What Is Wealth Hoarding? What Does It Mean?

bargain huntress on 30/06/2023 - 16:15

It's something I keep seeing and hearing complained about. Including on ozb sometimes.

Often by millennials or younger. Often aimed at baby boomers.

I am a millennial and in a bad financial and life situation. But I don't get it because:

Didn't the people who are now retiring mostly earn their money?

I understand part of it comes from real estate gains that are harder to get now. But isn't that luck?

What is it the boomers should actually be doing according to the people complaining?

That's what I don't understand.

Financial

Comments

    • Ghost47 on 02/07/2023 - 17:28
      +3

      Vietnamese immigration boom

      Refugees, not immigrants.

  • Duckie2hh on 01/07/2023 - 09:24
    +6

    All the hate for people trying to secure their financial future…

    Meanwhile on a seperate thread, "government should increase pension payments! It's not the people's fault that they don't have enough to retire on"

    😂

  • 2esc on 01/07/2023 - 10:10
    +3

    I wish i had the sort of real estate opportunities baby boomers had but im not going blame them.

    There are other advantages today they did not have back then as well.

    Only a small percentage of baby boomers are truly rich. They are lumping all baby boomers together.

    • larndis on 02/07/2023 - 14:43
      +3

      I don't think anyone complaining about house prices or negative gearing actually wants to try living in the 70s. They want all the luxuries of 2023 AND a house near the CBD for $100k, is that really too much to ask!!

  • saltypete on 01/07/2023 - 10:25
    +2

    Lots of folk huffing themselves up to loot the hard earned of the last generation. Who have developed the unfortunate habit of deferring reward, saving and accumulating wealth over time - calling it hoarding allows a negative spin that justifies the coming acts of looting.
    The only real answer is for boomers to spend before it’s stolen then suck welfare like the rest of the looters.
    But it’s difficult to break the habits of a long working life. 🤷‍♂️

    • bokka on 01/07/2023 - 10:57
      +4

      One generation accumulated wealth through their good habits. Another generation is trying to steal that wealth because of their bad habits. Nothing systemic that results in one generation having wealth and another generation being much worse off at the equivalent point in life.

      To me thats willful ignorance.

      • LVlahov on 01/07/2023 - 13:24

        High levels of immigration deliver systemic effects. But you are correct that good habits and perseverance will still enable most to get ahead. Although perhaps best to try and get ahead outside of Sydney and Melbourne if you fancy not losing so much income to rent and the banks.

  • panorama on 01/07/2023 - 10:34
    +4

    "Only a small percentage of baby boomers are truly rich. They are lumping all baby boomers together."

    So true, will be working full time into my late 70's if my health does not give out…….just to keep afloat…the govt pension WTF is nothing & a lot of the boomer wealth is thru inheritance, so an awful lot did not have parents with multi million dollar properties to inherit, like mine their parents were scraping by as well.

  • haemolysis on 01/07/2023 - 11:57
    +2

    Real estate gains are not “luck.” They are a collective effort of a generation in political power. They have built a system which has left a generation impoverished whilst they are all able to live with “passive income”.

  • Mythreesons on 01/07/2023 - 12:14
    +5

    So I personally think it stems from our current climate where so many people want to be a victim and blame others for any and everything wrong in their own personal lives, it seems that the current generation have no respect for their elders (My children are all in their 20’s). My grand parents did buy a home that cost next to nothing but they also earned next to nothing, they didn’t have childcare or any government handouts and were ashamed to ask for any financial help. My grandparents never attended University because back then you were lucky to even finish high school, as soon as you were old enough you went to work to help your family. The ones complaining about how easy it was boomers and any other generation before them, must have had a very privileged upbringing to have not seen any of the struggles other generations have gone through. I know for a fact my grandparents never ate out, never had tattoos and there was not cosmetic procedures. A holiday consisted of going to another family members house (usually at Christmas time) and sharing a bed with a cousin or sleeping on the floor, if it was a long trip sleeping in the car the break. Maybe if these poor victims tried to lived like the boomers they would get ahead in life. Want a life lesson go hang around Centrelink and have a look at some of the people in there, they are wearing brand name clothes, the women have lip fillers, fake eyelashes, fake finger nails, and how many have tattoos, none of that is cheap, I work and I can’t afford any of that because I sacrifice to pay a mortgage on an old house that needed work (which we are slowly doing) in a not so great area.

    • Some Human on 01/07/2023 - 13:00
      +5

      Spot on. What I realised the last time this topic was posted, was that people who grew up in priveleged areas with wealthy parents seem to think wealth is owed to them, not earnt. They complain that boomers "had it easy" but have no idea how hard it was back in the day, because they never lived it.

  • SpicyStew on 01/07/2023 - 12:25

    saving the penny under the pillow

    how people can own land (earth) is beyond me

  • dtc on 01/07/2023 - 13:07
    +7

    Pretty much all the anger comes down to property prices because today’s lifestyle is so much better and higher quality than in the 60s-80s

    When I was growing up 70s and 80s) I had one overseas holiday in my first 23 years. We ate takeaway once per month (the Friday of the week following the last day of the month- except December). No one bought coffee or lunch at work and Uber eats would have been laughed at. My Christmas presents were mostly a few clothes from k-mart. One TV for the house (with 2 to 5 channels). One car. Inflation at 5+% all the time

    And let’s not talk about social issues if you weren’t white male and sporty

    And I was from a solidly middle class family

    Yes the crowds were a bit less and the Eels were a better team.

