RBA cuts interest rate to record low

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In the face of slow economic growth, the Reserve Bank of Australia (RBA) has cut the official interest rate for the first time since August 2013, in a move to stimulate business activity and encourage household spending.

The RBA has cut the 2.5 per cent cash rate by 25 basis points to a new record low of 2.25 per cent. While some economists agree that the cuts are a good move, others seemed surprised.

“[The] Reserve Bank decision comes as a shock because most experts were betting on the cash rate to remain unchanged [yesterday]. In fact, 28 of the 30 leading economists and experts from the finder.com.au Reserve Bank Survey got it wrong,” says finder.com.au spokesperson Michelle Hutchison.

Some economists are already predicting a second 25 basis points cut, which could be upon us as soon as next month. According to Senior NAB Economist David De Garis: “There’ll be room for another cut this year, how soon remains to be seen. We’ve been thinking two (cuts) and it’s hard to steer away from that at this point.”

RBA cut will affect retirees most

Whilst the Reserve Bank’s rate cut is good news for mortgage holders, it seems the hardest hit will be retirees. The rate cut is designed to encourage those who already owe money to spend more money, under the illusion that they’ll have a little more in their pockets. However, those who have already toiled for years to pay off previous debt and who now live off their hard-earned life savings will be put through the wringer. Still, with the population ageing, I suppose it was only a matter of time before the ‘big bank’ found its next cash cow – retirees.

Let’s cut to the chase and see who benefits and who suffers most from the RBA rate cut.

Winners

  • good for those with debt/s (except credit card debt)
  • good for those with overseas investments, such as managed funds invested in overseas-listed shares (unless the fund is hedged for exchange rate risk)

Losers

  • interest-bearing investment holders
  • anyone trying to save money
  • those living off their savings, ie: retirees.

Mortgage holders stand to benefit most, potentially enjoying monthly savings of around $50, on a $300,000 loan, to $120, on an $800,000 loan. Some mortgage rates could potentially reach their lowest levels in almost 50 years.

Those with interest bearing investments will feel the harshest sting of the Reserve Bank’s slashed cash rate with their cash savings earning less interest.

Retirees currently living off these savings could be hard pressed to bridge the future shortfall – especially when taking into account the limited employment options available to over 65s. To make up for the loss of earnings, those in retirement may instead have to consider higher risk investments which earn greater interest, or tighten their belts – either way, it’s a tough pill for most to swallow.

One thing that may assist retirees is the possibility of Centrelink adjusting the deeming rules in order to free up some cash for those living off their savings. The question is: should retirees hold their breath and wait for that ‘sign of good faith’ from the government?

How does the RBA’s rate cut affect you? Are you prepared to take on more risk with your investments? Or will you now have to ‘tighten the belt’ even further and ride it out?

Read more at SBS News.

Read more at The Age.

If you’d like to calculate how much you’ll save on your mortgage, or how much you can afford to borrow, why not try Money’s Borrowing Power Calculator?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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137 Comments

Total Comments: 137
  1. 0
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    Have fond memories of the days when you could get more that 10% on a term deposit

  2. 0
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    Why don’t we get older people representing our interests elected to parliament where real change can occur?

    • 0
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      Long overdue. There were a couple of political characters who were plugging themselves on this site. I contacted them. One did not respond and the other was quite fixed in his ways and through a tantrum when I stated this…as well as effectively being what looked like a subsidiary of the current government…to whom his preference would have gone. Suspicious!
      I would love to get a political party going but unless the retirement community gave close to 100% support for such a candidate it is a pointless exercise as nobody is going to represent a group unless it supports them. A tough call.

    • 0
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      I would suggest that the older people once elected to parliament are all rosie with the generous pension they have just inherited and no longer have to worry that one day they may have had to survive on the old age pension and they become so focused and self-centred on retaining their elected position they forget what may have been had they not got elected and they just become embroiled in what is the policies that will ensure they stay in parliament. Unfortunately pensions and pensioners affected by interest rates fall of their agendas

    • 0
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      Its all about getting in, staying there for at least 2 terms (the qualifying period for the golden parachute better known as a parliamentary pension) and thereafter removing themselves from average Australians whilst they do as they like.

    • 0
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      “Its all about getting in, staying there for at least 2 terms”. Well apparently not any more Mick if Victoria, SA and Qld are anything to go by.

    • 0
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      There should be more of it. Send a message to the bastards.

