Rents will continue to test ‘Cash-Strapped’ tribes

Without rent assistance, poverty will continue to plague ‘Cash-Strapped’ tribes.

There is little relief in sight for age pensioners who rent, says Joel Pringle, advocacy campaigner at The Benevolent Society.

•••

In 2016, The Benevolent Society partnered with think tank Per Capita and The Longevity Innovation Hub to look at the experiences of Australians living on the Age Pension. The report, Adequacy of the Age Pension in Australia, comprehensively showed that relying on the pension while renting privately is the biggest indicator of poverty among older Australians.

That report played a major role in the Fix Pension Poverty campaign, which has repeatedly emphasised that the quickest and simplest way to address poverty among older people is an immediate increase in Rent Assistance – a 50 per cent rise for single people and 30 per cent for couples.

Ongoing costs for homeowners, such as rates, insurance and maintenance, can also prove difficult for those on low incomes. The inequality of access to council rate discounts or exemptions for people on the Age Pension (or others on low incomes) is a major issue in certain regions. The capacity of councils to provide financial relief in areas of disadvantage requires serious attention.

The Adequacy of the Age Pension report showed a massive difference not only in the additional costs faced by renters, but also in underspending on other areas of essential goods and services.

For example, pensioners who own their homes have private health insurance at similar rates to the rest of the community, around 46 per cent. That rate crashes to 16 per cent for pensioners who rent (Cash-Strapped tribes).

Older renters spend less on healthcare than their home-owning peers. This is also true for insurance, utilities, vehicle fuel and food. The evidence is that food is the first item of essential expenditure to be cut in order to cope with inadequate incomes.

This reinforces the view that being stuck in private rental accommodation while on a low income affects people’s entire wellbeing, including health and safety.

Looking forward to 2019, the much-talked-about housing downturn has seen rents decrease in Sydney and the central suburbs of other major cities – in other words, the places with the highest rental costs. Rents in many other suburbs and regional areas, where more affordable dwellings are typically found, continue to rise modestly.

While some relief will be felt by those paying the highest rent, it is unlikely to increase the availability of affordable private rental properties for people relying on the Age Pension. Being in private rental accommodation will still be the biggest cause of financial distress for older Australians.

The incomes of the Cash-Strapped tribes are inadequate. As the cohort in their age group with the lowest savings, the gap between their income and the cost of living is made up by debt and poverty.

The Benevolent Society urges you to seek out the services and supports available and ensure you are receiving them, for example rebates for supplies for diabetes or incontinence and energy rebates or low-income support from telecommunications providers, and seek out local not-for-profit financial counselling services and programs such as MoneyMinded.

• The Benevolent Society is a not-for-profit, non-religious charity committed to seeking a just society where all Australians can live their best life.

Would a significant boost to the Government’s rent allowance make a big difference for you? Do utilities test your budgeting skills?

Are you eligible for an Age Pension? Do you know your rights? The PensionChecker™ tool has all the information you need.

RELATED ARTICLES

    Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.





    COMMENTS

    To make a comment, please register or login
    MICK
    20th Jan 2019
    1:41pm
    More "tribes"..... Give us a break!
    Instead of rolling out a long eulogy just say that governments got out of low cost housing decades ago. Now we have what was always going to happen.
    Had the money handed to the wealthy been put into housing for those who have no home then it would have been a totally different ball game. Of course the bank accounts of the wealthy mean a lot more than a million people who are at the mercy of the markets. Welcome to business.
    Anonymous
    20th Jan 2019
    3:51pm
    We need a Labor government pronto, and for them to cap rents, particularly for the "Cash-Strapped". A pox on the LNP for letting what you describe happen.
    Anonymous
    21st Jan 2019
    9:22am
    Labor government will drive everyone poor
    What then - no one left to tax the faeces out of
    Rae
    21st Jan 2019
    10:52am
    Rents are market controlled.

    Public housing should never have been privatised. Privatisation is just to shift public money into private hands.

    Tax is useful in a fiat economy to control inflation. It hasn't as asset price inflation is out of control. The Government could build public housing by funding the States if they wanted. Most of the States will be in funding trouble anyway thanks to revenue issues from losing the profits after privatisation.

    Hitler's economists invented privatisation to do exactly what it has done. There was no mistakes made. Public funds have been stolen.

    Neither the LNP or the ALP can save us from recession now. The damage is too much and debt levels too high. Wages too low for too long and too much money bleeding into overseas accounts and tax havens.

    Income earners are paying excessive taxes, rates, rents, insurances, costs and GSTs etc while the privateers make off with the money untaxed.

    Something like 84% of our sharemarket is foreign owned and a lot of the businesses and property as well.

    The Liberals sold the Country out using scare tactics about government debt to do it.
    They lied about a budget emergency just as they lied about needing to rob retirees in those fascist budgets Hockey brought down.

