The Budget day decision set to sting retirees

Westpac’s chief economist expects the RBA to cut interest rates to just 0.10 per cent.

retired man ponders his retirement

Older Australians living off retirement investments have had an extraordinarily tough few years with interest rates continuing to be slashed but, believe it or not, there are some predicting that things are about to get worse.

While the Reserve Bank of Australia (RBA) official cash rate is currently at a historically low 0.25 per cent, Westpac chief economist Bill Evans believes it will be cut further when the board next meets.

The RBA is set to meet and decide on the cash rate on 6 October, the same day as the Federal Budget. And while the RBA traditionally waits to see what is announced in the Budget before moving the cash rate, Mr Evans believes they will cut rates to 0.10 per cent on the same day, ahead of that night’s announcements from Treasurer Josh Frydenberg.

“The RBA is expected to announce all these policy changes on 6 October, the day of the announcement of the Federal Budget, as a Team Australia initiative,” Mr Evans said in a statement to clients.

“The prospect of the RBA ‘sitting back’ to assess the Budget, which has been seen as the ‘norm’ in previous years, is not appropriate for these unique times.”

The RBA cutting the cash rate may be the right thing to do for the economy, but it certainly does not do retirees any favours.

Retirees living off the interest earned from investments and superannuation will feel the pinch most of all, as lower interest rates mean lower returns. This may force some to take bigger risks in order to live a more comfortable retirement, or even preserve their current standard of living.

As YourLifeChoices has previously reported, savings products have faced an enormous number of cuts in recent times.

As of August 2020, the average savings rate was cut from 1.15 per cent at the same time last year to 0.65 per cent. Aussie banks and financial institutions have made 1736 cuts across all savings products since 1 March 2020.

Term deposit holders were the biggest losers, with term deposit products copping a total of 844 cuts. Savings account rates were cut 635 times in the same time, and the remaining 257 cuts applied to bank accounts.

Mr Evans is also predicting that the cash rate will stay at 0.10 per cent for all of next year and potentially for much of 2022, with unemployment caused by the COVID-19 pandemic being slow to recover.

The Westpac projections are based on a speech RBA deputy governor Guy Debelle gave to the Australian Industry Group on Tuesday.

In that speech, Mr Debelle said that the economy was not going to recover from the COVID-caused recession quickly.

"We are now in a gradual and uneven recovery," he said.

"As the outlook for the Australian economy unfolds, the board will continue to assess the merits of the range of monetary options to best support the economic recovery."

The RBA’s current forecast is that the unemployment rate will still be above 7 per cent by the end of 2022.

Do you worry about the lower cash rate? How will it affect your retirement? 

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    COMMENTS

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    tobymyers
    24th Sep 2020
    10:30am
    If they want to get fair dinkum and help people with low interest rates then they should lower Credit Card interest.
    I know the banks won't do this because this is their cash cow.
    But, I do have to ask why are all the economists ignoring this and have been ignoring the impact of lower Credit Card rates ?
    Tom
    24th Sep 2020
    12:51pm
    The only thing government could do is to forcibly cap card rates and mandate certain provisions within card arrangements. I don't see why the government doesn't try that.

    Banks will never stop trying to maximise their profits of credit cards. However, people have several options:
    .Pay the full amount on time every month.
    .Pick a card with smaller interest rate.
    .Go without in bad times.
    .Go without in good times to build an emergency bucket to ensure the card always gets paid off.
    Jenny
    24th Sep 2020
    1:18pm
    I like your thinking, Tom!
    Greg
    24th Sep 2020
    4:09pm
    There are many credit cards out there with lower rates if you shop around.

    Interest rates are high on them as they are unsecured credit, mine have $40,000 worth of credit which is not secured in any way. Also fraud on credit cards is massive, people literally live off credit cards that have been stolen, overseas they can be easy to use and often use them until the expiry date.

    All that fraud and all the bad debts from people not paying back their balances has to be recovered somehow and interest rates is the major way.
    I NEVER pay interest on my cards and never pay fees either, use them constantly for everything I buy and pay the balance at the end of the month.
    Hoohoo
    24th Sep 2020
    5:14pm
    I agree, Tom.