    • 0
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      Yes definitely “disillusioned”. There are a few candidates on this blog who need to put their words to better use. How about it guys – seriously. Why should Jackie Lambie have all the fun

    • 0
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      Well She made a Bloody good attempt on the radio the other night to Keep The Barsteds Honest !! 🙂

  3. 0
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    Australians have been duped again by their government and the RBA.
    Our terms of trade (difference between import $ and export $) is bad as we import almost everything and the value of our exports (mainly coal, iron ore) are have dropped by half over the past few years.
    This means that we will pay more for a whole raft of goods: fuel, manufactured goods, even imported food. Since manufacturing has been put out of business by both sides of politics this means WE WILL ALL PAY MORE. And then there is inflation on top of that.
    Be prepared for a poor future and having to sell everything you own to make ends meet. And readers wonder why I keep plugging VOTING FOR INDEPENDENTS. Its a lay down misere.

    • 0
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      The difference between the values of imports and exports is known as the balance of trade. Terms of trade refer to negotiated prices each way.

    • 0
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      Mick.. I’m sure there is a calling in Canberra for you, I’ve thought it for a while, and don’t be coy about it, you may be surprised at the following you will get. I’m serious why don’t you give it a go? All the best.

    • 0
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      Thanks for the trade lesson Emps.
      Thanks also for your suggestion Willie. I am not too sure that you are right here or if your comment is tongue in cheek.
      I have contested federally once before. Sadly the electorate is of the opinion that only Labor of Liberal candidates can make a difference and whilst I know that this is dead wrong who am I to tell people that they are doing precisely what is bad for them?
      “Life wasn’t meant to be easy” and it sure as hell won’t be whilst voters refuse to see the real problem: the two sides of politics and their elected stooges representating themselves and their funding provider vested interests.
      If we had a dedicated ‘Retiree and Small Business Party’ with wide ranging support I would be happy to stand and work for the nation…paid or not. Without that support there is no point and the best I can hope to do is to convince voters that they are being worked over with propaganda campaigns which deliver only more pain.

    • 0
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      No tongue in cheek here pal, I don’t talk with forked tongue.
      You’ve just named your party in your above blog, that’s a start, now think of all the good you could do.

    • 0
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      I often go on about what seniors could do if they stopped with their Labor Party/Liberal Party nonesense and united against these two because THEY ARE THE COMMON ENEMY.
      We have the numbers but sadly not the resolve as most treat their political party of choice like a football team…and that is what the big boys rely on to keep them both in power. And it explains why the behaviours from both sides never change: they don’t need to.
      As I said, get me a united seniors group and I’ll run with this. How does the old saying go: ‘united we stand, divided we fall’? So true.
      Thanks for the show of confidence Willie. Maybe change is possible over time with if people begin to see the light.

    • 0
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      How interesting, mick. Why haven’t you warned us earlier about how Glen Strevens
      and the Reserve Bank of Australia have joined the Tony Abbott, Gina Reinhart, Rupert Murdoch and the Coal industry conspiracy to rob everything from us poor old pensioners to send off to New York for Rupert Murdoch’s twisted enjoyment?

    • 0
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      wally: the Reserve Bank used to be ‘independent’ of the government. One would have to ask id that were still the case.
      The suggest go go to Liberal Party HQ and look up whether or not the above illustrious crew have contributed election funding to the Liberal Party. Given that all 3 levels of government are tarred with the same brush I would be surprised of the corrption in state liberal were nor repeated at the federal level. It appears likely that the only reason this government has not been caught with its hands in the same till is that WE DO NOT HAVE A FEDERAL EQUIVALENT OF THE ICAC. We should have.

    • 0
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      Mick, stop thinking and just do it.
      Senator Mick has a nice ring to it.

      If we had a Senator Mick from each state (easily attainable), then that’s possibly the ballance of power. There are a few other regular posters here that could stand along with you (no Wally, not you), and hopefully they are spread out among the different states.

      Even two Senator Mick’s from each state is possible if some of the “rusted-ons” from both sides started to think for themselves for a change.

      Tony Abbott’s attitudes to the aging have made this possible, but it has to be done NOW. GO FOR IT MATE!!!!

  4. 0
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    Have you forgotten the days of 18% interest rates and the resulting “recession we had to have” under Paul Keeting? Unemployment 11% USD exchange rate at 51c.

    I’d say there was a way to go yet to match that.

    The RBA is too busy trying to do the best it can for Australia’s economy as a whole than individual vested interests.

    • 0
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      Oh yes KSS we recall those days, but we paid it and got our own places, but now its like you say and Cassius if only we could get about 10% back on investment we could live a little better. Oh well what goes around comes around.

    • 0
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      The RBA does NOT belong to the Australian people but is a Conglomerate of private Banks!!!!
      Like ANY CORPORATION, It looks after the “bottom line” of the bank!!!
      STUFF THE PEOPLE – Such unconditional & independent of their age.