    Which means - yes, let’s sort out property. But if you think the boomers or their kids had a much easier or better lifestyle, no they didn’t. Most of them stumbled into their ‘wealth’ as a result of something they had little to do with

    Btw, if you look at property prices, the two obvious drivers are interest rates (in the past 10 years) and the introduction of the 50% CGT concession in 2000. Link the concession to CPI and see what happens

    • netjock on 03/07/2023 - 09:49
      +1

      Yup. We built a society where you can have your cake and eat it at the same time. But when you find it can't happen you want someone else's cake.

      Bound to be entertaining.

  • peterw1 on 01/07/2023 - 13:44
    +4

    it applies to a group of people who survived conscription in australia due to the vietnam conflict and made it back. It applies to those australians who survived from chronic diseases that took their grandparents in the past like diabetes or who witnessed their siblings born premature who often died soon after birth. There are a lot of things millennial kids don't seem to be aware of except their self importance and entitlement and look for an 'easy' target to blame things on. I am older and have a older colleague who never new their father as he was shot down during a lancaster raid on germany in WWII. He is rich, I don't begrudge his wealth hoarding. He is a survivor.

  • 80kinvestment on 01/07/2023 - 14:00
    +2

    Most, regular folks would stop worrying about money once they have enough to live a lavish lifestyle and set up their kids so they never have to work a day in their life. Money has diminishing returns.

    At a certain point hoarding extra money does nothing to improve your own life or the lives of your family, but you’re still making sure other people don’t have that money to improve their own lives. Then you’re just a dragon on a pile of gold terrorising the village.

  • nswnotill on 01/07/2023 - 14:59
    +4

    Around 30 years ago, the State housing authorities ceased building affordable housing for the lower income groups in society. We are now seeing the results of this in the lack of affordable rentals. Even the State housing rentals of that era have been converted to 'rent to buy' homes, and most are now owned freehold.
    Poor policy and lack of forward thinking by State governments of both persuations.

    • Eeples on 02/07/2023 - 01:31

      Additionally I think NG drives high end builds. As they are easier to NG.

      • larndis on 02/07/2023 - 14:53
        +1

        This doesn't make sense, are you suggesting people routinely spec out their investment properties to save a bit of extra tax? That would be a very poor financial decision, any one who would do that either has enough income to not care or is unlikely to make it to a second investment property.

        Negative gearing is not the river of gold many seem to believe it is.

  • mitt on 01/07/2023 - 15:27
    +2

    Its more about pulling up the ladder behind them.

    Boomers benefited from a series of highly advantageous market conditions, then overwhelmingly voted for/acted in a way that eliminated those conditions for those who came later.

    Mass migration is the big one for me. Boomers got into the labour market, got into a position where they start to accrue assets/investments & would benefit from suppressed wage growth then mass migration surged, decoupling wages from productivity ever since.

  • Dack Smith on 01/07/2023 - 17:32

    Time to expel all immigrants and foreigners and make Australia great again

    Destroy the wealth hoarders - name and shame people who have more than $150,000 apart from a house and reveal where they live

    We must mob rule

    • bargain huntress on 01/07/2023 - 18:38
      +2

      Your sarcasm describes events that have actually happened a number of times in human history

    • Duckie2hh on 01/07/2023 - 19:47

      I would like to see how you plan to retire with less than $150k in the bank.

      Age pension is a privilege and not a right.

  • petepumpkin on 01/07/2023 - 19:57
    +2

    The term 'wealth hoarding' doesn't make any sense to me. The whole idea of wealth is to accumulate and pass it on.. I mean, what's the definition of 'wealth'..

  • Eeples on 02/07/2023 - 01:29
    -1

    “Wealth hoarding” could include the exempting of the family home in assets tests for aged pension, other pensions and for nursing homes.

    • bargain huntress on 02/07/2023 - 23:02
      +2

      If we stopped exempting homes in assets tests, that would be the final straw for the concept of home. Everyone would just live in an 'asset' then. How horriffic.

      • BobLim on 03/07/2023 - 01:22
        +2

        So a young family or teenager working at Coles should be funding a pension for a 75yo couple in their $5M mansion? Because they're so poor?

        Count the PPOR in the assets test and they can take out a reverse mortgage if they need extra lifestyle funding. Then leave their inheritance with just the $4.xxM remaining after that's been drawn down a bit.

        People who are sitting on a literal lifetime of wealth shouldn't qualify for a means-tested welfare handout, just because that wealth has been converted into a mansion rather than cash, a share portfolio, or garage full of Ferraris. The fact they do, means the qualifying criteria are broken.

        • morse on 03/07/2023 - 03:09
          +6

          So a 75 year old couple should be forced out of the home they worked hard to buy and spent 30years paying off the mortgage for, including interest, whilst paying tax on their salaries with the belief that this would mean in the future they could retire and live off a modest pension, whilst simultaneously paying for generations (including new arrivals to the country) to have access to infrastructure, education, healthcare etc? A $4million house in some parts of Sydney can be a very modest family home. That 75yo couple can’t help that property prices have gone crazy and the area they chose to buy in is now desirable. Do you want to uproot them from their local community where they might able to walk to shops, services, socialisation etc so that the next generation can get a house without having to sacrifice their overseas holidays, tech products, meals out, choice to go back to uni multiple times? Some of this next generation want to be able to buy a house and only pay a mortgage for 10year so they can then get an investment property, but still travel and send their kids so Taylor Swift concerts and then complain about the 75yo couple that lived very frugally their whole life.