    I got caught many years ago when we were broke and my Mum-in-law was very ill in Perth. We paid for air tickets from NNSW with a credit card. She died while we were there though the return flights were before the funeral, so we changed flights. I didn't know how the interest would compound so quickly, and even after we paid it off, they still charged some interest onto the next month's account, which continued to accumulate again unless paid off straight away. Don't book anything up for a month because there's no interest-free period until everything's paid up-to-date.

    Since then, I'm like you Greg - I NEVER pay interest on my cards though I use them constantly for any items that don't carry a credit surcharge (like Jetstar!). I do pay fees however, but only because I have a rare Rewards plan that pays for itself many times over.
    johninmelb
    25th Sep 2020
    6:48am
    I suspect credit cards are seen as a "lifestyle choice" and not a necessity to sustain life.

    No-one NEEDS a credit card, we CHOOSE to have them for various reasons. Those of us with at least one functioning brain cell enter into these credit card contracts with our eyes fully open in regard to interest rates, annual fees, and all the other onerous conditions that banks impose. However, none of that is to say that having entered into a contract that meets our needs, our circumstances won't change. We all know that they can and will, ie, loss of job, ill-health, family emergencies etc, etc.

    One of the secrets is of course, as others have pointed out - know how to use those cards to YOUR advantage, ie pay the balance in full every month and avoid interest.

    I have two cards, AMEX and Woolworths Visa which earn me Qantas points. And yes, I pay quite large annual fees for that. However the fee on my Amex card is rebated back as a Qantas credit towards a flight. So I don't lose there. Both cards have low credit limits well within my ability to manage. I pay the balance every month without fail and never pay interest. I never ever use the card to buy something I don't need at an inflated price just to earn points. Every single transaction on those cards has to be to my advantage or it doesn't happen. For example, Woolworths Visa gives me no points for Government transactions, ie car rego, council rates etc, so I pay them on my debit card. If they won't reward me, they lose the transaction, simple as that. If they punish me, I punish them.

    Credit cards are often demonised, but you can make them work for you.
    SuziJ
    25th Sep 2020
    10:49am
    A good solution to credit cards - don't have one. Live within your means and don't rely on high interest credit cards - simple as.
    Rae
    26th Sep 2020
    6:50am
    I have a credit card which is automatically paid off each month. It costs me $95 a year and I haven't had to pay for a flight anywhere for years if flying qantas. I only have two direct debits one for the credit card and the other for health insurance.

    If there are surcharges at all I use Bpay.
    Youngagain
    28th Sep 2020
    4:28pm
    I love my credit card. It costs me $195 a year. I pay no interest at all because I pay the full balance on the due date every month. The payment happens automatically by direct debit from my bank account. Reward points more than cover the $195 fee. Most years, I end up with about $500 in reward points that I can use for Christmas shopping. I also get free insurance on everything I buy - meaning if it breaks or is lost within 90 days of purchase it is replaced free. I get free travel insurance. And all warranties on goods I buy on the card are doubled automatically. The only surcharges I incur are at Aldi and the reward points more than compensate.

    I don't even know what interest rate applies to my credit card, because it's not relevant given that I pay the full amount on the due date.
    tobymyers
    24th Sep 2020
    10:36am
    it's pretty weird that even on a mortgage even with the lower interest rates I am still paying off the interest and making very little impact on the principle it just never seems to move much and yet even credit cards with their high interest can be paid down quickly . I wiped out $50,000 in debt in 4 years on Credit Cards yet that home loan has barely budged.
    jaycee1
    24th Sep 2020
    11:53am
    tobymyers, if you have been paying your mortgage monthly try changing to fortnightly payments instead. I would also be getting an independent person to look at why your principle is not moving as that doesn't seem right.
    Tom
    24th Sep 2020
    12:53pm
    Some people get their salary paid directly into their mortgage account and use redraw to pay their living expenses when needed. That works. Worth a look.
    Farside
    24th Sep 2020
    1:40pm
    have a look at the mortgage agreement and see how interest is calculated. One of the quickest ways to affect your mortgage is to make more frequent payments as jaycee mentioned.
    Horace Cope
    24th Sep 2020
    2:22pm
    jaycee1, paying fortnightly or weekly makes little difference, in fact to do so would only save enough in a year to buy a couple of schooners. A book was written about this in the '80's and was a best seller and made people think that paying fortnightly or weekly saved $thousands when the truth was that it was asking people to pay more off their loan each year.

