How does the welfare system work

[Trump]

Originally Posted by 2011G6E

Probably be summed up with one sentence:
"It's not a lifestyle choice, it's not there to support your choice not to work."

There's not an endless pool of money. It's got to come from those who do work.

Negative gearing is a good one...too many idiots saying it's "those rich ******" taking advantage of it.
Really?
I know quite a few people with units/houses which they own and rent out, some of them have a few houses. They do this purely for the tax advantages, nothing more...not for a charity, not out of some social need to provide homes for people...they do it for the tax breaks, full stop. And nearly every single one of them says the same thing every time a government talks about changing/doing away with negative gearing..."I'll just sell them all off and to hell with the hassle". That, or alternatively they say they might just stop renting it out and keep it vacant for themselves as a holiday home if it's an apartment or a small house in a popular coastal or city area.

Governments ought to be very very careful about changing negative gearing...the results would be a crash in house prices as thousands of homes suddenly came on the market, and people being thrown out on the streets because the landlord has stopped renting his house.

Go back to the old days of unemployment benefits...you only had so long to find a job, and if you ever were found to have turned down even one job offer of any sort, bang, no more benefits. You don't get to choose, you don't get to wait around for your dream job. You're living off hard working taxpayers money, and they demand that only lasts long enough to get you into some sort of employment, any sort.

The price of housing needs to come down substantially, a crash in prices would only be a bad thing if it is triggered by mass unemployment (and the consequential cessation of mortgage repayments).

If they did crash as a result of the removal of negative gearing, it would allow many former tenants to get in as owners.

[b0son]

Originally Posted by The Yeti

How many do you think would be in the same boat if there were no incentives?

Investments should stand on their own two feet, they shouldn't rely on tax concessions to make them worthwhile.

[b0son]

Originally Posted by Ghia5L

Firstly it's 48% (45%?) of every $ earned ABOVE $180k. Unless you're stating you're voluntarily contributing from your entire earnings so that it's 48% ($86,400) - then in that case you're quite the philanthropist and I tip my hat to you, Sir!

You've mis-read/misunderstood. 48% of the income tax collected by the federal government goes towards welfare.

[lgpking22]

haha thats funny i totally see the struggling investor saying i own 3 houses if they took away negative gearing id sell them all or leave them empty? really your so wealthy you can just leave them empty to fall into ruin i mean come on theyd still rent them out or if the sell them someone else will buy them give us a break im sure those regular mom and dad investors whoever they are the same ones who reduce there earnings to under $80,000 using the governments logic say alot of bull**** to stop governments making good changes.

[Trump]

Originally Posted by lgpking22

haha thats funny i totally see the struggling investor saying i own 3 houses if they took away negative gearing id sell them all or leave them empty? really your so wealthy you can just leave them empty to fall into ruin i mean come on theyd still rent them out or if the sell them someone else will buy them give us a break im sure those regular mom and dad investors whoever they are the same ones who reduce there earnings to under $80,000 using the governments logic say alot of bull**** to stop governments making good changes.

Please, please, please, use punctuation and capitalisation. It would make it so much easier to comprehend your ideas.

[mcflux]

Originally Posted by b0son

You've mis-read/misunderstood. 48% of the income tax collected by the federal government goes towards welfare.

Yes, I did mis-read. I won't bother to edit my post, I'll leave the error there in its entirety for all to see.

But, 48% of govt revenue comes from income tax. And 35% of govt expenditure goes towards welfare (& as quoted by someone else earlier 7% -of that 35% - goes towards dole/similar).

[lgpking22]

Originally Posted by Loud_Noises

Please, please, please, use punctuation and capitalisation. It would make it so much easier to comprehend your ideas.

neverrrrrrrrrrrrrrrrrrrrrrrrr

[Yellow_Festiva]

I for one have bought and sold probably a dozen properties and none were negatively geared.

It was always about making money from day one. Capital gains plus monthly positive cash flow for the win.

