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Friday, January 15, 2021

Assets and pension cuts

The Australian pensioners are alarmed, because their government pensions are going down, and they are losing money. So, in this post we are going to talk about the reasons why this is happening, and people are not happy.

Assets and pension cuts

Welcome to our article, Assets and pension cuts

Dear readers, in our last article, Australian pensioners alarmed, we talked about the disastrous budget that the treasurer Joe Hockey delivered on the 13^th of May 2014, in this article we are continuing to talk about the pensions cut, and the effect it will have on pensioners. Depending on what sort of pensioner you are, these changes will affect you in different ways. So, there are pensioners that their pension does not change at all, some pensioners that will be losing part of their pension, and some will lose it altogether. So, if the pensioners are upset about this change, they are right to be upset. Because Joe Hockey is an idiot, because any politician in his position, must consider first the effect of the budget it will have on the poor people, that rely on the pension.

Anyhow, now let us discuss an example, which we have started in our last article, about Mr. and Mrs. Day, who own two houses, they live in one house and rent the other one. Then, we will talk about other cases, and what some pensioner can do, because for every action there can be a reaction, so, the pension changes can bring other changes.

Talking about Mr. and Mrs. Day, and what they are going to lose, because of the pensions cut.

Let us talk about, how much pension they received before, then how much they receive now, and then compare this with other pensioner, whether they are being discriminated. Anyhow, we are setting this case, in a way that is easy to understand, so, all figures are well rounded figure, and therefore they have not been worked out mathematically.

So, Mr. and Mrs. Day have about $580,000 worth of assets beside their own residence.

Before the 1^st January 2017 change, they received about $450.00 per fortnight each.

After the 1^st January change, they will receive about $350.00 per fortnight each;

So, they will be losing about $100.00 per fortnight each. Now because they have problems with renting the house. When the house is not rented, it is hard to live on $350.00 per fortnight. One must keep in mind, that a single pensioner that has no assets, receives $873.90 per fortnight, and even they complain about living a modest decent life.

Anyhow, let us talk about owning and renting a house, because Joe Hockey budget, is a budget aimed at ruining the small property investor. So, these small investors must decide now, whether it is worth to keep things as they are, or they need to change a few things, to live their life at the same level of other pensioners. So, now let us look, how owning and renting a house affects the pensioners, if they can receive a government pension.

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People owning and renting a house

People believe that owning and renting a house is the way to go. If you talk to any real-estate agent, they will tell you that it is profitable to own a rental house. But we must ask ourselves if it is profitable all the time, or are there times, when it does not work out in your favor , or the way you want it work out, therefore, owning a second house is not the best thing to have, which is the case of Mr. and Mrs. Day.

As we have said in our last article, today most house owners find it hard to rent their houses, because there are too many vacancies here in Brisbane. So, Mr. and Mrs. Day, had to rent their house for $400.00 per week, which is a low rent if one considers the house value. Anyhow, they hope that the tenants will pay the rent on time and will not damage the house while they are living there. They have worked out that as things are, after paying all the bills, they can average in a year about $200.00 a week net rent. They must estimate a conservative figure, because there are too many vacancies, and there have been times, when their house has been vacant for months.

After going over all this rental stuff, we must start to think whether there is something wrong, with the way’s things have been set up for Mr. and Mrs. Day. So, we should ask. Did Mr. and Mrs. Day make a mistake when they invested in this rental property? Because they were thinking that by having a property for rent, they could be better off when they retied.

But now that the assets-test is changed they are shocked, because their second house investment is more a disaster than a benefit. In facts, they are worse off, because if they had only the house they are living in, they would have received a lot more pension, than what they are earning from their investment. So, they could have more time for themselves, instead of trying to run their property for rent.

Today we can only ask, what sort of government is this? They tell the people to save their money for their old age, so that they can live a better life. But when the people reach their old age, they turn around, change the laws and take away that money from you. But this is not all that we need to say; you see, they make laws that takes away money from the people on the government pensions, but they don’t make laws to cut their own pensions that are huge compared to the rest of us. You see, the means test, and the assets-test does not apply to their politician pensions, so, they can own huge properties or anything else, they can earn anything, and they still will receive their full government pensions and other benefits. So, there is a law for the public and a different law for the politicians.