    The author made a simple error asking people to divide their instalment by 4 and pay weekly but what was overlooked was that there are 12 months in a year and 13 4-weekly periods in a year so, in effect, borrowers were asked to make 13 instalments and any reduction of principle will automatically reduce the term of a loan and therefore give a large saving.

    To show what is meant by all of this, if an instalment is $1,200pm, dividing by 4 gives $300pw. Multiply $1,200 by 12 that gives $14.400pa but if you multiply $300 by 52 the answer is $15,600pa or one more instalment of $1,200. The true weekly payment to equate to the monthly payment of $1,200 is $276.92.
    Greg
    24th Sep 2020
    4:35pm
    tobymyers - Your mortgage is written over a long time frame, commonly 25/30 years, where as your credit card was paid off in 4 years.

    There's no tricks to this, just pure maths. If you had a mortgage for $50,000 at 3% it might be written over a term of say 20 years so the payments for this would be $277 pm. The total paid back in that time would be $66,480.

    The credit card interest rate maybe 20%, a balance of $50,000 over 4 years means you paid (on average) $1,522 pm and a total of $73,056.

    Obviously the repayment per month is far higher and the total paid back over such a short term of 4 years is higher then the mortgage.
    Greg
    24th Sep 2020
    4:55pm
    Horace Cope - You obviously have little understanding of how interest works on loans and whoever wrote the book has no understand either. Or you read it wrong.

    Paying a mortgage written over a long term like 20 to 30 years fortnightly compared to monthly WILL make a substantial difference to the term length and total amount of interest paid.

    Example: $500,000 at 3% and $2,400 pm will take 24 Years 7 Months Total payment $707,161
    $500,000 at 3% and $1,200 pf will take 21 Years 11 Months Total payment $682,016

    By simply paying HALF the monthly repayment every fortnight you save $25,145 and cut the term by near 2 Years 8 Months.

    Yes obviously you are paying one more "monthly" repayment per year but there's more to it then that.

    Interest on a loan is calculated daily, everyday whatever the balance is at the end of the day the 3% (3%/365) is calculated on that balance, the more often you reduce the balance the less interest that is calculated on your loan. So even paying weekly can help, paying daily helps more but with both of those scenarios you don't get the larger benefit of one extra monthly payment per year.
    Hoohoo
    24th Sep 2020
    5:36pm
    Tobymyers, have you got an interest-only mortgage? It sounds like it. Otherwise, the principle should be decreasing. I pay monthly, because I figure I get the 1, 2 or 3 days of the month for free (after 4 x 7 days = 28). If you have a large mortgage you'd be advised to pay more off earlier sooner than later. You will be rewarded hugely in the long run.

    However, I don't pay any interest on my mortgage because I have an offset account (which has the same amount as is owing on my mortgage), so it lowers automatically as it pays the mortgage. I have deliberately not paid off my mortgage so:
    1) I don't get charged for an early discharge,
    2) I can redraw over $50K which I've paid in advance, in case I have a medical emergency. I'm healthy so I don't have private medical insurance and therefor save $3K a year there), &
    3) I won't qualify for a new mortgage these days (hubby on OAP), and I'm planning to move at some stage.
    skinner
    24th Sep 2020
    8:15pm
    Paying weekly or fortnightly, instead of once a month, DOES WORK & it works well! I repaid my first home this way when the interest rates were high at 13.5% interest! While it was only on a loan of $35,000, way back in 1985, it's still better to repay weekly or fortnightly rather than once a month! This is because you are charged interest on what is outstanding. The banks use the formula LI = P x R T/365, or Loan Interest = Principle X Interest rate X
    no of day's between payments/365. Thus on a $50.000 loan at 13.5% interest, the monthly interest component is 35000 x .135 x31/365 = 401.31. I repaid $200 a week so after week 1 we have 49800 x .135 x 7/365 = 128.94. Initially before making a repayment, the interest would be 50000 x .135 x7/365 = 129.46, The difference is small, 52c, but it's better off in your pocket than in the bank's coffers! I repaid my loan within a decade, despite having a family & being the only income earner! If nothing else is remembered from this, remember the formula & use it to your advantage! If the minimum monthly repayment is, say $1000, then pay $250 a week! Try it & see for yourself!
    Allenmack
    24th Sep 2020
    11:07am
    Isn't it amazing. The cuts in interest rates have done nothing historically to rectify the economic situation but they keep on keeping on. It's like "we have a hammer and everything looks like a nail". Insanity is doing the same thing over and over again and expecting different results.
    Joyful56
    24th Sep 2020
    2:20pm
    Absolutely agree with your comment.
    Greg
    24th Sep 2020
    4:59pm
    '"done nothing"