          There are alternatives, and in many cases they are working. Some older people take in a lodger to help out and provide company whilst providing free or low cost accommodation.

          House prices could be better controlled by putting less incentives for investment in property- not picking on older people with a PPOR and forcing them out of their communities.

          What happens if that that 75yo couple does sell? Will the property prices automatically go down so a young family can chose to live where they want? Unlikely… more likely it will get snapped up by a property investor who wants to land bank, rent it out at exorbitant prices whilst minimising risk their own tax,

          Just remember that 17yo may also have access to a pension when they are older of the system hasn’t been eroded too much by then. They too have a choice to start saving for a property and pay it off over 30-40years by living frugally.

          Also a garage full of Ferraris would be means tested and make them pension ineligible. Some people part fund their pension with things like share dividends etc reducing they amount they receive on their pension, even though they paid tax their whole life to receive it.

          • Eeples on 04/07/2023 - 01:48

            @morse: And what was the problem with the 75yo’s taking out a reverse mortgage ?

            • morse on 04/07/2023 - 02:57
              +1

              @Eeples: It disincentivises home ownership. Why work hard your whole life own your own home if this will make you pension ineligible and need to go back into debt and instead of your own kids inheriting your home, the bank does (at least partially or mostly). Meanwhile someone else works less, doesn’t save for a home, pays less tax across their life gets a pension and relies on the government to subsidise their housing - and it becomes societies problem when there’s nowhere for them to live. If PPOR counted towards assets test people would find creative ways to hide that asset, eg transferring to kids names earlier and then still claim a pension. We want to incentivise people taking responsibility for their own housing, not disincentivise it. The current pension system is pretty good, especially the option for part pensions which allows for people to mostly self fund their retirement, but acknowledges their contribution through tax over their working life.

              This also does nothing to make housing more affordable if that’s the other gripe people have with older people staying in their own homes in old age.

              • BobLim on 04/07/2023 - 20:52

                @morse:

                Why work hard your whole life own your own home if this will make you pension ineligible

                Why work hard at all if the government's going to take 49% and give a significant portion of that to someone living in a house you'll never be able to afford even if you keep up that level of income, simply because they have a really expensive house, rather than a massive pile of cash or warehouse full of fancy cars?

                This also does nothing to make housing more affordable if that’s the other gripe people have with older people staying in their own homes in old age.

                My "gripe" is the principle of individuals with low incomes and low net worth, having significant portions of their pay taken away and given to someone else who has more assets than they can ever dream of, in addition to funding their own retirement, and making up some of the massive infrastructure shortfall which emerged while the older generation was apparently "paying their fair share of tax" and voting for policies to entrench the same.

                How does that make sense? If these people worked so very very hard their whole sorry lives then surely they've got plenty of cash to fund their own living expenses, no?

            • netjock on 04/07/2023 - 09:24

              @Eeples:

              what was the problem with the 75yo’s taking out a reverse mortgage ?

              What is the problem with them not taking out a reverse mortgage.

              I think this $5m example is just foolish. How many homes are $5m in Australia. It is like the $3m super balance super tax. I disagree with unrealised capital gains and not indexing part of it but it is trying to generate sympathy for a cause which will end up like bracket creep (lower).

              Most old people might sit on $1.5m to $3m properties. The problem when you sell if there is cost of agent fees (2%) then the stamp duty of your new place. Don't forget it isn't selling for $3m and moving down the street. It is more like moving far away into a cheaper suburb.

              Look at established homes with 600m2 that can build 2 units on. Cheapest I can find within 20km of Melbourne city is probably around $700k. After you knock down and build 2 units ($350k each) they end up selling for $700k - $800k. You almost end up where you started if you want to move back into the same area.

              • Eeples on 04/07/2023 - 10:34

                @netjock: We are talking about not exempting the family home in the asset tests which would not allow the 75yo's obtaining the old aged pension. They could get a reverse mortgage to get 'income'.

                I am not talking about selling the family home.

                • netjock on 04/07/2023 - 10:40

                  @Eeples:

                  They could get a reverse mortgage to get income.

                  Basically sell there home by another means. Doesn't make it sound any more appealing.

                  You are actually asking people to pay for the foolish visions of others. You can't penalise someone 30 years ago buying a home then all the fools look at houses like investments. I'd suggest just raise income taxes on the fools because they obviously have too much money.

                  If I sat on my hands and someone decides to do helicopter money I should be penalised for the foolishness of others? Actually it is happening right now with interest rates and all these people spending their stimulus money.

              • BobLim on 04/07/2023 - 20:57

                @netjock:

                I think this $5m example is just foolish. How many homes are $5m in Australia

                No idea. Are any of them owned by retirees drawing a pension? If so, I reckon we've got a problem.

                There's certainly plenty or retirees who cash out their retirement funds and immediately bury all of it into a PPOR for precisely this reason. At least spending the money on things other than residential property is actually productive for the economy (say, classic cars, or hiring a butler, or taking helicopter lessons). Why is ploughing money into a PPOR the one which receives the most favourable tax treatment?

                I actually don't care whether or not the 75yo thinks they're getting a good deal, or whether "they've contributed their fair share", or any other similar epithets. Someone with multiple millions of dollars in assets, of any flavour, shouldn't be receiving any form of welfare.

