Debt - A New Years message

[Guest pegasus 90]

i'd rather trust the reserve bank information than the speculators and your falling into the trap of comparing oz with gb,this is a different country with different trading partners and different rules,we were affected by the recession but not to the extent of some others,house prices did go down but they have recovered,just because our economy recovered faster than some doesn't mean were 2 years behind GB.MAYBE WE DONT FOLLOW ENGLAND ANYMORE maybe she'll follow us

We are not saying one economy is better than the other; just observation & comment of both.

P90

[Guest sooveroz]

Several excellent points here. The rise of the Chinese is one note of caution for us all.

I work in Africa every now and again, and many of the countries I go to there now look like Chinese military outposts. They are for example building roads all through Kenya (and mines right alongside them).

 

On the subprime issue, Australias banks seem to be starting to create a sub-prime all of their own. I saw some absolutely sh1te properties recently in Melbourne being sold at insane prices. That is exactly what happened in America in 2006/7.

 

As for manufacturing, you are spot on. Same in the UK. Gordon Brown and his incapable crowd of uneducated morons have failed to realise that with no manufacturing base the UK is knackered. They have coupled this with a desire to destroy the service sector via punative taxation. The UKs top rate of tax is now 62.8% (uncapped national insurance is also a tax - socialists forget that).

 

Low tax is what builds economies (and their wonderful solution to the current problem is to .... raise taxes!!!).

 

That was the reason I moved the HQ of my businesses overseas before selling it - lower tax. I had to stay out for the UK for 192 days in each of 2 years. By doing that I paid 5% tax on the sale of my business. Had I stayed here it would have been 53%. A no brainer. I would happily have paid 20%. Thats a small example of how the UK lost a nice sum of money to me and my co-directors. Socialism doesnt work. Same thing in Australia - the corporation tax need to be lowered to sto companies shippng it overseas.

 

Small businesses need to be encouraged - ultra low tax rates for them. BUT this should be couple with MASSIVE fines for tax dodgers and also the complete elimination of all loopholes. Remove the ability of clever accountants to reduce tax to zero BUT at the same time reduce the rate to approx 25%. Why should someone work for years to build up a business and then pay over 60% on the sale in tax? Likewise the inheritance tax threshold must be increased to at least £5m. Why should my kids lose 40% of their inheritance to the UK government if I am killed tomorrow?

 

All of these problems come down to society spending more than it can afford. And spending it on insane things. I beleive it would be simple to save 40% of UK government spending. If Asia is the model of efficiency that we are all to look at then the chickens are going to come home to roost big time.

 

As I have said before - the whole world is in the sh1t. Take care of your own is my motto. There is no such thing as equality - all men are NOT created equal.

 

The state must exists to provide a hand up and not hand outs. Stop penalising hard workers (brickies to bankers) to give free monet and housing to people that are fundamentally lazy.

 

Ultimately I think a spell of high inflation will be what will re-set the world economy. With oil heading back to $100 I think we will see that happen - and this will also cause a lot of globalisation to be rolled back. Transporting goods at $100 a barrel is inefficient and costly. More industries will switch back to their own countries. The "oil boom" will be seen as a very small blip on civilisation - lastign basically 50-60 years out of 40,000 years of mankind. It will be ugly - its just a question of when.

 

 

how long before australia turns chinese? there are now more chinese migrants than any other. even in new zealand, whole towns are chinese. the chinese have huge stakes in the west australian projects going on and yes, much of the labour is going to be outsourced to parts of asia. they are going to build there and ship the end product over. the profits will benefit china. its short term gain for long term pain - australia is a one trick pony and the chinese are cracking the whip.

[Guest LukeSkywalker]

i'd rather trust the reserve bank information than the speculators and your falling into the trap of comparing oz with gb,this is a different country with different trading partners and different rules,we were affected by the recession but not to the extent of some others,house prices did go down but they have recovered,just because our economy recovered faster than some doesn't mean were 2 years behind GB.MAYBE WE DONT FOLLOW ENGLAND ANYMORE maybe she'll follow us

 

I woudl suggest that as house prices have risen 17% in Melbourne in the last year that a bubble is being created. Doesn't bother me at this stage - I own plenty of property in Australia so happy days. But if you (or me or anyone) thinks that an economy can be based on house prices alone or just exports to China then we are all fantasising. Its not a question of anyone following anyone - except maybe China. When the Chinese currency adjusts later this year (it will have to) then all bets are off. That is why many people are predicting a double dip to the world economy.

 

Either way - lets hope Australia can sustain house prices that are the highest ratio to average wages in the world. Perhaps Kevin Rudd has eliminated boom and bust. I have heard that somewhere before, but I cant remember who said it or what the results were.

[Guest treesea]

Several excellent points here. The rise of the Chinese is one note of caution for us all.

I work in Africa every now and again, and many of the countries I go to there now look like Chinese military outposts. They are for example building roads all through Kenya (and mines right alongside them).

 

On the subprime issue, Australias banks seem to be starting to create a sub-prime all of their own. I saw some absolutely sh1te properties recently in Melbourne being sold at insane prices. That is exactly what happened in America in 2006/7.

 

As for manufacturing, you are spot on. Same in the UK. Gordon Brown and his incapable crowd of uneducated morons have failed to realise that with no manufacturing base the UK is knackered. They have coupled this with a desire to destroy the service sector via punative taxation. The UKs top rate of tax is now 62.8% (uncapped national insurance is also a tax - socialists forget that).