If negative gearing was abolished tomorrow it wouldn't phase me one iota.

Just putting it out there as there is a lot of speculation on what an investor would do re negative gearing.

Having said that, I think my mentallity is the exception not the norm.

[Cav]

Some of youse blokes need to take a chill pill and calm down, oh and keep paying your taxes to keep me (who doesn't pay any income tax) in the luxury lifestyle I currently enjoy.

[Trump]

Originally Posted by Cav

Some of youse blokes need to take a chill pill and calm down, oh and keep paying your taxes to keep me (who doesn't pay any income tax) in the luxury lifestyle I currently enjoy.

Shut up old man

[2011G6E]

Originally Posted by lgpking22

haha thats funny i totally see the struggling investor saying i own 3 houses if they took away negative gearing id sell them all or leave them empty? really your so wealthy you can just leave them empty to fall into ruin i mean come on theyd still rent them out or if the sell them someone else will buy them give us a break im sure those regular mom and dad investors whoever they are the same ones who reduce there earnings to under $80,000 using the governments logic say alot of bull**** to stop governments making good changes.

They do though...and they would. As I said, straight off the top of my head I know one guy with a unit in Arlie Beach and three houses in Brisbane. He said he would sell the Brisbane houses and leave the beach unit vacant for himself. They don't want to try and find someone who will pay enough rent to make them "cash positive" or whatever...they're happy to price them so they always have tenants and they take big advantage of the tax concessions for negative gearing the properties. Every time the government discusses changes, he starts looking at real estate guides to see what the market is like to sell. He only has them for the tax breaks...not to price them so high that he wouldn't get any tax breaks and would have to start paying other capital gains on them. The unit he has said he would be happy to let sit vacant and use it for himself and the family for a holiday home rather than go through the hassle of leaving it as a "normal" rental with no tax benefits.
Another bloke was fortunate enough to buy some ex-railway houses many years ago when they were dirt cheap and put a fortune in improvements into them, and now has six properties worth a decent amount of money, all rented out. Again, he has said he will sell the lot rather than lose the big tax breaks he gets through negative gearing them in an area where rents have taken a big hit and he can't really price the rents any higher.

People truly don't realise the popularity of people on slightly higher than average incomes who love negative gearing and take every advantage of it. As I said...they could care less about "providing cheap homes for people" or some social consciousness...they're in it for what they can get out of it, full stop. We've had financial advisors talk to us at work a couple of times on how to take advantage of the system if we were interested.

The government can change it if they wish...but they had better be prepared for what happens if they do...

[lgpking22]

Whats the alternative keep taking money from other places to prop up a scam system its really a no brainier everybody here is quite happy to crush money from so called dole bludgers but wont mention about negative gearing or super taxs or child care benefits or family tax a and b or scammers on the disability support pension or cgt or rich pensioners hiding money left and right to qualify for a pension card so they can save some bucks on medicine while travelling the country 24/7 why because that actually effects them theyd have to make sacrifices not other people. Like i said ive lived both lives i know which one is better and which one isnt i was on a careers pension for 5 years as a teenager and as an early adult through no fault of my own and i can assure you its no life of luxury.

[b0son]

Originally Posted by 2011G6E

They don't want to try and find someone who will pay enough rent to make them "cash positive" or whatever...they're happy to price them so they always have tenants and they take big advantage of the tax concessions for negative gearing the properties.

And at this point, its not really an investment, but more a tax avoidance tool.

I have no issue with people investing in property, but the key word is investing. The property should be making a return. Let people claim their losses when they go to sell, not deduct those losses off their income and rely on the taxpayer to prop it up.

Anyone who has bought a rental knows within a few years, most properties become positively geared anyway due to rent inflation. Until this point, the losses can come out of the their own savings.

With fewer people buying, upward price pressure will be reduced, and the lower end of the market will get a look-in. Honestly, am I the only one depressed by the fact that our kids may be consigned to renting for most of their lives??