    Motels could be bought right now to house the poor if there was a will to do so.
    Sundays
    29th Jan 2019
    10:36am
    Hope the Libs are paying you well for all your comments Lothario because it won’t last long. It’s a sinking ship. I have a friend who works in Parliamentary Services. Big increase in Liberal Ministers and back benchers asking for quotes on their entitlements if they leave.
    Anonymous
    29th Jan 2019
    11:33am
    ScoMo waaayyyy ahead of shorty as preferred PM
    LNP also going great guns in the polls
    Aussies are beginning to see what a disaster Shorten will be and how much more good the LNP can do for our beloved country
    Mad as Hell
    29th Jan 2019
    11:46am
    Those great economic managers the LNP leased Darwin Port for 99 years to the Chinese for $506 million. That’s $5 million dollars a year. How is that in Australian interests? Except for Andrew Robb.
    Anonymous
    29th Jan 2019
    11:49am
    That’s $506milliom cash right there , not to mention the savings in running and infrastructure costs etc
    Great deal - way to go LNP
    Sundays
    29th Jan 2019
    12:50pm
    Less the $47.8 Million, Morisson is spending on replicating parts of Captain Cooks voyage around Australia. Who know what other worthwhile projects (not) he has in mind trying to buy votes
    Anonymous
    29th Jan 2019
    12:53pm
    Sunday’s -dumb comment . Off topic
    Misty
    29th Jan 2019
    11:21pm
    As was your original comment Lothario and anyway people don't vote for the PM they vote for their local member.
    Anonymous
    30th Jan 2019
    10:57pm
    Misty
    Dumb and dumber has nothing on you
    Anonymous
    1st Feb 2019
    8:21am
    The problem we have is that the LNP has been and is a disaster, and Labor is much worse! Most of the minor parties are single-issue-focused or total ratbags. Independents just cause disruption - though I think we need lots of them right now to send a message to the majors that two-party politics isn't working for Australia.

    Rae is right, sadly. Neither party can save us from recession. The Libs have sold us out, and much as I detest Lothario's right wing BS, he's right about Labor. They will drive us all poor.

    I have deep sympathy for those who are genuinely doing it tough, and I'd like to see a return to investment in public housing, but you don't fix poverty by stealing from those who have managed to elevate themselves a little and destroying incentives to strive. The 'help the lame duck' mentality constantly creates more lame ducks, and we are seeing this continually in our society - more people opting out of striving because either it's too hard, or there is not sufficient benefit. The whole welfare system needs a complete restructure - starting with a universal pension for the aged to remove the incentive to over-invest in housing or spend up big to qualify for pension benefits. Currently there is simply no point in saving to be above the pension threshold unless you can be way above it, because to achieve a decent income, you have to spend the extra savings until you qualify for a pension. Might as well spend them quickly, because there is simply no benefit in having them otherwise.

    Similarly with the rent dilemma. Simply handing out generously to renters while home owners struggle with high rates, insurance and maintenance costs AND likely suffer a huge pension reduction for having strived for decades to pay off a mortgage, makes home ownership less appealing and fewer will strive to pay off a mortgage.

    The solution is NEVER as simple as increasing handouts. Someone has to pay for them. That's where I see the LNP and Labor differ, and neither is right. LNP is too harsh on the needy, and Labor just drives the growth of the lame duck mentality and punishes people for having a go. Somewhere there must be a happy medium, but seems none of our politicians have a clue how to find it. At least Palmer, for all his faults (and he has many) is focusing on stimulating economic activity to drive growth. Maybe he is onto something there? Certainly more sensible than the strategies either major party is pursuing.

    As for the election possibilities, I still think Labor is well in front, but the LNP is gaining ground and all the campaigns against the franking credit policy are helping their cause. I think Labor shot themselves in the foot with that nonsense brain fizz and all the lies they told to justify it.
    Sundays
    29th Jan 2019
    10:30am
    Our elderly, Carers and disabled should not have to struggle the way they do in a rich country like Australia. Everything Governments have privatised has ended up costing much more
    Anonymous
    29th Jan 2019
    11:38am
    No it hasn’t
    It’s enabled us to be debt free and save heaps
    Costs are also lower than they would have been run by dumb bureaucrats
    Sundays
    29th Jan 2019
    1:21pm
    Tell that to those struggling in private rental, or homeless because the Commonwealth Governments cut back the amount given to the States for housing
    Misty
    29th Jan 2019
    11:24pm
    What rot Lothario, the LNP have doubled the net debt since they came to power.
    Greg
    30th Jan 2019
    4:07pm
    "It’s enabled us to be debt free and save heaps"

