Bill Shorten Attacks Low Income Earners With Labor’s Class War!
“The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”
F. Scott Fitzgerald
I’ve often thought about that Fitzgerald quote when I hear the Coalition talk about Bill Shorten. On the one hand, he’s a captive of the unions and he’ll just do their bidding once he becomes PM; on the other, the election of his government will lead to more industrial unrest. And then there’s the fact that he’s a social climber who’s trying to suck up to billionaires, while simulataneously waging classwarfare.
Yes, holding two opposing ideas and still being able to function is the result of a first-rate intelligence. This, of course, explains the recent disfunction in the Liberal and National Parties.
Watching Josh Frydenberg’s video about negative gearing, I was amazed by two things:
- He’s trying to emulate Scott Morrison’s recent habit of walking and talking at the same time. I’m not sure the reason for this. Perhaps, it’s to suggest that politicians are too busy to sit or stand. Perhaps, it’s the idea that movement will distract from what they’re saying and lull us hypnotically into repeating, “Scott has always been our leader, these are not the drones you are looking for, move on!” Whatever, it reminds me of the home movies where my Nanna used to sit posed for a photo while telling me that it was a movie so it was ok to speak. Perhaps I should add that these were silent movies so all one saw was the lips moving but the meaning was lost… Exactly like Josh and Scottie.
- They seem to be persisting with the suggestion that the change to negative gearing not only will push prices down, but also up. While Josh doesn’t suggest that they’ll be lower for sellers, but higher for buyers – which they seemed to be saying when the policy was first announced – but he does suggest that while prices will be lower, rents will be higher. Now, you don’t need a PH.D in Economics to work out that if prices are lower and rents are higher, then it’s a great time to buy whether you’re a first-home buyer or an investor. While not all first home buyers would be able to get finance, investors should find it easy, because if I can buy a property for repayments of $2000 a month and I’m getting a rent of $2200 a month, there’s no limit to the number of properties I can buy. And believe me, if prices went down and rents went up, that’s exactly where we’d be. (Of course, if I did that I’d be stuffed if interest rates went up significantly, but that’s not going to happen according to the Liberals because Shorten’s policy will put a dampener on the whole economy!)
Whatever, the fundamental trick that they seem to be trying to pull is the old, “Look over there, nothing to see here!” Frydenberg is making much of the fact that a large number of negative-gearers earn less than $80,000. This is no surprise. The whole strategy behind negative gearing is to reduce your taxable income, so when Peter of Point Piper complains that he only earns $36,000 a year, one not only wonders why he doesn’t sell one of his 96 investment properties, but how he manages the school fees for his three children which far exceed his entire income. Using Josh’s logic, the next thing will be that some of our largest and most profitable companies won’t be paying any tax just because they’ve found ways of reducing their income so that… Oh wait, I may need to think about this before I go on.
Anyway, when I read about about Labor’s attacks on low income earners and poor retirees, I get the feeling that the reporting lacks any sort of analysis. Yesterday, for example, I read about a poor retired couple who were going to lose $17,000 in franking credits.
Now while I do understand that for people who’ve made their retirement decisions based on getting a healthy kick along from these franking credits, there may need to be a bit of an adjustment. We may need to look at how people who are likely to suffer a hit they can’t afford can be compensated.
However…
If the couple were receiving $17,000 a year in franking credits, that means they are receiving over $60,000 a year in dividend income. Using a generous average of a 4% return on the share portfolio, then they own at least $1,500,000 in shares alone. Any money they’ve tied up in superannuation or property would be separate to this.
Franking credits were introduced so that income wasn’t being taxed twice. Once, when the company paid the tax and again, as part of your income, when you received a dividend. When Howard introduced the idea that people who didn’t have an “income” should receive the money in the form of a payment, he was actually creating a situation where the money wasn’t even taxed once, because the people not paying income tax aren’t being taxed on it twice, they’re receiving the tax paid on it by the company because they don’t pay any tax to offset this against.
Yes, I know it’s very complicated, and very boring. And..
Hey, look over there, is that an embassy being moved or is it a potential terrorist attack?
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New England Cocky -
totaram -
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John lord -
ChristopherJ -
Kaye Lee
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Jagger -
ChristopherJ -
Matters Not -
Matters Not -
Shauna B. -
ajogrady -
Peter F -
totaram -
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Matters Not -
totaram -
MöbiusEcko
Return to home pageYou are a naughty boy Rossleigh, exposing the Liarbral Notional$ to public ridicule for their own words. Slap on wrist with wet tram ticket!!
Bring on the 2019 Federal election so the we may finally dispose of these self-serving egomaniacs into the WPB of Australian political history.
“If the couple were receiving $17,000 a year in franking credits, that means they are receiving over $60,000 a year in dividend income. Using a generous average of a 4% return on the share portfolio, then they own at least $1,500,000 in shares alone. Any money they’ve tied up in superannuation or property would be separate to this.”
Indeed, indeed! This is what happens when you bring a little bit of arithmetic into the picture. You discover that the “poor retired couple” are actually multimillionaires! After all, if they have 1.5 million in shares, surely they would have already reached the 3.2 million cap on their joint super? How dare the Labor party attack the incomes of multimillionaires! This is clearly the politics of envy!
I forgot to add that under Labor’s proposal these two poor people would probably have their payments grand fathered, but let us not get into technicalities.
well anyway you look at it, it is Labor’s fault and big taxing Bill will double the national debt… er wait
big taxing Bill will cut funding to school and hospitals which we have invested in in record amounts … and open our borders and allow a tsunami of illegal foreign terrorists to take all our jobs and lay about on the dole whilst simultaneously plotting to ban xmas
sigh –
pity it isn’t satire Rossleigh, just incredible
I heard a rumour that he was planning to ban seat belts.
wordsmith
thinker
funny
man, TY.
