Money assets and pension cuts.

WELCOME TO OUR GENERAL BLOG YOU ARE INVITED. Here, we will post articles about world issues, Australian issues, Italian issues. And we will post also my personal life story articles. 

Now, allow us to post some of my favorite links and other blogs:

http://manneedsgod.blogspot.com,http://ifyoubelieveingod.blogspot.com/, 

https://sites.google.com/site/prayersofreconciliation/,https://sites.google.com/site/godintheuniverse/, https://sites.google.com/site/menfrancoreconciliation/, www.catholic.org/,www.catholic.org.au/, www.catholic.org/bible/, www.adherents.com/Religions_By_Adherents.html, 

This article can be also found at this Hub Pages link,  Assets and pension cuts.  

Money is what everybody wants to live well. But money can be held also in assets, this may result in disadvantage, because you may lose money. See what has happened a few years ago. You see, after the assets test that started the 1st of January 2017, a lot of pensioners lost the government pension, or it was cut, because of the assets test. So let us dicuss this issue. 

Welcome to our article, Assets and pension cuts. 

Dear readers, this original article was written a few years ago, so, a few things may have changed since then. However, most things remain the same. so, let us talk about it. In a previous 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 should have taken into consideration the effect of the budget would have on the people. 

Anyhow, now let us discuss an example, about Mr. and Mrs. Day, who own two houses, they live in one house and rent the other one. 

So, 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 favour, 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, 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 more, 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 would 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.

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 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 Dilemma. 

To see more click on this link,Assets and pension cuts.   

See you soon.

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Australia Rental affordability issues.

WELCOME TO OUR GENERAL BLOG YOU ARE INVITED. Here, we will post articles about world issues, Australian issues, Italian issues. And we will post also my personal life story articles. 

Now, allow us to post some of my favorite links and other blogs:

http://manneedsgod.blogspot.com,http://ifyoubelieveingod.blogspot.com/, 

https://sites.google.com/site/prayersofreconciliation/,https://sites.google.com/site/godintheuniverse/, https://sites.google.com/site/menfrancoreconciliation/, www.catholic.org/,www.catholic.org.au/, www.catholic.org/bible/, www.adherents.com/Religions_By_Adherents.html, 

This article can be also found at this Hub Pages link,  Australia Rental Affordability Issues. 

We can say that what you see in this photo are rental units that most people can afford, these units can be expenseve for some people, and for what I know there are other rental accommodation, that are less atractive, but they can provide the basic.

Welcome to our article, Australia Rental Affordability Issues.

In this blog of Australia rental affordability, we may be able to suggest one of the reasons why this is happening, and if that is taken into accout, then in the fiture, this affordability issue can be less severe. Anyhow, us start with what we find on the news and internet, to show you what we mean about rental affordability. So, hereunder is a shortened report.

 The latest property data from research firm CoreLogic reveals Brisbane has recorded a 3.8 per cent rise in housing rents in the three months to the end of September — the highest rise of any Australian capital city.

As Brisbane continues to face record low vacancy rates, rents have risen by 13.5 per cent statewide in the past 12 months.

CoreLogic research director Tim Lawless said that equates to about a $68 a week increase for a typical rental dwelling, or $3,536 annually. (End of report).

Well, I hope you see what we mean. So, in this article, we want to discuss rental affordability, because they say that in Australia most people cannot find rental accommodation, and if they do, they cannot afford to pay for it. But what are the reasons for these days’ rental issues. It looks like that there are less property available for rent, but what could be the reason for this shortage, and what can be done to fix it.

Well, if the present government wants to fix it, they need to build more rental accommodation themselves, then rent them on low rent, perhaps at no profit at all or at a loss. But even if the government does that, will they be able to build enough rental property and solve the problem for good, I do not think they can do that, because that takes a lot of taxpayer money, and a lot of time to build enough rental properties, so, let us look at the reason why this is happening, and if anything has changed that has caused this shortage.

It looks like that in the past, when the rental property market was run from the private landlords, and there was some money to be made, these things did not happen very often, because a lot of small investors would invest on rental properties. But today there is very little profit in owning rental properties because they cost too much to run, and there are many taxes, starting from the local government, the state government, and from the federal government.

Because it is hard to make a profit, people that have money keep away from investing on rental properties. So, in this article let us try to find the reason this has happened and continue to happen. We want also to find the reasons why in the past it was better.

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Let us talk about the rental past

Rental properties in the past were more affordable, because there were more small investors in the market, they were just people that had some money and instead of keeping it in the bank, they bought a rental property hoping that, when they retied, they could keep their affordable rental property rented, and they would be better off financially, in their old age, at least this is what they wanted, but today it does not work like that anymore.

Most of these people do not have enough money themselves, to become a self-funded retiree. So, they would rely on the government pension, for a modest living standard, but a lot of things have change, so, whoever is on a government pension, would be better off if they had no rental property.

Then, there are a lot of overhead expenses to run the property. So, the small investors have stopped buying rental properties, since they give them enough trouble and very little returns. So, what went wrong one may ask? Well, let us try to answer that question.

We all know that most economies are run on capitalism, this type of setting requires that you need to make more money from the money you have, this works out well, when everything works the way, it is supposed to work, and you know what you are doing. But sometimes it does not work that well. This happens when unforeseen expenses pop up, and at the same time the rental market goes down, so, there is no money to be made, the worst part is when you know that you cannot make enough money, to run your properties at a profit. I believe that this is what has happened in Australia.