    There's something wrong with your "logic" system in your brain Lothario, debt free, since when, you have no idea.
    Anonymous
    30th Jan 2019
    7:07pm
    Debt free until Rudd and Gillard got their filthy hands on our bank account .
    Misty
    30th Jan 2019
    10:52pm
    Have you forgotten that little happening Lothario?, it was called a Global Financial Crisis.
    Anonymous
    30th Jan 2019
    10:59pm
    Misty
    Dumb and dumber have nothing on you
    Karl Marx
    31st Jan 2019
    1:11am
    So how did Rudd & Gillard personally get their hands on your bank account, what did the bank say, did you inform the police, where they charged & prosecuted. I'm sure we'd all like to know. No government or politician to my knowledge can access anyone's bank account. Unless of course the money in the account was from criminal activity or you owe the ATO money because of tax fraud, highly likely I'd say.
    Well done Rudd & Gillard
    Misty
    31st Jan 2019
    8:24pm
    What's that old saying Lothario,"Sticks and Stones etc", well you can carry on with your verbal abuse and bullying but it just passes me by.
    Misty
    31st Jan 2019
    8:25pm
    Repeating yourself again Lothario.
    Misty
    4th Feb 2019
    1:31pm
    1984 do you notice how Lothario never answers the questions asked of him?.
    Anonymous
    4th Feb 2019
    1:33pm
    1984 asked a stupid question -what a moron. I was referring the the national finances .
    No wonder he’s a leftie like you
    Dumb and dumber
    Misty
    4th Feb 2019
    1:44pm
    I could call you all sorts of names Lothario but I won't stoop to your level of right wing nastiness although I am sure there are some polite people who know their manners, voting for the right wing.
    Anonymous
    4th Feb 2019
    1:48pm
    I accept your apology Misty. Next time I hope you think before you falsely accuse me . Don't be like 1984 asking me moronic questions and expecting a response
    Misty
    4th Feb 2019
    3:10pm
    Lothario are you dumb?, or cannot you read correctly?, you are the one who is calling people names, you should be the one apologising.

    29th Jan 2019
    10:47am
    Do not push for a Labour government as we will get more refugees and that will cost us big time. I am not sure how to vote this time around as the current Labour and Liberal governments are piss weak and do not consider us pensioners that are struggling. Refugees and other immigrants are raping funds that should be going to pensioners or struggling families who do not have their own houses. I wish more people would see this but alas the do gooders can't see past their own back door.
    Anonymous
    29th Jan 2019
    10:58am
    It's Labor (not "Labour"). You're not in NZ or the U.K.
    Anonymous
    29th Jan 2019
    11:36am
    Yes - socialists can’t spell
    How do you expect them to run a country
    Misty
    29th Jan 2019
    11:25pm
    Off topic again Lothario.
    Anonymous
    1st Feb 2019
    8:37am
    Jannie might not be a able to spell 'Labor', but is right in the statements. The 'do gooders' never consider where the money is coming from. Curiously, they never volunteer to pay the bills! All those screaming that we should admit more 'refugees' (and I question the claimed 'refugee' status of many) should have to house and feed them - personally! Then see how many they want brought in.
    Anonymous
    4th Feb 2019
    12:33pm
    Yep, it's official. Shorten declared Labor will increase the refugee intake by 32,000. God help us!
    floss
    29th Jan 2019
    11:11am
    Great comment Rae you summed it up so well.Sorry Lothario you are still a fool.
    Anonymous
    29th Jan 2019
    11:35am
    You are very rude
    LNP will win the elections
    Sorry sweetheart - the leaners can whinge and asked for more handouts all they want. Aussies have had enough of bludgers
    Misty
    29th Jan 2019
    11:26pm
    In your dreams Lothario as that is the only place the Coalition will win.
    Anonymous
    1st Feb 2019
    8:40am
    I fear the LNP won't win, but they are gaining ground. Labor has really shot itself in the foot with its franking credit nonsense. As more and more people come to understand it and the danger it presents, there is a definite swing away from Labor. And Shorten's unpopularity doesn't help them. It's going to be an interesting few months - but whichever party wins, the people lose. That's a given.
    tisme
    29th Jan 2019
    11:14am
    I get $1000.00 per fortnight on a carer payment, 800.00 of that is rent daughter gets 900.00 pf disablity doesn't go far with two disabled people in the house electric /transport /medications/etc etc food
    Anonymous
    1st Feb 2019
    8:53am
    Sorry you are struggling, tisme, but unless my math skills are failing me, that seems okay compared to a couple on the OAP! You have $1100 per f/n to live on with no rates, house insurance or maintenance costs. That's $28600 per year, and you would get all pensioner benefits and concessions. The OAP is around $34,000 a year for a couple and they have to pay their housing costs out of that (either rent or rates, insurance and maintenance on a home). A couple would have to have housing costs of only about $100 per week to be as well off as you and your daughter are, and I doubt most would get anywhere even close to that.

