Re: Labor Taxes Low Income Earners

[Ext User(Footy Facts)]

"Mr Black" <mrblack@aanet.com.au> wrote in message news:437a95bc$1_2@news.melbourne.pipenetworks.com. ..
> _____________________________________
> "Footy Facts" <footyfacts@yahoo.com> wrote in message
> news:437a4921$1_1@news.melbourne.pipenetworks.com. ..
>> LOL
>>
>> That great govt for the people
>> the state Labor govt
>> proposes to impose a levy of $5000
>> per block on outer suburb land and housing
>> developments
>>
>> The Developer will merely pass this cost onto
>> the purchaser the great bulk of which
>> are low to middle income earners
>>
>> Nice won Labor
>> really looking after your roots!
>>
>> Too afraid after the NSW Labor govt
>> house sales tax debacle to go
>> after high end earners who have
>> too much clout (oh wait I forgot
>> the average MP including Labor
>> lives in a house worth over 600K)
>> and would never live in a project
>> we wouldn't want to tax ourselves would we
>>
>> This is a straight tax on development
>> the worst kind their is, you may bleat about
>> IR rules somehow slowing the economy
>> but shit state Labor and going to do it
>> all by themselves. Spin this one away guys!
>>
>> gF
>>
>>
>
> mate, your right wing kookfest is getting very boring.
> "spin" that anyway you want
>
> MrB
>
>

that wasn't right wing spin
it was left wing fact
what do you call a tax on building blocks
or project housing in the outer suburbs

Quite simply any tax that hurts the low
end of the housing market is disgraceful

If you read my posts you would know
how anti Negative Gearing I am
but neither L or R have the guts
to remove this heinous insidious tax rebate!

gF

[Ext User(Colin Kynoch)]

On Wed, 16 Nov 2005 20:44:22 +1100, "Footy Facts"
<footyfacts@yahoo.com>after much thought and consideration decided
that the following would improve the lives of those that read it:

>
>"Mr Black" <mrblack@aanet.com.au> wrote in message news:437a95bc$1_2@news.melbourne.pipenetworks.com. ..
>> _____________________________________
>> "Footy Facts" <footyfacts@yahoo.com> wrote in message
>> news:437a4921$1_1@news.melbourne.pipenetworks.com. ..
>>> LOL
>>>
>>> That great govt for the people
>>> the state Labor govt
>>> proposes to impose a levy of $5000
>>> per block on outer suburb land and housing
>>> developments
>>>
>>> The Developer will merely pass this cost onto
>>> the purchaser the great bulk of which
>>> are low to middle income earners
>>>
>>> Nice won Labor
>>> really looking after your roots!
>>>
>>> Too afraid after the NSW Labor govt
>>> house sales tax debacle to go
>>> after high end earners who have
>>> too much clout (oh wait I forgot
>>> the average MP including Labor
>>> lives in a house worth over 600K)
>>> and would never live in a project
>>> we wouldn't want to tax ourselves would we
>>>
>>> This is a straight tax on development
>>> the worst kind their is, you may bleat about
>>> IR rules somehow slowing the economy
>>> but shit state Labor and going to do it
>>> all by themselves. Spin this one away guys!
>>>
>>> gF
>>>
>>>
>>
>> mate, your right wing kookfest is getting very boring.
>> "spin" that anyway you want
>>
>> MrB
>>
>>
>
>that wasn't right wing spin
>it was left wing fact
>what do you call a tax on building blocks
>or project housing in the outer suburbs
>
>Quite simply any tax that hurts the low
>end of the housing market is disgraceful
>
>If you read my posts you would know
>how anti Negative Gearing I am
>but neither L or R have the guts
>to remove this heinous insidious tax rebate!

If you think Negative Gearing is a bad thing you have just proven to
me you have absolutely no idea.

Colin Kynoch
>
>gF
>

[Ext User(Footy Facts)]

"Colin Kynoch" <colinkynoch@gmail.com> wrote in message news:m0rnn19ura7gv1satkaihekn5vhctdl5s6@4ax.com...
> On Wed, 16 Nov 2005 20:44:22 +1100, "Footy Facts"
> <footyfacts@yahoo.com>after much thought and consideration decided
> that the following would improve the lives of those that read it:
>

> If you think Negative Gearing is a bad thing you have just proven to
> me you have absolutely no idea.
>
> Colin Kynoch
>>
>>gF
>>
>

we've had this argument before Col
you stick your idea about it
and I will stick to mine

Nagative gearing for commercial property
only stands to reason but to allow it
on residential property is a tax on
the poor and a rebate for the rich

[Ext User(Colin Kynoch)]

On Thu, 17 Nov 2005 15:38:22 +1100, "Footy Facts"
<footyfacts@yahoo.com>after much thought and consideration decided
that the following would improve the lives of those that read it:

>
>"Colin Kynoch" <colinkynoch@gmail.com> wrote in message news:m0rnn19ura7gv1satkaihekn5vhctdl5s6@4ax.com...
>> On Wed, 16 Nov 2005 20:44:22 +1100, "Footy Facts"
>> <footyfacts@yahoo.com>after much thought and consideration decided
>> that the following would improve the lives of those that read it:
>>
>
>> If you think Negative Gearing is a bad thing you have just proven to
>> me you have absolutely no idea.
>>
>> Colin Kynoch
>>>
>>>gF
>>>
>>
>
>we've had this argument before Col
>you stick your idea about it
>and I will stick to mine

Well Negative Gearing was removed by Paul Keating as Treasurer.

They realises what a monumental **** up it was to remove it so they
reinstated it.

It is far cheaper for you or I to provide housing than the government.

Someone investing in a residential property is effectively operating a
business.

If you remove negative gearing you would then logically not be taxed
on the rental.

Negative gearing is basically allowing the costs of conducting a
business to be deducted from income produced by that business.

Surely you would support the tax deductibility of expenses in running
a business.

>Nagative gearing for commercial property
>only stands to reason but to allow it
>on residential property is a tax on
>the poor and a rebate for the rich

What bollocks.

The tax office showed a few years ago that over half residential
property investors earned below AWOTE.

Suggesting that negative gearing be allowed on commercial but not
residential property is akin to suggesting that only wholesale
business can claim their expenses as and retail business can't.

Negative gearing allows far more lower income people to have
affordable housing than if it was all left to the government.

I am not surprised you cannot understand the economic realities
associated with this.
Colin Kynoch

[Ext User(Epigram)]

On 11/17/2005 13:09:23 Colin Kynoch <colinkynoch@gmail.com> wrote:

> On Thu, 17 Nov 2005 15:38:22 +1100, "Footy Facts"
> <footyfacts@yahoo.com>after much thought and consideration decided that
> the following would improve the lives of those that read it:

>> "Colin Kynoch" <colinkynoch@gmail.com> wrote in message
>> news:m0rnn19ura7gv1satkaihekn5vhctdl5s6@4ax.com...

>>> On Wed, 16 Nov 2005 20:44:22 +1100, "Footy Facts"
>>> <footyfacts@yahoo.com>after much thought and consideration decided that
>>> the following would improve the lives of those that read it:

>>> If you think Negative Gearing is a bad thing you have just proven to me
>>> you have absolutely no idea.

>>> Colin Kynoch

>>>> gF

>> we've had this argument before Col you stick your idea about it and I
>> will stick to mine

> Well Negative Gearing was removed by Paul Keating as Treasurer.

> They realises what a monumental **** up it was to remove it so they
> reinstated it.

> It is far cheaper for you or I to provide housing than the government.

> Someone investing in a residential property is effectively operating a
> business.

> If you remove negative gearing you would then logically not be taxed on
> the rental.

> Negative gearing is basically allowing the costs of conducting a business
> to be deducted from income produced by that business.

> Surely you would support the tax deductibility of expenses in running a
> business.

This is a very good point. However in the first case, the state
governments can provide housing for the residents _cheaper_ than the
market; in other words, if there was no government housing sector, then
most of the people that would be renters in that sector would be homeless.
There is no way a commerical contractor or business can provide rent
cheaper than government housing. To do so would loss the business money.

Secondly, every business has to be viable based on profit after tax,
otherwise there is no point for that business to exist. Sure, make a loss
for a few years, but there has to be a point where it is a viable business.
So for investors in property, why can't the rent earned be as a business,
not as induvidual income. Expenses for the business' earning the income
should be taken into account accordingly.

Keating ****ed up the negative gearing mainly because at that time,
propertly investors had to estimate their income from the property(ies)
_before_ the fiscal year and pay the provisional tax accordingly. Now that
provisional tax is dead, the only reason negative gearing still exists is
to temp more "mums and dads" investors to provide rental accomadation to
relieve the stress on government housing.

It's up to governments to work out whether this is working or being abused.
If it is being abused, then negative gearing should be wound back, so to
speak.

>> Nagative gearing for commercial property only stands to reason but to
>> allow it on residential property is a tax on the poor and a rebate for
>> the rich

> What bollocks.

> The tax office showed a few years ago that over half residential property
> investors earned below AWOTE.

> Suggesting that negative gearing be allowed on commercial but not
> residential property is akin to suggesting that only wholesale business
> can claim their expenses as and retail business can't.

> Negative gearing allows far more lower income people to have affordable
> housing than if it was all left to the government.

> I am not surprised you cannot understand the economic realities associated
> with this. Colin Kynoch

Nail on the head with residential housing, except that no ordinary investor
can provide rentals cheaper than government housing. As for commercial
rentals, it can be safely assumed that the lease is for businesses. I
can't see why any investor in business property should be rewarded for
supplying property to another business or even a government department.
Certainly political parties as investors shouldn't be rewarded over and
above the rent and depreciation of a property that is contracted to a
government department.

Negative gearing does have emotive conotations to it. As an incentive for
people to provide rental accommadation it is fair enough for low income
earners - pensioners and the like. But for ordinary income earners,
especially those on, say, %150 of the mean income and above, why should an
investor be "overly" rewarded.

There's no simple solution, as Keating found out. The state governments
must provide accomadation because if it were left to investors alone, the
homeless figure would be so much more unacceptable than it is now. Yet
there must be incentives for ordinary people to provide rental
accomadation. An idealist might say that only people with well above
average income can do this, and therefore are being rewarded for their
income, rather than their investment. Greg is probably leaning more to the
idealist side, and sees that everyone with an income should be able to
participate otherwise those who can't afford to purchase investment
property for the rental market are being "taxed" to pay for those who can.

It's certainly not a topic that can be summed up in 500 words or less, much
less debated on usenet with any form of resolution in sight.
--

Toby

--
I saw a funny thing on the way here. So I laughed.

(If you really want to email me, you'd know the address)

[Ext User(Colin Kynoch)]

On Mon, 21 Nov 2005 03:33:08 GMT, Epigram <not@this.id>after much
thought and consideration decided that the following would improve the
lives of those that read it:

>On 11/17/2005 13:09:23 Colin Kynoch <colinkynoch@gmail.com> wrote:
>
>> On Thu, 17 Nov 2005 15:38:22 +1100, "Footy Facts"
>> <footyfacts@yahoo.com>after much thought and consideration decided that
>> the following would improve the lives of those that read it:
>
>>> "Colin Kynoch" <colinkynoch@gmail.com> wrote in message
>>> news:m0rnn19ura7gv1satkaihekn5vhctdl5s6@4ax.com...
>
>>>> On Wed, 16 Nov 2005 20:44:22 +1100, "Footy Facts"
>>>> <footyfacts@yahoo.com>after much thought and consideration decided that
>>>> the following would improve the lives of those that read it:
>
>>>> If you think Negative Gearing is a bad thing you have just proven to me
>>>> you have absolutely no idea.
>
>>>> Colin Kynoch
>
>>>>> gF
>
>>> we've had this argument before Col you stick your idea about it and I
>>> will stick to mine
>
>> Well Negative Gearing was removed by Paul Keating as Treasurer.
>
>> They realises what a monumental **** up it was to remove it so they
>> reinstated it.
>
>> It is far cheaper for you or I to provide housing than the government.
>
>> Someone investing in a residential property is effectively operating a
>> business.
>
>> If you remove negative gearing you would then logically not be taxed on
>> the rental.
>
>> Negative gearing is basically allowing the costs of conducting a business
>> to be deducted from income produced by that business.
>
>> Surely you would support the tax deductibility of expenses in running a
>> business.
>
>This is a very good point. However in the first case, the state
>governments can provide housing for the residents _cheaper_ than the
>market;

That they provide it to the end user for lower amounts does not mean
it is cheaper for the government to provide it.

Yes there is government housing in all states, but the cost to those
governments outweighs the rental incomes by a considerable margin.
Government housing is heavily subsidised, far more heavily than the
'subsidy' that is provided via negative gearing.

