Housing Shortage

[spacesailor]

Good food places are getting everywhere. 

I have Chinese once a week if lucky,  as it must be bad for me . " I like " honey-chicken " .

spacesailor

[spenaroo]

eh, sushi is pretty popular with non-Asians,
same with the "Bahn-mi" has replaced the sandwich 

[Jerry_Atrick]

Yuk.. can't eat what I use for bait to catch and cook fish..

[spacesailor]

WORMS ! .

spacesailor

[onetrack]

You use pussycats as bait to catch fish??   

[Bruce Tuncks]

Many years ago, I was a new fishing guy and I went fishing with a bunch of experts. They forgave me for thinking that you could eat bait ( squid) on account of coming from Alice Springs.

Whenever I see any of this lot these days I ask them about calamari, I reckon I got the last laugh.

[willedoo]

On the subject of calamari, cuttlefish has an odd quality. As bait in it's raw state, it's much tougher than squid and stays on the hook better. But when cooked, it's more tender than squid and tastier as well. It's definitely the preferred calamari in my book. Calamari rings are usually squid, whereas calamari strips are often cuttlefish.

[Jerry_Atrick]

Back to the housing shortage.

 

The immigration numbers have been blamed a bit for the increase ihousing shortage, both in the rental and ownership race. And, yes, I am sure it has an effect, but is it the main driver, or is there something else. Simple economics of supply and demand, of course, but as I recall, the housing rental market crisis started towards the end of SFM's tenure, or possibly early on in the Albo tenure, which was before the massive immigration uptick (I have been keeping an eye on both the rental and purchase market for a few years now).  The prices have of course increased for purchasing, but for ental, they seem more or less steady - showing slight increases in very popular areas since the initial, about 25% uptick (in advertised prices, but as eveyrthign was going to sealed bids, the actual increase may have been higher).

 

So, why the sudden interest? Well, there is a massive discrepancy between pay for "junior" doctors (who are actually experienced, but haven't climbed into consultants, bascially), GPs, nurses, ambos, midwives between the UK and Australia, Canada, the US, and to a lesser extent, contiental Europe. There other other soul-destroying issues in the health servie here as well; what was seriously one of the better world wide public health systems has been systematically disassembled by the Tories over 13 years. The result: A lot of health professionals have had enough and are packing up their bags, and either retiring, chaning career, or moving to the aforementioned countries.

 

The pay band for Junior doctors is between $32K (say $64K, which it is not quite), and £65K ($130K) per year. It takes at least 11 years to become a junior doctor. For reference, a London bus driver earns around £32K/year. In Australia, according to this(https://advancemed.com.au/junior-doctor-salary-australia-guide/), NSW has the lowest starting salary of $73K, and the highest paid specialist registrar (which is included in the UK numbers) is c. $180K in Tassie. So, they can earn $40K more in Aus than the UK at the top end, and $10K more at the bottom end.

 

Of course, there is the slight problem that cost of living in Australia is moe than the UK, and I am guessing at those numbers, it is, with the possible exception of rental property, going to eliminate any gain of the absolute value of increase in pay. But, for a slice of paradise, that is not a bad thing.

 

Of course, the two comparisons are not entirely accurate; in the UK, the largest medical employer is the public sector - the NHS; by a long way. However, although I haven't done the numbers, yet, my understanding is that in Australia, the largest employer is the private sector. And there are no standard pay rates to compare. But my sis-in-law, who is English, is a GP and for that I can say, there is a massive gap in difference in pay. The average income GP (of which most, if not all, are private), is around £100K per year. I have seen GP advertisements for government jobs in regional areas, such as Ballarat, where it is 9 - 5:30 and no weekend/evening work (unlike GPs here, which are contracted to do so), for over $330K. That difference is a game changer in most peoples' books.

 

Nurses, midwives, and ambos (paramedics - I should use the correct term) also earn significantly more in Aus than the UK. Oddly, Physios, dentists, and other similar health care professionals earn about the same, give or take.