    Your situation highlights the overall inadequacy of the system, and it's sad that people with disabilities are struggling, but I don't think there are any easy answers. Increasing welfare sounds simple, until you question how to pay for it. I think there are avenues to increase revenue fairly - e.g. by addressing global company tax avoidance - but with debt at current levels, funding more welfare is going to be a challenge, and if the government keeps taking from battlers who have some savings, but low incomes, we will have less people with savings and more on welfare.
    thommo
    29th Jan 2019
    11:43am
    Why can't this govt just increase the age pension across the board and be done with it, instead of handing out band aids to assist pensioners.. it is a disgrace and a blothch on us all for letting govts getting away with our social responsibilities....
    Vote in a govt which will introduce a decent universival pension, instead of one that kow tows to the rich and powerfull...
    Anonymous
    29th Jan 2019
    11:46am
    The age pension amount is adequate
    thommo
    29th Jan 2019
    12:42pm
    You're mean Lotharia....
    Anonymous
    29th Jan 2019
    12:43pm
    And you’re just greedy
    thommo
    29th Jan 2019
    1:28pm
    you make me laugh and feel sorry for you
    Triss
    29th Jan 2019
    1:51pm
    How do you know the pension is adequate, Lothario? Do you live easy on it? Tell me how it’s adequate, not “you’ve heard of a pensioner who goes on a cruise” or a pensioner who lives in a house that must be worth a $million. Itemise it out for me.
    Misty
    29th Jan 2019
    11:28pm
    Yes Lothario, do you get a govt pension, not a super one?, there is a big difference.
    Rae
    30th Jan 2019
    8:28am
    They just need to fix the CPI to include housing costs. Rejig the basket to only include necessary costs including housing. Homeowners do have housing costs as well.

    If the cPI actually showed inflation properly pensions would rise.
    Anonymous
    1st Feb 2019
    8:59am
    Govt pension or super one, Misty. Yes, there IS a big difference. The govt one is secure, increased twice a year, and comes with a host of concessions and benefits. Super pension is dependant on investment returns and the asset balance, comes without benefits and concessions, and only increases if returns are good and there are no losses.

    Vast numbers of people on super pensions are really struggling, and fear reducing their savings because that will reduce their income further. With the Labor Govt threatening a vicious attack on their income, and many having lost countless thousands through the LNP treachery, vast numbers are seeing the govt pension as appealing - especially since many on government pensions have investments that drive their income up to as high as $60K a year - much more than hundreds of thousands on super pensions enjoy.
    greenie
    29th Jan 2019
    11:58am
    From whence came this inane term 'tribes'?
    Anonymous
    29th Jan 2019
    12:00pm
    Its a greenie / leftie gender neutral pronoun thing
    Triss
    29th Jan 2019
    1:56pm
    Let’s ban the idiotic term, I am not a tribal member of anything.
    Sundays
    29th Jan 2019
    2:05pm
    YLC, idea for a Friday Poll. Actually find out if we want to be labelled as Tribes. It’s ridiculous to introduce it without any consultation
    Nascar.
    29th Jan 2019
    12:05pm
    Tribes WTF ? Lothario rubbish.
    Erminio
    29th Jan 2019
    12:34pm
    Hey Dickhead, How many times do you have to be told? Stop calling us tribes.
    Anonymous
    29th Jan 2019
    12:42pm
    You must be from the nasty tribe
    Misty
    29th Jan 2019
    11:30pm
    Takes one to know one Lothario.
    Karl Marx
    29th Jan 2019
    12:52pm
    Poverty exists not because we cannot feed the poor, but because we cannot satisfy the rich.
    And for those touting polls, just ask any politician & they'll tell you polls mean nothing, it's the ballot box that counts.
    LNP members, like the rats they are, are deserting the sinking ship already. glug glug
    Rae
    30th Jan 2019
    8:31am
    If Africa, South America and India could stop screwing around just producing babies and get working on producing food to feed their growing masses a lot of poverty would be eliminated.

    We cannot satisfy the rich as you say but we can stop feeding them. It's called shutting wallets and keeping them shut until the bastards capitulate and raise ordinary incomes.
    Karl Marx
    30th Jan 2019
    3:10pm
    And that's why this government MUST go as they are only interested in the big end of town. ALP are very close behind them.
    Anonymous
    1st Feb 2019
    9:03am
    Actually, I suspect Labor is ahead of them, 1984, but just better liars. One thing is certain: Labor is going to struggle with its budget plans if elected, because Bowen's figures are all wrong - based on outdated data and ignoring a lot of quite obvious implications of policy change.
    Happy Jack
    29th Jan 2019
    1:13pm
    Where on earth is germsjerk69? Christ! I'am worried about him.
    Has he gone into hiding?
    "Come out" Germsjerk, "come out".
    Charlie
    29th Jan 2019
    3:42pm
    If i am to be referred to as a member of a "tribe" I will be expecting some land use agreement under the native titles act.
    Rae
    30th Jan 2019
    8:36am
    Honestly does it matter if they say tribe or group or cohort. At least everyone gets the idea that it's people with similar incomes. It's just a label.