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What some people could do?

When the laws change, and those properties that you have worked hard for, they don’t earn what you expected them to earn. You must start thinking many things including about what you want to do, and what you can do with what you have.

In the case of Mr. and Mrs. Day, they are losing so much money that they must start thinking about a different set up, so that they can receive more pension than they are receiving now.

As we have said, Mr. and Mrs. Day, are not on the best terms, they are living together, because divorces and changes are costly, but because of what has happened to their pension, they may have to divorce now. Because, now that their pension has gone down, they have lost that financial balance, which in a way kept them together. So, they will be forced to divorce, because, if they are divorced, they will receive a single pension each. But that is not all, they will own a house each, and live in their own houses, so, they have no more assets, they will not earn any money, so, they don’t have a mean-test or assets-test to go through to receive their pension. therefore, they will receive the full pension each. Now let us see what difference it will make.

Today they receive about $350.00 per fortnight each.

If they are divorced and live in their own houses, they will receive, $873.90 each per fortnight.

Which is a lot more than what they receive today, the only question left here is will they do it?

Anybody that is losing that much money will certainly do it, to make sure, let us look at those figures again, but this time let us see, how much money they are losing in a year, if we work both pensions together:

Now, they receive about $700.00 per fortnight, in a year they are receiving $18,200.00.

If they divorce, they will receive 873.90 each per fortnight, which will be $22,721.4 each.

Or 45,442.8 per year. So, they are losing $27,242.8 government pension in a year.

Our own views on this is this.

If people start divorcing to receive a full single pension in the future, you cannot blame them, because they have been pushed from the government to do it. If the assets-test had not changed, this would not happen.

Now, let us talk about pensioners owning properties.

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Pensioners owing properties

The pensioners that own a rental property today are in a lot of trouble, because everything has turned against them. The government changes the assets-test and cuts the pensions down. Then the properties cannot be rented unless they rent cheap, and, they cannot sell their properties easily, because there are too many rental properties up for sale; and when a business makes not enough money, it is hard to sell.

But there is more, when their rental property is sold, it is subject to the gain tax, here again the government is robbing what is rightfully yours. They are robbing you, because if you want to buy another property of about the same value somewhere else, you must pay the gain tax, which is based on the difference in price, when you bought the property the first time. If you have bought the property a long time ago, for sure there will be a lot of gain tax. Now, I want to point out, if you need to buy another property of the same value, for personal reasons, why you must pay this gain tax, you really haven’t gained anything at all, because you still have a property of the same value. But the government does not accept this explanation, they work on the difference of the price when you bought it the first time.

Now let us look at some other real-estate problems. Some of you may think that I am exaggerating, because everybody things that the properties are always going up. But I tell you what, the boom on the property market for me is already ended, but people are not aware of it yet. When I drive around the street of Brisbane, there are too many signs of places for rent and for sale, when a few years ago, there were none. So, everybody that owns real estate should brace themselves now, for the rough ride ahead, this will also affect the pensioners that happen to own properties.

Anyhow, we want to conclude this article now, by saying that the pensioners are having a hard time no matter where they turn, they find problems.

Therefore, in the future, they better plan to own just one house, and then collect the full pension from the government.

I believe that I have said enough in this article. So, see you in our next article, the assets test problem.

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Assets and pension cuts

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Monday, January 11, 2021

Australian pensioners are alarmed

Anyhow, in our last blog, we talked about that Australia can do better in the future, if the politicians put people first. But look what has happened, to make the Australian pensioners alarmed and upset.

Australian pensioners alarmed

As we have said, for Australia to do better, the politicians must put people, but this man above did the opposite, and even so, he keeps getting rich, while the rest of us on a pension struggle to make ends meet. This is not right.