    You can't say it's done nothing - if rates were at 10% still would people be as keen to borrow compared to 3%?

    You can say the interest rate reductions haven't had a larger enough effect on the economy and a lower rate maybe needed. There is very little that can be done to MAKE people get loans and spend money, all you can do is try.
    Hoohoo
    24th Sep 2020
    5:47pm
    Agreed Allenmack. This Liberal government has been trying to make people borrow by forcing the RBA to lower rates, but no-one will borrow when they're worried about the future.

    What would make people and businesses confident about the future? I suggest a price on carbon, so business could confidently invest in low-carbon options. Presently, they are worried about investing in stranded assets. This is why no banks or insurers will back up Adani and it's rail-to-port infrastructure, because they KNOW coal has no long-term future. It doesn't matter what the interest rate is if no-one is keen to borrow money.

    We want infrastructure for real, long-term jobs which will ultimately boost the economy and society. Investing in coal is dead money, just as paying rent is dead money.
    Rae
    26th Sep 2020
    6:56am
    You can assist people to spend more by raising incomes rather than lowering interest rates.

    More money coming in means more confidence to borrow and spend.

    The money is ending up in tax havens and in assets like houses, businesses, shares , bonds and term deposits.

    If the fixed the CPI then pensions would increase and so would wages.

    Housing costs need to be added to the basket used to measure inflation.
    Hoohoo
    1st Oct 2020
    7:55pm
    Yes, I totally agree Rae. Pensioners will stimulate the economy, as will lower wage earners.

    Extra money in poorer hands stimulates the economy much more than extra money in richer hands. People on low incomes spend it all, while wealthy people invest in real estate, shares, superannuation, bonds, etc., which does nothing to stimulate small, local businesses, which are the real lifeblood of the economy.

    I call it "trickle up economics". It actually works, unlike trickle down economics.
    Milly
    24th Sep 2020
    11:14am
    tobymyers, if you want to reduce your principle on your mortgage this is how you do it with your next mortgage payment add $1000 extra on this payment, then pay your regular mortgage 2 weeks in advance, this will reduce your principle. If you can afford it add a little more to your monthly payments. I did this and reduced my 25 years mortgage to completely pay off in 7 years.
    Greg
    24th Sep 2020
    5:00pm
    Exactly
    Tanker
    24th Sep 2020
    11:27am
    So much depends upon how the government intend to restore the economics of the country following the pandemic. One point not to lose sight of is the extraordinary high level of debt accumulated over the last 7 years.
    Australia is actually in a very good position to reduce the debt by taking a measured approach to it. If the government opt for the classic right wing "Austerity" method then we are in trouble, as least those of us ordinary people are.
    This is what frightened me with the statements earlier indicating we would follow the Thatcher model. That will be disastrous for Australia.
    Hoohoo
    24th Sep 2020
    6:04pm
    Yes Tanker, the Thatcher model would indeed be disastrous for Australia. Trickle-down economics has not only not worked, it has squeezed the low paid when there's nothing left to squeeze out of them. This has helped to shrink the economy.

    It's also produced stagnant wages for the lowest paid jobs, while corporate profits soared by 20%, shareholders have benefitted and CEO's have received very generous bonuses. It's morally corrupt in my view - those bonuses should have gone to the workers who created profit and wealth for the corporation.

    That all said, I've been pleasantly surprised by Morrison regarding Jobkeeper payments and COVID payments to the unemployed, though stopping these payments too abruptly will have a devastating effect on those people and the recovery of the economy after COVID. University and childcare employees should have been included, and we'll all pay for that down the track.
    Janus
    24th Sep 2020
    11:44am
    Deeming? Any cut in interest rates should be reflected in this punishment.