    Native Title is an odd term too as anyone born here is Native and has bee labelled such since the early 1800s.
    inextratime
    29th Jan 2019
    5:05pm
    I rented a unit from a well know billionaire whose first name is Harry. He gave us 3 months notice with the reason being he wanted to sell the unit. No he didn't he wanted to put the rent up over and above the c.p.i. so we got kicked out and an overseas student, financed by her father living in another country, moved in paying over $100 a week more than we were. We had survived two rental increases over 2 years and had paid every week on time. The real story behind the BS.
    Rae
    30th Jan 2019
    8:43am
    Yes and at <2% profit after costs Harry's Corporation can't keep losing that sort of money to compensate low income earners.

    Get used to it because once the Negative Gearing and Capital Gains change it will be the Harry's Corporations ending up owning all the rental properties and then he will want that traditional 6% profit level.

    Like everything those with money force up the prices and there are millions of rich Asians and Indians competing now. They want our clean food too which is why seafood, meat, dairy and even chicken prices are rising

    With all the tax cuts increasing rental assistance may not be possible.
    Anonymous
    1st Feb 2019
    9:10am
    Agree Rae. This is the crux of the problem. Too many people think there are easy solutions. Just reduce rents. Just tax someone else more. Just increase welfare. Unfortunately, every action leads to reaction. People who own properties want returns. Easy for renters to say they are greedy, but... inextratime, do you know how much that unit cost to buy, how much the rates and insurance and maintenance cost, how much tax Harry pays on the profits he receives? Okay, he's a billionaire you say. So maybe he can afford to be charitable, though he likely got to be a billionaire by being savvy with his investments. But a lot of landlords are really struggling. And Rae is right. End Negative Gearing and reduce CGT concessions, and only the rich will be able to afford to own investment properties and then up goes the rents.

    Bottom line is that someone always has to pay. What we need to do is drive increased productivity, economic activity, and profit. Just taking from one to give more to another is never going to work.
    nan
    29th Jan 2019
    5:52pm
    What about the poor souls on unemployment benefits. They are not all dole bludgers.
    Charlie
    29th Jan 2019
    10:32pm
    Yes not good for people who have lost employment later in life. The benefit and the way its applied, is designed to get young people out looking for work.

    When i lost employment at 56 yo due to chronic illness, I went on to disability support pension and it seemed to be designed to erode what I had in the bank, before I got the maximum pension.
    Anonymous
    1st Feb 2019
    9:14am
    No, they are not all dole bludgers, and I think this should be our major priority - particularly aid for older unemployed who have worked and paid taxes for decades.
    Misty
    29th Jan 2019
    11:34pm
    People living in the big cities do have a much higher rent to pay then those living in the country but sometimes cost of living in the country is higher then those living in the cities so I suppose it evens out in the long run.

    30th Jan 2019
    7:31am
    I think that itis very unfair that self funded retirees whos income is just a little above the pension dont get the pension concessions . Shorten wants to cut our franking credits that will bring a lot of os down to the pension level.i have an annual income of $30000 with franking credits if they are taken away will probably end up with about $26000 so for all those that think people who get franking credits are rich please think again and whatever you do dont vote for Shorten or the Green's or you will end up on the pension that will probably cost Shorten more than he saves.
    If he wants to bring in franking credits put a limit on them like $10000 or less and you will be exempt
    Misty
    30th Jan 2019
    9:28am
    Fair Dinkum you need to ring your local Federal member, opposition treasurer and Bill Shorten's office and explain to them how it will affect you, if all those who are going to lose out sit back and do nothing then the worst case scenario will occur.
    Anonymous
    30th Jan 2019
    9:30am
    Shorten will not listen
    He’s too stupid and too arrogant . He simply doesn’t care
    Misty
    30th Jan 2019
    9:37am
    Have you talked to him or his office Lothario?, I bet you haven't, just take what the press and media tell you as Gospel.
    Karl Marx
    30th Jan 2019
    3:07pm
    Sorry Lothario but being too stupid & arrogant is only am LNP trait, & their trolls of course
    Adrianus
    31st Jan 2019
    8:19am
    Fair Dinkum, I am sorry for your predicament. There are many others in your situation who are worried about whether they will have enough income to live on following a Labor victory. Many good people like yourself who have tried to do the right thing should be held up as examples, rather than discarded as if they were of no value. Our social structure needs people like you to continue to not be a ball and chain on the social security system.
    Misty
    31st Jan 2019
    9:31am
    Fair Dinkum, is it possible for you to rearrange your investments so the FC changes do not impact on your finances?.
    Adrianus
    31st Jan 2019
    2:28pm
    Misty, no it is not obviously. Effectively, Bill Shortens new tax on retirees means that Fair Dinkum will get a lower yield from investing in, Say CBA shares, than a high income earner or someone like you on a OAP would receive. Its not only unfair, it is discriminatory.
    We should all be concerned about the effect a Labor government will have on the economy at this point in our recovery.
    Misty
    31st Jan 2019
    3:33pm
    Why is that Adrianus?, I know OAP are exempt from the FC changes but how does it affect high income earners, are they exempt too?.
    Adrianus
    31st Jan 2019
    5:22pm
    Under the Shorten FC plan high income earners will not be affected. Unless of course they have massive tax deductions, which doesn't make sense but you cant put everyone in the same basket. The people who will be most effected by this FC tax grab are not wealthy people but retirees who just miss out on the OAP and its benefits. Many of whom may have incomes lower than the OAP and moreso when they lose their FC.

