ONE of the nation’s most senior bankers has taken aim at the negative gearing used by millions of property owners, claiming the tax break was leading to an unhealthy focus on housing as a means to get rich, while pushing property prices to unaffordable levels.
Phil Chronican also suggests
Real estate should not be regarded as speculative investment vehicle to get rich, but as ”a place to live in, sleep, eat and raise your family”.
But most worrying is the revelation that “Australians have as much as 60 per cent of their total wealth tied up in real estate.” If this number is correct, then government policy with regard to home ownership becomes quite problematic. Already we have seen a recent suggestion to impose capital gains tax on housing and now we have an admission that the current negative gearing tax break back to the property owning class is fueling speculation and driving up prices. But this figure of 60% explains a lot, that is, the recent capital gain in home ownership, being tax free is naturally encouraging people to invest in their homes, and the negative gearing crap is allowing them to leaverage their principal real estate and make even more money in the real estate game.
But this is a bit of a Ponzi scheme. By playing, investors keep driving up the prices for homes, but to play they have to keep putting the money back into real estate. Unfortunately for all concerned, if the speculation eventually runs out of steam (and it will) and housing prices actually start to retreat, then a lot of wealth is at risk which will then feed back into the rest of the economy. Not only that but as speculators start to lose money they will be the first to cut and run. So problem number one is the Aussie economy is hostage to house prices, which in turn means (problem #2) the government of the day is also hostage to house prices and despite the rhetoric about affordable housing, governments therefore have an interest in keeping the real estate market afloat.
It means a lot of capital is tied up in things that only make money if prices go up. Sounds like a gamble and if the game goes bust we could be in deep shit.
This could be a post directed at the global warming denialist, you know the how it goes…carbon dioxide is just a gas, the science is questionable, humans have nothing to do with it and besides the planet isn’t warming anyway, yada yada.
Not that there’s anything wrong healthy skepticism as such, it encourages good solid proof for one thing but there is a distinctly anti-intellectualism permeating the denialist camp which is spreading into other political issues. Take for instance this little gem of a comment posted in response to a story in the Herald Sun – “Higher tax call for McMansion dwellers”
If Dr Robert Crawford was an expert at anything he wouldn’t have wasted his life at Uni getting a Phd. How big and energy wasting are Universities anyway? Get out and get a real job instead of being a permanent student thinking you can tell everyone else what to do. Moron. I bet this idiot lives in a high rise apartment without so much as green grass. Dillpot. Always the stick instead of the carrot with these morons. Penalise everybody into submission. Dufuss.
But wait there’s more and here’s where we start to see Politics enter the mix
If Robert Crawford wants to live in a cardboard box, that’s his choice. But for him to advocate taxing people because they choose to live a different lifestyle than him and are happy to pay the bills for doing so is a sign of left-wing lunacy. These fools only think of one thing when in academia – punish the well-to-do with taxes, so they can redistribute their hard-earned money to the layabouts. Mr Crawford should go and live in the real world instead of hiding in a university on a permanent tenure and living in cloud-cuckoo land. I don’t care about the gap between rich and poor – if the poor want to be rich, they have every means to do so without receiving money misappropriated from the rich.”
That last quote was from Hotheads Online of Australia and it had company from real world who said
Oh man another elitist academic telling the serfs how to live their lives. Here’s an idea, how about a tax on elitist academics who think they can tell us how to live.
Gaz of Wide Bay reckons
They pay more than enough for their houses….lets tax the universities and the professors…they drain more than enough out of all level of the energy jar.
Peter of Bayside…
I am a firm believer that this great nation of ours would be even better if we didnt have to fork out so much money for the services of some of our academic professionals.
At his point I’m getting just a little depressed. I’m glad loc included this rather simple defence
If there were not intellectuals you would all still be living in caves.
The cult of ME lives and breathes in these comments.
Shaun Akkermans, pictured outside his home in Pakenham, says if you've got enough money to live in a big house - then "go for it
One of the rather annoying things about the mainstream media narrative for domestic Australian politics right now is that Labor doesn’t stand for anything other than retaining government. It’s a meme that grew out of NSW Labor’s 16 years in power which declined into cronyism and self obsession but recently the NSW “disease” has apparently contaminated all of Labor.
It’s probably not a bad story, certainly there are plenty of angles for the mainstream and especially the Murdoch press to sink their milk teeth into but the idea itself is slightly odd. Labor of course is supposed to stand for something, they are supposed to be the party of conviction, standing up for the downtrodden and disadvantaged.
The leader of the Liberal party, Mr Abbott reminded us of that little meme in his sermon to the converted at the Victorian Liberal’s state conference when he said “Ladies and gentlemen, it is a tremendous honour to stand before you as the standard bearer for our national party.”