    • 0
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      Perhaps Patriot you would do well to look at the Reserve Bank Act 1959 to understand the ownership and purpose of the Reserve Bank and the functions of its Board. Section 9 paragraph 2 states:

      “It is the duty of the Reserve Bank Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank under this Act and any other Act, other than the Payment Systems (Regulation) Act 1998, the Payment Systems and Netting Act 1998 and Part 7.3 of the Corporations Act 2001, are exercised in such a manner as, in the opinion of the Reserve Bank Board, will best contribute to:

      (a) the stability of the currency of Australia;
      (b) the maintenance of full employment in Australia; and
      (c) the economic prosperity and welfare of the people of Australia.

      Further, where the Reserve Bank acts as a bank, profits are returned to the Commonwealth. See section 30. So much for your invective “stuff the people”.

    • 0
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      Really KSS? 1959 says it all. A few observations:
      1. the currency is anything other than “stable”. Any of the big traders like George Souros can easily make the currency run in either direction.
      2. full employment? Is that why governments have shut down manufacturing and thrown millions of Australians out of work?
      3. Rhubarb, rhubarb, rhubarb. The removal of trade barriers has not helped the nation. All it has done is open up opportunities for the LOW WAGE third world to take over everything. And now we are hostage to imports whilst our “prosperity” is heading south.
      You are quoting the same feel good rhetoric which all government literature at all levels now use. The fact that much of it is fiction does not seem to matter as those who write this crap feel good about it.
      If you seriously think that Australia is in a good place I await your views in a year’s time when the cost of imports blows out, the cost of everything you buy goes up and your income stays the same.
      The dropping dollar is good for exporters but a poison pill for average Australians. But then what does this government care about average Australians whose only uses are to vote and to pay taxes.

    • 0
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      Mick I am directly quoting the Reserve Bank Act not some ‘feel good rhetoric’ of Government literature. This is law. The law under which the Reserve Bank is established and operates.

      It is not a “Conglomerate of private Banks” as Patriot alleged nor is it just some random literature as you assert. And because you have failed to check your facts, yes the Act was first enacted in 1959 but has been amended regularly since then. The latest in July 2014.

      You Mick, are the one who “write this crap”!

    • 0
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      Do me a favour KSS. Go to your local council and pick up a report on something: parks, lagoons, etc. The read it. I think that you will get the gist of my point.
      You clearly either disagreed or did not read my reponses to each of the points in the Act. That is the crap. Whilst the rhetoric may have been true once upon a time it has not too much relevance to today’s world or the way politicians throughout the western world behave.

    • 0
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      As always Mick when you are proven wrong you resort to personal attacks.

      I am surprised you have not rolled out the “Troll” tag yet. Although there is still time.

    • 0
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      And what you said is EXACTLY what the poster who aslo posts under Solomon/Frank/miss aisle says. It does lead me to one place mate.
      Stick to the facts and avoid slapping any political party on the back and you will get a lot further.

    • 0
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      WOW,
      Just back from planting some veggies, had a “bite to eat” and I see that a fairly hefty discussion has taken place relating to one of my favourite subjects.
      OK, I suggest we take the RED Pill and go a little bit deeper into the Rabbit Hole.

      Sure, the legislation is stating as has been quoted but that does not mean that the “truth & Reality” is as it looks at Face Value!!! So, KSS (Technically) is most likely correct! However, Pollies also MUST ensure that they act in our best interest. ARE THEY???t
      I refer to an organisation by the name of: “Banking & Finance Consu,ers Support Association (inc)” and refer to an article which is named: “Who REALLY owns the Reserve Bank of Australia?”and is located at the following link: http://www.bfcsa.com.au/index.php/entry/who-really-owns-the-reserve-bank-of-australia
      The article states the following: EVIDENCE THE BANK IS A FOREIGN ADI WITH FOREIGN LINKS AND BRANCHES:

      The below act shows how foreign coroporations have power of attorney over the Reserve Bank of Australia:

      RESERVE BANK ACT 1959 – SECT 76 Attorney of Bank
      The Bank may, by instrument under its seal, appoint a person (whether in Australia or in a place beyond Australia) to be its attorney and a person so appointed may, subject to the instrument, do any act or execute any power or function which he or she is authorized by the instrument to do or execute.
      (Source: http://www.austlii.edu.au/au/legis/cth/consol_act/rba1959130/s76.html

      Foreign Agents in control of the Reserve Bank of Australia:

      RESERVE BANK ACT 1959 – SECT 75 Agents etc.
      In the exercise of its powers and the performance of its functions, the Bank may:
      (a) Establish branches and agencies at such places, whether within or beyond Australia, as the Bank thinks fit;
      (b) Arrange with a person to act as agent of the Bank in any place, whether within or beyond Australia; and
      (c) Act as the agent of an ADI carrying on business within or beyond Australia.