    No doubt our Thatcherite Treasurer will hand out a bit of cash, but there is not a lot to spend it on these days.

    Doesn't buy my vote....
    Mootnell
    24th Sep 2020
    12:29pm
    I agree. They won’t alter deeming or credit card interest. Banks and government are hell bent on having everyone as wholly reliant on them as soon as possible. No thanks at all to years of liberalism ( you can thank ex banker Turnbull for bail in laws) aided and abetted by labor.
    They all know we want to keep industry within Australia and get rid of privatisation yet yesterday, in the face of people’s wishes, they are spruiking the ‘one day’ sell off of our broadband.
    They all sicken me with the rape of the Australian people.
    Joyful56
    24th Sep 2020
    2:21pm
    Agree, the deeming rate is always WAY too high and WAY too late.
    Agree with your other sentiments too.
    Youngagain
    24th Sep 2020
    4:17pm
    Deeming rates are very low compared with the effective deeming rate applied to asset-tested retirees, which is over 7.5%. Be thankful, Joyful56, Janus and Mootnell.

    Personally, I think all means tests should be abolished and retirement income taxes. Nobody should be punished for having saved, invested wisely, or working and earning in old age.
    Hoohoo
    24th Sep 2020
    6:07pm
    Agreed Mootnell.
    Rae
    26th Sep 2020
    7:02am
    It was APRA that insisted on Bail In Legislation and both Labor and Liberal agreed. The smart money is flowing out of deposit accounts now and it is frightening both the RBA and the Government.

    I don't understand why aged pensioners on limited income would be racking up credit card debt when saving up is cheaper.
    JoJozep
    24th Sep 2020
    12:26pm
    I'm sick and tired of hearing Josh telling us the retirees are having it too good! Doesn't the prick realize all who had investment savings and living off the pension or super, have had their regular income cut by up to 30% because of the pandemic. I believe the deeming rates have only been reduced by a fraction, certainly not 30%. This is to keep pension payments to the bare minimum.

    The ScoMo express is deliberately playing with figures so they look like they're doing something for the economy. Well the results are damming! Wait till election time comes around. To all those goodie-good shoes how voted for the LNP, suck on the results after 7 odd years of LNP! The NP party only think of themselves and how they can get rich off the Koala's back, so they are a dead loss as a party, and only inflate the Lib's ego to stay in power. What a mess, Please explain?
    Tom
    24th Sep 2020
    12:57pm
    Not one mention of the Covid-19 in your post. Says it all about your politics.
    Give my regards to the Falcons.
    Joyful56
    24th Sep 2020
    2:23pm
    Agree with you. The economy was stuffed before COVID and while yes it has most certainly had a huge impact, the LNP had run the economy into the ground prior to it.
    And yes, Tom, my politics are for all to see too.
    Youngagain
    24th Sep 2020
    4:13pm
    But the problem we face is that Labor would do worse. They always do. They didn't get elected because they put forward policies that were going to be hideously harmful and when they were warned about the harm, they arrogantly told us not to vote for them. So we didn't!

    Both parties are pursuing the same goals. The biggest difference between them is that Labor is much better at deception. The LNP is more transparent - transparently evil!

    Of course the LNP has looked after self-funded retirees in fine style - generously allowing them to cut their drawings from super in half and live on fresh air! Not one ounce of assistance. Just 'don't spend as much of your own money'.
    KSS
    24th Sep 2020
    4:26pm
    Ok to have a rant but what exactly does this have to do with the article that is about the RBA and cash rates NOT the Government?
    Hoohoo
    24th Sep 2020
    6:30pm
    KSS this Liberal Government have been pressuring the RBA for years now, hoping they can get some fiscal outcome (thinking low rates will encourage people to borrow and invest). But we can see for ourselves this hasn't worked because people are always cautious when they don't trust the government and/or the banks. You can't get blood out of a stone, especially when workers have been suffering stagnant wages for some considerable time now.