                What would you suggest instead? Maybe a threshold to count only the value of PPOR exceeding $3M if $5M is "foolish"? Place a caveat on the estate to recover the pension costs of these high-wealth but apparently completely cashless individuals?

                • netjock on 05/07/2023 - 10:36

                  @BobLim:

                  There's certainly plenty or retirees who cash out their retirement funds and immediately bury all of it into a PPOR for precisely this reason

                  The only reason you do that is because you can't make 9% after tax on your super to pay your mortgage. Why are you paying 6% on your mortgage and deal with a potential risk of the market. The ASX200 index is only paying 2.8% in dividends.

                  You are dream of some kind of cunning move that nobody is actually making or a very few are making.

                  No idea. Are any of them owned by retirees drawing a pension? If so, I reckon we've got a problem.

                  If you have a $5m home it would have been worth $1m or $2m to start with which means you are probably smart enough to save for your retirement.

                  This is the same theory with the $3m super balance super tax. Turns out that it only affects less then 0.9% of the population like 1,000 people. What I don't agree with that tax is it isn't indexed (because the reasonable benefits limit is going to $1.9m with inflation and it would over take this cap in less than a decade)

                  This $5m problem is probably 0.85% of the population. It is just screaming because it is a diversion away from the real problem. Thee is a vacancy for every unemployed person. The government is too lazy to get people the skilled to get a job.

                  Taking money from Paul to pay Peter never solves the fundamental problem. It just means at some point Paul works until they die and everyone starves.

    • netjock on 03/07/2023 - 09:44
      +1

      Sounds nice.

      As someone pointed out if you make PPOR subject to tax. Nobody will ever move. You decrease social mobility.

      Why after living in a house in Melbourne for 10 years and want to move to Brisbane for a job I get taxed 45% on say $100k of capital gain then move to Brisbane and probably not be able to enter the market because have to pay stamp duty.

      Look at USA where 70% of people are on 30 year mortgages under 4%. They are not going to move and pay 7%.

      • Eeples on 04/07/2023 - 01:51
        +1

        Not subject to tax.

        Just not exempt for the purposes of asset tests.

        • netjock on 04/07/2023 - 09:19

          Just not exempt for the purposes of asset tests.

          You know it is exempt right?

          It is because you can't take a brick down to the supermarket and pretend it is worth a fraction of the cost of your house.

          What exactly did they do to make the price of their property go up? It is because the fools who come into their suburb and bid it up. So you should be disadvantaged due to the fools? That is like getting T-bones by some P plater in a $5k bomb and saying it is your fault for driving a 2 year old Camry that is worth more second hand than when you bought it.

          Just like people argue here why people should not be required to move to where there is jobs because they have family and roots where they are. Who are you to tell some old people who have all their friends in the area they should sell their house and move to somewhere with no friends and probably very far away?

          • Eeples on 04/07/2023 - 10:36
            +1

            @netjock: No, but if it was not exempt then the old couple would not receive the aged pension (because of the assets test).

            The old couple could take out a reverse mortgage to get 'income' to live on.

            I am not not talking about them having to sell up and move.

            Again, what is wrong with them getting a reverse mortgage?

            • netjock on 04/07/2023 - 10:45

              @Eeples:

              if it was not exempt then the old couple would not receive the aged pension (because of the assets test).

              You seem to think lots of people sit on $5m properties? As I have said. $5m isn't actually $5m because your neighbour's house is also $5m. You and your reverse mortgage idea is just sale by another name. I don't dislike reverse mortgages but you need to see the rate to know it is a rip off. It is a rip off of old people.

              How many $5m properties are there? As I have said. Reason why old people are not trading down is because cost works out to be the same for very little cash in hand and reverse mortgages are a rip off. I'd like to see you pay reverse mortgage interest rates and pretend you love it so much you'll have another helping.

              As for the assets test. They obviously don't have a lot of assets other than their family home. It just seems it is okay to be homeless and on the pension rather than have a home and be on the pension. You seen articles of those old people who are on the pension and rent assistance that need to move out because their rents go up? I guess reverse mortgage is just like renting off the bank until you run out of equity and they kick you out.

              • Eeples on 04/07/2023 - 14:50

                @netjock: I haven’t stated $5 million. Someone else did.

                Let’s say 1.4million.

                Let’s say the family home is not exempt from the old aged pension test. Now, let the government run a new reverse mortgage type scheme at a reasonable rate enabling the older couple to stay in their family home.

                That’s right the government would over time then have heaps of equity in family homes. These would eventually be sold in another new scheme to first time home owners.

                (I realise the mechanics of this isn’t worked out)

                • netjock on 04/07/2023 - 15:56
                  +1

                  @Eeples:

                  Now, let the government run a new reverse mortgage type scheme

                  LoL. They can't even build social housing.

                  • Eeples on 05/07/2023 - 10:35

                    @netjock: So banks and other financial providers have high fees and the government are incompetent to run reverse mortgage scheme?

                    So it’s all too hard.

                    Clearly, you think the inter generational unfairness of home ownership is all fine and dandy. And to explore ideas to address it are all “LOL”.

                    • netjock on 05/07/2023 - 10:45
                      +1

                      @Eeples:

                      Clearly, you think the inter generational unfairness of home ownership is all fine and dandy.

                      My parents are boomers and I'm an early millenial.