Now, let us see why this has happened, who are the people that are interested in the rental market, and if there is a way to fix this rental shortage. I dare to suggest that the government may have to change some laws, that permits the landlords to run the properties at a small profit, because that is the only way to have enough properties in the market. Here I am not talking about the rich people that run large luxurious holdings and can make money, from their new units on high rent, because most people cannot afford that rent. So, we are looking for affordable rentals, that the workers or the pensioners can afford.

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Let me state my views.

I believe that there are two ways to fix the rental problem, one way is that the federal and state governments, build enough affordable rental themselves, and rent them at no profit or at a loss. The other way is to copy what we did in the past, because in the past there were more affordable rentals, since it was easier for small investors to have a property for rent, without losing money. Anyhow, what I am saying here is that we may have to go back and see what has changed, and if it is necessary, change it back the way it was before, since there were more affordable properties then.

Now we know that the private sector, can find ways how to supply all the rental properties required, but that must be done at a profit, so, the large companies are not interested to build affordable rentals, because there is not enough profit in them, then it is the small investors that can make the difference, and because there can be a lot of small investors that can be interested, if the laws permits them to have a rental property at a small profit, or as long as they do not lose other government entitlements, like the pension, then they could be interested to own a property for rent.

Now let me explain how it is possible to lose money. Small investor X lives in his own house and has a unit for rent, soon he is going to retire and hopes to receive the government pension, if he did not have the unit for rent, he would be intituled to receive the full pension, because the other assets he has, will take him past the limit he can have, before the pension is cut. But the unit is a real problem, because the net money he can make, is a lot less than the pension he loses, and that is the real problem, so, he believes that it was better if he did not have the unit. Then the last problem are the smoke alarms. Here the government makes laws that the landlords must employ a registered company to install the smoke alarms, but it does not say how much they are allowed to charge, so, they charge a lot, this can only make the rents dear.  

This is what the government should take into consideration. So, I dare to suggest that, if the government makes laws that the small investors can make at least from their rental properties, as much money as the government pension cut, then the small investors may be willing to invest in residential units, and the problem is half solved.

Anyhow, this is one of the reasons I can see, why this rental shortage is happening. I can write other examples that can explain better the rental situation. But I hope people understand what I am saying here. This is all I need to say about this rental affordability issues in Australia. 

To see more click on this link, Australia Rental Affordability Issues. 

 Anyhow, in our next article, we will discuss, Assets and pension cuts. 

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Australian pensioners alarmed.

WELCOME TO OUR GENERAL BLOG YOU ARE INVITED. Here, we will post articles about world issues, Australian issues, Italian issues. And we will post also my personal life story articles. 

Now, allow us to post some of my favorite links and other blogs:

http://manneedsgod.blogspot.com,http://ifyoubelieveingod.blogspot.com/, 

https://sites.google.com/site/prayersofreconciliation/,https://sites.google.com/site/godintheuniverse/, https://sites.google.com/site/menfrancoreconciliation/, www.catholic.org/,www.catholic.org.au/, www.catholic.org/bible/, www.adherents.com/Religions_By_Adherents.html, 

This article can be also found at this Hub Pages link, Australian pensioners alarmed. 

This article is about Australian government pensions and budget, this month there will be a new budget from the new government. Anyhow, we hope that they bring a balanced budget, and they adjust some of the mistakes the previous government made several years ago. This is what is written in this article. 

Welcome to our article, Australian pensioners alarmed. 

Dear readwes, in a few days there will be a new government budget, we hope that they remember that the pensioners have been treated badly in previous budgets. To understand what we are saying, we are writing hereunder what has happened. 

Anyhow, let us start from the beginning and talk about the man that brought in this disaster, that the Australian pensioners didn’t deserve. 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, let me 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, welfare community and disability groups are protesting. 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.

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 Pensioner are alarmed.    

Dear readers, you need to know that this event is happened in the past. Anyhow, 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, paid 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 anymore, 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. 

To see more click on this link,Australian pensioners alarmed.  

I have reposted this blog thinking and hoping that next budget can fix some of these issues.

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Australia can do better than this.

WELCOME TO OUR GENERAL BLOG YOU ARE INVITED. Here, we will post articles about world issues, Australian issues, Italian issues. And we will post also my personal life story articles. 

Now, allow us to post some of my favorite links and other blogs:

http://manneedsgod.blogspot.com,http://ifyoubelieveingod.blogspot.com/, 

https://sites.google.com/site/prayersofreconciliation/,https://sites.google.com/site/godintheuniverse/, https://sites.google.com/site/menfrancoreconciliation/, www.catholic.org/,www.catholic.org.au/, www.catholic.org/bible/, www.adherents.com/Religions_By_Adherents.html, 

This article can be also found at this Hub Pages link, Australia Can Do Better. 

This is the house of rappresentative  in Canberra, this is where the Australian parliamentarians discuss and pass their laws. Sometimes their laws or budget are poorly made, so, they need reviewing, like the assets test that we are talking in this article. 

Welcome to our article, Australia Can Do Better.  

Dear readers, what we are posting in this blog is an old article, that I wrote years ago, but the problems we had then, are stil present today, so, we are repeating it here, to show you what we mean. You see, we believe that the Australian government can do better if the politicians in power put people first. Therefore, whichever party is elected 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.

The coalition in government 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 in 2014 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 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, that 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 citizens 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 citizens 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 affected the owners adversely, because of the overrated assets test and to what degree. See you in our article, Australian pensioners alarmed. 

To see more click on this link, Australia Can Do Better.  

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