What Is Wealth Hoarding? What Does It Mean?

bargain huntress on 30/06/2023 - 16:15

It's something I keep seeing and hearing complained about. Including on ozb sometimes.

Often by millennials or younger. Often aimed at baby boomers.

I am a millennial and in a bad financial and life situation. But I don't get it because:

Didn't the people who are now retiring mostly earn their money?

I understand part of it comes from real estate gains that are harder to get now. But isn't that luck?

What is it the boomers should actually be doing according to the people complaining?

That's what I don't understand.

Financial

Comments

- - - - greatlamp on 03/07/2023 - 14:47
        
        @Duckie2hh: The total yield on owning a rental property will be lower if there is no negative gearing. Banks will loan significantly more to a landlord than an owner occupier.
        
        If there are less landlords, house prices will be lower, house price growth will be lower. Permanently.
        
        Duckie2hh on 03/07/2023 - 15:11
        
        @greatlamp:
        
        The total yield on owning a rental property will be lower if there is no negative gearing
        
        Correct.
        
        Banks will loan significantly more to a landlord than an owner occupier.
        
        Not correct. We are talking about residential mortgage here. Lenders will only loan based on the borrowing capacity of the borrower. In fact, since lenders usually charge a higher interest rate for investment loans, landlords actually will be able to borrow less when compared with the same borrower for as an owner occupier (all other parameters the same, i.e., income, expenses, age, etc).
        
        If there are less landlords, house prices will be lower, house price growth will be lower. Permanently
        
        Agree to disagree. Short term yes. Long term, with continual immigration and population growth, house prices will increase because of the demand and people wanting to live in/close to city centres. All and all, existing renters and those who cannot afford to buy a home, will be even worse off.
        
        greatlamp on 03/07/2023 - 15:25
        
        +1
        
        @Duckie2hh:
        
        Not correct. We are talking about residential mortgage here. Lenders will only loan based on the borrowing capacity of the borrower. In fact, since lenders usually charge a higher interest rate for investment loans, landlords actually will be able to borrow less when compared with the same borrower for as an owner occupier (all other parameters the same, i.e., income, expenses, age, etc).
        
        No. You can check this yourself using any bank's online calculator in 2 mins.
        
        Duckie2hh on 03/07/2023 - 17:01
        
        @greatlamp:
        
        No. You can check this yourself using any bank's online calculator in 2 mins.
        
        Nope. Just did it and correct as expected. https://www.anz.com.au/personal/home-loans/calculators-tools…
        100K income, $2k/month expenses
        Owner occupier: $502k
        Landlord: $493K
        
        I would screenshot if I could but feel free to try :)
        
        greatlamp on 03/07/2023 - 18:08
        
        @Duckie2hh: Add rental income to the calculator…
        
        Duckie2hh on 03/07/2023 - 22:39
        
        @greatlamp: That changes the parameter of "income". Your argument is that banks loan out more to landlords compared to owner occupiers. I said that they don't provided all other parameters such as income, stay the same.
        
        greatlamp on 03/07/2023 - 23:30
        
        @Duckie2hh: Well all landlords would include rental income when applying for an investment loan. That's why the interest rate is higher for landlords in the first place, their income has more risk. All other factors are the same, the same person will be given more money to spend if they lease out the home instead of choosing to live in it.
        
        Now that you've considered this, you can see how encouraging people to own investment properties directly inflates house prices.
        
        Duckie2hh on 03/07/2023 - 23:43
        
        @greatlamp: House prices go up and down according to demand. Not only due to them being "investment". If demand drops due to, lack of migration (i.e. such as those during the border shut down), it won't matter if the house is an investment or an owner occupiers.
        
        greatlamp on 04/07/2023 - 00:09
        
        @Duckie2hh: And? It's ok to agree with me, you don't need to shift the goalposts.
        
        During the border shut down house prices increased at the fastest rate in history. Low interest rates encouraged people to buy up investment properties and holiday homes, particularly in regional areas.
        
        Blaming high house prices on migrants is a bullshit talking point invented by the liberal party. Literally.
        
        Duckie2hh on 04/07/2023 - 01:01
        
        @greatlamp: I'm not the one shifting goalposts.
        