So he stands for something but what?
Ladies and gentlemen, I stand before you as the proud representative of the values that our party has represented as much in our time as in Bob Menzies time. It is important that we never forget that as Liberals we believe in freedom and in choice. As conservatives, we support the family and values which have stood the test of time. But above all else, as Australians we support policies that work and that will give the people of our country, the forgotten families of our country, hope opportunity and reward.
hmmm, family values, freedom, choice, hope, opportunity and reward. Sure Tony whatever you say…
Which reminds me
But what Tony loves to do is tell us how bad the government is…
Now ladies and gentlemen, it’s often said that this is the worst government since Gough Whitlam. But that is very unfair to Gough Whitlam, whose government was certainly incompetent but who never sold Labor’s soul to the Greens.
Reading from the hymn book, verse and chapter. I stand for values (except for telling the truth) and this mob in government have sold their souls to the Greens…shock horror omg!
I mean would you buy a used car from this man?
This meme of standing for something is crap. It’s a meme that Abbott exploits and the media plays along with but it’s really a distraction. The subtext is that Labor are unprincipled but which political party is still taking donations from the tobacco industry? What’s the guiding principle there Mr Abbott?
I guess Tony’s standing up for the tobacco industry as well.
But the really big thing Tony does stand for is saying NO. Actually that doesn’t make any sense, but you get the idea. Tony likes to say NO, a lot. He especially likes to say no whenever anyone mentions a carbon tax, which according to Mr Abbott will ruin everything…
The whole point, ladies and gentlemen, of a carbon tax is to stop the use of coal and to make electrical power more expensive
well that’s not quite true, yes part of the point is to make burning coal for electricity more expensive but surely as a champion of free market economics Mr Abbott understands that price is supposed to a product of supply and demand and somewhat surprisingly the trend price for renewables sources for electricity are going down
Which means that we should be able to replace old coal burning plants with carbon friendly alternatives pretty soon and not go bust in the process.
I wonder if big coal are donating to the Liberal party?
But our Tone does have a plan for dealing with carbon, even if he doesn’t really believe in climate change.
Positive initiatives like a standing green army, 15,000 strong to supplement and advance the Landcare work that is currently being done by councils, farmers and volunteers and positive initiatives like our direct action plan to reduce emission, not just to make everything more expensive, by planting more trees on suitable land, getting more carbon into soil by using more organic fertiliser and using smarter technology to take carbon dioxide from power stations and turn it into bio-diesel and stockfeed
Well I’m all for planting more trees and I’m especially keen to see all the existing trees left alone but I’m curious about why Tony avoids mentioning other renewables like solar and wind which have got a foot in the door.
And just in case you wanted Tony to say Ladies and Gentlemen one more time…
Ladies and gentlemen, make no mistake, the carbon tax is the bank nationalisation of our time.
So word of mouth recommendations and mobile applications are going to be the next big thing.
Leaving aside obvious self interest here, you know Facebook, advertising revenue, mobile phones…join the dots, leaving that aside since we apparently can never discuss the motivation to make money because that’s both a given and completely natural, leaving aside the money what is there left to talk about?
Location data on your mobile. Do you allow your phone to track you? Some people aren’t even aware that it happens but it’s a feature (not a bug as Apple recently found out) in the new iterations of mobile technology. Apple obviously does it, Google does it and it’s a safe bet that if Windows ever makes it to a phone, then Microsoft will most certainly do it too. Yes you can switch it off, but how many people do? And if they do in large enough number then why is Facebook getting so excited about the possibility of linking sellers with punters via mobile technology?
So here’s one possible scenario, leaving aside the Facebook component for the moment. You are driving along in your nice little hybrid, minding your own business, the mobile is safely installed in the little handsfree cradle thing where you can see the messages that make you life complete and all off a sudden on screen pops this funky little ad for product abc. Now display ads tend to work by either locating an idea next to the point of sale or by raising your desire for something that can be consumed generally. But technology opens up the possibility that selling is no longer strictly tied to physical points of sale, companies will take your money anywhere anytime. So now you have more options, the display ad on your mobile might be advertising for a product that is near you, say real estate, or it could be a product that you might be a chance to buy soon, say you are traveling to a football game, or it could be a product that some marketing genius has decided will suit your mood at a given time and place.
How can technology guess a person’s mood? Well social networking is part of the answer. All those likes and page views and conversations, all sitting in a big database somewhere, they all add up to a picture of you albeit incomplete but probably sufficient for advertisers who really don’t care too much for accuracy anyway.