      Yet another article from an organisation named Independent Australia named: “Who is the Reserve Bank really looking after?”explains quite some details. https://independentaustralia.
      et/business/business-display/who-is-the-reserve-bank-really-looking-after,5243

      The following link exposes much about the global finace conspiracy: http://larryhannigan.com/who_really_owns_the_reserve_bank_of_australia.htm
      This exposes some of the Control Mechanisms on the Money Supply as related to Australia. It also has many other excellent info that is not widely known.

      I just ask one question. How would we feel is Australia declared war on (say) New Zealand. How would you feel if the Strategy to win this war was “Set & Determined” by a person who:
      1 Was NOT an Australian
      2 Did NOT live in Australia
      3 Whose personal Loyalty & Welfare was not part of the equasion associated with the welfare of Australia as a country.
      4 Who had allegance to the Kiwi’s and whose personal welfare was dependent of the New Zealand economy?
      Would we Trust Him/her ???? If you had a say, would you let it happen???

      Our politicians MUST be Australians and so must be the head of the Aust armed forces. Certainly, it SHOULD also be a legislated requirement for the ARB!

      AND WE potentially ALLOW A FOREIGNER TO BE INCHARDE OF THE BANKING SYSTEM OF AUSTRALIA??? HOW STUPID CAN WE GET??
      This system is VITALLY important to the wellbeing of EVERY AUSTRALIAN!!!

      I also believe that this is contravening the Aust Constitution!

      Just to put it into some personal perspective. How would any of us feel if one of our kids was in the final of a international footy match and the referee was a member of the opposing team.
      We’d get up in arms and complain bitterly.
      Why then are we “Sitting on our hands” when Australia is STOLEN from us by the Foreighn Corporations.
      Why are we willing to sacrifice the future of our children rather than “get off our BUTS” and defend this nation!!!!!!!!!!!!!!
      As per Aust Constitution, our Government has the Right & Duty to generate the currency necessary for this great nation and issue such “AT ZERO interest”into the Auastralian economy.
      That is what made Australia a the great country it once was.
      Ever since we lost control of our finances, we have gone “Down Hill”.

    • 0
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      The fact that the electorate does not set policy has been clear for some time. Abbott was summonied to see Rupert Murdoch after winning office. Funny that. And then he repealed the Carbon Tax for no other reason other than the profits of the fossil fuel industries. How odd…and taxpayers are now effectiviely subsidising this to the tune of $8 BILLION every year. Last of all is the banking system. Whilst I have not got my head around this one it foreign banks own around 50% of our banks and large companies whilst lending money to other big investors who have bought large stakes in Australia. That the banking system ‘owns’ the country is quite possible.
      I am aware that APRA has introduced Cyprus style ‘bail in’ arrangements so that depositor money can legally be stolen should the banks get into trouble and this has been repeated around the globe….WITHOUT THE CONSENT OF VOTERS AROUND THE PLANET.
      Your account Patriot is a concern, but why does this not surprise me.

    • 0
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      Just another interesting bit of info.
      If WE own the bank why, as owners, are we apparently not allowed to know???
      http://barnabyisright.com/resources-articles/who-owns-our-debt/

    • 0
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      I certainly remember the 18% interest when I had just bought my first home, and very bad employment opportunities, and stuck in a low wage job – but I could get 2 bags of groceries for around $30.00 or less, and the same groceries would cost about triple that now. Petrol was so much cheaper along with everything else that is a regular necessary purchase like electricity, insurance, phone, and we didn’t even have to pay for water then. I am much worse off now, having to fork out on a daily basis nor necessities that cost so much more.

      The cost of living is so much higher now, that the financial burden of that far outstrips the benefit of the lower interest rate. That is without taking into account the massively higher cost of buying a house and its corresponding massive mortgage. During the period of time you are talking about KSS you could get a new 4 bedroom house built on a block of land for around $65,000 in a decent estate.

      If the employment rate was still classified like it was back then in the ’80’s I wouldn’t be surprised if it was now higher than 11% if classified on that same basis of working a certain number of hours before being considered employed.

      We have more than matched the situation a long time ago.

    • 0
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      I should add that the fact that the RBA is cutting an interest rate that is already down to 2.50 % is a sign that this country is in some serious economic trouble.

    • 0
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      KSS
      All the Government is is “Feel Good Rhetoric”.

    • 0
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      Cat, the fact the RBA is cutting the interest rate is the result of the response to the delayed effects of Labor’s bad economic management and their efforts to “Abbott Proof” what they did. Abbott Proofing was meant to hinder as much as possible anything Tony Abbott would try to do to clean up the economic mess they had created.