 

So, what has all this got to do with immigration ? Well, as I mentioned, there is a bit of an exodus happening in the health care sector and a decent chunk of it is to Australia, the US, Canada, and Europe. So, I am thinking of capitalising on it and setting up a recruitment agency focusing on expatriating British health care (and possibly IT, but doubt it) professionals from the UK to these countries. I am also thinking about teachers, too. The service would be reasonably high end, with an assessment of a candidate's compatibilkity with the country, obviousl qualification, employment, credit, and criminal checks, a proper psychometric test appropriate to the role and region, with the idea that the candidates and employers are confident that it will work for both. Then there will be visa and movign assistance, etc.. This is aimed more at those with families, etc; working holiday visas are easy enough got young-ans to get without any help, and obviously, they are more flexible if things don't pan out.

 

Also, would be providing education to candidates on the possible benefits of moving to more rural areas to start - easier to get a Visa, still good education and facilities, plus the active lifestyle.

 

My question is, what is more important to Australians - keeping the lid on migration (and hopefully reduce the stress of the housing shortage), or have enough medical professionals to get treatment where and when it is needed? The reality is that even if I managed to move a thousand people into Aus, unless they all congregated in the same suburb, it is unlikely to have that much an impact, but perceptions can be very important over facts. For example, when I was speaking to a nurse who retired early, her response was, like, "Don't you dare! We need nurses." To which my response was why then did she retire early? The same reason the are looking to move to Aus. All I would do is offer a service to those who want to to take the stress and minimise the risk of such a move.

 

 

[pmccarthy]

There is a desperate shortage of GPs in Australia, particularly in rural towns. Most GPs that I know are working two or three locations, a day or two per week at each. Many, like my niece, are training as specialists for the bigger pay packet, reduced hours, and the certainty of a city job. In many towns, newcomers cannot see a doctor as patient lists are closed. They have to travel back to where they came from to see their previous GP.

[nomadpete]

Jerry,

 

Since our old Commwealth (un) Employment Service was deemed incompetent and got replaced by a gouging private unemployment system we would love to discover a service such as you propose.

If only Australia  had any employment agency that offered

 

"The service .....  with an assessment of a candidate's compatibilkity with the country, obviousl qualification, employment, credit, and criminal checks, a proper psychometric test appropriate to the role and region, with the idea that the candidates and employers are confident that it will work for both..."

[old man emu]

One of the objectives of Australia's immigration policy was to bring in people with qualifications in areas where those qualifications were needed to lead the development of the Economy. Medical professionals, whilst doing important work don't really promote the development of the Economy. They are service providers. What is needed are the professionals who plan and design to advance an industry, thereby providing the means by which those with the skills to carry out the minutiae of the pan can complete it.

 

Go to any city, be it one of the capitals, major secondary, or even rural ones and you will see lots of immigrants. However, they seem to be mainly employed in service industries - working in various retail businesses. Of course there are the doctors and others in the health and aged care sector, but that's still the service sector. A lot of Chinese seem to be working in the residential building industry, but you could also class that as a service industry. Where are the professionals who are laying the foundations for a self-sufficient future? 

 

Australia once had a strong (for the size of the country) manufacturing sector, making everything from garden taps to agricultural machinery. It would seem that the desire for short-term financial gains has overridden all thought of long term stability and sustainable economic growth. With the "closure" of the sea route through the Suez Canal, we are likely to suffer from the determination to satisfy that desire for quick profit. If the Indo-Pacific region gets really hostile, watch Australia' standard of living spiral downwards.

[red750]

This block on Morack Rd., Vermont has been vacant for at least 15 years, probably a lot longer. A planning notice has just been posted stating the planning application is for FIVE DOUBLE STOREY DWELLINGS, with parking, 4 metres clear of trees.

 

[facthunter]

TWO story is the GO everywhere now. I think they are going higher than that near ME and out in the sticks. .Nev (the Bushwacker). 

[red750]

Up, not out.

[facthunter]

My point is IF it's happening HERE where there's heaps of open land , what can you expect for the INNER suburbs?  Nev

[spacesailor]

Ask that neighbour of Guy Sebastion. .