But that’s small beer. The big one for Facebook is likes. Your ‘friends’ can like stuff, and get a tiny commission for it. They might suggest you like it too, they can tag products in their photos and get money and they might be chatting to you on the phone and happen to mention they like something. What it all boils down to is your friends suddenly have a vested interest in telling you stuff. Are they still your friends? Well as long as you don’t defriend them…
It’s another way that money is driving our lives. But let’s leave that aside and talk about the potential, the next big thing in the world of business. It might strike you as odd but have you noticed how little we talk about the potential for humans to do anything other than make money?
100 photographs from 100 different places around the world that are threatened by climate change.The pictures are taken by some of the world’s best photographers and all the places are based on reports from the UN’s Intergovernmental Panel on Climate Change IPCC.
Microsoft bought Skype for one reason, and one reason only. Relevance.
A quick reading between the lines of Balmer’s internal email supports this idea.
Today’s announcement underscores who we are as a company. We are ambitious and forward looking. We have big goals and aspirations. And when we look into the world and see opportunities to do more with technology, we’ll drive toward them and keep pushing. Sometimes we’ll build ourselves, as we’ve done most recently with Bing and Kinect. Sometimes we’ll partner or form an alliance to seize the moment, as we’ve done with Yahoo! and Nokia. And other times we’ll make an acquisition, as we’ve announced today–one that plays to both company’s strengths and opens new opportunities not available otherwise.
There’s no question about Microsoft’s ambition, it’s been pretty constant since the days of bribing and coercing pc manufacturers into installing windows to gain it’s near monopoly hold on the emerging operating system market. It’s aspiration is simply to be number 1, and that’s why Steve pulled out the cheque book.
The problem for Microsoft is the world is moving away from its Microsoft controlled playpen. Microsoft Office is still obligatory but it wont be long before enough people wake up to cheaper and free alternatives. The problem here isn’t that the de facto Office standard is undermined to any great extent, it’s just that creating office documents is not the only thing people use technology for and it’s how technology is used which is driving markets. As for Windows, Android on tablets is Steve’s worst nightmare. It’s was bad enough when Apple introduced the iPod and then the iPhone, but Google and Android is shaking Redmond to its core.
The emerging tablet/smart phone market is likely to be tomorrow’s PC landscape. Apple understands this which is why Apple recently eclipsed Microsoft in terms of market cap. Google understands it which is why Android is popping up everywhere. Microsoft understands it but it is likely to be too late with Windows on the phone despite getting into bed with Nokia. Hence Skype.
If you look at Steve’s email, there a strong sense of denial running through it. Microsoft claims to be innovative, but historically all they have ever done is steal their PC ideas from Apple. The only thing they ever build is a buggy Microsoft monoculture which is why the virus writers have field day. They came up with Bing long after Google gave the world a way of sifting through the information overload on the internet and they have been playing catchup with their partner Yahoo ever since. And if Microsoft was so inventive why didn’t they come up with Skype years ago?
But it would be a mistake to underestimate Microsoft on this one. Skype’s user base is large and while most use the free service, it still represents a potential market. And more importantly it consolidates a part of the technology world under the Microsoft umbrella and prevents the Google monster from gobbling it up. Yet Microsoft’s ability to make big bucks in areas outside of the Windows desktop is questionable, it failed to counter the iTunes/iPod/iPhone concept, it is barely making a profit on its Xbox department, and it is way behind with Bing.
Still if you throw enough money at something it might work. That seems to be the extent of Ballmer’s ideas on innovation
In breaking news, Gavin Atkins over at The Oz have uncovered a evidence of “left-leaning group-think at The Drum”.
The real measure of bias at The Drum is not the range of opinion, it’s the frequency. Until the end of last month, 98 writers had been published eight or more times at The Drum, producing a total of 1880 articles. Only eight of these contributors (one in 12) would pass muster as being on the right of the political spectrum
Apparently this bias has distracted the flagship News department of the ABC to such an extent that news of the Japanese tsunami went missing on its 24 Hour channel (really?) and even more dramatically, caused a failure in programming which saw regular TV uninterrupted by news of bin Laden’s death.
According to Gavin
if the ABC concentrated on giving us the news instead of this online puffery, it could help solve two problems at once
Problem 1, there is too much trendy left group thinking on the Drum, and it’s costing the taxpayer money. It would be OK if the money was wasted with people like Gavin…
Problem 2, ABC news is wasting taxpayers money by not covering news the way Murdoch would like it covered.
Well I’ve done some reading of the Oz from time to time. It’s opinions and news selection/direction has a distinct odour of righteous self importance, one befitting any horse in the murdoch stables. Gavin’s provocative little brain fart is just pot calling the kettle black but it also underlines just how much the ABC gets up the nose of the Murdoch crowd no matter what Aunty does.