> in other words, if there was no government housing sector, then
>most of the people that would be renters in that sector would be homeless.

Much the same as the severe housing shortage that started to build
when Keating abolished Negative Gearing.


>There is no way a commerical contractor or business can provide rent
>cheaper than government housing.

From whose point of view?

From the renters I agree wholeheartedly as the government subsidies
provided to occupants of government housing mean that the rentals paid
are generally considerably below market values.

> To do so would loss the business money.

The governments spends hundreds of millions per year on public housing
every year, they are in business terms losing considerable sums on
public housing, and that money has to come from somewhere.


>Secondly, every business has to be viable based on profit after tax,
>otherwise there is no point for that business to exist.

Many businesses run at losses on paper, yet are very profitable
businesses.

> Sure, make a loss for a few years, but there has to be a point where it is a viable business.

Just because a business makes a loss year after year does not mean it
is not a viable business.


> So for investors in property, why can't the rent earned be as a business,
>not as induvidual income.

Most people who do so do so as sole traders and as such business and
personal are not differentiated.

> Expenses for the business' earning the income
>should be taken into account accordingly.

It is it is called negative gearing.


>Keating ****ed up the negative gearing mainly because at that time,
>propertly investors had to estimate their income from the property(ies)
>_before_ the fiscal year and pay the provisional tax accordingly. Now that
>provisional tax is dead, the only reason negative gearing still exists is
>to temp more "mums and dads" investors to provide rental accomadation to
>relieve the stress on government housing.

And the smart ones do.

Negative Gearing is not just for property though, it can be used for
any income producing investment.


>It's up to governments to work out whether this is working or being abused.
> If it is being abused, then negative gearing should be wound back, so to
>speak.

Define being abused?

Paul Keating once said something along the lines of "It is every
Australian's responsibility to use the tax system to their benefit,
but it is not the government's job to tell them how"

He was spot on. Anyone not utilising the tax system to their benefit
cannot complain about it or isn't paying tax.

>>> Nagative gearing for commercial property only stands to reason but to
>>> allow it on residential property is a tax on the poor and a rebate for
>>> the rich
>
>> What bollocks.
>
>> The tax office showed a few years ago that over half residential property
>> investors earned below AWOTE.
>
>> Suggesting that negative gearing be allowed on commercial but not
>> residential property is akin to suggesting that only wholesale business
>> can claim their expenses as and retail business can't.
>
>> Negative gearing allows far more lower income people to have affordable
>> housing than if it was all left to the government.
>
>> I am not surprised you cannot understand the economic realities associated
>> with this. Colin Kynoch
>
>Nail on the head with residential housing, except that no ordinary investor
>can provide rentals cheaper than government housing.

Yes they can and do so.

The cost of me providing a house to be a rental is approximately
$1,000 per annum. It would cost the government at least 5 times this
much.

You may or may not have noticed that there is no residential property
trusts (either listed or unlisted) in Australia.

The main reason for that is that the costs of administering such a
trust would be prohibitive, it is one of the exceptions to the economy
of scale argument. Commercial property is far easier to manage than
residential and has the added bonus of higher yields.

> As for commercial rentals, it can be safely assumed that the lease is for businesses.

Except for when they are for government departments, non-profit
organisations, charities, etc, etc.

> I can't see why any investor in business property should be rewarded for
>supplying property to another business or even a government department.

What reward are you talking about?

Deduction of expenses is a standard taxation principle.


>Certainly political parties as investors shouldn't be rewarded over and
>above the rent and depreciation of a property that is contracted to a
>government department.
>
>Negative gearing does have emotive conotations to it. As an incentive for
>people to provide rental accommadation it is fair enough for low income
>earners - pensioners and the like. But for ordinary income earners,
>especially those on, say, %150 of the mean income and above, why should an
>investor be "overly" rewarded.

How are they overly 'rewarded'?


>
>There's no simple solution, as Keating found out. The state governments
>must provide accomadation because if it were left to investors alone, the
>homeless figure would be so much more unacceptable than it is now. Yet
>there must be incentives for ordinary people to provide rental
>accomadation.

ie the current system

> An idealist might say that only people with well above
>average income can do this, and therefore are being rewarded for their
>income, rather than their investment.

And that is completely incorrect given that the distribution of
property investors above and below AWOTE is approximately 50/50

> Greg is probably leaning more to the
>idealist side, and sees that everyone with an income should be able to
>participate otherwise those who can't afford to purchase investment
>property for the rental market are being "taxed" to pay for those who can.

Everyone has the opportunity to do so.

You do not have to be wealthy to invest in property.

If less Australian's pissed their incomes up against the wall and
purchased items like holidays and plasma screens on credit then there
would be more in a position to invest.

Most Australian's put their head in the sand and live for the moment
without a thought to the future, the spend beyond their means and then
cry poor when others who actually took the smarter route and took some
short term gain and puts some money aside to purchase a property and
then paid enough of it off as quickly as they could to purchase an
investment property actually gets ahead.

I would suggest that those against negative gearing are typical people
infected with Tall Poppy Syndrome.

>It's certainly not a topic that can be summed up in 500 words or less, much
>less debated on usenet with any form of resolution in sight.

You never know Toby.

Colin Kynoch

[Ext User(Footy Facts)]

"Colin Kynoch" <colinkynoch@gmail.com> wrote in message news:97i2o15836qk4811itncf10fephcl6n33q@4ax.com...
> On Mon, 21 Nov 2005 03:33:08 GMT, Epigram <not@this.id>after much
> thought and consideration decided that the following would improve the
> lives of those that read it:
>

my final thought on the whole
farce that is negative gearing

please produce the figures as to how
an average family of four on $40K a year can
buy a house as an investment
and still buy the house they live in!

Heres Mine
Now I am not a Financial Analyst
All I can do is do what any average
Joe would do when looking to buy a house
(Of course he coulda bought a unit
at Docklands on the back of many Financial
Planners recommendations and be
way in front now not! ROTFLMGO!)

Using Caroline Springs as an example
Cheapest package is 3BR $250K
Loan $225K = $1660pcm = 385pw
(I used RAMS as an average guide)

385pw loan
25pw rates
$410pw costs (not even including any other costs!)

quick realestate.com.au rental check
60 3BR houses in Caroline Springs from $200 - $320
average =$250pw (I actually averaged them, not the midpoint)
less 7% avg Agent Fees = $235pw
less 8% avg non-occupancy rate = $220pw

so our guy is making a $190pw loss at this stage
now he only pays $160pw tax so they are already
$30pw behind but hang on he has a massive $610pw
out of which he has his own home to pay for
$410pw so that leaves $200pw for Car, Food etc
so his best bet is to rent his mates house and vice-versa
so they can both get a tax deduction on their own homes
Woops hang on I think thats what I argued for
and why NG is a farce! Give the working stiff
a decent tax break on the family home and ditch
Negative Gearing and the hoary old argument
that you need it to provide rental property disappears
in the vapour that its entire substance is made of

Keating changed NG but he didn't provide the
family home tax break at the same time that
would have maintained the status quo on housing

Also since the tax break is only on the first home
then the tax break of NG is used to artificially fuel
spiralling house prices on the back of it!

and heres the final rub
I don't have nor will never have an investment
residential property and as at today I am
to all intents and purposes a multi-millionaire
(Assets 2.1M Debt $0)
but hey any good financial planner will tell
you debt is always good! What a crock of shit!
Debt is mostly only good if it increases production
(A home loan is a lien against future production)
not when its only function is to increase prices
but I don't want to ruin the Cant of the FPs,
as I obviously have no idea how to manage
my financial affairs!

so what does the Labor Govt do it a proposes
an $8K increase in land prices then naively
says that the property developers make so much
profit that they will wear the cost (yeah sure)
and at the same time is reducing the home grant
from $5K to $3K, thus the poor low income guy
has to find another $10K to be able to by his
basic $250K woops now $260K package
oh but hang on the Labor Govt then says but
we have increased the amount of land we
are releasing that will bring down prices
only problem is that the development of the land
is in the hands of a few major commercial
interests and it sure as hell isn't in their interests
to buy and release land to oversupply the market
and drive down their own prices yeah that will work!

Just who the **** are they really supporting!

The have increased taxes, reduced tax breaks
given developers more land, yep I can really
see how the avg bloke is helped here

so Col as you are the Financial Planner
please provide a true and accurate financial
plan for a family of four on $40K, in outer suburbs
with std Commodore for him and small car
for the missus, plus food, power, clothes,
school, etc etc and have a property investment!

gF

[Ext User(Dave)]

"Footy Facts" <footyfacts@yahoo.com> wrote in message
news:438192ec$1_1@news.melbourne.pipenetworks.com. ..
>
> "Colin Kynoch" <colinkynoch@gmail.com> wrote in message
> news:97i2o15836qk4811itncf10fephcl6n33q@4ax.com...
>> On Mon, 21 Nov 2005 03:33:08 GMT, Epigram <not@this.id>after much
>> thought and consideration decided that the following would improve the
>> lives of those that read it:
>>
>
> my final thought on the whole
> farce that is negative gearing
>
> please produce the figures as to how
> an average family of four on $40K a year can
> buy a house as an investment
> and still buy the house they live in!
>
> Heres Mine
> Now I am not a Financial Analyst
> All I can do is do what any average
> Joe would do when looking to buy a house
> (Of course he coulda bought a unit
> at Docklands on the back of many Financial
> Planners recommendations and be
> way in front now not! ROTFLMGO!)
>
> Using Caroline Springs as an example
> Cheapest package is 3BR $250K
> Loan $225K = $1660pcm = 385pw
> (I used RAMS as an average guide)
>
> 385pw loan
> 25pw rates
> $410pw costs (not even including any other costs!)
>
> quick realestate.com.au rental check
> 60 3BR houses in Caroline Springs from $200 - $320
> average =$250pw (I actually averaged them, not the midpoint)
> less 7% avg Agent Fees = $235pw
> less 8% avg non-occupancy rate = $220pw
>
> so our guy is making a $190pw loss at this stage
> now he only pays $160pw tax so they are already
> $30pw behind but hang on he has a massive $610pw
> out of which he has his own home to pay for
> $410pw so that leaves $200pw for Car, Food etc
> so his best bet is to rent his mates house and vice-versa
> so they can both get a tax deduction on their own homes
> Woops hang on I think thats what I argued for
> and why NG is a farce! Give the working stiff
> a decent tax break on the family home and ditch
> Negative Gearing and the hoary old argument
> that you need it to provide rental property disappears
> in the vapour that its entire substance is made of
>
> Keating changed NG but he didn't provide the
> family home tax break at the same time that
> would have maintained the status quo on housing
>
> Also since the tax break is only on the first home
> then the tax break of NG is used to artificially fuel
> spiralling house prices on the back of it!
>
> and heres the final rub
> I don't have nor will never have an investment
> residential property and as at today I am
> to all intents and purposes a multi-millionaire
> (Assets 2.1M Debt $0)
> but hey any good financial planner will tell
> you debt is always good! What a crock of shit!
> Debt is mostly only good if it increases production
> (A home loan is a lien against future production)
> not when its only function is to increase prices
> but I don't want to ruin the Cant of the FPs,
> as I obviously have no idea how to manage
> my financial affairs!
>
> so what does the Labor Govt do it a proposes
> an $8K increase in land prices then naively
> says that the property developers make so much
> profit that they will wear the cost (yeah sure)
> and at the same time is reducing the home grant
> from $5K to $3K, thus the poor low income guy
> has to find another $10K to be able to by his
> basic $250K woops now $260K package
> oh but hang on the Labor Govt then says but
> we have increased the amount of land we
> are releasing that will bring down prices
> only problem is that the development of the land
> is in the hands of a few major commercial
> interests and it sure as hell isn't in their interests
> to buy and release land to oversupply the market
> and drive down their own prices yeah that will work!
>
> Just who the **** are they really supporting!
>
> The have increased taxes, reduced tax breaks
> given developers more land, yep I can really
> see how the avg bloke is helped here
>
> so Col as you are the Financial Planner
> please provide a true and accurate financial
> plan for a family of four on $40K, in outer suburbs
> with std Commodore for him and small car
> for the missus, plus food, power, clothes,
> school, etc etc and have a property investment!
>
> gF
>

Not really footy but what the heck

Colin is correct. Property is the favoured - substitute obsessive -
investment of those around the AWOTE income level. A figure which is around
$54K compared to the $40K amount in your hypothetical situation.

The serious money follows private equity, then equity and then property
comes a distance third.

