right?

    ie. he is renting it out for less than it costs him in interest and other costs… and just hoping to make it back on capital growth?

    • Mistredo on 01/04/2022 - 16:21

      In other words most property investments?

      • trapper on 01/04/2022 - 18:50
        -1

        Yes, isn't it great that you can rent a house for far less than it would actually cost to cover the mortgage, rates and other expenses?

        • duchy on 01/04/2022 - 20:00

          You can but you are losing money.

          • trapper on 01/04/2022 - 20:13
            -1

            @duchy: Yes it should be free? obviously…

  • Therealjohndoe on 01/04/2022 - 14:00
    +2

    Looking forward to seeing the OZBARGAIN party on the ballot paper. Bigpoppa for PM.

    I agree with your reforms. Serious issues need some serious and pretty confronting changes. Unfortunately, humans don't like change, change is scary, leads to reactive state. Hence why labour lost the last election when predicted in their favour (at least one of the major reasons, too many big changes too quickly).

    • bigpoppa on 01/04/2022 - 17:29

      NGL, have thought about getting into politics lol, but I don't know anything about politics. But I think you're right, mostly no one wants massive changes

      • popsiee on 01/04/2022 - 18:47

        You can start your journey with where the power is and that is people with properties .
        Understanding that point and there no point in even considering change .

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