    The Libs believe that recovery should be led by business (that's why they planned huge corporate tax cuts). COVID has turned that notion on its head and now the government has been forced to stimulate the economy with handouts, something they screamed blue murder about when Labor did it for the GFC. Turnbull even tried to talk down our economy and spook the share market, by insisting this was the path to hell and beyond. And Turnbull was a liberal Liberal!

    I think Trump has totally shuffled our previous ideas of left and right politics/economic thinking - it certainly doesn't serve people, voters or economies any more. I'm hoping we get a swathe of Independents voted in at all levels of government in the future so we can start having decent debates about issues, argued on their merits rather than Liberal or Labor dogma (where big business overtrumps all anyway, regardless of who is in power). We need to ban corporate donations - they stink up everything! Our country, environment and the whole world are becoming desperate for a change like this.
    Farside
    24th Sep 2020
    10:41pm
    not so sure it is a case of the Government pressuring the RBA, at least for the past year. The RBA has not been silent toward the Government over its failing to manage a stagnating economy.
    Hoohoo
    25th Sep 2020
    2:05pm
    The current rate is .25% because consecutive LNP Treasurers want business to invest in the economy, instead of the government investing. They believe in small government and cutting taxes, something that cannot continue indefinely but will win elections every time. Now there's so little room to lower the rate, (and it will have little effect if at all, if the last few years is any indication) that the government has to start using other fiscal signals to stimulate the economy. Again, I suggest a price on carbon so investment goes into a real economy, not one propped up by fossil fuel industry donations and us all having to pay for stranded assets.

    I have no doubt the economy will bounce back as soon as COVID has run its course, and much faster than economy-led recessions of the past. But will wages increase? Or will it be back to business as usual with continual growth, large corporate profits, dividends and CEO bonuses, while wage-earners flounder. If we want younger people to fuel our economy and retirements in the future, we're going to have to start addressing that...and fast.
    Rae
    26th Sep 2020
    7:04am
    My deeming rate was cut from 43% to 10% which is a 33% cut. There is no point having non concessional amounts in super when this can be done to deny part pensions and concession cards.
    Horace Cope
    24th Sep 2020
    12:34pm
    Again, we have a heading that is misleading. There is an inference that, somehow, it's the government's decision in the release of the budget that will affect retirees when the story is actually about what one economist thinks the Reserve Bank will do on the same day. Other economists also think that the interest rates will remain untouched so this is a nothing story.
    tobymyers
    24th Sep 2020
    12:40pm
    The fact is what the government spends on pensions is less than what we spend on defense and that is around 9.6% of budget which is down on 2009 figures
    wogaroo
    24th Sep 2020
    1:33pm
    Look, at the end of the day who comes first in this once mighty country...Do you look after your bosses or pensioners!. ScoMo and Co have found $17.5 million to help FOXTEL!!!
    But we need to freeze Pensions!!! Say no more!!
    Joyful56
    24th Sep 2020
    2:23pm
    Exactly.
    Youngagain
    24th Sep 2020
    4:15pm
    Pensions are NOT frozen, wogaroo. Get your facts straight. They didn't rise this time because the CPI didn't rise. I think that's unfair, because the cost of living for retirees certainly rose, but the pension was NOT frozen and will rise in line with CPI increases in the future just as it always has. Be thankful that it didn't fall in line with the CPI this time around!
    Hoohoo
    24th Sep 2020
    6:40pm
    The $17.5 million to Foxtel was so they'd be more inclusive for things like women's sport. But do you think people are going to pay a subscription for sport that needs subsiding? It's a bad joke and Rupert's laughing all the way to the bank. Why? because he's going to charge the public (tax-payers) to subscribe, when us tax-payers have already given him $17.5 million!!! It's just a government handout to a rich mate. Disgusting!

    The ABC and SBS should be given money to promote sports that can't yet cut a deal with commercial broadcasters.
    SuziJ
    25th Sep 2020
    11:06am
    Hoohoo, the WNBL (Australia's elite women's basketball competition) used to be on the ABC - JUST 1 GAME PER WEEK on a Saturday afternoon @ 3pm. It is still on, but on Foxtel - JUST 1 GAME PER WEEK. That's how highly many think of women in sport.

    Yet, the NBL is on Foxtel with ALL GAMES BROADCAST!