    • 0
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      Patriot, I would have thought that the Feel Good Rhetoric that was fed to us by Kevin 07 and Julia between 2007 and 2o13 would have been enough. After 6 years of Labor’s feel good bullshit, lies , misrepresentations and “window dressing” efforts to trick the voters into thinking they were doing something the public wanted (like Julia’s so called “solutions” to the boat people flood by sending the to East Timor), it is time to face the unpleasant fact that Labor stuffed Australia. Now they are trying to perpetuate the mess they caused.

    • 0
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      Cat: the reason the the interst rate is being cut is solely due to the fact that this government has contributed a large amount to the deficit and not done one single thing other than attack average Australians to fix it. Since coming to office this government has set up an annual payment of $8 BILLION to its ekection funding provider the fossil fuel industries (specificallly coal!). And then it removed the borrowing ceilling so that it could borrow forever whilst blaming the previous government for the movement of money to the wealthy. These are the facts and wally is simply trotting out the liberal party script for his employer.

  5. 0
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    What gets me about the young folk of today they want everything we have strived years to get. They want it now and think its their God given right to get it. Is that Greed with a capital “G”?

    • 0
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      There’s some who could say the same thing about ‘oldies’ on this site who “think its their God given right” to everything. And anyway who taught the ‘young folk’ their values? Wouldn’t that be the ‘oldies’ i.e. the parents?

    • 0
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      KSS: Pamiena is spot on. What parent teach and how they turn out when they repeatedly hear about their ‘rights’ are two different things. And then there are partners.

    • 0
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      Mick and who told them about their rights? Those that grew up in the freedom of the 60s & 70s who discovered their voice…. i.e. the parents,

      I do not disagree that there is a sense of entitlement in the younger generation but, hey, they got that from their parents too! The same people who now think the Government owes them a pension as their ‘God given right’ etc etc etc

    • 0
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      Not me KSS. My children never had any od the ‘rights’ poison taught to them. They were taught responsibility, respect and to work hard and save to get on.
      I think that the local media and American TV have a fair bit to do with what you are alluding to.
      We are currently going through a campaign where gen Ys are of the opinion that it is the state’s responsibility to pay for the care of their children whilst they head off to work. Whilst I understand why this happens I do not condone everybody footing the bill for mum to go and earn a lifestyle.

    • 0
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      KSS,
      The Government OWES US an Old Age Pension indeed.
      I say again, at the time the scheme was introduced, the government increased taxes toenable money to be “Put Away” for when the time came for us to collect.
      I, as many others, have paid this extra tax for many years and I now am here to collect an OLD AGE PENSION which was wisely invested by My Govenment on behalf of “All of US”.
      YES WE ARE ENTITLED AND THE “AGE of ENTITLEMENT” IS HERE!!!
      KSS just read the hansard that relates to these Parliamentary decisions! PLEASE.

    • 0
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      What you call the ‘government’ Patriot is (supposedly) the sum of the society. WE all pay for pensions and these can be given and taken as voters see fit…although this government seems to believe that this is at its bidding.
      I’m not too sure about ‘rights’ but I do agree that people who pay enough taxes all of their lives should not be abandoned.

    • 0
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      Mick,
      I also say to you: “Read the Hansard” and you’ll confirm that a separate TAX WAS IMPOSED AT THE TIME (just to pay for that purpose & none other) to pay for pensions when they became due.
      Even when compulsory Super was introduced this tax was not “done away with”.
      Double dipping they call that I think.

    • 0
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      Fair enough Patriot but all governments eventually through money for specific causes into consolidated revenue and spend it as they please. I’m not saying tis right but just that it is how they operate.

    • 0
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      mick,
      That is exactly what Menzies ( a Liberal) did.
      ALP NEVER Reversed it though so they MUST have AGREED with it.
      However, you cannot use this as “A General” as, scotland, Holland and I believe the UK (and probably others) established a FrameWork of Insurance (sort off Life Ins ???) that took care of the contributions and the mechanics of the re0distrubution of these funds when they are needed!
      There are easy ways Australia can fund these needs!
      However, the Bankers won’t let them!!!!!
      Download the link to: “The money trick” further South in this Forum and you’ll understand the mechanism I’m referring to.

    • 0
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      Respectfully Patriot this happens all the time. Do you remember the NRMA getting up in arms about road funding which went elsewhere. The theory might be good but the practice is normally different.
      As for th enext government not reversing it methinks that this is a bit like the GST…which they all wanted. So why reverse something the other side gets the boot for?

    • 0
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      Bill Shorten will fix everything after the next election.

  6. 0
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    The problem is that centrelink hasn’t put its deeming rate down making it all most impossible to find an interest rate to match it, therefore everyone on a pension is losing money. If you are asset tested you lose even more.