[Ext User(Colin Kynoch)]

On Mon, 21 Nov 2005 20:27:04 +1100, "Footy Facts"
<footyfacts@yahoo.com>after much thought and consideration decided
that the following would improve the lives of those that read it:

>
>"Colin Kynoch" <colinkynoch@gmail.com> wrote in message news:97i2o15836qk4811itncf10fephcl6n33q@4ax.com...
>> On Mon, 21 Nov 2005 03:33:08 GMT, Epigram <not@this.id>after much
>> thought and consideration decided that the following would improve the
>> lives of those that read it:
>>
>
>my final thought on the whole
>farce that is negative gearing
>
>please produce the figures as to how
>an average family of four on $40K a year can
>buy a house as an investment
>and still buy the house they live in!

Nice try given AWOTE is 53206 p.a.

In addition to this the average family also has the lower income
spouse earning an income of between $10,000 and $15,000 part time.


>Heres Mine
>Now I am not a Financial Analyst
>All I can do is do what any average
>Joe would do when looking to buy a house
>(Of course he coulda bought a unit
>at Docklands on the back of many Financial
>Planners recommendations and be
>way in front now not! ROTFLMGO!)

Most of those units were not sold by Financial Planners. Very few
Financial Planners recommend direct property as there is no direct
property on their approved lists.


>Using Caroline Springs as an example
>Cheapest package is 3BR $250K
>Loan $225K = $1660pcm = 385pw
>(I used RAMS as an average guide)

Well using RAMS I come up with a figure of 1294 pcm (using their
Basic Loan and paying interest only, only the poorly informed pay P&I
on an investment loan when they still have personal debt) therefore
$299 p.w.


>
>385pw loan
> 25pw rates
>$410pw costs (not even including any other costs!)

or $324 more realistically.


>quick realestate.com.au rental check
>60 3BR houses in Caroline Springs from $200 - $320
>average =$250pw (I actually averaged them, not the midpoint)
>less 7% avg Agent Fees = $235pw

Well negotiated you should be able to get 5.5 to 6%

>less 8% avg non-occupancy rate = $220pw

You are kidding right. vacancy across Victoria is currently running
at 2.4% and in Melbourne 2.2%

http://www.domain.com.au/Public/Article.aspx?id=1132016828510&index=NationalIndex

so $250 p.w. less 6% agents fee $235 p.w.

Vacancy of 2.5% would reduce that to $229 p.w.


>so our guy is making a $190pw loss at this stage

Or more realistically a $96 p.w. loss


>now he only pays $160pw tax so they are already

Well the person on AWOTE pays $246 pw tax

>$30pw behind but hang on he has a massive $610pw
>out of which he has his own home to pay for

Except this makes the false assumption that the guy has purchased the
property in the same year.


>$410pw so that leaves $200pw for Car, Food etc
>so his best bet is to rent his mates house and vice-versa
>so they can both get a tax deduction on their own homes
>Woops hang on I think thats what I argued for
>and why NG is a farce!

Your figures are a farce and bear no resemblance to reality.

> Give the working stiff
>a decent tax break on the family home and ditch
>Negative Gearing and the hoary old argument
>that you need it to provide rental property disappears
>in the vapour that its entire substance is made of

There is already a significant tax break for owning your own home.
Guess you missed that one.



>Keating changed NG but he didn't provide the
>family home tax break at the same time that
>would have maintained the status quo on housing
>
>Also since the tax break is only on the first home
>then the tax break of NG is used to artificially fuel
>spiralling house prices on the back of it!

There is a tax break on any home that you have as your own home.


>and heres the final rub
>I don't have nor will never have an investment
>residential property and as at today I am
>to all intents and purposes a multi-millionaire
>(Assets 2.1M Debt $0)
>but hey any good financial planner will tell
>you debt is always good!

Well any half decent Financial Planner could have put you in a
position better than you currently are.

A Financial Planner will tell you that some types of debt are good.
Others certainly are not.


If debt is so bad why do guys like Packer and Murdoch use it so
effectively to increase their wealth.

> What a crock of shit!
>Debt is mostly only good if it increases production
>(A home loan is a lien against future production)
>not when its only function is to increase prices
>but I don't want to ruin the Cant of the FPs,
>as I obviously have no idea how to manage
>my financial affairs!

Wow you have $2mill and no debt. I would far prefer to have $5
million in debt and $10 million in assets.

You clearly are a convert to Hansonomics.


>so what does the Labor Govt do it a proposes
>an $8K increase in land prices then naively
>says that the property developers make so much
>profit that they will wear the cost (yeah sure)
>and at the same time is reducing the home grant
>from $5K to $3K,

two completely separate issues.

> thus the poor low income guy
>has to find another $10K to be able to by his
>basic $250K woops now $260K package
>oh but hang on the Labor Govt then says but
>we have increased the amount of land we
>are releasing that will bring down prices
>only problem is that the development of the land
>is in the hands of a few major commercial
>interests and it sure as hell isn't in their interests
>to buy and release land to oversupply the market
>and drive down their own prices yeah that will work!

You have no idea of economics. The more land that is released the
more it will drive prices lower. It is called supply and demand.


>Just who the **** are they really supporting!
>
>The have increased taxes, reduced tax breaks
>given developers more land, yep I can really
>see how the avg bloke is helped here

Well given your poor grasp of economics I can understand your lack of
idea.


>so Col as you are the Financial Planner
>please provide a true and accurate financial
>plan for a family of four on $40K, in outer suburbs
>with std Commodore for him and small car
>for the missus, plus food, power, clothes,
>school, etc etc and have a property investment!


Problem is your figures are so far out it isn't funny. Also your idea
as to who recommends property is laughable. Property spruiking is a
largely unregulated industry and very few Financial Planners recommend
Direct Property as very few Dealer Groups have Direct Property on
their approved lists.


Further to this your assumptions are severely flawed.

Colin Kynoch

[Ext User(Footy Facts)]

"Dave" <somebody@somewhere> wrote in message news:43819e2f$0$30789$5a62ac22@per-qv1-newsreader-01.iinet.net.au...
> "Footy Facts" <footyfacts@yahoo.com> wrote in message news:438192ec$1_1@news.melbourne.pipenetworks.com. ..
>>
>> "Colin Kynoch" <colinkynoch@gmail.com> wrote in message news:97i2o15836qk4811itncf10fephcl6n33q@4ax.com...
>>> On Mon, 21 Nov 2005 03:33:08 GMT, Epigram <not@this.id>after much
>>> thought and consideration decided that the following would improve the
>>> lives of those that read it:
>>>
>>
>> my final thought on the whole
>> farce that is negative gearing
>>
>> please produce the figures as to how
>> an average family of four on $40K a year can
>> buy a house as an investment
>> and still buy the house they live in!
>>
>> Heres Mine
>> Now I am not a Financial Analyst
>> All I can do is do what any average
>> Joe would do when looking to buy a house
>> (Of course he coulda bought a unit
>> at Docklands on the back of many Financial
>> Planners recommendations and be
>> way in front now not! ROTFLMGO!)
>>
>> Using Caroline Springs as an example
>> Cheapest package is 3BR $250K
>> Loan $225K = $1660pcm = 385pw
>> (I used RAMS as an average guide)
>>
>> 385pw loan
>> 25pw rates
>> $410pw costs (not even including any other costs!)
>>
>> quick realestate.com.au rental check
>> 60 3BR houses in Caroline Springs from $200 - $320
>> average =$250pw (I actually averaged them, not the midpoint)
>> less 7% avg Agent Fees = $235pw
>> less 8% avg non-occupancy rate = $220pw
>>
>> so our guy is making a $190pw loss at this stage
>> now he only pays $160pw tax so they are already
>> $30pw behind but hang on he has a massive $610pw
>> out of which he has his own home to pay for
>> $410pw so that leaves $200pw for Car, Food etc
>> so his best bet is to rent his mates house and vice-versa
>> so they can both get a tax deduction on their own homes
>> Woops hang on I think thats what I argued for
>> and why NG is a farce! Give the working stiff
>> a decent tax break on the family home and ditch
>> Negative Gearing and the hoary old argument
>> that you need it to provide rental property disappears
>> in the vapour that its entire substance is made of
>>
>> Keating changed NG but he didn't provide the
>> family home tax break at the same time that
>> would have maintained the status quo on housing
>>
>> Also since the tax break is only on the first home
>> then the tax break of NG is used to artificially fuel
>> spiralling house prices on the back of it!
>>
>> and heres the final rub
>> I don't have nor will never have an investment
>> residential property and as at today I am
>> to all intents and purposes a multi-millionaire
>> (Assets 2.1M Debt $0)
>> but hey any good financial planner will tell
>> you debt is always good! What a crock of shit!
>> Debt is mostly only good if it increases production
>> (A home loan is a lien against future production)
>> not when its only function is to increase prices
>> but I don't want to ruin the Cant of the FPs,
>> as I obviously have no idea how to manage
>> my financial affairs!
>>
>> so what does the Labor Govt do it a proposes
>> an $8K increase in land prices then naively
>> says that the property developers make so much
>> profit that they will wear the cost (yeah sure)
>> and at the same time is reducing the home grant
>> from $5K to $3K, thus the poor low income guy
>> has to find another $10K to be able to by his
>> basic $250K woops now $260K package
>> oh but hang on the Labor Govt then says but
>> we have increased the amount of land we
>> are releasing that will bring down prices
>> only problem is that the development of the land
>> is in the hands of a few major commercial
>> interests and it sure as hell isn't in their interests
>> to buy and release land to oversupply the market
>> and drive down their own prices yeah that will work!
>>
>> Just who the **** are they really supporting!
>>
>> The have increased taxes, reduced tax breaks
>> given developers more land, yep I can really
>> see how the avg bloke is helped here
>>
>> so Col as you are the Financial Planner
>> please provide a true and accurate financial
>> plan for a family of four on $40K, in outer suburbs
>> with std Commodore for him and small car
>> for the missus, plus food, power, clothes,
>> school, etc etc and have a property investment!
>>
>> gF
>>
>
> Not really footy but what the heck
>
> Colin is correct. Property is the favoured - substitute obsessive - investment of those around the AWOTE income level. A figure
> which is around $54K compared to the $40K amount in your hypothetical situation.
>
> The serious money follows private equity, then equity and then property comes a distance third.
>
>
>

OK so lets use Cols figures
and a straight balance Sheet approach

Assumptions
1. Pay is split 40K/14K AWOTE using Cols Figures
2. In Own Home for 7 years (average occupancy) borrowed $200K 7 years ago $300pw equity $150K
3. Two Car family 3 yo Commodore & 8yo Astra is about the avg
4. I have a typical family of 4 with modest power/phn and will use my last 12 months costs

Amount Balance Item
$770 $770 Main Income
($165) $605 Tax on $770
$270 $875 Spouse Income
($25) $850 Tax on $270
($300) $550 Home Loan Repayment
($120) $430 Car Loan on Commodore
($10) $420 Home Phone
($20) $400 Mums Mobile (Dads is a work one)
($10) $390 Gas
($20) $370 Electricity
($20) $350 Rates
($60) $290 Petrol (I could push this to $80 with two cars but wont for the sake of argument)
($160) $130 Most Groceries/Meat (and we shop at ALDI which is consistently $60 cheaper for us)
($40) $90 Fruit & Veg
($25) $65 School Fees/Books/Camps etc One High School, One Primary

Now I haven't added in Clothes plus other typical family costs
Swimming Lessons ($20), Music Lessons($20) & Takeaway ($30)

Having done this balance sheet I didn't realise just
how even more ridiculous NG is when this family should be getting
a $170 tax deduction for the first 5 years of their
home loan so that they could be in a sound financial
position after that time rather than struggling every bloody week!

The Loan
Assumptions

1. Given Cols advocation of debt they would borrow
the whole amount + costs so loan is $265K IO
using home equity & investment equity would cover it

2. A property is typically empty for one month (8.5%)
but given a tenant is on average in for 3 years
I can accept Col 2.5% vacancy but will also factor in
that an agent will charge you one months rent also
as a re-letting fee covering advert/costs etc so thats
a more realistic 5% vacancy costs

Amount Balance Item
($370) ($370) Loan Repayment
$250 ($120) Rent
($20) ($140) Rates
($20) ($160) Maintenance (this is prob way too low but it is in because it needs to be)
($10) ($170) 5% Agents Commission
($10) ($180) Vacancy Costs
$180 ($0) Tax Offset

so I adjusted all my figures to match
the AWOTE and took all the debt I could

I can't be clearer in any of these figures
and have been absolutely generous at every stage.
Sure, this family can just cover the cost of the property
but they are so exposed to any one single negative
event that they are living precariously and they
know it and sweat on it every day of their lives!

so tell me again how NG is a good tax break
and is not better than giving these people
a 5 year interest only tax break on the family home
and then pay 10% GST when they sell it

yeah and sure the family home gets a minor CGT
tax break but that is at the end of the ownership
when typically most people don't need it rather than
at the start when most people do!