 

Low tax is what builds economies (and their wonderful solution to the current problem is to .... raise taxes!!!).

 

That was the reason I moved the HQ of my businesses overseas before selling it - lower tax. I had to stay out for the UK for 192 days in each of 2 years. By doing that I paid 5% tax on the sale of my business. Had I stayed here it would have been 53%. A no brainer. I would happily have paid 20%. Thats a small example of how the UK lost a nice sum of money to me and my co-directors. Socialism doesnt work. Same thing in Australia - the corporation tax need to be lowered to sto companies shippng it overseas.

 

Small businesses need to be encouraged - ultra low tax rates for them. BUT this should be couple with MASSIVE fines for tax dodgers and also the complete elimination of all loopholes. Remove the ability of clever accountants to reduce tax to zero BUT at the same time reduce the rate to approx 25%. Why should someone work for years to build up a business and then pay over 60% on the sale in tax? Likewise the inheritance tax threshold must be increased to at least £5m. Why should my kids lose 40% of their inheritance to the UK government if I am killed tomorrow?

 

All of these problems come down to society spending more than it can afford. And spending it on insane things. I beleive it would be simple to save 40% of UK government spending. If Asia is the model of efficiency that we are all to look at then the chickens are going to come home to roost big time.

 

As I have said before - the whole world is in the sh1t. Take care of your own is my motto. There is no such thing as equality - all men are NOT created equal.

 

The state must exists to provide a hand up and not hand outs. Stop penalising hard workers (brickies to bankers) to give free monet and housing to people that are fundamentally lazy.

 

Ultimately I think a spell of high inflation will be what will re-set the world economy. With oil heading back to $100 I think we will see that happen - and this will also cause a lot of globalisation to be rolled back. Transporting goods at $100 a barrel is inefficient and costly. More industries will switch back to their own countries. The "oil boom" will be seen as a very small blip on civilisation - lastign basically 50-60 years out of 40,000 years of mankind. It will be ugly - its just a question of when.

 

Sure, the top rate of tax is way "over the top" and doesn't exactly provide an incentive for people to maximise their income in the UK, but keep in mind, the person fortunate enough to earn that top rate probably doesn't need the 37.2p in every pound he/she is left with for esential expesnes, and therefore gets to invest it to earn all that tax back.

 

Looking at the other end of the scale, someone trying to support a family on the minimum wage, this is set so impossibly low that earning the minimum wage qualifies you for a whole host of benefits, including housing and council tax benefit, even if you have a mortgage (i.e. interest relief) and working tax credit/child tax credit. I know people who work part time, because that is all they can get, and the benefits they get as top ups work out at more than what they earn through their labour. That's the real failure, surely, of the current regime, that a significant portion of the working public earn so little that they qualify for benefits.

 

Even having got the benefits, the working poor still have to live hand to mouth and spend everything they earn, just in order to meet essentials like the electricity bill and half decent school shoes for their children. In some ways, living on the minimum wage is like being taxed 100% because there is nothing left to save at the end of the week/fortnight.

 

I am not sure that Australian mortgage loans are as sub prime as they look, even in relatively poor quality suburbs. Capital adequacy laws in Australia mean that if you don't have at least a 20% deposit, you have to pay the bank's mortgage insurance. That can be pretty significant, - on the first property we ever bought it worked out to $5,200 on an $86K mortgage. Self certified mortgages don't exist and if you're self employed, they usually don't want to lend to you unless you have a hefty deposit.

 

Inheritance tax is a bit "off" whatever the rate it cuts in at, because it is a tax on assets where the money that paid for those assets has already been taxed, so is double dipping. But here the gap between the "haves" and "have nots" is so great, plus the numbers of "have nots" dwarf the "haves". So there is support from the majority to have taxes which fleece the marginally well off to give to the poor, simply because there are so many poor here compared even to the marginally well off.

 

"The state must exist to provide a hand up and not hand outs." sounds like the kind of patronising statement David Cameron would come out with, and will go a long way to ensuring the Conservatives are not elected with a majority. I don't see any problem with requiring the whole population to work, provided that the state is prepared to do things like pay relocation costs (Sweden's way), provide affordable good quality child care (like most of Northern Europe), guarantee the job will continue (so none of this zero hours contracts rubbish that the unemployed are having foisted onto them at the moment), match the job to the person's abilities (so not require a physically disabled person to be, for instance, a storeman) and provide decent accommodation at an affordable cost when they get there. Plus any additional support the person may require if they are disabled.

 

Instead we get this stupid situation where people who live in Merthyr, and lost their jobs when the Hoover factory closed down, are expected to go into Cardiff to attend interviews for jobs they are not qualified for. These are people who can't pay their gas and electricity payments - where does the Government think they are going to get the money to pay for the bus fare into Cardiff?

 

Roll on the election. I can't wait for a hung parliament. The thought of GB being the prime minister again doesn't enthuse me, but at least the minor parties will have a true voice. As to David Cameron, I just don't see the British public warming to him, or his Old Etonian front bench. He's like a man in an ivory tower, who not only talks down to the people - he always sounds so condescending - but also gives the impression of never coming down to the street level, of having now comprehension of how ordinary people live their lives. And in that way he's different from Brown, Blair and Thatcher.