Now, let us start from the beginning

Today the Australian pensioners are alarmed, because their pensions can be cut, and some of them may even lose the government pension. So, let us talk about the man that brought in this disaster, that the Australian pensioners didn’t deserve. Anyhow, this disastrous budget was delivered from the then treasurer Joe Hockey, the 13th of May 2014, today we are still finding how terrible this budget was. Because the 1^st of January 2017, some Australian pensioners have lost some pension payments. But first let us see how the expert have described this budget at that time. So, here I quote:

The grim budget faced widespread criticism and was overwhelmingly rejected by the Australian public as reflected in all opinion polls after its release. Opposition to "unfair" budget measures came from the opposition and crossbench, pensioners, economists, the union movement, students and welfare, community and disability groups with some taking to the streets in protest. The budget included changes which were contrary to pre-election commitments and promises made by the Liberals in opposition. Critics argue that every one of the following pre-election commitments made by Tony Abbott were broken in the first budget: "No cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS." Echos of the "dead and buried" Fightback! policy package from the 1993 election occurred with proposals to defer unemployment benefits for six months for under 30s and the removal of GP bulk billing. Most proposals have since been shelved, dumped or modified.

End of quote.

Anyhow, Joe Hockey, has moved out of the Australian politics, but the politician have given him a good job, with a very good pay. Meanwhile the Australian pensioners are hurt from those changes to the assets test that he proposed. Here we want to ask, if he wanted to save money to the government by cutting the pension, why he didn’t propose to cut his own pay and the other politician pay, at least the same amount that the pensioner will lose, just to be fair for everybody, since they receive a ridiculous high pay for their services. We think that to cut the politician pay is only fair, since we are all in the same boat of Australia. Now, let us talk about the Australian pensioners, because they are alarmed and worried.

(But before we do that, please note that these articles now have been regrouped, so they may not follow each other closely.)

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Pensioner are alarmed

Yes, dear readers, today the Australian pensioners are alarmed, they are alarmed because they feel that the Australian government is ripping them off. They feel ripped off because the changes that are taking place from the first of January 2017 are unfair to them. We believe that they are right to feel alarmed, worried and upset, because some of them will be forced to live with less than the minimum government pension.

Therefore, we will talk about the Australian pensions, since most of us must be interested about. I admit that I am not an expert in politics and government matters, however, when we use our common sense and things don’t work out, we want to have our say. So, let us talk about the Australian politics and what affects us directly. So, the Australian Pensions are changing, from the first of January 2017. This change is hurting people that rely on the Australian government pension.

Here we are talking about retirees, that have not got enough of their own funds to retire and live a modest decent life, so, they rely on the Australian government pension, for a full pension or part pension. Most of the people that will be affected from this change, are the part pension retirees; some of them will receive less pension, and some of them will lose the government pension altogether, because of the changed in the assets-test.

Now, what hurts most these pensioners that are losing pension money, is that the people that have got no assets, because they have never worked hard and tried to save money, they will still receive the full pension from the government, but those that have worked hard, payed their tax and saved their money for rainy days, hoping to have just a bit extra cash when they retied will have the pension reduced and in some cases completely cut off. We believe that this is not right, because it is the people that have worked hard and saved their money, are the people that have paid most taxes in the past.

Anyhow, here are some figures that have been published on the net.

About 330,000 Australians will find their pension cut from the 1^st of January- 90,000 will be losing it entirely, because of the tighter assets test. I believe that it is not fair, because it is already hard for pensioners to live a modest life peacefully.

So, if the federal government loses next election, because of what they have done, they deserve to lose. Anyhow, let us look at some possible outcome, and how people can react to these pensions cut. Here we are going to write about some imaginary case, about what some people can do, because they feel that they are being discriminated and punished for being good honest citizen.

Anyhow, here we are going to talk about a case or two, as an example. You see, before this pension was cut, this couple had accepted that the government would give them only a part pension, so, they tried to live with that, but now that pension is being cut, they don’t know what to do, because it is going to be hard for them to live a decent modest life.

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Other pensioners’ concerns

Here we cannot use real names, so, the name that appear are not their real names.

Mr. John Day and Mrs. Ann Day are two pensioners, they have received a part pension for years, as they are both over 70 years old, so, they are aged pensioners.

Anyhow, let us describe how this change will affect Mr. and Mrs. Day.

Mr. and Mrs. Day own two houses, they both live in the same house, even though they are not on the best terms with each other, and it is said that they will end up divorced soon. Anyhow, they are still living under the same roof as husband and wife, so, they receive their pension as a couple, which is less than if they had the pension paid as single people, so, they start thinking if they are doing the right thing, or they should do other things to improve their financial position. So, let us compare what is happening to their pension.