    On the flip side, the Suncorp Super Netball League (SSNL) (Australia's elite netball competition) is broadcast on the Nine network. 2 games on Saturday and 1 game on Sunday. The remaining game is on Telstra TV. Even in the pandemic, there was extra rounds played mid-week, and they were also broadcast on Telstra TV.

    What a disparity!
    Hoohoo
    25th Sep 2020
    2:19pm
    SuziJ, I am very aware of the sports coverage you've mentioned above, as my business (over 25 years) relies on women's sports (and some men's), mainly netball, both across Australia and internationally.

    I'm not quite sure what your point is. My point is that until people see how good and entertaining women's sport is, and what skilled and amazing athletes they are, (via free-to-air coverage), they're never going to pay for it on Foxtel. Like I said above, that $17.5 million is just a government handout to a rich mate. Disgusting!

    In NZ, both the Rugby and the Netball are only available on Foxtel, because all the athletes are national heroes and everyone who's interested in sport already has a Foxtel subscription. It's different in Australia where even when we're the World Champions, most male sports fans couldn't even name someone in the Diamonds' Squad. Women's sport deserves to be sponsored by the government and promoted on free-to-air, not pay TV.
    Migrant
    24th Sep 2020
    4:28pm
    I agree with previous writers, the deeming rates should reflect current cash investment rates
    My question is:-
    Will the pension rise when the CPI increases, by the increase over the March or September base ? Or will a new base be “ fixed “ for the increase .?
    Migrant
    Rae
    26th Sep 2020
    7:11am
    It appears the basket measuring inflation is "fixed" so it doesn't measure the rise in everyday costs truthfully.
    tobymyers
    24th Sep 2020
    5:53pm
    I went back a while and found that the pension received a increase of $30.00 because after a "royal commission " it was deemed to0 low but at the same time (I forget the guys name) he found that the single pension had to rise in relationship to the Married pension because he figured it was a lot cheaper for two to live and that the single pension was tooo low in comparison.
    As far as I am concerned he had this about face .
    Instead of using the married pension as a yardstick he should have used the single pension as a yard stick because remember there was no such thing as a married pension back in the early nineties so this guy justice some body or other whose name escapes me must have head his head in a political parties arse who had given guideines and directives. and I guess he had never heard of two single pensioners living together or perhaps three or four , which I guess was a reflection of the times when the wife was for washing dishes and relieving a man of his pent up sexual frustration. .
    My feelings are we should move to a single pension as many countries are doing and do away with the old idea of marriage ,defacto , being the guideline to partnerships as today who can say what is a relationship, who is in it , and what constitutes a relationship in modern thinking or on the other hand what does not constitute a relationship which is why we should bury this notion once and for all and treat every one as independents .
    KSS
    24th Sep 2020
    9:51pm
    So looks like I am being censored! Posts to this topic AND the Australian values topic both deleted!
    Farside
    24th Sep 2020
    10:44pm
    not necessarily, check tomorrow to see if YLC decides to make a topic out of it. They occasionally do this so there are not competing conversation threads.
    Rae
    26th Sep 2020
    6:44am
    Anyone risking their savings in term deposits if they need anything new or any home maintenance at all are foolish in my opinion.
    There is no point locking money in term deposits at these yields.
    Strangely I think inflation will get away simply because of the money Government is throwing at business with job keeper and subsidies and the $32 billion taken out of superannuation.
    Best to have money where you can easily get at it if needed.
    JoJozep
    26th Sep 2020
    11:12am
    Debit Cards? What's that? Never had one. Never paid interest on credit-debit cards. How? you don't need one. It's all to do with timing. Here's what you do. Open a credit card account with your bank of choice. Save some money for what you expect to purchase in full and put it into that account. Call it your personal account if you like.

    Knowing you have the money ready, go on a shopping spree to at least three major stores (Covid permitting). Look out for your TV, washing machine, fridge or whatever else you consider essential. Your advantages are:
    1. As you are using your own money there is no interest. You save around $360 on a $2,000 purchase.
    2. Most stores like dealing with cash or Credit cards, because they have zero or minimal overheads managing the transactions, and get their money within seconds.
    3. Find your favorite store and negotiate a bargain price. You could often get 10%-20% off the list price.
    4. Your $2,000 item is now $1500-$1800.
    5. Your card balance is now still $860 (say) after the first purchase, (discounting interest to pay in future). While your hot, negotiate another item for the balance. You now have an oven and washing machine for $2,000. (you may need to chip in $350 temporarily from another account)
    You owe $0. End of storey. Save for your next purchase ( $2,350) and repeat. Interest is $0 or maybe plus 1% (you gain).