    No, high income earners are not exempt, but they are in a position to take full advantage of their FC's. It is a discriminatory tax of the worst kind and if Bill Shorten doesn't drop the idea he will never be PM. Australians wont vote for this type of discrimination.
    Karl Marx
    31st Jan 2019
    7:33pm
    Adrianus, the only issue is that most Australians don't know, understand or even care about FC especially the young. It's mainly those that are already retired & have FC that understand the consequences.
    To be honest I didn't even know what FC where until it was mentioned by the ALP last year.
    As most policies by any party recently, no deep thought or micro management has been done to see who is affected & whether or not those that should be targeted are targeted. And that's not retirees or anyone that are on a meager income less or just above the OAP.
    Misty
    31st Jan 2019
    8:36pm
    1984 does anyone really understand how and who the FC changes work and who they will affect, my Financial Advisor told me I would be affected because of my super but when I rang Dr Mike Kelley's office, my local Federal MP, I was told that as a OAP I would not be affected, a fact sheet was sent then to my Financial Advisor and today I heard the PM say that pensioners would be hit through their super so maybe the PM needs to get a fact sheet to to understand how the FC changes will work, that is if they ever get past the Senate.
    Adrianus
    31st Jan 2019
    9:24pm
    Misty you will be affected if you have superannuation. It is your super fund which will have its yield cut by 15%. That is to say if your fund has a fully franked dividend of 8% you will instead get a return of 6.8% with Shorten in the lodge. Which is 30% minus the 15% fund's tax rate. Unless of course your fund hasn't been passing on the FC's? and pocketing them for political advertising? We know the unions have spent $10m during this election campaign. Where did that money come from?
    Misty
    31st Jan 2019
    10:20pm
    Adrianus that is not correct, that is what my Financial Advisor thought too, but Dr Kelley's office explained to him that as I am a OAP recipient I will not be affected, so much confusion surrounds this FC change and Labor should be out there explaining it if they want to win the next election.
    Anonymous
    1st Feb 2019
    9:26am
    Misty, Dr Kelley's office is misleading you. Pensioners won't be affected if they hold shares directly. If you have a super fund, the fund almost certainly averages FC income over members. It's highly unlikely the fund allocates FC individually to each member. But regardless, the fund is not a pensioner, so the fund is impacted by the legislation change. There are a couple of possibilities in your situation.

    (1) The fund did not pass on you FC credits anyway and nothing will change
    (2) The fund has enough members in accumulation mode to use all the FC credits as tax savings and nothing will change for you, personally
    (3) The fund doesn't have enough members in accumulation mode and will lose income, and that could reduce your income.
    You being a pensioners has nothing to do with the issue if the shares are held by your super fund rather than by you directly.

    I agree there is a lack of clarity in the proposal - partly because Labor made so many hasty changes when the flaws in the policy were exposed, and partly because Labor has told a lot of lies to justify the policy and win support. For example, that it is aimed at SMSF members with more than $2.4 million in assets. No. It's aimed squarely at those with LESS than $1.6 million. Most of the savings Labor claims it will gain have already been made by the LNP introducing the TBC legislation. Labor's figures are three years out of date. Then there's the cost of pushing countless thousands of struggling SFRs onto the OAP that Labor hasn't counted.

    The policy is seriously flawed. Even the OECD has declared it dangerous and foolhardy.

    But sadly, both Bowen and Shorten have made it abundantly clear that there WILL BE NO CHANGE TO IT and they have refused outright to enter into any discussion or even to listen to objections. It appears they have instructed Labor MPs to support the ''no comment/no discussion'' rule.
    Anonymous
    1st Feb 2019
    9:32am
    And BTW. Adrianus is right. Those who will lose are people like Fair Dinkum, who are struggling with low incomes but don't qualify for pensions. THE WEALTHIER ONE IS, THE LESS THEY LOSE. Great policy from a party that claims to support the battler! But what those on welfare don't realize is that the general economic fallout could mean they are hurt worst of all ultimately.