                      I've got more net worth than they do and I'm decades away from retirement. My super is more than my home (it was a decision to buy cheap rather than buy expensive)

                      I got 75/100 finishing high school and my parents were poor as nuts, I had to work for the family starting at 7yo. No school holidays, no outside of school activities. I went on site to be translator on weekends. I've had my share of racism, actually more in this country than the other country I had the pleasure of moving to and getting a passport. Australia likes to keep people down and focus their issues on each other so the confusion just keeps the heat off the real issues.

                      If you parents have money blame them. If someone else's parents have money blame them. I guess no money no problem, actually it just gives you time to fish after someone else's money.

                      Don't you find it interesting the government went from $1bn surplus to $19bn surplus without knowing it until like a week ago. Yet they can't afford to do social housing because the PM has like 7 investment properties? Maybe it is the politicians and their incompetence scaring the day lights out of people so they are socking their wealth away?

                      Look at super policy. It has got progressively worse to pretend it is fairer but I don't see much transfer to the less fortunate. Remember the government super co-contribution. It has got progressively smaller yet the government is taking more taxes from super and less people qualify for the co-contribution due to rising wages.

                      People are barking up the wrong tree.

                      • Eeples on 05/07/2023 - 14:06

                        @netjock:

                        yet the government is taking more taxes from > super

                        Where is the evidence for this?

                        Didn’t the SG just rise to 11% on 1 July 2023?

                        If you are referring to the over $3 million in super tax that’s not slated until July 1 2025 (it will be taken to the electorate).

                        • netjock on 05/07/2023 - 15:22

                          @Eeples:

                          Where is the evidence for this?

                          You get a 4% payrise. 10.5% of that is super, taxed at 15% on the way in and 15% on returns. They get an automatic raise too.

                          If you are on base + super your employer has to fund the extra 0.5% which the government gets 15% on the way in and 15% on returns.

                          Inflation does wonder from the government. That is why they don't want to index the tax brackets because they get an automatic income rise.

                          You don't think the government did nothing on rising property prices and sat back. The growth in home loan values means more interest income for the banks which means more company tax etc for the government.

                          It serves politicians to keep the confusion going but keep the focus on people fighting themselves so to keep the eyes off them and their rich mates robbing the country. As I pointed out with the reluctance to pass a politicians and billionaires stage 3 surcharge of $9k each.

                          The current government basically have only given money to unemployed renting parents with kids in child care (JobSeeker raise, rent assistance and CCS uplift). Everyone has got a little bit or nothing.

                          They have blame the debt mountain on the last government and suddenly they stumble upon an additional $18bn in the few months since the last budget but they don't blame that on the last government.

                          We are tip top at being fooled.

                          I just hope you don't end up being an old millenial and people tell you to eat your $600k house you bought today because it is worth $3m due to everyone else speculating.

                          • Eeples on 05/07/2023 - 18:09

                            @netjock: Super is a tax effective though because on entry and earnings within are only taxed at 15% as opposed to being taxed at ones marginal rate.

                            Or, are you arguing that this is too generous and has enabled wealth ‘hoarding’.

  • Guerilla89 on 02/07/2023 - 04:59
    +2

    We can't make housing affordable until we're ready to allow housing fall in price. Conservatives vote, I'd bet far more than those who don't. They also seem to be responsble and thus usually own homes. They won't vote for change until after the number of voters owning houses is less than those who don't, it's been falling for a while but it has only fallen down to somewhere around 65%. We'll probably be propping up home prices in the coming recession pushing gears and levers even further towards propping up speculative pricing even moreso than we do already, but there will be a tipping point somewhere. Probably when they realise they won't want to live with their kids and grandkids as well.

    • Hydralyte on 02/07/2023 - 09:30
      +1

      I've seen it in California.

      A huge upsurge in single professionals who are not interested in getting married. Would prefer to stay single or in a de-facto and avoid kids. The LGBT population is also growing. Many see having kids as a privilege not worth exploring.

    • netjock on 03/07/2023 - 09:46

      Part of the problem is to do with cost of land

      Another part is cost to construct

      15sq home costs $250k to build (single story) and land probably another $300k (300m2 block), north of Melbourne. New estate.

      Who wants to take the cuts?

      • Guerilla89 on 03/07/2023 - 14:15

        You are thinking about minimum pricing which I wouldn't recommend. The gears and levers I'm talking about would be things like zoning with less restrictions such as allowing duplexes or 4 unit blocks in neighbourhoods which would otherwise only allow single level homes or allowing people to live in a caravan for a year or two on the block while they also build their own home. There are other things that could be done such as only allowing negative gearing for individuals up to a certain limit or declassifying homes as investments so that you aren't incentivized to hold them for a year before sale to get that sweet 50% discount on tax. The exclusion of the home in means testing I think is good but should a 30 million dollar home be excluded? Even things like politicians being allowed to own investments could be revised to help them remain more objective in their thinking on the issue, especially when homes are being removed from the realm of necessities into the realm of prospective investments.

        • netjock on 03/07/2023 - 15:17

          Be nice if you used paragraphs.

          The gears and levers I'm talking about would be things like zoning with less restrictions such as allowing duplexes or 4 unit blocks in neighbourhoods which would otherwise only allow single level homes

          I think you are talking about objections rather than restrictions. I can't think of one place in Melbourne other than land too small that would stop you from building.