[vztrt]

Originally Posted by Loud_Noises

In the short term, cutting all forms of welfare would result in utter chaos and warfare. But at the end of it, the country would be the better for it. The system has supported and protected far too many morons and lazy scum at the expense of those that genuinely need a hand.

Over 50% of welfare goes to the age pension (not including the extra money given on utilities etc). It would be interesting to see what happens if that was removed.

[Trump]

Originally Posted by vztrt

Over 50% of welfare goes to the age pension (not including the extra money given on utilities etc). It would be interesting to see what happens if that was removed.

There's no sugar coating it, it would be harsh.

[vztrt]

Originally Posted by Loud_Noises

There's no sugar coating it, it would be harsh.

If these people own their own home and have to sell flooding the market with houses would make house price much more affordable...or at least adjust the price back were it historically should be.

[barrys123]

Originally Posted by b0son

And at this point, its not really an investment, but more a tax avoidance tool.

I have no issue with people investing in property, but the key word is investing. The property should be making a return. Let people claim their losses when they go to sell, not deduct those losses off their income and rely on the taxpayer to prop it up.

Anyone who has bought a rental knows within a few years, most properties become positively geared anyway due to rent inflation. Until this point, the losses can come out of the their own savings.

With fewer people buying, upward price pressure will be reduced, and the lower end of the market will get a look-in. Honestly, am I the only one depressed by the fact that our kids may be consigned to renting for most of their lives??

What is the difference to a business writing off the cost of capital expenditure as a tax deduction, negative gearing is crap I would much rather have a positive geared property.

[b0son]

Originally Posted by barrys123

What is the difference to a business writing off the cost of capital expenditure as a tax deduction

compare apples with apples.

businesses pay tax on their yet-to-be-sold inventory. following that logic, investors should be forced to get a property valuation every year, and pay CGT on the appreciation before they sell it.

[barrys123]

Originally Posted by b0son

compare apples with apples.

businesses pay tax on their yet-to-be-sold inventory. following that logic, investors should be forced to get a property valuation every year, and pay CGT on the appreciation before they sell it.

I bet they have claimed the cost of their inventory as a tax deduction.

[BPXR6T]

Originally Posted by vztrt

Over 50% of welfare goes to the age pension (not including the extra money given on utilities etc). It would be interesting to see what happens if that was removed.

They'd just give it away in foreign aid instead. I prefer my tax dollars to contribute to my parents pension or if I stuff my life up then support me when I can't work.

[Junkyard-Dog]

Originally Posted by BPXR6T

They'd just give it away in foreign aid instead. I prefer my tax dollars to contribute to my parents pension or if I stuff my life up then support me when I can't work.

German Chancellor Angela Merkel pledged €2.3 billion ($3.6 billion) in aid for Syria.

Foreign Minister Julie Bishop announced that Australia would give $25 million in humanitarian and development aid.

Meanwhile we will be spending $700 million over the next four years on our campaign of airstrikes on Iraq and Syria.

Don't fool yourself into thinking your tax dollars are going into foreign aid.

[Giant Cranium]

Originally Posted by vztrt

If these people own their own home and have to sell flooding the market with houses would make house price much more affordable...or at least adjust the price back were it historically should be.

Let me get this straight. You think it's a good idea to make pensioners sell their homes to pay for their retirement? They didn't have the luxury of super in their day. On a side note my grandparents had a whole heap of land in Sydney that was taken from them to be given to DOH. In today's dollars it would be about 5mill. Should they have to sell just to live? Tell me I am misunderstanding your post

[sprintman1]

Originally Posted by vztrt

If these people own their own home and have to sell flooding the market with houses would make house price much more affordable...or at least adjust the price back were it historically should be.

Sell and go where?

[BPXR6T]

Originally Posted by Junkyard-Dog

German Chancellor Angela Merkel pledged €2.3 billion ($3.6 billion) in aid for Syria.