Yes, Bill’s been distracted by the gold and cannot, now, turn back to, well us Still, his govt will be streets better than the bloggers currently in power
These videos that they are doing are getting ridiculous. PLEASE make them stop!
John Lord, don’t you know “poor people don’t own cars or drive them very far.”
Jagger, they often do own cars, bro, lots of them unregistered down at the carpark of my local Salvos. But as you allude, they don’t drive them and often owe fines and so on that prevent them from ever getting a license again. The solutions require society to value them as citizens that deserve a good life here and spend the money so that they can operate vehicles.
Don’t ask me how to pay for it
RE KL @ 3:34 pm. Note the comment from Dee Madigan (Campaign Edge)
Indeed! One wonders how many will get the irony? What a superb backhander from a true professional to a rank amateur. Now that will get his BP up.
totaram at 12:55 pm
Perhaps you might get into the technicalities – because as I understand it at the present (it keeps changing even though the boast at the time was – it’s a well considered policy) while there will be grandfathering of taxation arrangements when it comes to investment properties, no such loophole will apply to dividend imputation. But I remain open to your ‘technical’ explanation – and do so with (potentially joyous) anticipation.
Perhaps I should point out, that those who rely on superannuation income will not escape the crackdown on dividend imputation because (consciously or not) those who are in growth funds will inevitably receive a lesser pension as such funds currently benefit from dividend imputation arrangements. Am certain, that such pensioners will become more aware as the election approaches and the LNP attack with a ferocious campaign. But fear not – Labor’s thought of ALL the implications of this well considered policy.
But if history’s any guide, they haven’t
Wonderful article Rossleigh Brisbane. I loved the way you explained the reasons why the LNP are wrong, wrong, wrong when they attack Bill Shorten and Labor’s policies. But that’s not the only reason. I also love you because you spelled NANNA correctly. Thank you! I’m a nanna and had to argue about the spelling when I first became one. Pathetic isn’t it? :o)
Everything wrong with Australia has John Howard’s fingerprints all over it.
@ajog: I agree, and it must be hell inside there. I trust that his little hell will be complete after the next election.
MN: I am a self-funded pensioner (allocated pension from super fund) and my fund has assured me that the dividend imputation cut will not affect the “returns” on my pension corpus. They explained that they have enough tax-paying members in the fund to offset the dividend imputations. Maybe they tell porkies and you know better?
I should have said that certain pensioners are to be exempted, rather than “grandfathered”. I believe that is the current policy.
totaram, I too am what is (laughingly) called a self-funded retiree. You say that your fund has assured you that the dividend imputation cut will not affect the returns ... Stop there for a moment and consider how a cut will not affect (or effect) the returns. How is that possible? When is a ‘cut’ not a ‘cut’?
But your reply continues:
So your fund will take from (entitled) tax paying members and give to those who are meant to be affected by the cut. One wonders what those tax paying members think of that arrangement? One wonders whether it would withstand legal challenge? Or perhaps they are telling porkies and hope it goes undetected. (It won’t).
My fund is Q Super – and they are honest (while still not trying to frighten the horses). I cite their notification to all members.
If they told me porkies, I would let them know. Nevertheless, you might try to read between the lines. eg limited impact. As they openly admit – given changes to franking credits Australian shares would become somewhat less attractive, so we would likely be a bit more overseas. Overseas shares do NOT have franking credits either.
I stand by my comments made earlier. Of course the effect will be affected by your asset allocation and the like. Hope that helps.
Bill Shorten might not worry about us self-funded retirees, but it is nice to know that Daniel Andrews in Victoria cares about mums and their babies:
https://www.abc.net.au/news/2018-11-19/victorian-labor-promises-baby-bundles-first-aid-for-new-parents/10509662
helvityni, Daniel Andrews proposes making the lives of grandparents much more difficult re what to buy the newborn. Presumably the contents come in different colours with pink for … and blue for …
A pity he didn’t look to Finland for his education policies. But given the baby bundle idea goes back to 1930, maybe there’s still time to catch up.
MN: I thought the explanation would suffice. Let us work through it.
1. The “cut” refers to persons who get a refund from the ATO for dividend imputation that does not offset any tax due. ONLY this refund will be cut.
2. If you are paying tax and the imputation reduces your tax to any amount over zero, – no change.
Stop me there if I am wrong.
My Super has investments in Australian shares which give dividend imputation of $x a year.
My super has enough funds in “accumulation mode” that the tax on their returns at 15% / annum exceeds $x. The dividend imputation then offsets this tax to the extent of $x. There is still some residual tax to be paid.
Hence in my super, there are no dividend imputations left over for the ATO to give a refund. Hence no change.
Please explain to me how my returns will be reduced.
Your super is making a vague and general statement, which will never be wrong, no matter what. My super has done the sums and told me there will be no change. The CFO of my super said this in a public forum consisting of several hundred retirees. I’m pretty sure he has done his sums.
You see, careful attention to arithmetic always gives better results. And a little attention to high-school algebra would serve everyone very well, but sadly that is a bridge too far. Even Wayne Swan does not understand the “3 sectors financial identity” or at least refuses to understand it, or to admit that it is true. Very sad. My children are already suffering and will further suffer the consequences.
Two things.
Morrison’s polls are bad, and as has happened on bad polling with every L-NP government since Howard, terrorist news stories and AFP raids suddenly pop up everywhere. Morrison doubled down by adding the immigration intake to the mix.
This one got my goat up and I had to double take to ensure I heard right. Channel 9 news reporting on Shorten’s about to be released energy and the reporter said Shorten is about to release a policy after a 10-year policy vacuum by Labor.