Yep, Packer & Murdoch do use debt to increase their
wealth and it is at yours, mine and everyone elses expense
especially since they continue to use that debt to
mainly acquire and not increase production

The ridiculous govt land release is premised by the assumption
that as the land is available anyone could develop it
but you know damn well that isn't the case
all the govt has done is reset the boundaries
that land can be converted into suburbs
if you think that the 4/5 companies that control
95% of the property development market
will release more land and drive down their own
prices you are living in Disneyworld. They
will buy up the land, driving down the purchase
price from the landowner because that is where the glut
is (NOT developed but UNdeveloped land) and then they
will hold it and release it to maximise their profit

Hold Supply and Create Demand
and you reckon I know nothing of economics
you have absolutely no idea!
In a Quinopoly (sic) there just isn't enough
competition for it to drive down prices

gF

oh and I will take my no debt existence
every day over yours, I am 100% free
you however are a slave to the debt

[Ext User(Dave)]

"Footy Facts" <footyfacts@yahoo.com> wrote in message
news:4381c7a3_2@news.melbourne.pipenetworks.com...
>
> "Dave" <somebody@somewhere> wrote in message
> news:43819e2f$0$30789$5a62ac22@per-qv1-newsreader-01.iinet.net.au...
>> "Footy Facts" <footyfacts@yahoo.com> wrote in message
>> news:438192ec$1_1@news.melbourne.pipenetworks.com. ..
>>>
>>> "Colin Kynoch" <colinkynoch@gmail.com> wrote in message
>>> news:97i2o15836qk4811itncf10fephcl6n33q@4ax.com...
>>>> On Mon, 21 Nov 2005 03:33:08 GMT, Epigram <not@this.id>after much
>>>> thought and consideration decided that the following would improve the
>>>> lives of those that read it:
>>>>
>>>
>>> my final thought on the whole
>>> farce that is negative gearing
>>>
>>> please produce the figures as to how
>>> an average family of four on $40K a year can
>>> buy a house as an investment
>>> and still buy the house they live in!
>>>
>>> Heres Mine
>>> Now I am not a Financial Analyst
>>> All I can do is do what any average
>>> Joe would do when looking to buy a house
>>> (Of course he coulda bought a unit
>>> at Docklands on the back of many Financial
>>> Planners recommendations and be
>>> way in front now not! ROTFLMGO!)
>>>
>>> Using Caroline Springs as an example
>>> Cheapest package is 3BR $250K
>>> Loan $225K = $1660pcm = 385pw
>>> (I used RAMS as an average guide)
>>>
>>> 385pw loan
>>> 25pw rates
>>> $410pw costs (not even including any other costs!)
>>>
>>> quick realestate.com.au rental check
>>> 60 3BR houses in Caroline Springs from $200 - $320
>>> average =$250pw (I actually averaged them, not the midpoint)
>>> less 7% avg Agent Fees = $235pw
>>> less 8% avg non-occupancy rate = $220pw
>>>
>>> so our guy is making a $190pw loss at this stage
>>> now he only pays $160pw tax so they are already
>>> $30pw behind but hang on he has a massive $610pw
>>> out of which he has his own home to pay for
>>> $410pw so that leaves $200pw for Car, Food etc
>>> so his best bet is to rent his mates house and vice-versa
>>> so they can both get a tax deduction on their own homes
>>> Woops hang on I think thats what I argued for
>>> and why NG is a farce! Give the working stiff
>>> a decent tax break on the family home and ditch
>>> Negative Gearing and the hoary old argument
>>> that you need it to provide rental property disappears
>>> in the vapour that its entire substance is made of
>>>
>>> Keating changed NG but he didn't provide the
>>> family home tax break at the same time that
>>> would have maintained the status quo on housing
>>>
>>> Also since the tax break is only on the first home
>>> then the tax break of NG is used to artificially fuel
>>> spiralling house prices on the back of it!
>>>
>>> and heres the final rub
>>> I don't have nor will never have an investment
>>> residential property and as at today I am
>>> to all intents and purposes a multi-millionaire
>>> (Assets 2.1M Debt $0)
>>> but hey any good financial planner will tell
>>> you debt is always good! What a crock of shit!
>>> Debt is mostly only good if it increases production
>>> (A home loan is a lien against future production)
>>> not when its only function is to increase prices
>>> but I don't want to ruin the Cant of the FPs,
>>> as I obviously have no idea how to manage
>>> my financial affairs!
>>>
>>> so what does the Labor Govt do it a proposes
>>> an $8K increase in land prices then naively
>>> says that the property developers make so much
>>> profit that they will wear the cost (yeah sure)
>>> and at the same time is reducing the home grant
>>> from $5K to $3K, thus the poor low income guy
>>> has to find another $10K to be able to by his
>>> basic $250K woops now $260K package
>>> oh but hang on the Labor Govt then says but
>>> we have increased the amount of land we
>>> are releasing that will bring down prices
>>> only problem is that the development of the land
>>> is in the hands of a few major commercial
>>> interests and it sure as hell isn't in their interests
>>> to buy and release land to oversupply the market
>>> and drive down their own prices yeah that will work!
>>>
>>> Just who the **** are they really supporting!
>>>
>>> The have increased taxes, reduced tax breaks
>>> given developers more land, yep I can really
>>> see how the avg bloke is helped here
>>>
>>> so Col as you are the Financial Planner
>>> please provide a true and accurate financial
>>> plan for a family of four on $40K, in outer suburbs
>>> with std Commodore for him and small car
>>> for the missus, plus food, power, clothes,
>>> school, etc etc and have a property investment!
>>>
>>> gF
>>>
>>
>> Not really footy but what the heck
>>
>> Colin is correct. Property is the favoured - substitute obsessive -
>> investment of those around the AWOTE income level. A figure which is
>> around $54K compared to the $40K amount in your hypothetical situation.
>>
>> The serious money follows private equity, then equity and then property
>> comes a distance third.
>>
>>
>>
>
> OK so lets use Cols figures
> and a straight balance Sheet approach
>
> Assumptions
> 1. Pay is split 40K/14K AWOTE using Cols Figures
> 2. In Own Home for 7 years (average occupancy) borrowed $200K 7 years ago
> $300pw equity $150K
> 3. Two Car family 3 yo Commodore & 8yo Astra is about the avg
> 4. I have a typical family of 4 with modest power/phn and will use my last
> 12 months costs
>
> Amount Balance Item
> $770 $770 Main Income
> ($165) $605 Tax on $770
> $270 $875 Spouse Income
> ($25) $850 Tax on $270
> ($300) $550 Home Loan Repayment
> ($120) $430 Car Loan on Commodore
> ($10) $420 Home Phone
> ($20) $400 Mums Mobile (Dads is a work one)
> ($10) $390 Gas
> ($20) $370 Electricity
> ($20) $350 Rates
> ($60) $290 Petrol (I could push this to $80 with two cars
> but wont for the sake of argument)
> ($160) $130 Most Groceries/Meat (and we shop at ALDI which is
> consistently $60 cheaper for us)
> ($40) $90 Fruit & Veg
> ($25) $65 School Fees/Books/Camps etc One High School, One
> Primary
>
> Now I haven't added in Clothes plus other typical family costs
> Swimming Lessons ($20), Music Lessons($20) & Takeaway ($30)
>
> Having done this balance sheet I didn't realise just
> how even more ridiculous NG is when this family should be getting
> a $170 tax deduction for the first 5 years of their
> home loan so that they could be in a sound financial
> position after that time rather than struggling every bloody week!
>
> The Loan
> Assumptions
>
> 1. Given Cols advocation of debt they would borrow
> the whole amount + costs so loan is $265K IO
> using home equity & investment equity would cover it
>
> 2. A property is typically empty for one month (8.5%)
> but given a tenant is on average in for 3 years
> I can accept Col 2.5% vacancy but will also factor in
> that an agent will charge you one months rent also
> as a re-letting fee covering advert/costs etc so thats
> a more realistic 5% vacancy costs
>
> Amount Balance Item
> ($370) ($370) Loan Repayment
> $250 ($120) Rent
> ($20) ($140) Rates
> ($20) ($160) Maintenance (this is prob way too low but it is
> in because it needs to be)
> ($10) ($170) 5% Agents Commission
> ($10) ($180) Vacancy Costs
> $180 ($0) Tax Offset
>
> so I adjusted all my figures to match
> the AWOTE and took all the debt I could
>
> I can't be clearer in any of these figures
> and have been absolutely generous at every stage.
> Sure, this family can just cover the cost of the property
> but they are so exposed to any one single negative
> event that they are living precariously and they
> know it and sweat on it every day of their lives!
>
> so tell me again how NG is a good tax break
> and is not better than giving these people
> a 5 year interest only tax break on the family home
> and then pay 10% GST when they sell it
>
> yeah and sure the family home gets a minor CGT
> tax break but that is at the end of the ownership
> when typically most people don't need it rather than
> at the start when most people do!
>
> Yep, Packer & Murdoch do use debt to increase their
> wealth and it is at yours, mine and everyone elses expense
> especially since they continue to use that debt to
> mainly acquire and not increase production
>
> The ridiculous govt land release is premised by the assumption
> that as the land is available anyone could develop it
> but you know damn well that isn't the case
> all the govt has done is reset the boundaries
> that land can be converted into suburbs
> if you think that the 4/5 companies that control
> 95% of the property development market
> will release more land and drive down their own
> prices you are living in Disneyworld. They
> will buy up the land, driving down the purchase
> price from the landowner because that is where the glut
> is (NOT developed but UNdeveloped land) and then they
> will hold it and release it to maximise their profit
>
> Hold Supply and Create Demand
> and you reckon I know nothing of economics
> you have absolutely no idea!
> In a Quinopoly (sic) there just isn't enough
> competition for it to drive down prices
>
> gF
>
> oh and I will take my no debt existence
> every day over yours, I am 100% free
> you however are a slave to the debt
>
>

Greg .. do you hide all your cash under your mattress as well?

[Ext User(David Clayton)]

On Mon, 21 Nov 2005 10:16:16 +0000, Colin Kynoch wrote:

> On Mon, 21 Nov 2005 20:27:04 +1100, "Footy Facts"
........
>>please produce the figures as to how
>>an average family of four on $40K a year can buy a house as an investment
>>and still buy the house they live in!
>
> Nice try given AWOTE is 53206 p.a.
........
Quite possibly an initial incorrect usage of "average", but how about
someone post the Median income for a family in Australia, and try and work
out how viable it is to make investments with whatever "disposable income"
this sort of household has available?

BTW, the "AWOTE" has been significantly inflated over the past 15 years by
the enormous increases in above average incomes relative to the increases
"enjoyed" by those in the below $45K PA range (just have a look at the
increases in Executive salaries).

It has also been speculated that due to the various changes in taxation
policy (lower top tax rates, reduced avoidance) over the years, more
high-income earners have been counted in the "Salary" statistics - thus
inflating the rise in the "average" - and therefore given a misleading
boost to the overall rises in household incomes.

The bottom-line is that many, many families on the wrong side of the
so-called average are not as well off as the statistical comparisons may
indicate, and still have little real access to all of the various
investment benefits which are supposed to help them improves their
circumstances.

Add into that the changes to University enrolments - which have been an
opportunity for those in lower socio-economic circumstances to succeed via
merit - are now more and more being made available to those families who
have access to the necessary wealth.

Isn't it good to know that Australian Universities will be filled with
more stupid rich kids in the place of those who may be smarter and more
motivated, but just weren't born into a family rich enough to give them
that opportunity.

That'll really help the country in the long-term, won't it..........

--
Regards, David.

David Clayton, e-mail: dcstar@XYZ.myrealbox.com
Melbourne, Victoria, Australia.
(Remove the "XYZ." to reply)

Knowledge is a measure of how many answers you have,
intelligence is a measure of how many questions you have.

[Ext User(Footy Facts)]

"Dave" <somebody@somewhere> wrote in message news:4381d43b$0$30780$5a62ac22@per-qv1-newsreader-01.iinet.net.au...
> "Footy Facts" <footyfacts@yahoo.com> wrote in message
>>
>
> Greg .. do you hide all your cash under your mattress as well?
>
>

of course not
true to my mantra
I invest in commercial interests
the prime purpose of which
is to generate profits through endeavour
and increase/improve production.
(There are many of us in this country
who don't follow the Cant of Cols debt!)