    Apparently the only battlers Shorten and Bowen care about are those on welfare. Although I read a claim yesterday that Labor has now introduced a grandfather clause exempting SMSFs that had at least one member in pension mode (not on a government pension) as at March 2018. Again, confusion reigns. Several have disputed that and nobody seems able to offer any certainty - and Labor MPs won't comment!
    Adrianus
    1st Feb 2019
    10:05am
    I'm sorry Misty, this Shorten FC tax is not like the mining tax where nobody gets taxed. Labor hope to get $11b of their $200b in new taxes from this new Shorten FC tax.
    I have tried to understand the Labor philosophy, I really have. It makes no sense to me.

    When the Shorten FC tax proposal was initially announced it was a tax on rich people. But in all clarity rich people will not be taxed any differently.
    Labor is simply lying, there is no other explanation.
    I agree with Rainey, your Financial advisor would know a lot more about the effects of the changes to the Shorten FC policy than your member's office.

    Shorten thinks he is in an unlosable position in May. He is not Bob Hawke. Hawkey had the political capital to spend on introducing new taxes to his voter base. Not many politicians can have you laughing along with them while they take your money and reduce your retirement income.
    Shorten is no Hawke!!
    Anonymous
    1st Feb 2019
    11:44am
    But at this point in time, Adrianus, it appears Labor has succeeded in deceiving the majority. I am hearing people very aggressively insisting that the FC policy is a good thing because 'it's time the wealthy paid their way'. Try to tell them that it's not going to touch the wealthy and they quote Shorten in response. They just have no idea. They waffle on about people who don't pay tax. Clearly they have no comprehension of the fact that NOBODY ever got a refund unless they paid tax that wasn't legally due and payable. It's a refund of tax that WAS PAID BUT ISN'T PAYABLE. And how the hell can anyone justify giving a wealthy person or high income earner a tax credit but keeping the huge chunk of income taken from the poorer person's income that was never due and payable and always, morally and ethically, should have been refunded.

    I accept that some may be manipulating to appear to have no taxable income and then getting FC refunds that are not fairly deserved, but address that via the tax system - not by ripping off honest, ethical people who genuinely have low incomes. Or, as some have suggested, cap the FC refunds - though there are far better ways to address the current revenue deficit. Logically, fixing the tax on super is the obvious first choice method.

    As many economists and tax experts are asking - is this the first hurdle? Will the next be to keep overpaid PAYG and PAYE taxes? I suspect there would be a massive uproar if that were proposed, and yet it's not really that much different. We are talking about the income retirees NEED to survive - income they carefully planned for and invested specifically to earn, and income that many have no or very limited options to replace, other than perhaps by upsizing their family home or taking a cruise and claiming the OAP .

    The $11b is simply not there to collect. Most of that claimed saving was achieved by the LNP's TBC legislation, which resulted in SFRs with substantial assets paying tax, so they will claim their FC off their tax. Nothing there for Shorten. Vast numbers of those who will be impacted will resort to the OAP, costing the nation more. Some will find ways to switch their investments away from affected shares. Some will move into super funds that escape the ALP's clutches. And overall, the entire nation will lose because contributing expansion capital to companies seeking to grow and employ will be less attractive. Share prices are likely to fall - resulting in reduced wealth across the board. With reduced company investment resulting in less expansion we see reduced tax income tax, company tax and GST revenue. Reduced spending by those impacted reduces GST revenue and business profits, and therefore job growth and income tax revenue.

    Despite Shorten's claims to the contrary, this policy DOES impose higher taxes. And latest studies reveal it will reduce the superannuation income of some $2.6 million members of institutional super funds, as well as 660,000 SFRs and individual shareholders. You simply can't slash income like that and not cause economic damage. Even the OECD agrees the policy is bad and will do economic harm.

    I suspect the reason Shorten and Bowen have ordered silence on the issue is because they know they stuffed up badly and they don't know how to save face!

    Thankfully, awareness is increasing - albeit slowly. But it's not helping that some who are coming out whining about losses are disclosing a financial situation that makes them appear to be wealthy enough to withstand the loss without much pain. Of course those shouting 'just spend your savings' don't have any comprehension of economic realities. It's fine to spend your savings in your 90s. But in your mid-60s, if longevity is likely, it's damned dangerous. And nobody went without to save so they could give it to the taxman to hand to someone who didn't save. Charity and generous welfare is desirable, of course, but our system simply doesn't do enough to determine need accurately, nor to assess genuine capacity to contribute more to be redistributed.