  7. 0
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    The RBA may have announced the rate cut yesterday but when an Investment we had with a bank matured last Thursday and we went in to reinvest it the bank had already lowered its rate. They did this on Friday morning in anticipation of the cut.
    Some banks have not passed the cut on to home owners but they were quick to apply it to investments making life tough for those trying to live on the income from them.

    • 0
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      Nothing new there Chat. Always were slow to reduce rates.

      In case you missed it, the big 4 banks ‘divorced’ themselves from the RBA about a year or more ago. They have not adjusted their rates in line with the RBA (or at all) for quite some time. There was a while there when the banks INCREASED their rates when the RBA lowered theirs.

      You usually do better with a non-bank financial institution, or on-line savings accounts.

    • 0
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      So why else would banks make donations to conservative politicians other than to have the right to do this? And lets not forget about thechanges the previous government made to protect consumers….which this government came in and tried to quash.

    • 0
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      Chat,
      Not in anticipation at all.
      They KNEW as they are part of the decision making process

    • 0
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      Mick
      Happens the other way to.
      Joe donated $8.8 billion (our dough) to the RBA

    • 0
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      One hand washes the other, or if you prefer, “You scratch my back and I’ll scratch yours”.

    • 0
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      I have to agree with that Patriot. And then removed the ceiling on borrowing.

  8. 0
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    “The rich get richer and the poor get poorer,” not much change. I think it’s “tighten your belt and ride it out” for most pensioners. That’s life!!

    • 0
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      Spot on Mar. Rich property investors and shareholders are delighted. Another nail in the first home buyers’ coffin. Will we have a property bubble bursting????

    • 0
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      Grateful how does a low repayment rate on a housing loan equate to “another nail in the first home buyers coffin”? It makes the loan more affordable.

      It is not the low interest rate per se that is the problem, it is the cashed up retiree investors i.e. SMRF owners competing for property with first home buyers that is the main issue. Tell the ‘oldies’ to invest elsewhere and perhaps there may be more entry level dwellings available for first timers.

    • 0
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      Come KSS stop playing the ‘dumb’ card. We both know that low interest rate will lead to higher property prices because purchasers can afford more. Have a look at the share market. It is up almost 1% today and yeasterday was a great day as well.
      Your tale of SMSF retirees has some truth but then you could say the same about the big superannuation funds investing in shares. The housing problem is very simply due to rapidly increasing population and the refusal of INVESTORS to build new housing stock becaus of the huge costs, mainly governmentvcosts.

    • 0
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      According to Roy Morgan research in May 2014: over the last four years the number of investment property loans in Australia has grown by 37% compared to an increase of only 4% in the number of owner occupied loans.

      …… The result is that 11.9% of the 50 to 64 age group now hold an investment property loan (compared to 9.4% in 2010)……..

      …. Within the same time period the proportion of those aged 50 and over with an owner-occupied home loan has increased with the greatest growth being in the 50-64 age group, up from 31.6% to 34.0%. ……

      So tell me again Mick, about the increasing population because I am obviously too ‘dumb’ to understand.

    • 0
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      “Lies, damned lies, and statistics”? Have a look at the following links:

      http://www.abs.gov.au/ausstats/[email protected]
      sf/Latestproducts/2071.0Main%20Features952012%E2%80%932013?opendocument&tabname=Summary&prodno=2071.0&issue=2012%962013&num=&view=

      and also:

      http://www.tradingeconomics.com/australia/population

      Population in 1960 about 10 million. Population now approaching 24 million. I’d call that population increase. The second graph shows a spike
      As I correctly said WE ARE NOT BUILDING ENOUGH NEW HOUSES. That my dear troll is the prime driver of prices. Its just supply and demand.

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      And there’s the ‘T’ word. Yay!!!

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      And as the trolls always do: ignore the facts put before them whilst they trot out the propaganda. Come on in spinner.

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      You taught ’em well, mick.

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      Facts are something you wally, or whoever you really are, have no stomach for. You simply follow a similar script:
      1. demonise Labor and Unions at every step, often with dishonest misinformation.
      2. praise the Liberal Party whilst again using dishonest statements.
      The problem with you and the other aliases from the same paid troll is that you have no integrity because you make no attemot at honest discussion. Your posts aare propaganda meant to mislead those who are not in possession of the facts.

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      And these are the facts that you get from GetUp Mick?

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    Agree with Willie Poker. Mick, why don’t you go for it !!

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      Yes, Mick, how about it? Interested?