Who lost a court case, over the nearness of Sebastian's

" gutters " .

spacesailor

 

[facthunter]

Who  are  THEY?  Man's home is his Castle. A BASTION against the Elements and Invaders.. Nev

[old man emu]

Negative gearing allows losses from an investment property to be deducted from a person's income tax.  It is a situation where expenses associated with an asset (including interest expenses) are greater than the income earned from the asset. Sounds reasonable, doesn't it. However delve into it and you will see that it goes against the very idea of investing money. 

 

This is how a normal investment works: You invest money into something, such as shares, or even long term deposits with the intention that the use of the money will generate profits which you can either use immediately or reinvest to earn even more profit. Eventually, you can call in the money you have invested and you will be receive the same number of dollars that you originally put in. The profits hopefully have dealt with inflationary losses so that your dollar has the same purchasing power as those you invested years ago. The profit you make is what is left over after you have paid your income tax on it.

 

Now take negative gearing; You invest in a house or commercial property. Thereafter, you have a number of costs associated with owning that property - mainly local government fees; fees to maintain connections to utilities; insurance both against destruction of the property and the costs and risks of having tenants. And don't forget the costs of maintaining the mortgage, mainly interest on money borrowed to purchase the property and agent's fees. Each year, negative gearing allows you to deduct those costs from your personal income, to reduce your taxable income. All the while, the "value" of the property asset is increasing, creating hidden wealth. So a person could purchase enough properties to eliminate their income tax debt and at the same time be amassing wealth in a property portfolio.

 

Who are the sort of people who use this technique the most by negatively gearing many properties? The people who, this week, will be here:

 

 

 

Doing this reduces the tax income for the government so that it cannot meet the demand for functions it is expected to carry out - health, education, judiciary, infrastructure etc, etc.

[Jerry_Atrick]

The basic tenet of investing to earn an income is that costs associated with pursuing that income are deductible from the revenues over a period oif time (e.g. a financial year - but not always), to arrive at the proft of the undertaking. From the profit only, is tax payable.

3 hours ago, old man emu said:

Now take negative gearing; You invest in a house or commercial property. Thereafter, you have a number of costs associated with owning that property - mainly local government fees; fees to maintain connections to utilities; insurance both against destruction of the property and the costs and risks of having tenants. And don't forget the costs of maintaining the mortgage, mainly interest on money borrowed to purchase the property and agent's fees. Each year, negative gearing allows you to deduct those costs from your personal income, to reduce your taxable income. All the while, the "value" of the property asset is increasing, creating hidden wealth. So a person could purchase enough properties to eliminate their income tax debt and at the same time be amassing wealth in a property portfolio.

This is no different to investing in other commercial assets. Professional and seasoned amateur investors willuse magin lending and other leveraging products to get more exposure than they can or want to with their available cash. The costs of these facilities are deductible against their income whether or not the shares have made money. They will only pay tax (apart from stamp duty on their transactions - similar to property) when they have sold their shares, assuming they made a profit. The difference is that I believe in most states, Land tax is payable on properties one owns that is not their primary residence. I don't think land tax is deductible from income of a property (I could be wrong). I think property rates are, though.

 

The difference with negative gearing is it allows you to estimate your losses due to (I thought it was only residential) property investment and have the losses applied in 12 equal instalments during the financial year rather than wait until the end of the financial year. This helps cash flow which makes property investing available to more people that it would otherwise, as without that cash break a lot of people would not be able to afford to get on the rental property ladder. This will increase demand from property, especially as moe and more people start looking for investment properties, but also has the advantage of inceasing the supply of the rental market - normally keeping a lid in rental prices. Yes, the current rental crisis is a blip as normally when rental prices go up, purchase prices go down. But, lately anything is other than normal.

3 hours ago, old man emu said:

Doing this reduces the tax income for the government so that it cannot meet the demand for functions it is expected to carry out - health, education, judiciary, infrastructure etc, etc.