This debt filled society is sitting
on top of the biggest pyramid scheme
you have ever seen and like any good
pyramid scheme you have to keep pouring
ever increasing amounts of money into
the pyramid as its base widens
Financial Planners will tell you how good debt
is because (as Col stated he has $5M)
the more debt they have, the more debt they
need you to incur to increase prices to dig
them out of the hole they are in and as more people
go into debt to fuel the debt more people go into
debt to fuel the debt afraid that they will be
left behind because they don't have sufficient
debt to leverage against the ever increasing debt
and as I said like any good pyramid scheme
the bloke in before you will always tell you
how good it is to be there because he has
to suck you into the pyramid because the
worst place to be is at the bottom of the pyramid!
(As Col said Murdoch and Packer have huge debt
and at which end of the pyramid do you think they sit!)
Hence, as I said, the Debt Mantra of the FPs
I could visit 100 FPs and would bet my bottom
dollar every one of them would say "Lets use
the equity in your home to borrow money
to buy another house/shares or whatever"

I know COl will naysay this, he has to,
being such a huge part of the pyramid
he has no choice.

I on the other hand am considerably wealthier than
most Australians, ABS figures put me in the
top 5% (though yet again COL denigrates my position
from his debt fueled desires) and have done so
by never borrowing more than 1 years salary
to buy my first and second family home and retired debt
within three years in both cases and by investing in
production which generates both income and capital gain
and by re-investing the income back into production
I have gone from assets of 0K in 1988 to 2.1M in 2005
and yet checking my Tax returns for those 17 years
I have only earnt $450K and taking out the 80% you need
to live (if you are lucky its that low) I have basically
turned 100K into 2.1M in 17years without any
considerable debt (and I do recognise that people
do have to borrow to buy a house in our current
financial setup only I advocate no more than
2 times salary not the 4 or more that is currently used!)
(How quickly people seem to forget the aptly named "Pyramid" BS)

However it remains as true now as ever,
Debt must be used to increase/improve production
or it is a lien against future production thats all it
can be, when you leverage too much debt against
future production without increasing/improving
then you have no capacity to repay the debt thus
you have to lift prices to service the debt
thus workers have to campaign for pay increases
to cover the increase costs.

ergo, a poor man without significant debt
is screwed by the system because he has
nothing to leverage against to offset the
increase merry go round.

On the other hand if you do increase/improve production
then cost per unit goes down, the company has capacity
to service the debt without increasing prices etc

Now, I know this is a simplistic view but the basic
tenets of debt/production are undeniable and
have been since economics 101, you keep pouring
water into the bucket but where is the water coming
from and worse still the bucket has a hole in the bottom

The Negative Gearing fueled economy has
workers borrowing madly against their future
production and the govt seeing no way out
has to introduce the IR regulations to
improve production costs or the whole house
of cards will fall down!

gregF

[Ext User(Epigram)]

On 11/21/2005 12:50:33 Colin Kynoch <colinkynoch@gmail.com> wrote:

> On 11/17/2005 13:09:23 Colin Kynoch <colinkynoch@gmail.com> wrote:

>>> On Thu, 17 Nov 2005 15:38:22 +1100, "Footy Facts"
>>> <footyfacts@yahoo.com>after much thought and consideration decided that
>>> the following would improve the lives of those that read it:

>>>> "Colin Kynoch" <colinkynoch@gmail.com> wrote in message
>>>> news:m0rnn19ura7gv1satkaihekn5vhctdl5s6@4ax.com...

>>>>> On Wed, 16 Nov 2005 20:44:22 +1100, "Footy Facts"
>>>>> <footyfacts@yahoo.com>after much thought and consideration decided
>>>>> that the following would improve the lives of those that read it:

>>>>> If you think Negative Gearing is a bad thing you have just proven to
>>>>> me you have absolutely no idea.

>>>>> Colin Kynoch

>>>>>> gF

>>>> we've had this argument before Col you stick your idea about it and I
>>>> will stick to mine

>>> Well Negative Gearing was removed by Paul Keating as Treasurer.

>>> They realises what a monumental **** up it was to remove it so they
>>> reinstated it.

>>> It is far cheaper for you or I to provide housing than the government.

>>> Someone investing in a residential property is effectively operating a
>>> business.

>>> If you remove negative gearing you would then logically not be taxed on
>>> the rental.

>>> Negative gearing is basically allowing the costs of conducting a
>>> business to be deducted from income produced by that business.

>>> Surely you would support the tax deductibility of expenses in running a
>>> business.

>> This is a very good point. However in the first case, the state
>> governments can provide housing for the residents _cheaper_ than the
>> market;

> That they provide it to the end user for lower amounts does not mean it is
> cheaper for the government to provide it.

Cheaper for the one who rents, not who provides. I don't know how it works
in other states and territories, but if a person or family is a good
tennant, Homeswest gives the those tennants the opportunity to buy the
rental. The amount of rent already paid is deducted from a calculated
"market value", and future rent becomes the same as paying interest on the
loan.

This normally only applies to single dwellings or duplexes, not units. And
it is the only way people on a government pension can afford to buy their
own home.

> Yes there is government housing in all states, but the cost to those
> governments outweighs the rental incomes by a considerable margin.
> Government housing is heavily subsidised, far more heavily than the
> 'subsidy' that is provided via negative gearing.

>> in other words, if there was no government housing sector, then most of
>> the people that would be renters in that sector would be homeless.

> Much the same as the severe housing shortage that started to build when
> Keating abolished Negative Gearing.

>> There is no way a commerical contractor or business can provide rent
>> cheaper than government housing.

> From whose point of view?

Again, from the one who pays the rent.

> From the renters I agree wholeheartedly as the government subsidies
> provided to occupants of government housing mean that the rentals paid are
> generally considerably below market values.

Because otherwise accomadation in a ordinary home or unit would be
impossible for those legitamately on welfare. One might point out there is
a considerable waiting list to get government housing.

>> To do so would loss the business money.

> The governments spends hundreds of millions per year on public housing
> every year, they are in business terms losing considerable sums on public
> housing, and that money has to come from somewhere.

What are taxes for? I must be mistaken if tax is not used for social
equity. Or perhaps the 8 governments are.

>> Secondly, every business has to be viable based on profit after tax,
>> otherwise there is no point for that business to exist.

> Many businesses run at losses on paper, yet are very profitable
> businesses.

I have an issue with some forms of debt. Some debt is "good", eg a home
loan. Others are "bad" like credit card debt.

The same applies to businesses, there are forms of debt, which I won't go
into here, that are seen to be a "good" debt for the business because it
reduces the tax the business has to pay. Some call this debt investment,
other may call it cheating on tax.

>> Sure, make a loss for a few years, but there has to be a point where it
>> is a viable business.

> Just because a business makes a loss year after year does not mean it is
> not a viable business.

Like Foxtel or OptusVision? They still haven't made a profit after a
decade, so the question is, are they viable? I believe their parent
companies will continue to pour money into them until there is a monopoly -
but that's just me.

>> So for investors in property, why can't the rent earned be as a business,
>> not as induvidual income.

> Most people who do so do so as sole traders and as such business and
> personal are not differentiated.

>> Expenses for the business' earning the income should be taken into
>> account accordingly.

> It is it is called negative gearing.

>> Keating ****ed up the negative gearing mainly because at that time,
>> propertly investors had to estimate their income from the property(ies)
>> _before_ the fiscal year and pay the provisional tax accordingly. Now
>> that provisional tax is dead, the only reason negative gearing still
>> exists is to temp more "mums and dads" investors to provide rental
>> accomadation to relieve the stress on government housing.

> And the smart ones do.

> Negative Gearing is not just for property though, it can be used for any
> income producing investment.

From a social aspect, and I offer no suggestions or judgements here, at
what point is ng being used to, and I use the word "cheat" advisedly, tax
and only allow those who can afford it through ordinary means to the
exclusion of others? I'm not talking about wage earners who piss there
money up against the wall - that's their problem. However on the lower end
of the wage scale, there comes a point where a person cannot make any
progress because of tax breaks that are available to those earning more.
It is a social inequity that should be looked at by Treasurers if they are
serious about level playing fields.

>> It's up to governments to work out whether this is working or being
>> abused. If it is being abused, then negative gearing should be wound
>> back, so to speak.

> Define being abused?

> Paul Keating once said something along the lines of "It is every
> Australian's responsibility to use the tax system to their benefit, but it
> is not the government's job to tell them how"

> He was spot on. Anyone not utilising the tax system to their benefit
> cannot complain about it or isn't paying tax.

There is a point where a person cannot "utilise the tax system to their
benefit". People who work hard, don't get welfare, don't piss their money
up against the wall, but struggle to get out of the hole they are in.
Market forces are too strong or have a greater impact on their lives than
those in much higher wage earning percentiles.

Keating, despite being a member of what once could be described as a
socialist party, is right-wing. So too are the NZ and British Labor
governments.

>>>> Nagative gearing for commercial property only stands to reason but to
>>>> allow it on residential property is a tax on the poor and a rebate for
>>>> the rich

>>> What bollocks.

>>> The tax office showed a few years ago that over half residential
>>> property investors earned below AWOTE.

>>> Suggesting that negative gearing be allowed on commercial but not
>>> residential property is akin to suggesting that only wholesale business
>>> can claim their expenses as and retail business can't.

>>> Negative gearing allows far more lower income people to have affordable
>>> housing than if it was all left to the government.

>>> I am not surprised you cannot understand the economic realities
>>> associated with this. Colin Kynoch

>> Nail on the head with residential housing, except that no ordinary
>> investor can provide rentals cheaper than government housing.

> Yes they can and do so.

> The cost of me providing a house to be a rental is approximately $1,000
> per annum. It would cost the government at least 5 times this much.

You can't rent a property, nor can anyone else, to someone on welfare
cheaper than the government can. The government recognises this by having
rent subsidies to make up the difference".

> You may or may not have noticed that there is no residential property
> trusts (either listed or unlisted) in Australia.

> The main reason for that is that the costs of administering such a trust
> would be prohibitive, it is one of the exceptions to the economy of scale
> argument. Commercial property is far easier to manage than residential
> and has the added bonus of higher yields.

The reason governments provide housing is not for economic gain, but for
social gain. Don't confuse the two.

>> As for commercial rentals, it can be safely assumed that the lease is for
>> businesses.

> Except for when they are for government departments, non-profit
> organisations, charities, etc, etc.

>> I can't see why any investor in business property should be rewarded for
>> supplying property to another business or even a government department.

> What reward are you talking about?

> Deduction of expenses is a standard taxation principle.

I'm not arguing that. I'm arguing that providing property to a business
should not be subject to the same amount of negative gearing as providing
accomadation for a person or people. At what amount is not going to be
solved here, or, more importantly, taken up as a policy priniple by the
government or opposition.

>> Certainly political parties as investors shouldn't be rewarded over and
>> above the rent and depreciation of a property that is contracted to a
>> government department.

>> Negative gearing does have emotive conotations to it. As an incentive
>> for people to provide rental accommadation it is fair enough for low
>> income earners - pensioners and the like. But for ordinary income
>> earners, especially those on, say, %150 of the mean income and above, why
>> should an investor be "overly" rewarded.

> How are they overly 'rewarded'?

>> There's no simple solution, as Keating found out. The state governments
>> must provide accomadation because if it were left to investors alone, the
>> homeless figure would be so much more unacceptable than it is now. Yet
>> there must be incentives for ordinary people to provide rental
>> accomadation.

> ie the current system

>> An idealist might say that only people with well above average income can
>> do this, and therefore are being rewarded for their income, rather than
>> their investment.

> And that is completely incorrect given that the distribution of property
> investors above and below AWOTE is approximately 50/50

And what is AWOTE these days? $54k? That's alot more money than most
people I deal with.

>> Greg is probably leaning more to the idealist side, and sees that
>> everyone with an income should be able to participate otherwise those who
>> can't afford to purchase investment property for the rental market are
>> being "taxed" to pay for those who can.

> Everyone has the opportunity to do so.

> You do not have to be wealthy to invest in property.

And I beg to differ. Perhaps because we define "wealthy" differently. For
myself, I'm wealthy, but not in a monetry sense.

> If less Australian's pissed their incomes up against the wall and
> purchased items like holidays and plasma screens on credit then there
> would be more in a position to invest.

Inflation would be higher too, and investments would have a lower return as
the various markets would be at their fullest extent or flooded. I can
hear you say "bollocks".

> Most Australian's put their head in the sand and live for the moment
> without a thought to the future, the spend beyond their means and then cry
> poor when others who actually took the smarter route and took some short
> term gain and puts some money aside to purchase a property and then paid
> enough of it off as quickly as they could to purchase an investment
> property actually gets ahead.

> I would suggest that those against negative gearing are typical people
> infected with Tall Poppy Syndrome.