As we have said, Mr. and Mrs. Day have two houses, one they live in and another one they rent, so, the house they rent is calculated as an asset, the value of the house is set at 520,000 dollars, add to that a few more things they have, they have 550,000 dollars’ assets, so, their pension is calculated on these assets, as it was before they told me that they were getting from the government about 450 per fortnight each, from the 1^st of January, they are going to get about 350 dollars per fortnight each. This is not enough to live with even if you try hard to save money.

The house they rent, today it is rented at 400 dollars per week, because they could not rent it any higher, now, that is not net money, because they must pay all the fixed expenses, like the rates, the water and other urban utilities, the insurance, the maintenance. But that is not all, because sometimes the house is vacant for several weeks until a new tenant is found. So, there are times when in a year, they can average from the house rent, about 200 dollars per week.

Here one needs to ask, where and how the government people work out this new law, about the assets and how much you earn. I believe that it should be worked on a real possibility that you can earn at least as much money as the full pension, before they cut the pension.

Anyhow, at this point of time I believe that this article is becoming too long, so, the facts and figure about this example will be discussed in our next article, assets and pension cuts.

See you soon.

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This blog, Australian pensioners are alarmed

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Wednesday, January 6, 2021

Australia can do better in the future

WELCOME TO MENFRANCO GENERAL BLOG. Today we continue posting a few posts about Australia, we started with the drought issue that is affecting the farmers, and continue with other issues that affects the Australian public, and other world issues.

ANYHOW, IN OUR LAST BLOG WE TALKED ABOUT WORLD ISSUES, BECAUSE WE WANTED TO SAY WHAT WE SEE HAPPENING IN THE WORLD, HAVING DONE THAT NOW WE CAN GO BACK TO TALK ABOUT THE AUSTRALIAN ISSUES. This is a group or articles that we have written in the past, and now we are publishing them in blogger.

Australia Can Do Better

But the people in power need to put people first

Welcome to our article, Australia can do better in the future

Dear readers, this is another article about the Australian political parties. We believe that the Australian government can do better, if the politicians in power think about the people first. Therefore, whichever party is elected from the people to form government, when they budget or make new laws, they must put people first, because that is their job, since that is the reason they have been elected to parliament. Of course, the political parties have their own beliefs, so, they help some groups more than other groups. So, let us look which political party is better for which group:

The Labour Party helps the workers and the have-not. They also have idealistic ways to help all communities; so, it is like the communist party, in the sense that they don’t like the rich and the large enterprise. They like the government to be the big spender, which is good, but they easily run out of money and that is their biggest problem.

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Now let us talk about the coalition. The coalition like to make laws and budgets to helps the rich; they also help the poor and the have-not, but they are not their priority.

In this article, because the coalition is in government and we want to say things that they have done, let us talk about them a bit more than the Labour Party.

The coalition likes large enterprises and the rich people, they are more willing to help the employers, the self-employed and those that own properties, in the belief that these groups will employ people gainfully, which will help run the country without asking help from the government; so, the coalition government let the country run on its own, as much as they can from these self-driven people; which when the coalition is in power, they are more willing to use their own money to run their business. But even this system misses a few things, because there is no help for a large section of the community.

Anyhow, what we want to say here is that both parties are not looking after those people that are neither rich and no poor, they are left on their own to do what they want to do, because they are self-employed, are farmers or own properties; but that is not all, they turn to these people only to tax them, and worst still sometimes they make laws or pass budgets that penalize them badly. Anyhow, let us look at what the coalition did, when they did this mathematical heartless budget that has hurt many people.

The mathematical heartless budget

To understand what I am saying here, we need to go back to Joe Hockey budget 2014; this budget must be the worse budget ever made, because it penalizes those people that work hard and look after themselves. If you ask me what I think about Joe Hockey as a politician treasurer, I will say that they made a mistake to put him there. Whoever becomes a treasurer must be somebody compassionate, he must think about how his budget is going to affect the people, especially the poor people, the pensioners and the family man; but Joe Hockey has no compassion in him, he thinks only about the government bank account that is overdrawn, so, he wants to brink the government bank account to surplus.