          There are other things that could be done such as only allowing negative gearing for individuals up to a certain limit or declassifying homes as investments so that you aren't incentivized to hold them for a year before sale to get that sweet 50% discount on tax

          You haven't spreadsheeted this have you? If you made $70k, bought a $300k property and it doubled in 7 years, if your NG is $10k pa. Even after CGT you get pushed into higher tax bracket and pay $4k more tax (that is before you get pushed above $250k income tax that will get you a surcharge on super contributions). Alternative If NG was losing that much money they would have got rid of it. There is enough people thinking through it in government to screw you over.

          The exclusion of the home in means testing I think is good but should a 30 million dollar home be excluded?

          You obviously don't have a $30m home and is the government pension going to even pay the council rates on it? Think you've over reached.

          If you start applying tax to profits on PPOR nobody is moving anywhere because you sell you get taxed. You know what that does to social mobility right?

  • RefusdClassification on 02/07/2023 - 05:27

    To prevent health hoarding, we need to tax wealth in addition to taxing income. Property taxes, annual taxes on capital gains, inheritance taxes.

    Baby ka-boomers have become rich primarily because property has, since the 70s, appreciated far more than wages and welfare payments have risen. It is undeserved wealth. They have done nothing to earn it. Housing "magically" increases by 100% every 8.5 years, and you don't need to lift a finger to reap the profit.

    • bargain huntress on 02/07/2023 - 23:06
      +1

      Death taxes have terrible consequences sometimes.
      Family farms get turned into giant international corporation owned farms.
      Adult disabled children end up homeless, institutionalised or in public housing when their parents die.

      • netjock on 03/07/2023 - 09:41
        +2

        Those who call for taxes are usually the ones that don't get impacted by it.

      • Eeples on 04/07/2023 - 15:17

        Interesting you changed inheritance tax to death tax.

        The latter is certainly more emotive. Cue the scare compaign.

        Perhaps it is all about degree. An inheritance tax prorated above $5mil would certainly cover any disabled children. And a farm exception wouldnt be too hard.

    • netjock on 03/07/2023 - 09:40
      +1

      To prevent health hoarding, we need to tax wealth in addition to taxing income. Property taxes, annual taxes on capital gains, inheritance taxes.

      Might add birth tax to that too. But I guess high cost of living and taxes are already pushing down people's desire to have kids. That is why Elon Musk has 9 kids to help all of us poor people out.

      Baby ka-boomers have become rich primarily because property has, since the 70s, appreciated far more than wages and welfare payments have risen. It is undeserved wealth

      One off. Also should be a one off tax. If you let the government introduce a new tax it will most likely stay. I guess if you lived in the 1800s then it is undeserved poverty. I'd suggest deserved / undeserved is subjective. How do you view people who in the lotto? Deserved or undeserved luck?

      Housing "magically" increases by 100% every 8.5 years, and you don't need to lift a finger to reap the profit

      Think that is what people selling you courses want you to believe. To believe it is one housing market and it applies to every house.

  • frostman on 02/07/2023 - 09:15
    +2

    Wealth Hoarding is mentioned in many religious texts, and as a sin.
    In the Islamic religion, Hoarding was the practice of hoarding wealth (Gold & Silver at the time) and not donating a small percentage to the poor.
    This result on society of not doing this only accelerates the gap between rich and poor.

    Hoarding is also purchasing life necessities and using that position to monopolise the market.

    • Hydralyte on 02/07/2023 - 09:25
      +1

      In the islamic and Jewish (the orthodox ones) faith, interest is also forbidden (both taking and giving) as it oppresses the poor and makes the 1% richer.

      You only have to look at the UK and USA to see what interest does to a nation. Crime, homelessness, and debt has consumed the nation.

      Christian church also banned usury in the early days but the Christians made up their own rules when they left the teachings of Jesus in place of conquest and wealth.

      • frostman on 02/07/2023 - 09:39

        In the islamic and Jewish (the orthodox ones) faith, interest is also forbidden (both taking and giving) as it oppresses the poor and makes the 1% richer.

        Yes, interest and hoarding are mutually inclusive, your money is being compounded without creating value.

        • cloudy on 02/07/2023 - 10:40
          +1

          So should money be lent without interest? If so, where is the incentive to repay debt?

          • Hydralyte on 02/07/2023 - 19:35
            +1

            @cloudy:

            So should money be lent without interest? If so, where is the incentive to repay debt?

            Yes, exactly. The incentive is if you cannot repay the debt, then you must pay back the money with whatever means you have available. It becomes a debt for life.

            It depends on what society you want to live in. A society where the rich make money off of loaning money to the majority is a recipe for disaster.

          • frostman on 02/07/2023 - 21:15
            +1

            @cloudy:

            So should money be lent without interest? If so, where is the incentive to repay debt?

            Interest (Usury), is the bane of all financial evil, it's one of the prime factors driving poverty and ultra rich.
            Jesus came to the Children of Israel and asked them to refrain from this evil act, at the time, some farmers would let the lender 'have his way' with the wife if he couldn't repay a compounded interest debt.

            During the 1500s and prior, Kings and businessmen embraced the practice of usury, while the Church deliberately ignored it. In 1462, Italian Franciscan monks established the initial non-profit pawnshops, known as monti di pietĂ  (or 'banks of piety'), which eventually proliferated throughout Europe. The concept aimed to emulate a Grameen Bank in Renaissance Italy, serving as a final source of loans and displacing exploitative loan sharks who preyed on desperate borrowers. Eventually, the Pope granted approval for an increasing variety of financial instruments, effectively permitting lending with interest.

            There's been no good of interest except that it furthers the interest of the rich.