Think what you will. Negative gearing isn't the only way for investment in
property to work, which has nothing to do with Tall Poppy Syndrome.

>> It's certainly not a topic that can be summed up in 500 words or less,
>> much less debated on usenet with any form of resolution in sight.

> You never know Toby.

Ah, but I do. As long as you participate in the argument.

> Colin Kynoch
--

Toby

--
I saw a funny thing on the way here. So I laughed.

(If you really want to email me, you'd know the address)

[Ext User(Epigram)]

On 11/22/2005 05:10:40 David Clayton <dcstar@XYZ.myrealbox.com> wrote:

> On Mon, 21 Nov 2005 10:16:16 +0000, Colin Kynoch wrote:

>> On Mon, 21 Nov 2005 20:27:04 +1100, "Footy Facts"

> ........

>>> please produce the figures as to how an average family of four on $40K a
>>> year can buy a house as an investment and still buy the house they live
>>> in!

>> Nice try given AWOTE is 53206 p.a.

> ........ Quite possibly an initial incorrect usage of "average", but how
> about someone post the Median income for a family in Australia, and try
> and work out how viable it is to make investments with whatever
> "disposable income" this sort of household has available?

> BTW, the "AWOTE" has been significantly inflated over the past 15 years by
> the enormous increases in above average incomes relative to the increases
> "enjoyed" by those in the below $45K PA range (just have a look at the
> increases in Executive salaries).

> It has also been speculated that due to the various changes in taxation
> policy (lower top tax rates, reduced avoidance) over the years, more
> high-income earners have been counted in the "Salary" statistics - thus
> inflating the rise in the "average" - and therefore given a misleading
> boost to the overall rises in household incomes.

> The bottom-line is that many, many families on the wrong side of the
> so-called average are not as well off as the statistical comparisons may
> indicate, and still have little real access to all of the various
> investment benefits which are supposed to help them improves their
> circumstances.

> Add into that the changes to University enrolments - which have been an
> opportunity for those in lower socio-economic circumstances to succeed via
> merit - are now more and more being made available to those families who
> have access to the necessary wealth.

> Isn't it good to know that Australian Universities will be filled with
> more stupid rich kids in the place of those who may be smarter and more
> motivated, but just weren't born into a family rich enough to give them
> that opportunity.

> That'll really help the country in the long-term, won't it..........

Thanks David for injecting a hellavalot of reality into this.

Most of my friends are in the "in demand" professions. To name a few, a
GP, nurses and tertiary teachers. Only one has a salary above the AWOTE,
and he is a public servant in the WA Ministry of Justice.

The AWOTE is certainly skewed upward, and as long as we have governments
that believe in a pay-as-you-go system with education, health etc, then
there is no social investment.

Strange to that these same polical parties believe in surplus budgets. I'm
not saying that a defecit is good, but any surplus should be plowed back
into investment in our social needs. Somewhere along the line, money has
become as much of a commodity as a person.
--

Toby

--
I saw a funny thing on the way here. So I laughed.

(If you really want to email me, you'd know the address)

[Ext User(Colin Kynoch)]

On Tue, 22 Nov 2005 00:12:00 +1100, "Footy Facts"
<footyfacts@yahoo.com>after much thought and consideration decided
that the following would improve the lives of those that read it:

>
>"Dave" <somebody@somewhere> wrote in message news:43819e2f$0$30789$5a62ac22@per-qv1-newsreader-01.iinet.net.au...
>> "Footy Facts" <footyfacts@yahoo.com> wrote in message news:438192ec$1_1@news.melbourne.pipenetworks.com. ..
>>>
>>> "Colin Kynoch" <colinkynoch@gmail.com> wrote in message news:97i2o15836qk4811itncf10fephcl6n33q@4ax.com...
>>>> On Mon, 21 Nov 2005 03:33:08 GMT, Epigram <not@this.id>after much
>>>> thought and consideration decided that the following would improve the
>>>> lives of those that read it:
>>>>
>>>
>>> my final thought on the whole
>>> farce that is negative gearing
>>>
>>> please produce the figures as to how
>>> an average family of four on $40K a year can
>>> buy a house as an investment
>>> and still buy the house they live in!
>>>
>>> Heres Mine
>>> Now I am not a Financial Analyst
>>> All I can do is do what any average
>>> Joe would do when looking to buy a house
>>> (Of course he coulda bought a unit
>>> at Docklands on the back of many Financial
>>> Planners recommendations and be
>>> way in front now not! ROTFLMGO!)
>>>
>>> Using Caroline Springs as an example
>>> Cheapest package is 3BR $250K
>>> Loan $225K = $1660pcm = 385pw
>>> (I used RAMS as an average guide)
>>>
>>> 385pw loan
>>> 25pw rates
>>> $410pw costs (not even including any other costs!)
>>>
>>> quick realestate.com.au rental check
>>> 60 3BR houses in Caroline Springs from $200 - $320
>>> average =$250pw (I actually averaged them, not the midpoint)
>>> less 7% avg Agent Fees = $235pw
>>> less 8% avg non-occupancy rate = $220pw
>>>
>>> so our guy is making a $190pw loss at this stage
>>> now he only pays $160pw tax so they are already
>>> $30pw behind but hang on he has a massive $610pw
>>> out of which he has his own home to pay for
>>> $410pw so that leaves $200pw for Car, Food etc
>>> so his best bet is to rent his mates house and vice-versa
>>> so they can both get a tax deduction on their own homes
>>> Woops hang on I think thats what I argued for
>>> and why NG is a farce! Give the working stiff
>>> a decent tax break on the family home and ditch
>>> Negative Gearing and the hoary old argument
>>> that you need it to provide rental property disappears
>>> in the vapour that its entire substance is made of
>>>
>>> Keating changed NG but he didn't provide the
>>> family home tax break at the same time that
>>> would have maintained the status quo on housing
>>>
>>> Also since the tax break is only on the first home
>>> then the tax break of NG is used to artificially fuel
>>> spiralling house prices on the back of it!
>>>
>>> and heres the final rub
>>> I don't have nor will never have an investment
>>> residential property and as at today I am
>>> to all intents and purposes a multi-millionaire
>>> (Assets 2.1M Debt $0)
>>> but hey any good financial planner will tell
>>> you debt is always good! What a crock of shit!
>>> Debt is mostly only good if it increases production
>>> (A home loan is a lien against future production)
>>> not when its only function is to increase prices
>>> but I don't want to ruin the Cant of the FPs,
>>> as I obviously have no idea how to manage
>>> my financial affairs!
>>>
>>> so what does the Labor Govt do it a proposes
>>> an $8K increase in land prices then naively
>>> says that the property developers make so much
>>> profit that they will wear the cost (yeah sure)
>>> and at the same time is reducing the home grant
>>> from $5K to $3K, thus the poor low income guy
>>> has to find another $10K to be able to by his
>>> basic $250K woops now $260K package
>>> oh but hang on the Labor Govt then says but
>>> we have increased the amount of land we
>>> are releasing that will bring down prices
>>> only problem is that the development of the land
>>> is in the hands of a few major commercial
>>> interests and it sure as hell isn't in their interests
>>> to buy and release land to oversupply the market
>>> and drive down their own prices yeah that will work!
>>>
>>> Just who the **** are they really supporting!
>>>
>>> The have increased taxes, reduced tax breaks
>>> given developers more land, yep I can really
>>> see how the avg bloke is helped here
>>>
>>> so Col as you are the Financial Planner
>>> please provide a true and accurate financial
>>> plan for a family of four on $40K, in outer suburbs
>>> with std Commodore for him and small car
>>> for the missus, plus food, power, clothes,
>>> school, etc etc and have a property investment!
>>>
>>> gF
>>>
>>
>> Not really footy but what the heck
>>
>> Colin is correct. Property is the favoured - substitute obsessive - investment of those around the AWOTE income level. A figure
>> which is around $54K compared to the $40K amount in your hypothetical situation.
>>
>> The serious money follows private equity, then equity and then property comes a distance third.
>>
>>
>>
>
>OK so lets use Cols figures
>and a straight balance Sheet approach
>
>Assumptions
>1. Pay is split 40K/14K AWOTE using Cols Figures

Aint my figures.

AWOTE is $53200. The second income is in addition to that.

>2. In Own Home for 7 years (average occupancy) borrowed $200K 7 years ago $300pw equity $150K
>3. Two Car family 3 yo Commodore & 8yo Astra is about the avg
>4. I have a typical family of 4 with modest power/phn and will use my last 12 months costs
>
>Amount Balance Item
>$770 $770 Main Income

That is net

>($165) $605 Tax on $770
>$270 $875 Spouse Income
>($25) $850 Tax on $270
>($300) $550 Home Loan Repayment
>($120) $430 Car Loan on Commodore
>($10) $420 Home Phone
>($20) $400 Mums Mobile (Dads is a work one)
>($10) $390 Gas
>($20) $370 Electricity
>($20) $350 Rates
>($60) $290 Petrol (I could push this to $80 with two cars but wont for the sake of argument)
>($160) $130 Most Groceries/Meat (and we shop at ALDI which is consistently $60 cheaper for us)
>($40) $90 Fruit & Veg
>($25) $65 School Fees/Books/Camps etc One High School, One Primary
>
>Now I haven't added in Clothes plus other typical family costs
>Swimming Lessons ($20), Music Lessons($20) & Takeaway ($30)
>
>Having done this balance sheet I didn't realise just
>how even more ridiculous NG is when this family should be getting
>a $170 tax deduction for the first 5 years of their
>home loan so that they could be in a sound financial
>position after that time rather than struggling every bloody week!
>
>The Loan
>Assumptions
>
>1. Given Cols advocation of debt they would borrow
> the whole amount + costs so loan is $265K IO
> using home equity & investment equity would cover it
>
>2. A property is typically empty for one month (8.5%)

What crap.

> but given a tenant is on average in for 3 years
> I can accept Col 2.5%

That is the actual figure.

> vacancy but will also factor in
> that an agent will charge you one months rent also
> as a re-letting fee covering advert/costs etc so thats
> a more realistic 5% vacancy costs


>Amount Balance Item
>($370) ($370) Loan Repayment
>$250 ($120) Rent
>($20) ($140) Rates
>($20) ($160) Maintenance (this is prob way too low but it is in because it needs to be)
>($10) ($170) 5% Agents Commission
>($10) ($180) Vacancy Costs
>$180 ($0) Tax Offset

Where is the depreciation?


>so I adjusted all my figures to match
>the AWOTE and took all the debt I could
>
>I can't be clearer in any of these figures
>and have been absolutely generous at every stage.

Except you took the main income earners nett figure and taxed it.

The $770 is the main income earners after tax income

>Sure, this family can just cover the cost of the property
>but they are so exposed to any one single negative
>event that they are living precariously and they
>know it and sweat on it every day of their lives!

Given you have overtaxed the family $165 and have not considered the
depreciation, the family in the above situation could comfortably
purchase the property in question and afford to take out the
appropriate insurances to cover the negative events.

I would also say that your $200 p.w. to feed 4 people is an extremely
generous figure. I have 3 kids and our weekly grocery bill is $150.
But then you probably buy a lot of processed and prepared foods.

>so tell me again how NG is a good tax break
>and is not better than giving these people
>a 5 year interest only tax break on the family home
>and then pay 10% GST when they sell it

It is far better than giving them a 5 year interest tax break and then
slugging them 10% GST (are you sure you mean GST?) when they sell, as
NG is an incentive to increase their wealth whereas the vast majority
of people with a short term tax break such as the one you suggest piss
it up against the wall. The government needs to encourage more
investment so that more people are self sufficient in retirement. The
small cost to the government in NG is far outweighed by the long term
benefits of having more people self sufficient in retirement.

>yeah and sure the family home gets a minor CGT
>tax break

Minor!!!!!!!!!!!!!!!!!!!!

The Family home is CGT EXEMPT.

That is not a minor break.

>but that is at the end of the ownership
>when typically most people don't need it rather than
>at the start when most people do!

It means that the equity they build up in their own home is TAX FREE.

People need to take a long term view and frankly most Australian's are
too intent on living in the now and hoping the future will take care
of itself. They live beyond their means and expect the government to
be there when they retire. Well here's the good news people the aged
pension is roughly 1/4 of AWOTE, try living on that.

Oh yeah, your family home is not included in the assets test for
pensions and benefits, further breaks.


>Yep, Packer & Murdoch do use debt to increase their
>wealth and it is at yours, mine and everyone elses expense
>especially since they continue to use that debt to
>mainly acquire and not increase production

Nice communist viewpoint there Footy.