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      And Big Business will Straighten Him up into line very soon after Nominating !! 🙁

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      Give me the numbers to have a chance against the thugs on either side of politics and I would stand.
      Having been there once before it is pointless when the public has been brainwashed and votes for stooges who do not even live in their electorates. That is what one is up against.
      When voters begin to get smart then we will see small players throw their hats in. That is the ideal of what politics is supposed to be about….
      ot the roadshow rubbish dominated by frauds posing as community representatives which seems to be the only game in town.

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      So that’s why you have such anger in you Mick. You stood and were rejected by your electorate.

      How frustrating for you to have all the answers and be rejected by the ‘brainwashed public’ from whom you sought votes.

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      Not worth a comment KSS. You are clearly a piece of work and likely on the list of those paid to comment given some of your political adds.
      “Anger”? Really? I threw my hat in the ring knowing that voters only know 2 flavours. The fact that the electorate does not always get it right is clear by the results. The dog’s breakfast is there for all to see…from both sides. The people we keep electing are not for the most part worthy of running a chook raffle let alone a nation. And you work for them. Says it all.

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      Mick, I think that more people than ever are sick of those 2 flavours, and still haven’t found an alternative, so you never know, your time may eventually come. The problem is getting the message out because the major parties get all of the air time.

      There are growing issues with aging population, and I think that new independent candidates with their finger on the pulse about this, as well as representing the financial interests of retirees, will become a more appealing candidate.

      Some of the current policies on aging population are way off, and potentially catastrophic. The current strategy to deal with an aging population is more migration so there are more working aged people to support a larger group of retirees in the near future. But what I am seeing right now is a growing number of people in their 40’s, 50’s, and even older enrolling in undergraduate uni courses, across all faculties. Most seem to pick courses that drop straight into a job right after the 3 years like pharmacist, teacher, radiation technician, but a few are going for the long haul of 7 years to be a registered psychologist, etc, I think there are a lot of people that can not afford to retire at all, or live in what they have in the future, so have to re-invent their future.

      The current policies no not recognise this, and the older cohort of job seekers will just find it harder to compete for jobs with increasing migration, and even more older people will likely be pushed into unemployment and poverty.

      I am not against immigration because we still need it, but it would be far better economically if those people who did wish to continue working had the opportunity, rather than push the projected equation for the future of having a migration level that will supposedly result in 4 younger people of ‘working age’ supporting each older person, which is what is supposed to magically happen in another decade or so under the arranged migration rate. I severely doubt that this will magically happen. It’s pie in the sky, and I don’t believe that the future job market, economy, productivity, efficiency level etc. will support that.

      No doubt it’s no surprise that it’s also been reported in the news that older Australian’s are experiencing age discrimination in the workforce.I’m not saying that people should not retire. People should be able to enjoy their retirement if they want to and should not have to work over retirement age if they don’t wish to. The point is that I have not heard one politician have anything to say about any of these issues. All I hear these days from them is about who is suing who for what. If someone stepped in the ring representing older people and got their message out, I think they’d have a chance, especially if their target group was broad, not just retirees but also at least people in their late 40’s & 50’s.

      Also, while I am not against immigration because we do need a certain level of immigration, the current policy of younger migrants supporting older people doesn’t

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    Why are people complaining about low interest rates?
    High interest rates usually means that the rate of inflation is also high which effectively devalues savings over time.
    Whilst low interest rates means dipping into savings to get an adequate income, we do now have a very low rate of inflation so we are really no worse off.
    Also the RBA acts independently of the Government and their decision to cut interest rates is because we have low inflation and they also want to stimulate business which rely on cheap loans to overcome cash flow problems and to invest in creating new jobs.

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      Yes BigBen I agree, but many here don’t let the truth get in the way of a good moan or an opportunity to blame the Government.

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      Wait until you go to buy that new car or TV BigBen…or any of the many imported goods you buy.
      So you think that the RBA acts “independently” of the government eh. That may not be as true as we all believe.
      The reason for cutting rates is not about low inflation. It is about supposedly stimulating the economy but that has not worked well elsewhere in the world because banks are not lending to businesses, which they see as much riskier than home lending. As a result the cheap money is not reaching the very people it needs to reach. Instead it is going into house investment and this drives up the prices of houses AGAIN. Its a vicious cycle.
      And whilst we are at it lets remember that ALL governments want to creat some inflation. If you want to worry about something then consider that average earners have been hit with a decade of price increases with many from the government sector. I can see a wages explosion at some time as the attempt by this government to turn average Australians into the working poor that AMerica has is going to backfire. When that times comes the country will suffer and that includes the rich who think that they are exempt because they own the game.

      KSS: your posts are starting to sound a lot like the Solomon/Frank/miss aisle propaganda and I have to wonder if you are another alias for the above poster. Instead of slapping this worst of all governments on the back (FOR WHAT???) perhaps discuss the issues.