Foreign Minister Julie Bishop announced that Australia would give $25 million in humanitarian and development aid.

Meanwhile we will be spending $700 million over the next four years on our campaign of airstrikes on Iraq and Syria.

Don't fool yourself into thinking your tax dollars are going into foreign aid.

I fail to see this as bad news.

[Robos F6]

Originally Posted by vztrt

Over 50% of welfare goes to the age pension (not including the extra money given on utilities etc). It would be interesting to see what happens if that was removed.

The pension or the dole? Id like to see the welfare % going to people on the dole?

The pension rate will slowly reduce as superannuation was brought in to counter act this.

[b0son]

Originally Posted by Giant Cranium

Let me get this straight. You think it's a good idea to make pensioners sell their homes to pay for their retirement? They didn't have the luxury of super in their day.

Luxury? I think if you asked most people whether they'd prefer to have super that may or may not last until they die, or 10% more in their pay and a pension upon retirement, many would choose the latter. The government are slowly setting us up for withdrawal of the pension, and quite possibly a lot of age-based concessions. Meanwhile, those who are supported by the system have had the benefit of outrageous house price growth while not having to pay an exorbitant cost to get their foot in the door of the housing market.

At the very least, the primary beneficiaries of house price growth absolutely should use some of that equity to fund their retirement. The family home should be part of the assets test.

[raised by monkeys]

Didn't read the whole thread but im sure at least 50% is interesting/accurate.

Our model of welfare stems from British poor laws in the 1600's; and subsequent work for the dole programs influenced by british work houses. It is a means of gap filling until work can be sourced to ensure survival.

Some of my observations:
With an ageing population and a larger % of the population suckling at the teat that is welfare, is it any wonder why the retirement age has been pushed back and the sudden interest in 'fitness' through government initiatives (reduced costs and fast tracking to become a PT in 2 weeks) and its flow on affect of interest and obsessiveness to improve the overall health of a nation to increase the % of a working population?

I think the changes to health service access, the NDIS has the interest of the nations economy in mind. Although I think it further isolates those in regional and rural areas to access health services; it does makes it more difficult for those crying wolf in the shape of 'superficial' mental health and not too dissimilar problems to gain a DSP. However, if this is thought behind said change, the option to manage NDIS funding from your own account is a contradiction to this, ruling out those with unruly intentions of welfare payments.

* for those that understand the NDIS - If you're on welfare payments, receive NDIS funds into your account, blow a large sum of it on [insert unnecessary items] and you don't show invoices and receipts for what you have used, just like those who don't pay their public school fees, it wont make you accountable because they cant afford to repay back the funds.

[Mowdit]

Originally Posted by b0son

compare apples with apples.

businesses pay tax on their yet-to-be-sold inventory. following that logic, investors should be forced to get a property valuation every year, and pay CGT on the appreciation before they sell it.

That could work, but if as an investor I'd want to see some profit in my pocket every year also
All that system would do is create more paper shuffling, compliance and monitoring, to be honest there is far too much of that form of employment in our society already

The question over the welfare system and how it works is difficult to answer and stay on track, without looking at the business of it, and as the government run it, it is easy to get side tracked......................

If only the government could operate effectively and efficiently enough to have a surplus every year, rather than juggling numbers and looking to spend "possible future income streams" to cover todays costs !
As a business the government and in turn Welfare system are bankrupt

[b0son]

Originally Posted by Mowdit

That could work, but if as an investor I'd want to see some profit in my pocket every year also

Its called equity, which gives you borrowing power, which further pushes young people out of the market....

[car10002]

How come people that truely need welfare get bent over because of ones that cheat or don't need it

Some people would like extra and theyre not able to work 5 days week and it isn't their fault and ones that need it should be able to have a bit more for a reserve if they happened to use a bit more power or water or food bill was a bit higher than expected