    Let's see what you would have paid with a Debit only card. Oven $1,800 plus $860 washing machine plus $480 odd interest. You owe $3,130 (Approx.) eating away your debt at 18% per year. Yes you got the items seemingly for nothing, but you're paying through the nose down the track.

    No wonder people using their debit cards are always behind other people who don't. Add up what it costs over ten years and you'll find just 10 items could be over $100,000 plus $18,000 interest. If your income can't find this sort of money, wake up to the fact you couldn't afford that expensive TV state of the art oven or induction hob in the first place. But if you save first, you probably could.

    As these 10 items have a lifespan of around 10 years, be prepared to replace the items one by one, so keep your account balance always at least $2,000. Hey, you saved $18,000 dollars and maybe gained $3,500, that's $21,500 dollars still in your pocket. Do this for another 10 appliances and you could afford a new car. I've got many other examples if you want.

    How well do you fight off the advertising? Do you succumb to those constant repetitive adds on commercial television (and now sadly on SBS), to buy a useless exercise machine worth thousands you use once a year, buy now pay later costings. That's how the wheels turn that make the smart arses rich and keep you poor.
    Farside
    26th Sep 2020
    11:58am
    run me through that debit card example again JoJo, where does the $480 interest and 18% rate come from?
    JoJozep
    26th Sep 2020
    1:05pm
    Farside, I said $1800 (oven) plus $860 (washer) = $2660x18%=$478.80then,$2660+$480(rounding off)=$3,140. I said $3,130. That's assuming the majority of debtors don't always pay off their debts in a year which I believe is normal.

    The 18% was the amount charged last time I looked about 5 years ago on Credit cards.

    Note the point I'm making is any interest on borrowed money above zero is a loss. That's to the customer, not the creditor. Look at the first comment by Tobymyers in this post. I simple put figures on the bare bones of his statement.
    Farside
    26th Sep 2020
    3:14pm
    I understood a debit card takes direct from savings account so no borrowing involved, therefore no interest paid.
    tobymyers
    26th Sep 2020
    4:52pm
    Well, yes thats all nice and lovely but in the real world people want stuff, I mean to say, it's part of life ,
    What about those bills that come up out of no where you crack a tooth and need $320.00 right there right now .As a pensioner what do you do ?

    You see a credit card is not a luxury it is a necessity in many instances .

    if you know someone who will loan money to a pensioner for 5 per cent let me know , hook me up, I'll be in that .
    In the end we all die and i think I would like to die in debt if it means a better quality of life, I just think too many people are so tight they have lost sight of life .
    JoJozep
    2nd Oct 2020
    12:33pm
    I'm getting the impression some people love using Debit Cards. I agree, their convenient, easily accessible and cover you instantly to provide payment for your instant purchase, be it in store or on line. I'm assuming here a debit card is where you are in debit and the bank loans you money from their coffers, not your savings, so you owe them interest. Maybe I should be calling this a credit card, as the bank advances you credit, using their money. Here I am confused, because I never had one.

    Who cares you say? In the end it's only money! There may be no tomorrow! You can't take it with you!. Yes these assumptions could be true.

    Problem here is there is a much greater chance under present living conditions (in Australia at least), that people will live on and the day of reckoning will come at the end of the month. Then they pay back the loan plus this interest. If they don't, the banks rub their hands with glee and extend the loan plus of course their exorbitant interest. You become frustrated and agree, and the downward spiral continues.

    If you used the card for other purchases in the meantime, you may need to take out another loan (at a reduced rate say of below 10%) to help manage the debit-credit card repayments. If you can't help yourself, you get into deep trouble. Do you want this?

    It's like gambling, once you get instant gratification you become addicted. Has anyone seen any counteracting advertising that says borrowing using your card will be bad for you? I haven't yet.

    Food for thought perhaps.


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