I would argue not necessarily for two reasons. First, the higher prices increase stamp duty, which goes to the states rather than the federal goverment, and the bulk of the above spending and administration is performed by the states. Without the cost of redistributing income from the federal government to the state government, there is more actually in the pocket of the states as a result. Secondly, states collect land taxes of non-primary residential properties. There are little, if any other such taxes on other asset classes. Of course, this would depend on the quantum. Also, if everyone owned only one property, the increase in the value of the property would not be taxable either. Now you are left with no land tax receipts; Then when you sell your primary resiudential property for a profit, you are not going to pay capital gains tax on that. When you realise your capital gain on your investment property, you will pay capital gains tax on it. The one thin that puts a fly in that ointment is the lack of probate tex.death duties. This means there is no incentive to sell as you can pass on the assets tax fre to the next generation. In the UK, there is death duties over 250K of assets and often this requires the next generation to sell some or all of the assets to cover.

 

Of course, the housing market isn't a normal market and shouldn't be treated as such. The question of allowing negative gearing or any of the expense deductions is a political one - does society want housing to be affordable to as many as possible, or do they want to allow it as a vehicle for people to build wealth outsude the primary residence. In the face of sprialling prices driven largely by rental landlords flooding the market and increasing demand, the government here took two steps - significantly increased stamp duty to Australian levels (it was about 1% when I purchased my first home here). Althought he UK didn't have negative gearing like Australia, it did allow all costs and generous depreciation allowances - just like Australia - but you got it at the end of the year (real estate agents had to withhold tax on rental payments). They basically removed it all, and allowed very small maintenance allowances. That did correct the market.

 

Yes the news of so many houses being owned by members of parliament creates a conflict of interest of them administering the tax for the benefoit of society. If getting house prices down, nopt onl getting rid of negative gearing is required to remove the cash flow benefit, but getting rid of the expenses as a deduction altogether would go a long way.

 

But, if you want to plug public finances, I would suggest focusing on stopping the billions of dollars of multinational corporate profits exported by transfer pricing, where the money is sent to low tax jurisdictions that "supply" the goods and services at grossly inflated prices creating artificial losses in Australia would be a more productive pursuit.

[spacesailor]

I know of someone,  who deliberately purchased a property 

In Brisbane,  to use that ' negative gearing ' so he could have his ' summer holiday ' there . Even the hotel he stayed in was a tax deduction. 

Inspection & maintenance,  plus ' travel expenses ' .

I called it a rort .

spacesailor

[Jerry_Atrick]

There are always people rorting all sorts of tax provisions. I know a bloke who developed a PPL thoery course on a CD in the 90's so he could get his flying training deducted from this income.

 

Many people who have pty ltd companies have their annual general meeting in a state or country other than where their company is incorporated..

[old man emu]

Like EVs, negative gearing doesn't affect me. I don't have the money to buy properties nor a car off the showroom floor, no matter what its power source might be.

[facthunter]

  In an investment portfolio you can claim losses as losses and with houses (not the one you live in) how do you make  an EXCEPTION without throwing out the concept of being able to claim losses and costs  as a BASIC principle in any money making activity?  Builders can and do make losses for various reasons. (weather) etc and incur costs in running the business.  Nev

Edited February 12 by facthunter

[spacesailor]

Then the building business  , goes belly up & pays 10 cents in the dollar. 

Only to start the same business again , with a different name .

Happening all the time .

spacesailor

PS : my grandson has worked for the same management, for many years , even through the company name keeps changing.  AND his super disappears each name change .

 

[onetrack]

The simple fact remains that investment in property is seriously under-taxed, as evidenced by the vast wealth generated by anyone who invested in property in the last 25 years.

That wealth generation is vastly greater than any other form of investment. And this applies right across the board, to every type of land, including farming and pastoral land.

 

I have former farmer clients whose land was worth a couple of million 25 years ago, one just sold out for $21.5M, and there's was nothing exceptional about his land, just an average wheatbelt farm.

 

The vast amounts of money being ploughed into land and property is staggering. I have never seen anything like in my lifetime. Houses get a "for sale" sign on them and a "sold" sticker the next day.

I haven't seen ANY house of any kind in the suburban areas last on the market for any more than a couple of days in recent times. I fear we're heading down the Tulip Bubble/Mania path.

 

Edited February 13 by onetrack