    We need the entire retirement funding system overhauled - not a stupid bandaid over a perceived problem, at the massive risk of creating far, far worse problems.
    Adrianus
    1st Feb 2019
    1:07pm
    Labor have never really understood economics, or if they did it was always overridden by political expediency. If they have released policies outlining the $200Billion in new taxes this far out from the election then what are they holding back? This Shorten Labor party could very well be the most damaging government we have ever seen. At least when Rudd and Gillard were there they may have acted as a speed bump to the lunacy.
    Adrianus
    2nd Feb 2019
    2:39pm
    And we all know how battered and bruised Rudd and Gillard were by the end of their tenure.
    Give Shorten a High speed freeway and watch us go down hill.
    The CFMEU have just given Bill Shorten $1m for electioneering so does anyone think they are not expecting interest on their investment?
    kaithy
    2nd Feb 2019
    3:00am
    it's not really good about the poor community.
    https://www.smartsurveys4u.com/famous-daves-guest-satisfaction-survey/
    Mez
    2nd Feb 2019
    4:23pm
    AGREED!
    Mez
    2nd Feb 2019
    4:21pm
    For many decades, most people overseas preferred to rent unlike us who thought that bricks and mortar is always safe.
    A great reflection on our business people who have very little entrepreneurial aptitudes and spillover into the general population who who do not have the business savvy to invest well.
    The article is wrong to suggest that only the poor are forced to rent for it is totally incorrect, BUT, Rent Assistance and Age Pension increases to bring us into line with those overseas IS THE WAY TO GO AND WELL OVERDUE!
    Maybe voting for Labour is the way to go as long as they do not increase the number of migrants willy nilly otherwise our country will go down a SINK HOLE QUICK SMART!
    Anonymous
    2nd Feb 2019
    5:38pm
    Rents will skyrocket under Labor, as their changes to CGT and negative gearing force less wealthy investors out of the market. Although they might force retirees into the market with their franking credit policy changes killing the income from shares. I wouldn't gamble on them getting anything right, personally, but I would be prepared to bet on them increasing migration - especially the intake of refugees, and specifically Muslims. It appears their goal is to have as many people as possible on welfare, where they can control them. They appear to absolutely detest anyone who strives to be self-sufficient.
    Misty
    2nd Feb 2019
    5:45pm
    I don't know a lot about Negative Gearing but when young first home buyers are unable to buy a home because local and foreign investors are willing to pay over the top for their 4th, 5th, 10th and so on, investment properties, something needs to change.
    Misty
    2nd Feb 2019
    5:50pm
    I don't think Labor will allow more refugees into our country, it would be political suicide for them if they did that. Refugees and migrants should not be allowed to come here if they are not willing to abide by our laws, one in particular, one wife only, some on welfare here have 4-5 wives because it is allowed in their country and they are getting welfare for them and all their children, NOT ON.
    Anonymous
    2nd Feb 2019
    5:54pm
    Abolishing negative gearing won’t change a thing
    I would have bought all my 4 investment for cash or absorbed the interest cost and passed on the extra cost to the tenant where possible
    Karl Marx
    2nd Feb 2019
    5:58pm
    I believe that scraping negative gearing will not have a great impact on house prices, affordability or rents as these will be driven by the market.
    And one of the biggest groups getting the benefit from negative gearing are politicians themselves.
    Lets just get rid of negative gearing entirely & see what happens as I believe very little will as most of those that it affects will will look at other ways to invest.
    Adrianus
    3rd Feb 2019
    11:11am
    Mez, Misty, I can see that you didn't go to the recent Labor Conference. Because if you did you would have heard Bill Shorten explain the Labor Party Policy on Immigration. You missed the part where he said Labor will increase refugee intake to 32,000.
    Anonymous
    3rd Feb 2019
    9:00pm
    Yes, 1984, rents are driven by the market, and when there is less incentive to own investment property there are less properties so more tenants competing for properties drives the rents up. That's how the market works. It's called 'supply and demand'. Lothario might have been able to buy his investment properties for cash, but lots of investors rely on negative gearing and/or CGT concessions and couldn't own property otherwise. When they pull out of the market, there is less building activity so fewer jobs and fewer new homes and units being built and offered for rent so rents rise.

    See what happens? Of course most it affects will look at other ways to invest. Same as with the franking credit policy. People will look for ways around the loss. Doesn't mean it won't do horrendous economic harm - even if some do find ways that don't cause personal loss. For example, my way around loss is to spend a little and apply for a pension. I'll cost the government twice what Shorten's stupid brain fizz saves by slashing my income. A few hundred thousand are thinking the same thing. Then there's the hundreds of thousands from whom Shorten THINKS he's getting extra tax but Turnbull got there first and their situation won't change. And there's the hundreds of thousands who are taking the advice leading investment advisers are handing out freely - i.e. to transfer their shareholding to a large institutional super fund and retain other assets in their SMSF. Of course many will turn to foreign investment, reducing Australian economic growth. And so it goes on and on and on. There is no easy solution. It's easy to make glib comments like 'most will look at other ways to invest', but it's precisely that that causes the problems. Labor isn't assessing the cost of the reactions to their brain fizzes.

    Of course it is possible that overseas investors will take up the slack in property investment and rents won't rise. That would be good wouldn't it? NOT!