>The ridiculous govt land release is premised by the assumption
>that as the land is available anyone could develop it
>but you know damn well that isn't the case
>all the govt has done is reset the boundaries
>that land can be converted into suburbs
>if you think that the 4/5 companies that control
>95% of the property development market
>will release more land and drive down their own
>prices you are living in Disneyworld. They
>will buy up the land, driving down the purchase
>price from the landowner because that is where the glut
>is (NOT developed but UNdeveloped land) and then they
>will hold it and release it to maximise their profit
>
>Hold Supply and Create Demand
>and you reckon I know nothing of economics
>you have absolutely no idea!
>In a Quinopoly (sic) there just isn't enough
>competition for it to drive down prices
>
>gF
>
>oh and I will take my no debt existence
>every day over yours, I am 100% free
>you however are a slave to the debt

No debt is a salve to me.

Debt is a wealth creation tool if used correctly. It enables you to
take opportunities when they are there. it increases your leverage,
and it multiplies your profits.



Colin Kynoch
>
>

[Ext User(Colin Kynoch)]

On Tue, 22 Nov 2005 08:16:18 +1100, "Footy Facts"
<footyfacts@yahoo.com>after much thought and consideration decided
that the following would improve the lives of those that read it:

>
>"Dave" <somebody@somewhere> wrote in message news:4381d43b$0$30780$5a62ac22@per-qv1-newsreader-01.iinet.net.au...
>> "Footy Facts" <footyfacts@yahoo.com> wrote in message
>>>
>>
>> Greg .. do you hide all your cash under your mattress as well?
>>
>>
>
>of course not
>true to my mantra
>I invest in commercial interests
>the prime purpose of which
>is to generate profits through endeavour
>and increase/improve production.
>(There are many of us in this country
> who don't follow the Cant of Cols debt!)

If you used debt you could invest in more of those commercial
interests and therefore speed up production etc, etc.


>This debt filled society is sitting
>on top of the biggest pyramid scheme
>you have ever seen and like any good
>pyramid scheme you have to keep pouring
>ever increasing amounts of money into
>the pyramid as its base widens
>Financial Planners will tell you how good debt
>is because (as Col stated he has $5M)
>the more debt they have, the more debt they
>need you to incur to increase prices to dig
>them out of the hole they are in and as more people
>go into debt to fuel the debt more people go into
>debt to fuel the debt afraid that they will be
>left behind because they don't have sufficient
>debt to leverage against the ever increasing debt
>and as I said like any good pyramid scheme
>the bloke in before you will always tell you
>how good it is to be there because he has
>to suck you into the pyramid because the
>worst place to be is at the bottom of the pyramid!

Nice fairy story Greg.

>(As Col said Murdoch and Packer have huge debt
>and at which end of the pyramid do you think they sit!)
>Hence, as I said, the Debt Mantra of the FPs
>I could visit 100 FPs and would bet my bottom
>dollar every one of them would say "Lets use
>the equity in your home to borrow money
>to buy another house/shares or whatever"

It would depend on your circumstances, but if they are as you say then
you are costing yourself considerable gains by burying your head in
the sand.

>I know COl will naysay this, he has to,
>being such a huge part of the pyramid
>he has no choice.

No I will naysay it because you are wrong.


>I on the other hand am considerably wealthier than
>most Australians, ABS figures put me in the
>top 5% (though yet again COL denigrates my position
>from his debt fueled desires) and have done so
>by never borrowing more than 1 years salary
>to buy my first and second family home and retired debt
>within three years in both cases and by investing in
>production which generates both income and capital gain
>and by re-investing the income back into production
>I have gone from assets of 0K in 1988 to 2.1M in 2005
>and yet checking my Tax returns for those 17 years
>I have only earnt $450K and taking out the 80% you need
>to live (if you are lucky its that low) I have basically
>turned 100K into 2.1M in 17years without any
>considerable debt (and I do recognise that people
>do have to borrow to buy a house in our current
>financial setup only I advocate no more than
>2 times salary not the 4 or more that is currently used!)
>(How quickly people seem to forget the aptly named "Pyramid" BS)

Yes Pyramid were offering interest on deposits approx 2% higher than
the rest of the market. Care to point out any current examples Greg.

OR are you just introducing another red herring.


>However it remains as true now as ever,
>Debt must be used to increase/improve production
>or it is a lien against future production thats all it
>can be, when you leverage too much debt against
>future production without increasing/improving
>then you have no capacity to repay the debt thus
>you have to lift prices to service the debt
>thus workers have to campaign for pay increases
>to cover the increase costs.

Yes our inflation is rampant isn't it Greg. running at that
astronomical figure of around 3%

>ergo, a poor man without significant debt
>is screwed by the system because he has
>nothing to leverage against to offset the
>increase merry go round.
>
>On the other hand if you do increase/improve production
>then cost per unit goes down, the company has capacity
>to service the debt without increasing prices etc
>
>Now, I know this is a simplistic view

Very.

> but the basic
>tenets of debt/production are undeniable and
>have been since economics 101, you keep pouring
>water into the bucket but where is the water coming
>from and worse still the bucket has a hole in the bottom

Have you heard of economic growth Greg?

>The Negative Gearing fueled economy has
>workers borrowing madly against their future
>production and the govt seeing no way out
>has to introduce the IR regulations to
>improve production costs or the whole house
>of cards will fall down!


What bollocks.

Colin Kynoch

[Ext User(Colin Kynoch)]

On Tue, 22 Nov 2005 08:10:40 +1100, David Clayton
<dcstar@XYZ.myrealbox.com>after much thought and consideration decided
that the following would improve the lives of those that read it:

>On Mon, 21 Nov 2005 10:16:16 +0000, Colin Kynoch wrote:
>
>> On Mon, 21 Nov 2005 20:27:04 +1100, "Footy Facts"
>.......
>>>please produce the figures as to how
>>>an average family of four on $40K a year can buy a house as an investment
>>>and still buy the house they live in!
>>
>> Nice try given AWOTE is 53206 p.a.
>.......
>Quite possibly an initial incorrect usage of "average", but how about
>someone post the Median income for a family in Australia, and try and work
>out how viable it is to make investments with whatever "disposable income"
>this sort of household has available?
>
>BTW, the "AWOTE" has been significantly inflated over the past 15 years by
>the enormous increases in above average incomes relative to the increases
>"enjoyed" by those in the below $45K PA range (just have a look at the
>increases in Executive salaries).

Over a workforce of 9million the executive salaries are a blip.


>It has also been speculated that due to the various changes in taxation
>policy (lower top tax rates, reduced avoidance) over the years, more
>high-income earners have been counted in the "Salary" statistics - thus
>inflating the rise in the "average" - and therefore given a misleading
>boost to the overall rises in household incomes.

Again over a workforce of 9 million mere blips.

Oh and the furphy that the GST would eliminate the black economy is
well and truly disproven.

>The bottom-line is that many, many families on the wrong side of the
>so-called average are not as well off as the statistical comparisons may
>indicate, and still have little real access to all of the various
>investment benefits which are supposed to help them improves their
>circumstances.

Negative gearing can start with an initial investment of $2000.

You do not need mega bucks to start.

>Add into that the changes to University enrolments - which have been an
>opportunity for those in lower socio-economic circumstances to succeed via
>merit - are now more and more being made available to those families who
>have access to the necessary wealth.

My understanding is that Uni places are still available for those who
get the marks. HECS is not the bad ogre people have tried to make it
out to be.


>Isn't it good to know that Australian Universities will be filled with
>more stupid rich kids in the place of those who may be smarter and more
>motivated, but just weren't born into a family rich enough to give them
>that opportunity.

Sure you can buy a place, but if you don't have the marks money will
not get you a place.


>That'll really help the country in the long-term, won't it..........

Not if it were the case.

Colin Kynoch

[Ext User(Colin Kynoch)]

On Mon, 21 Nov 2005 23:29:45 GMT, Epigram <not@this.id>after much
thought and consideration decided that the following would improve the
lives of those that read it:

>On 11/21/2005 12:50:33 Colin Kynoch <colinkynoch@gmail.com> wrote:
>
>> On 11/17/2005 13:09:23 Colin Kynoch <colinkynoch@gmail.com> wrote:
>
>>>> On Thu, 17 Nov 2005 15:38:22 +1100, "Footy Facts"
>>>> <footyfacts@yahoo.com>after much thought and consideration decided that
>>>> the following would improve the lives of those that read it:
>
>>>>> "Colin Kynoch" <colinkynoch@gmail.com> wrote in message
>>>>> news:m0rnn19ura7gv1satkaihekn5vhctdl5s6@4ax.com...
>
>>>>>> On Wed, 16 Nov 2005 20:44:22 +1100, "Footy Facts"
>>>>>> <footyfacts@yahoo.com>after much thought and consideration decided
>>>>>> that the following would improve the lives of those that read it:
>
>>>>>> If you think Negative Gearing is a bad thing you have just proven to
>>>>>> me you have absolutely no idea.
>
>>>>>> Colin Kynoch
>
>>>>>>> gF
>
>>>>> we've had this argument before Col you stick your idea about it and I
>>>>> will stick to mine
>
>>>> Well Negative Gearing was removed by Paul Keating as Treasurer.
>
>>>> They realises what a monumental **** up it was to remove it so they
>>>> reinstated it.
>
>>>> It is far cheaper for you or I to provide housing than the government.
>
>>>> Someone investing in a residential property is effectively operating a
>>>> business.
>
>>>> If you remove negative gearing you would then logically not be taxed on
>>>> the rental.
>
>>>> Negative gearing is basically allowing the costs of conducting a
>>>> business to be deducted from income produced by that business.
>
>>>> Surely you would support the tax deductibility of expenses in running a
>>>> business.
>
>>> This is a very good point. However in the first case, the state
>>> governments can provide housing for the residents _cheaper_ than the
>>> market;
>
>> That they provide it to the end user for lower amounts does not mean it is
>> cheaper for the government to provide it.
>
>Cheaper for the one who rents, not who provides. I don't know how it works
>in other states and territories, but if a person or family is a good
>tennant, Homeswest gives the those tennants the opportunity to buy the
>rental. The amount of rent already paid is deducted from a calculated
>"market value", and future rent becomes the same as paying interest on the
>loan.

Yeah there have been blunders like that in most of the states.

Usually the terms are horrendous for the 'tenant/purchaser'

>This normally only applies to single dwellings or duplexes, not units. And
>it is the only way people on a government pension can afford to buy their
>own home.

I certainly hope the WA government has worked out a far better system
than the ones in Vic and NSW have done in the past.

>> Yes there is government housing in all states, but the cost to those
>> governments outweighs the rental incomes by a considerable margin.
>> Government housing is heavily subsidised, far more heavily than the
>> 'subsidy' that is provided via negative gearing.
>
>>> in other words, if there was no government housing sector, then most of
>>> the people that would be renters in that sector would be homeless.
>
>> Much the same as the severe housing shortage that started to build when
>> Keating abolished Negative Gearing.
>
>>> There is no way a commerical contractor or business can provide rent
>>> cheaper than government housing.
>
>> From whose point of view?
>
>Again, from the one who pays the rent.

Only through heavy subsidy, which is paid for by the rest of the
taxpaying community at a higher rate than the effects of NG.


>> From the renters I agree wholeheartedly as the government subsidies
>> provided to occupants of government housing mean that the rentals paid are
>> generally considerably below market values.
>
>Because otherwise accomadation in a ordinary home or unit would be
>impossible for those legitamately on welfare. One might point out there is
>a considerable waiting list to get government housing.

In every state.

>>> To do so would loss the business money.
>
>> The governments spends hundreds of millions per year on public housing
>> every year, they are in business terms losing considerable sums on public
>> housing, and that money has to come from somewhere.
>
>What are taxes for? I must be mistaken if tax is not used for social
>equity. Or perhaps the 8 governments are.

NG is another tool which assists in providing housing. FF seems to
think that it doesn't assist in production. He is wrong there as the
more investors in the market the more demand increases and the more
houses get built. Now he may consider construction not to be
productive, given his bizarre views.


>>> Secondly, every business has to be viable based on profit after tax,
>>> otherwise there is no point for that business to exist.
>
>> Many businesses run at losses on paper, yet are very profitable
>> businesses.
>
>I have an issue with some forms of debt.

Not necessarily. High levels of capital expenditure will result in
high levels of depreciation, and yes that capital expenditure will
invariably include some debt. This is also using debt to increase
production.

> Some debt is "good", eg a home
>loan. Others are "bad" like credit card debt.

I would class debt for the average person three ways.

