Here we are looking for a better security system
Welcome
to our article,
We are looking for
a better social security system, where everybody gets a minimum payment, which
is equal to the minimum pension or unemployment benefit.
Dear readers, we
believe that the Australian Social Security System must be equal for everybody,
but it is not, as we have said in our previous articles, which had something to
do with the Australian social security system, starting with, Farming Today Is
Still a Risky Business, then, Australian Social
Security, then, The Australian
Parties, then, Australia can do
better than this, and then, The Assets Test
Dilemma, now in these articles we were talking about how the Australian Social
Security System works and helps people. So, we have found that the Australian
social security system, is good but not perfect, since some people cannot
receive it for one reason or another; therefore, the social security system
needs to be changed, to fix these unforeseen failures to help. Australia cannot
claim to have a good social security system, when it fails to deliver help to
those that need help.
Having said that,
now we need to study the situation and try to come up with an answer for this
social problem, because, the Australian Social Security system, must be equal
for everybody. We believe that everybody in the community must be given a
minimum of help, when they need help. So, we are going to suggest our
views, hoping that somebody important reads them and does something about it.
Now, what we want
to write here is not going to be popular, because it criticizes the existing
social security system, since it says that it is not good enough, they need to
avoid what is happening to the farmers, so, they must put in place a better
system, where people in need are helped. So, let us imagine and talk about a
social security system that can guaranty that.
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Talking about the
ideal social security setup
What
we are writing hereunder is an idealistic way for the social security system to
adapt, if they can. I said if they can, because it is unlikely that this system
can be approved now, because Australia cannot afford it today, however, it is
important that something like this exists. We hope that future politicians,
start working on this idealistic social security system that we are talking
about.
We
believe that all legal citizen that are unemployed or don’t have any income,
must be granted from the government an amount of money that is at least equal
to the minimum government unemployment benefit or pension, it would be like
receiving a small wage from the government. Now, we believe that this is what
is needed in Australia, and we believe that one day can be done, if we are organised to achieve that, after all Australia is a rich country, so,
we should be able to do that. I know that it is going to cost a lot more than
we can afford, but if it is well planned, it can be done. Now let us see how
this will affect the community and which group of people will benefit from this
change.
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The people that can benefit from the change.
The people that
will benefit from this change, are those people that today don’t receive any
payment from the government, and those people that don’t receive enough, so,
they are forced to live below the poor threshold. In this case the poor
threshold is set, as equal to the minimum government pension that today is
about, $900 per fortnight for a single person, or $700 each for a couple. This
is the minimum of money that people need to live, and we believe that it must
be equal for everyone.
As things stand
today, there are people that must live with less than the minimum government
pension, because of the anomalies in the system. One of those anomalies is
caused from the assets test, where the pensioners receive a smaller pension,
the rest of their earnings is supposed to come from their assets, which are
supposed to earn about 7.8 %; but most of the rental properties, can only earn
about 2.5 to 3%, as we have shown you in our previous article, The Assets Test
Dilemma, where a house valued at $650,000 did only make $8500 in a year, which
is about 1.3%. So, we believe that the assets test on rental properties must be
set according to what they can earn, if the government believes that we need
mum and dads to invest in rental properties and keep the Australian real
estate market the way it is today.
You see, today
people believe to invest in rental properties and it is the way to go; but soon
they will become aware that to own a second house, can be a problem when they
apply to receive their pension, because the assets test will reduce their
pension more than what they can earn from their assets; once the people know
that they cannot make any money from rental properties, when they become
pensioners, they will stop investing in rental properties.
My views are that
the assets test on rental properties, must be set at a level, where it is
possible for the owners, to earn at least as much as they loose from the
pension. Now my views are that the assets test on rental properties should be
one third of what they are now, so that the pensioners will lose one dollar per
thousand, instead of three dollars per thousand. But even this might not be
enough, you see if you have a property valued at one million dollars, you
cannot receive any pension. The question here is; will this property earn the
owner about $24,000 per year net. I don’t think so. Anyhow, these are our
views.
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The property owners’ other problems
As we
have seen in this article and our previous articles, to own a rental property is a problem and
not a benefit, because people lose their pension or unemployment benefits, so,
to own a second property is not the way we should plan for better retirement,
since the assets test reduces the pension payments to more than what you can
earn from your properties.
But there are more
negative things in owning a rental property, the worst of all is the land-tax.
The land-tax in Queensland is $1.7 per thousand, this means that if you have
land valued it one million dollars, every year you must pay $17,000 to the
government just because you own this land. They don’t give you anything at all,
you just must pay, because they need the money.
Some people still
believe in owning properties, because their price go up all the time, so, they
think that they are better off having properties, you see, they don’t realize
that there is this gain tax that will take away all their earnings and more,
let me give you this example.
You own a rental
house that you have bought several years ago for $250,000, which was the right
market price, today you must sell the rental house, because you need to move to
another town, where houses are about the same value, so, you think that it will
be easy; you sell the house for $650,000 and you buy another one about the same
price. But that is not going to happen, because the $400,000 dollars that you
have gained is taxable. This is called the gain tax, which may well be around
$100,000, it is hard to be more specific. So, in this case you may lose
$100,000 dollars because of the gain tax.
The figures in this
article, might not be correct, but they are close enough to what they are
supposed to be for showing our views.
This is all I can
say today; this setup is not fair for anybody that owns properties, because
those properties in the assets test, cannot earn half the money that they will
receive from the government pensions or other benefits, if they had no
properties. So, for them it would have been better to have no properties; since
the assets test affects the pension and other benefit adversely, starting from
the farmers, as we have said in, Farming Today Is
Still a Risky Business.
So, people are
discouraged to own properties and to save for rainy day, because there is no
benefit to own them, since they are going to lose and not to gain. Here we are
asking for a chance that the scale in the assets test for properties, be set in
a way that gives the property owners a chance to earn at least as much money as
they lose, from the government benefit. It is not fair that people lose money
because they have worked hard and saved money.
Now we are talking
about money, so, if you have money instead of a property, today you are not
better off, because the interest that you can receive from the bank, is not
equal to the money you lose from your pension.
Anyhow, this is all
what I can think about today. I believe that at least I have pointed out what
in my views needs adjustment. Because we believe that, the Australian social
security system must be equal for everybody.
I hope that
somebody in the government reads my articles, and then thinks what can be done
to make them fair for those people that have worked hard. We would have liked to continue to talk about Social Security, but today there are other maters that we need to talk about, because we need to talk about what is happening in the world today.
See you in next article.
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This is, Menfranco general blog
The Australian social security must be equal
IS TO BE CONTINUED;
Next time with;
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Other links from same author
http://menfranconewworldorder.yolasite.com
https://sites.google.com/site/menfrancoreconciliation/
https://sites.google.com/site/prayersofreconciliation/
https://sites.google.com/site/godintheuniverse/
See you soon.
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