The then prime minister Tony Abbott did not understand the situation any better himself, he thinks that Joe Hockey budget is good; I remember Tony Abbott smiling and laughing at budget night, when people were shocked at this tough budget. In my opinion the PM should have at least be apologetic to the people that were affected adversely, but he kept smiling and laughing, as if what they were doing was great.

There were many mistakes in Joe Hockey 2014 budget, but in my opinion one of the main mistakes was the change they made to the assets test. Because treasurer Joe Hockey and PM Tony Abbott made a disaster, when they changed it, from $1.50 per thousand to $3.00 per thousand, when people in most cases cannot earn that sort of money from their assets. Perhaps I feel this way, because I have been affected and I have many friends that have been affected by the assets test badly, so, we hate Joe Hockey, because he has robbed us of our fair share of money that we were intitled to have. This is what we want to talk and explain in this article, and if this article is not enough will write another article, to show you what we mean.

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Let us start talking about the assets test

The assets test and the pensioner the way we understand it.

Here we are forced to repeat; people work hard during their lives and save money, so that when they retire, they can use this money or use the earnings from the assets that they have bought to live a better life.

But this does not work right all the time, because politicians introduce laws or taxes that hurt people that have worked hard and saved their earnings, like the change in the assets test of 2014 budget, that has cut off the pension to many pensioners, other had their pension reduced so much that they can hardly live on it, in fact, these people have to live on a budget that is a lot less that the government pension. People that work hard and save money don’t deserve to be treated this bad.

I don’t know why the politician cannot work it out themselves, it is not that hard to add a few numbers together; anyhow, it maybe that they are too lazy to do that, so, we need to write down examples to show them what they are doing, because they need to be explained the consequences of what they have done. So, let me write a short example hereunder on how the assets test has affected these pensioners that own two houses, one is their residence, the other is a rental property.

We are talking about rental properties, because rental properties are at the top of the list of the disadvantages that have resulted from the increased assets test. So, let us talk about some friends of mine that will call, Mr. and Mrs X in a shortened version, we will write a longer version in our next article.

Mr and Mrs X, after the assets test was introduced, they informed me that the new assets test has affected them so bad and in such a way that that they could starve, therefore, they must withdraw money from their savings to live a modest life. You see, they receive very little money from their government pension to live on, because of the assets test. Their pension has been cut to $120 each per fortnight, so, they receive $240 for both from the government pension, plus their house rent that is about $13000 a year net, after expenses. This works out at about $450 per fortnight for both, So, their income is now; $240+450=690 per fortnight for both, which is a lot less than the normal pension, which can be about $1200 for both.

What is wrong with the people in Canberra? Are they blind and can’t see that they are punishing the people that have worked hard during their lives? They worked hard and saved their money to live an easier life when they retire, but now they are punished for having done that; this does not sound right to me, this should not happen, if all citizen were treated equal, but that nasty budget broke all rules, when they changed the assets test. I believe that the government, before they change anything financially, they must ensure that all citizen should receive, or they should be able to earn a minimum amount of money to live on. Therefore, they should not bring out laws or budgets that make it impossible for their citizen to achieve that themselves; but if they bring out laws like that, they must reimburse the citizen for their loss, it is only fair.

But there is more to worry about, if this trend of punishing the self-driven hard worker continues, they will be killing the will of the hard-working people to earn and save money and own a second property. You see, once this group of people realize that there is no point to work hard and save money, because they will be put in a disadvantage financial position from the government. They will stop working hard and the looser will be the Australian government, because they will run their business in such a way that they can collect the government pension when they are old. I hope you see what we mean. I believe that Australian government can do better than this, but they need to fix the mistakes they are making, and most of all fix the assets test.

This article is becoming too long, so, see you in our next article, where we will write a few articles, starting with how the Australian pensioners are alarmed, and about how the rental properties have affect the owners adversely, because of the overrated assets test and to what degree. See you soon.

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This blog, Australia can do better in the future

IS TO BE CONTINUED;
Next time with; Australian pensioner are alarmed
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