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      I really think you need to get your facts right, Mick. The price of imported goods (inc TVs and cars) are linked to the inter-bank exchange rate which in turn is linked to the RBA Interest Rate. The Aussie dollar was strong while the interest rate was high but it has now fallen to what most consider is a more realistic level with the reduction in interest rates and the price of commodities. A weak Aussie dollar makes our exports more attractive to overseas buyers and our imports more expensive to Australians. It would be nice to buy an Australian made TV or car but the cost of production in this country not competitive with the rest of the world. You can thank the unions for that and not blame the Liberal government.
      Regarding your comment that money is not being invested in businesses but in home lending, this is not strictly correct but none the less, more house lending in itself directly results in a need for new house construction which in turn creates new jobs both at the work face and in the supply chain which includes the manufacture and retail of new furniture, carpets, curtains etc etc. More houses on the market also helps to keep prices lower; its called supply and demand.
      I like your comments, KSS. You seem to be one of the few people on this forum who has a balanced and informed view.

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      BigBen: are you running a shell game? The facts are clear. Every time interest rates are cut the dollar falls because overseas investors find better places to invest their capital other than in Australia. Did you not notice this in the past couple of days?
      Your bit about inter-bank exchange rate and the RBA is gobbly gook because the dollar is no longer controlled and floats…which mena it goes up or down according to international investors.
      More of the same troll comments: Labor bad Liberal good argument? How predictable. And then you slap your other alias on the back? So have we lost Solomon/Frank/miss aisle and gained KSS/BigBen? Methinks it is looking so.
      The rest of you ‘argument’ is a textbook Liberal Party line. So it is now about exports whilst average Australians pay through the nose for imports. And suddenly we are talking about construction jobs when banks are not lending to business and when domestic jobs do nothing to pay for our huge amount of imports with a falling export revenue. Your boss Tony clearly has no real understanding of what the problem is. That is why this government can do nothing else other than come after average Australians.

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      Mick, It is clear to me and probably most of the other readers that you have little knowledge of the facts and are just being argumentative.
      I am pleased to note that you do acknowledge that there is a linkage between interest rates and the value of the dollar and I never said that the RBA set the dollar value, only the interest rate!!
      I also never mentioned or blamed the Labour government – I said it was the unions which have caused Australian industry to be uncompetitive and incidentally, weak management for allowing it to happen. Whilst Australians are paying more for imports than they did in the past, they are not paying through the nose for imports now. Australians are still much better off than other countries even with the weaker dollar. Suggest you compare the pensions in the UK and Greece and see what they buy. The rest of my so called “argument” has nothing to do with the Liberal party line. It is basic economic sense. Interest rate cuts DO stimulate jobs and I have given you an example as to how jobs can be created in construction and the supply chain industries as a result of an increase in lending by the banks to home buyers, a point you raised in your earlier post!
      I am pleased to be aligned with KSS. Is much better than being aligned with Chairman mick, aka Mao!

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      As I keep saying the trolls are so obvious by their behaviours.
      If you choose to attack unions then please also attack company Boards and their CEOs whose remuneration increases tell workers that they are not doing it tough. Horses for courses. And whilst we are on the topic Australians expect enough pay to live on. Whilst big business in particular keeps crying out for American style wages and conditions they themselves will have none of that for themselves. You hear it every other week with Cate Cantrel the latest spokesperson for the rich wanting it all.
      The problem with you and your other aliases BigBen is that you represent the interests of those who seek to take an unfair share of what does not belong to them in the first place. If that makes me a communist then I am proud of it. Whilst business deserves a cut it in no way owns everything, something which it would find hard to come to grips with.
      Your suggestion that cutting interest rates stimulates jobs is only oartially true. It never worked in both America or Japan. Japan was in deflation mode for 2 decades with zero interest rates. So much for your flawed argument.
      Argumentative? Me? Maybe. But I argue on the facts, not the Liberal Party script which you are reading from. And I repeat our writings are identical to those of a number of aliases used by the person who admitted to me that he was paid a yearly retainer from the Liberal Party for “services”. That again appears to be you. Take it as you like but argue the true facts, not political propaganda and I’ll leave you alone.

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      Is the pot calling the kettle black?

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      Mick: It is clear to me and the other contributors to this forum that your judgement is clouded with political propaganda and hatred and you are not capable of contributing anything sensible to a discussion such as this. I will not waste any more of my time trying to explain to you how the world works.

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      So the alias which posts as Solomon/Frank/miss aisle has now taken on a few new avatars.
      You are easy to spot by your posts. Always the same lies and spiel.
      The only propaganda comes from those who state things which are intended to deceive and which can normally be easilt proven as lies. But then you have been spawned from this government so why does this behaviour not come as any surprise?

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