            As a wealthy person, consider only placing $5M in ANZ Term Deposit at 4.51% Return,
            This pays you $226,000 after 12 months, or $4,346 Weekly (Gross). How much does the average working family (Husband/Wife) earn here busting their chops?

            If so, where is the incentive to repay debt?

            Ideally there should be no reason for anyone to borrow a significant amount of money they can't repay, the reason we ALL borrow millions today is due to Interest itself causing a shift in macro economics.

            • bargain huntress on 02/07/2023 - 23:11
              +1

              @frostman: This subthread and this post in particular is absolutely fascinating! Where can i learn more about this history?

              • frostman on 06/07/2023 - 10:21

                @bargain huntress: I would encourage you to read books on ancient history of the Catholic Church and its prohibition of Usury.

                Have a look at this excerpt from Wikipedia, although I dont trust Wikipedia these days as a sole source of truth:
                https://en.wikipedia.org/wiki/Usury#:~:text=The%2018th%20cen….

                To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality, which is contrary to justice. In order to make this evident, we must observe that there are certain things the use of which consists in their consumption: Thus we consume wine when we use it for drink and we consume wheat when we use it for food. Wherefore in such like things the use of the thing must not be reckoned apart from the thing itself, and whoever is granted the use of the thing is granted the thing itself and for this reason, to lend things of this kind is to transfer the ownership. Accordingly if a man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice. In like manner he commits an injustice who lends wine or wheat, and asks for double payment, viz. one, the return of the thing in equal measure, the other, the price of the use, which is called usury. (ST II-II.78.1)

            • tomfool on 03/07/2023 - 21:27

              @frostman: No wealthy person would put $5M in an ANZ term deposit for 4.51% return when inflation is running at +8%. If that was their only income after tax they would make $148583. The compounding effect of inflation at 8% per year would depreciate their wealth into 50% of its value within about 8 years.

              • frostman on 06/07/2023 - 10:27

                @tomfool:

                • Inflation is not 8%+
                • You're still paid annually at $226,000, after tax that's an income of $2,800/week, more than what you earn slaving away weekly, whilst the $5M is generating money daily - inequality.
                • The above is not financial advice, it's an analogy to show how interest feeds inequality at wealth distribution.
                • The lack of wealth causes some people to go gamble, losing more money and being a catalyst to homelessness.
                • Compound Interest = Evil, and those that actively participate in it are evil. BlackRock buy government debt and charge interest sending smaller economics down a shit-hole.
    • baldur on 03/07/2023 - 11:11

      Obviously there are some changes occurred in the past 1500 years. Lol.

  • acersaurus on 02/07/2023 - 10:22
    +1

    I think at this stage we want boomers to wealth hoard (save more and spend less). As spending needs to slow in the economy before interest rates can go down.

  • baldur on 02/07/2023 - 16:13
    -1

    The problem is Generation z thinks they deserve everything without putting any effort, making any sacrifice.

    • acersaurus on 02/07/2023 - 18:24
      +1

      Not sure, but they have it roughest in terms of housing market. Arguably they have it easier in terms of a strong job market.

      • Ghost47 on 02/07/2023 - 19:06

        Arguably they have it easier in terms of a strong job market.

        Job market might be strong but these days people compete with applicants from interstate and overseas. It's not always easy to land a job when you're competing against 100 other people.

        • baldur on 03/07/2023 - 10:27

          You can be an english teacher in third world countries just because you were born in australia. How about that? See, There are advantages and disadvantages for everyone in the world.

        • Dognosis on 03/07/2023 - 10:39

          I guess that is what a fair playing field looks like in the real world now?

      • netjock on 03/07/2023 - 09:27
        -1

        If you got wealth hording parents you just need to wait it out to have it passed down.

        Alternatively if parents are not wealth hording train them to do so. Easier them making sacrifices then you. It is like selling coaching courses, you just need to teach the material and don't need to live it.

  • The Wololo Wombat on 03/07/2023 - 00:43
    +9

    I dunno.

    I’m millennial, never seen a day of the 80s… System is working great for me. Came from a loving middle class home, great parents, got a ‘free’ education that I only had to pay for when I started working, so, hardly felt the impact (I’m a high school teacher).

    I’ve been able to travel the world, own my own home at 21 in QLD, invested some money and already rich by early 30s, which I fully believe is mainly due to me avoiding ‘avo toast’, latest gagents, expensive nights out and driving a crappy car.

    Got really really sick a few years ago and was able to get some great healthcare for a cheap price.

    Of course life has obstacles and I’ve had many periods of hard work and stress… but this country is amazing.

    • netjock on 03/07/2023 - 09:23
      +1

      Those that complain about wealth hording are those who never horded themselves.

      It is always easier to complain about the money of the wealthy but also aspire to be wealth yourself (take their money and give some to me kind of idea).

      I do support higher taxation for the wealthy through income tax. The government actually needs to help those on lower incomes to make higher incomes (educations / get a skill whatever) rather than trying to redistribute wealth too much (because there will always be more poor people than you could distribute to, it is like that Twitter joke where Elon Musk could give away his money and everyone gets like $1m. Everyone probably get like $1k)

    • baldur on 03/07/2023 - 10:29
      +6

      People who complain about australia are entitled and have no idea what other people have to deal with in other countries.

    • Some Human on 03/07/2023 - 11:40
      +1

      Good on you.
      It's refreshing to see another person who understands how good we have it here.