Consumer debt (ie credit cards loans for holidays etc) = bad debt

Mortgage on own home (used for the purchase of the home, not including
borrowings for holidays TV's etc) = reasonable debt

Debt for investment = good debt (provided the investment is a good
investment


>The same applies to businesses, there are forms of debt, which I won't go
>into here, that are seen to be a "good" debt for the business because it
>reduces the tax the business has to pay. Some call this debt investment,
>other may call it cheating on tax.

It isn't cheating on tax if it is legal.


>>> Sure, make a loss for a few years, but there has to be a point where it
>>> is a viable business.
>
>> Just because a business makes a loss year after year does not mean it is
>> not a viable business.
>
>Like Foxtel or OptusVision? They still haven't made a profit after a
>decade, so the question is, are they viable? I believe their parent
>companies will continue to pour money into them until there is a monopoly -
>but that's just me.

My own businesses lose money every year (not much about $1,000 p.a.)
this is organised by my accountant and suits the way I prefer to run
my business it makes the tax considerably easier to deal with.

>>> So for investors in property, why can't the rent earned be as a business,
>>> not as induvidual income.
>
>> Most people who do so do so as sole traders and as such business and
>> personal are not differentiated.
>
>>> Expenses for the business' earning the income should be taken into
>>> account accordingly.
>
>> It is it is called negative gearing.
>
>>> Keating ****ed up the negative gearing mainly because at that time,
>>> propertly investors had to estimate their income from the property(ies)
>>> _before_ the fiscal year and pay the provisional tax accordingly. Now
>>> that provisional tax is dead, the only reason negative gearing still
>>> exists is to temp more "mums and dads" investors to provide rental
>>> accomadation to relieve the stress on government housing.
>
>> And the smart ones do.
>
>> Negative Gearing is not just for property though, it can be used for any
>> income producing investment.
>
>From a social aspect, and I offer no suggestions or judgements here, at
>what point is ng being used to, and I use the word "cheat" advisedly, tax
>and only allow those who can afford it through ordinary means to the
>exclusion of others?

You can negatively gear with an initial investment as low as $2000.

So that excludes very few income earners.

> I'm not talking about wage earners who piss there
>money up against the wall - that's their problem. However on the lower end
>of the wage scale, there comes a point where a person cannot make any
>progress because of tax breaks that are available to those earning more.
>It is a social inequity that should be looked at by Treasurers if they are
>serious about level playing fields.

Well those on the lower end of the income scale have breaks like
substantially lower tax levels.

They also have access to an array of government benefits (eg health
Care Card)


>>> It's up to governments to work out whether this is working or being
>>> abused. If it is being abused, then negative gearing should be wound
>>> back, so to speak.
>
>> Define being abused?
>
>> Paul Keating once said something along the lines of "It is every
>> Australian's responsibility to use the tax system to their benefit, but it
>> is not the government's job to tell them how"
>
>> He was spot on. Anyone not utilising the tax system to their benefit
>> cannot complain about it or isn't paying tax.
>
>There is a point where a person cannot "utilise the tax system to their
>benefit".

Yep when they are not paying tax.

Sure the benefits of using the tax system are higher if you are paying
more tax.

> People who work hard, don't get welfare, don't piss their money
>up against the wall, but struggle to get out of the hole they are in.
>Market forces are too strong or have a greater impact on their lives than
>those in much higher wage earning percentiles.

And yet I have more clients earning around the 30-50K p.a mark than
those on the top bracket and they tend to take the long term view much
better than those on the higher incomes.

>Keating, despite being a member of what once could be described as a
>socialist party, is right-wing. So too are the NZ and British Labor
>governments.

And interestingly the Labor party representatives are usually much
better off financially than their Liberal counterparts.


>>>>> Nagative gearing for commercial property only stands to reason but to
>>>>> allow it on residential property is a tax on the poor and a rebate for
>>>>> the rich
>
>>>> What bollocks.
>
>>>> The tax office showed a few years ago that over half residential
>>>> property investors earned below AWOTE.
>
>>>> Suggesting that negative gearing be allowed on commercial but not
>>>> residential property is akin to suggesting that only wholesale business
>>>> can claim their expenses as and retail business can't.
>
>>>> Negative gearing allows far more lower income people to have affordable
>>>> housing than if it was all left to the government.
>
>>>> I am not surprised you cannot understand the economic realities
>>>> associated with this. Colin Kynoch
>
>>> Nail on the head with residential housing, except that no ordinary
>>> investor can provide rentals cheaper than government housing.
>
>> Yes they can and do so.
>
>> The cost of me providing a house to be a rental is approximately $1,000
>> per annum. It would cost the government at least 5 times this much.
>
>You can't rent a property, nor can anyone else, to someone on welfare
>cheaper than the government can.

It isn't only people on welfare that need somewhere to live.

> The government recognises this by having
>rent subsidies to make up the difference".

yes and they could not afford to provide housing for the millions who
are not on welfare and still need somewhere to live.

>> You may or may not have noticed that there is no residential property
>> trusts (either listed or unlisted) in Australia.
>
>> The main reason for that is that the costs of administering such a trust
>> would be prohibitive, it is one of the exceptions to the economy of scale
>> argument. Commercial property is far easier to manage than residential
>> and has the added bonus of higher yields.
>
>The reason governments provide housing is not for economic gain, but for
>social gain. Don't confuse the two.

And likewise the allowances for NG are so that they can continue to
afford to provide housing at that end of the scale. the government
couldn't possibly afford to provide the rest of the accommodation
needed, so it makes it attractive for the average punter to do so.


>>> As for commercial rentals, it can be safely assumed that the lease is for
>>> businesses.
>
>> Except for when they are for government departments, non-profit
>> organisations, charities, etc, etc.
>
>>> I can't see why any investor in business property should be rewarded for
>>> supplying property to another business or even a government department.
>
>> What reward are you talking about?
>
>> Deduction of expenses is a standard taxation principle.
>
>I'm not arguing that. I'm arguing that providing property to a business
>should not be subject to the same amount of negative gearing as providing
>accomadation for a person or people. At what amount is not going to be
>solved here, or, more importantly, taken up as a policy priniple by the
>government or opposition.

Which would only add further complexity to our 'simpler fairer' tax
system, which has increased in its complexity over 300% since the
Howard government took power. It would also create additional
loopholes to be abused.


>>> Certainly political parties as investors shouldn't be rewarded over and
>>> above the rent and depreciation of a property that is contracted to a
>>> government department.
>
>>> Negative gearing does have emotive conotations to it. As an incentive
>>> for people to provide rental accommadation it is fair enough for low
>>> income earners - pensioners and the like. But for ordinary income
>>> earners, especially those on, say, %150 of the mean income and above, why
>>> should an investor be "overly" rewarded.
>
>> How are they overly 'rewarded'?
>
>>> There's no simple solution, as Keating found out. The state governments
>>> must provide accomadation because if it were left to investors alone, the
>>> homeless figure would be so much more unacceptable than it is now. Yet
>>> there must be incentives for ordinary people to provide rental
>>> accomadation.
>
>> ie the current system
>
>>> An idealist might say that only people with well above average income can
>>> do this, and therefore are being rewarded for their income, rather than
>>> their investment.
>
>> And that is completely incorrect given that the distribution of property
>> investors above and below AWOTE is approximately 50/50
>
>And what is AWOTE these days? $54k? That's alot more money than most
>people I deal with.

$53200


>>> Greg is probably leaning more to the idealist side, and sees that
>>> everyone with an income should be able to participate otherwise those who
>>> can't afford to purchase investment property for the rental market are
>>> being "taxed" to pay for those who can.
>
>> Everyone has the opportunity to do so.
>
>> You do not have to be wealthy to invest in property.
>
>And I beg to differ. Perhaps because we define "wealthy" differently. For
>myself, I'm wealthy, but not in a monetry sense.
>
>> If less Australian's pissed their incomes up against the wall and
>> purchased items like holidays and plasma screens on credit then there
>> would be more in a position to invest.
>
>Inflation would be higher too, and investments would have a lower return as
>the various markets would be at their fullest extent or flooded. I can
>hear you say "bollocks".

Well given these were arguments against compulsory superannuation when
it was introduced and they have proven to be wrong. If there is more
money to invest then more production occurs. and economic growth is
faster.


>> Most Australian's put their head in the sand and live for the moment
>> without a thought to the future, the spend beyond their means and then cry
>> poor when others who actually took the smarter route and took some short
>> term gain and puts some money aside to purchase a property and then paid
>> enough of it off as quickly as they could to purchase an investment
>> property actually gets ahead.
>
>> I would suggest that those against negative gearing are typical people
>> infected with Tall Poppy Syndrome.
>
>Think what you will. Negative gearing isn't the only way for investment in
>property to work, which has nothing to do with Tall Poppy Syndrome.
>
>>> It's certainly not a topic that can be summed up in 500 words or less,
>>> much less debated on usenet with any form of resolution in sight.
>
>> You never know Toby.
>
>Ah, but I do. As long as you participate in the argument.


LOL

Colin Kynoch

[Ext User(David Clayton)]

On Tue, 22 Nov 2005 00:17:50 +0000, Colin Kynoch wrote:

> On Tue, 22 Nov 2005 08:10:40 +1100, David Clayton
> <dcstar@XYZ.myrealbox.com>after much thought and consideration decided
> that the following would improve the lives of those that read it:
>
>>On Mon, 21 Nov 2005 10:16:16 +0000, Colin Kynoch wrote:
>>
>>> On Mon, 21 Nov 2005 20:27:04 +1100, "Footy Facts"
>>.......
>>>>please produce the figures as to how
>>>>an average family of four on $40K a year can buy a house as an
>>>>investment and still buy the house they live in!
>>>
>>> Nice try given AWOTE is 53206 p.a.
>>.......
>>Quite possibly an initial incorrect usage of "average", but how about
>>someone post the Median income for a family in Australia, and try and
>>work out how viable it is to make investments with whatever "disposable
>>income" this sort of household has available?
>>
>>BTW, the "AWOTE" has been significantly inflated over the past 15 years
>>by the enormous increases in above average incomes relative to the
>>increases "enjoyed" by those in the below $45K PA range (just have a
>>look at the increases in Executive salaries).
>
> Over a workforce of 9million the executive salaries are a blip.
>
Fine, let us know the median income and we'll all see how much of a "blip"
it is.

Even if you are 100% correct, the "blip" has still inflated the average
income increases due to far more growth in the top 25%, and that means the
other 75% are no where near as well off as a simplistic view of the
figures would indicate.

This seems to be acknowledged by all the economists I read in the media,
so I don't know why it is anything to dispute.
>
>>It has also been speculated that due to the various changes in taxation
>>policy (lower top tax rates, reduced avoidance) over the years, more
>>high-income earners have been counted in the "Salary" statistics - thus
>>inflating the rise in the "average" - and therefore given a misleading
>>boost to the overall rises in household incomes.
>
> Again over a workforce of 9 million mere blips.
>
> Oh and the furphy that the GST would eliminate the black economy is well
> and truly disproven.
>
?

>>The bottom-line is that many, many families on the wrong side of the
>>so-called average are not as well off as the statistical comparisons may
>>indicate, and still have little real access to all of the various
>>investment benefits which are supposed to help them improves their
>>circumstances.
>
> Negative gearing can start with an initial investment of $2000.
>
> You do not need mega bucks to start.
>
>>Add into that the changes to University enrolments - which have been an
>>opportunity for those in lower socio-economic circumstances to succeed
>>via merit - are now more and more being made available to those families
>>who have access to the necessary wealth.
>
> My understanding is that Uni places are still available for those who
> get the marks. HECS is not the bad ogre people have tried to make it
> out to be.
>
In the past (now distant) all uni places were obtained on merit, now a
growing proportion are full-fee paying places, and as with any system with
limits, an increase in one area means a decrease in the other.
>
>>Isn't it good to know that Australian Universities will be filled with
>>more stupid rich kids in the place of those who may be smarter and more
>>motivated, but just weren't born into a family rich enough to give them
>>that opportunity.
>
> Sure you can buy a place, but if you don't have the marks money will not
> get you a place.
>
So are you saying a university with vacancies in full-fee courses won't
accept students that have the money but weren't good enough to make it on
merit?

The whole point is that some of the best prospects - the ones that have
have the marks and would have got in the past, will be replaced by those
who have the resources to pay for the increasing proportion of "full-fee"
places.
>
>>That'll really help the country in the long-term, won't it..........
>
> Not if it were the case.
>
Having some of those best qualified to go to uni replaced by those best
able to pay is good for the country?

--
Regards, David.

David Clayton, e-mail: dcstar@XYZ.myrealbox.com
Melbourne, Victoria, Australia.
(Remove the "XYZ." to reply)

Knowledge is a measure of how many answers you have,
intelligence is a measure of how many questions you have.