I couldn’t care less about last night’s budget. In fact, I didn’t even know it was on until this morning when I read the paper. Shame on me.
…And you know what, I don’t normally read the paper, but it was a Wednesday and I know some papers produce a finance lift-out on Wednesdays.
So, almost by accident I got sucked in to the big budget announcements.
It was almost like walking down memory lane for me, I remember when I was a lot younger and had very little money. My parents and I would sit by the television and listen in closely to the announcements.
We listened for some divine intervention that could turn around our financial future.
You’re probably thinking to yourself, what are you doing at home with your parents at that age?
I was a late bloomer.
Back to the story. No matter how hard I looked, I couldn’t find any positives in any budget that I’ve ever had the opportunity of being involved in.
About 9 years ago, I stopped completely, even paying attention to the budget. I took the view that regardless of what is in there, it didn’t relate to me… and to tell you the truth, it hasn’t affected me one bit.
Probably the best thing I ever did.
I think it’s an event that you should avoid totally. Unless of course you want to stay in the 95% that end up dead broke. It’s usually those folks that sit on the edge of their couch, watching with great anticipation.
But this morning, because I stumbled across it, I thought I’ll look for any signs that may relate to the economy from a perspective of finance… and of course there was plenty of it in there.
Most of it useless… To me anyway.
Now I know why I’ve completely avoided all budget announcements. What was in the budget this morning? A lot more doom and gloom than anything else. Seems to me the government is preparing itself for a severe down-turn.
Or at least that’s what they’re telling the masses.
They’re building up a big war-chest of cash, just in case. I don’t know, maybe that’s okay from their point of view, but aren’t they sitting on a massive surplus from the previous government?
Anyway, I haven’t got a political bone in my body – so I don’t give a rip either way.
But two things caught my attentions – and these were kind of buried in 2 and 3 word paragraphs.
The government is suggesting to give some sort of rebate of $8,000 to property investors who give renters a 20% discount.
How the hell they expect to implement this I’ve got no idea… and what is the criteria for qualification? I’m sure some genius has worked out, but it’s the intent of what they think is likely to happen with rents that got me curious as to why they would want to offer a rebate scheme.
What is their view on housing affordability from the point of view of a tenant? The tenant aint going to be able to afford it and the government aint going to be able to house them… costs too much, so let’s give the investor a break.
The other thing that caught my attention is the self-admission of a slow-down of the economy as well as a $4 billion hole from a lack of capital gains taxes being paid.
Of course not all capital gains tax relates to property, but boy it’s a big chunk.
Any developers reading in to the budget’s undercurrent of expectation would probably put a few projects on hold, just to see how the economy pans out. That doesn’t help the already chronic housing shortage.
Thirdly, I know I did say two things… But I’m sort of on a rant here…
…Is the expectation and the encouragement of increasing migration into Australia. This one is really interesting from my point of view, where are these guys going to live for one, and secondly, they’re unlikely to buy property initially – so they’re ultimately going to become renters.
Rents to explode even bigger than what I initially thought – perhaps.
For me, this is one to watch closely. What if you could actually find out where most of these migrants are going to setup stumps?
Bet your bottom dollar, if you can get quality stats on this you can virtually pick the next hotspots that are likely to increase by 15-20% in capital growth – maybe even more.
But here’s a question, if you’re bringing in more migrants and you reckon there’s going to be a down-turn in the economy (which means jobs will suffer), what is going to happen there?
I’m a little bit confused, but I kind of know the answer. The migrants whoa re going to be coming in are likely to be skilled migrants who are likely to earn higher dollars. (Not all of them will be skilled of course).
For me, whether you agree or disagree, it doesn’t really matter. Please don’t email me back with your political stance, I certainly wont read it or entertain it.
My view, as you know by now is that your financial future is your responsibility and no budget today or tomorrow is even going to be the defining moment of whether you’re going to make it or not.
You may think it doesn’t do any damage by simply having an innocent look. I beg to differ. When you have little perspective, or you’re unsure, then the perspective of the masses will fill the void that you’ve allowed.
Don’t let that happen to you. Put on your own individual budget-protector. I hope it’s not too late.