    • acersaurus on 03/07/2023 - 14:01
      +2

      Australia has been good to a lot of millennials. Key difference that I observe is between millennials who bought a house in say 2011 vs millennials who bought a house in say 2022, or haven't bought one. Good on you for saving and buying a house young, but if you weren't so disciplined or had different priorities and ended up in the latter category - you may not feel so lucky.

      Also I think if a gen z'r works hard to buy a house at 21 today they won't have equivalent luck - property market has its limits to growth based on capacity to pay. They will also need a much bigger deposit and pay higher interest.

      • Some Human on 03/07/2023 - 17:38
        +3

        I am a millenial who waited far too long to buy a house, because I didn't like the idea of being in debt. It was always possible to buy one, I was just being stupid. Ended up spending way more on one than I could /should have. But I accept responsibility for my choice and only have myself to blame, not the gubment and certainly not boomers.

        • acersaurus on 03/07/2023 - 20:51

          Well potentially you could also blame multiple tiers of government for not producing effective solutions that lead to a greater supply of housing. The extent of price growth was not broadly foreseeable.

          • Some Human on 04/07/2023 - 13:32
            +1

            @acersaurus: I learnt during my first week of work to accept responsibility for my own mistakes.
            No sense blaming someone or something else, because it achieves nothing and you learn nothing from it.

        • Blahness on 04/07/2023 - 22:49
          +4

          Same. Could have bought a house in 2009 but did so in 2021.
          I didn’t wanted to commit and was traveling and enjoying my youth. Then I finally grew up and with a career in place (thanks hecs), I saved hard and lived frugally and was able to have my own place. All this was my choice.
          Young people who enjoy avo roast, Netflix, regular overseas trips “to find themselves” are entitled to enjoy themselves and live their lives. But they are not entitled to complain about home ownership nor blame other generation due to their own choices.

          • acersaurus on 05/07/2023 - 09:27

            @Blahness: Fair enough, yes some people look at forgone investment opportunities as a mistake. I don't personally see them that way, as it wasn't predictable in say 2009 how everything would turn out - some may disagree. If it was predictable, your approach would probably have been different. However the trade off to not buy in 2009 probably seemed value at that time in terms of life quality, and based on everything you knew at that time.

    • dmac on 04/07/2023 - 13:49

      How did you own your own home at 21 as a university student?

      • morse on 04/07/2023 - 21:29
        +1

        ‘in Qld’

        Also unclear if at 21 they’d bought it and were paying a mortgage, or actually owned it.

        When I moved to Qld in 2011 property was pretty cheap, even close to Brisbane city.

      • The Wololo Wombat on 05/07/2023 - 17:19

        I graduated school at 17 and started working at 21. Of course I mean with a mortgage.

  • Juice-Wa on 03/07/2023 - 08:39
    -6

    Time for the decrepit boomers to release their multi bedroom houses that they hoard their junk in and downsize to 1-2 bedroom homes. Sentimental value holds nothing to the needs of others, people are too emotional. So get your grandmas out of their 40yo houses and put em in a home.

    • morse on 03/07/2023 - 20:54
      -1

      Time for you to pay your own way.

      • Juice-Wa on 04/07/2023 - 12:26
        -1

        I already own a house MrPotatoHead, but my situation doesn't make it any more or less true.

    • JIMB0 on 04/07/2023 - 13:26

      We don't live in a socialist country. If someone has the money to occupy a large house and leave most of the bedrooms empty that's their business. What's next, no single occupant cars during peak hour traffic?

      • Juice-Wa on 04/07/2023 - 15:47
        -2

        We don't live in a socialist country

        would also be an argument as to why they should remove the pension for you old arses

        What's next, no single occupant cars during peak hour traffic?

        There are already sections of roads that are illegal to enter with a single occupant vehicle during peak hour traffic so your comparison is moot… but traffic management of public roads and carparks is a separate issue to what OP was asking:

        I understand part of it comes from real estate gains that are harder to get now. But isn't that luck?
        What is it the boomers should actually be doing according to the people complaining?

        • JIMB0 on 04/07/2023 - 17:06
          +1

          would also be an argument as to why they should remove the pension for you old arses

          I'm generation Y, most of us aren't going to get a pension as we have superannuation.

          Maybe you should stop worrying about what others have. Your envy is only hurting yourself.

          • Juice-Wa on 04/07/2023 - 18:20
            -2

            @JIMB0: It's not envy, it's common sense and as I pointed out, an actual response to OP. Even the government is trying to incentivise the elderly to move out. If anything you seem to be the one invoking statements out of emotion and not fact. Likely due to having family members in the same scenario that myself, the government and many others would see as a problem. Time to put your parents in a home buddy.

            • JIMB0 on 04/07/2023 - 21:07
              +1

              @Juice-Wa: My parents are still working, they're not old enough to get a pension. Their houses are half the size of mine, yet have more people in them, why should they be forced to sell?

              • Juice-Wa on 04/07/2023 - 21:23
                -3

                @JIMB0: Haha I mistook gen Y for gen X, my bad. I guess you despise the term millennial, would have been clearer. Then it's time to put your grandparents in the home!

  • netjock on 03/07/2023 - 09:19
    +2

    Wealth hording is good.

    Look at what happens when people are spending like right now? Inflation and rates going up.

    • Some Human on 04/07/2023 - 13:38
      +4

      Yep. People complain about the cost of living, but look how many shiny new things they have.

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