        Add rental income to the calculator…
        No. You can check this yourself using any bank's online calculator in 2 mins.
        
        I am not blaming house prices on migrants. I am merely stating that demand increases house prices. Increased migration as well as population growth (i.e., birts) also contribute. Don't twist my words to fit your agenda of anti-landlords.
        
        greatlamp on 04/07/2023 - 08:00
        
        @Duckie2hh: I assume someone presenting stong views on negative gearing understands how housing finance works for investors. I shouldn't have to assume you don't realise something that everyone else does, and when you do realise it instead of reconsidering anything you change the argument.
        
        I'm not twisting your words. I'm just pointing out that your words are political talking points, not based on facts. You have been misled.
        
        You don't seem to have any appreciation for the strength of different drivers.
        Is it more important to you that you are right in the scenario and terms that you dictate, or that you understand what is happening in the real world?
        
        I'm not going to respond further if you just want to win an argument
        
        Duckie2hh on 04/07/2023 - 09:36
        
        @greatlamp: I am sorry that you feel that way. My argument is that housing prices increase with demand. I am not sure what world you live on that basic maths no longer apply. If there is no demand in the marketplace, house prices do not increase (exception of increasing cost of goods). You keep reiterating and make statements with flawed logic and no foundations and expect everybody to "understand".
        
        Yes there would be some contraction in rental availability AND investment properties would be sold off and house prices will fall. Following that a proportion of renters will buy their own home.
        Instead of spending billions of tax dollars on tax deductions for investors, spend money on support for renters during the transition period.
        
        You keep spouting that removal of negative gearing would result in more owner occupiers. I do not disagree with that. But where I am pointing the fallacy of your argument is that you fail to recognise that a reduction in the % ownership of investment properties would result in renters paying more rent. You seem to have this notion that all renters would suddenly move into home ownership. Instead of acknowledging this point, you have been skirting around the argument before insinuating that I am a supporter of anti-immigration like those "bullshit talking point invented by the liberal party". Feel free not to respond, if you don't feel that you can defend your own argument/talking point.
        
        wackedupwacko on 05/07/2023 - 13:43
        
        +1
        
        @greatlamp: One of the biggest reasons rent would increase after the initial volatility of removing NG is simple profit /loss. Currently there is some benefits to LOSING money continuously on an investment.
        
        If we remove NG then EVERY investment property in the whole country will shift from being ok negatively geared (aka losing money) to suddenly wanting to be positively geared. Guess how you get to positively geared.
        
        Its hard to happen at an individual level but if the whole market collective has a change in investment goals, the whole market will move to a new price point. Which is probably a good 40-50% higher than rent now.
        
        Vancouver is a good example of this. They don't have negative gearing. Their investment properties attempt to cover ALL expenses for the landlord (mortgage, strata, council etc) AND earn profit. Their rental prices are seriously nuts and is a step above Sydney.
        
        xavster on 02/07/2023 - 00:46
        
        +2
        
        @greatlamp: removal of NG would make the investment not attractive, reducing supply and thus drive up prices.
        
        Supply & Demand is at play.
        
        greatlamp on 02/07/2023 - 10:41
        
        +3
        
        @xavster: This is the same comment I already responded to two posts above. It's inaccurate, think through the logic of what you posted. If owning an asset becomes less attractive, that asset doesn't become more valuable and expensive.
        
        JIMB0 on 04/07/2023 - 09:47
        
        +1
        
        @xavster: Removal of negative gearing would make no difference if the investor is paying cash.
      - kiitos on 01/07/2023 - 20:18
        
        @Duckie2hh: What do you mean the negative gearing is added back upon selling?
        
        Duckie2hh on 01/07/2023 - 21:10
        
        @kiitos: All those negative geared $$$ is added back to reduce the cost base of your property and thereby making your CGT bigger when you sell
        
        larndis on 02/07/2023 - 18:40
        
        +1
        
        @Duckie2hh: LOL, negative gearing (i.e. deducting eligible expenses to reduce taxable income) and capital gains are separate parts of the tax system. One does not get added back to the other. Hope you use a tax agent mate.
        
        jaycee on 03/07/2023 - 11:12
        
        @larndis: I think what he/she really meant to say is that the amount depreciated reduces the cost base by the same amount, hence it will increase the CGT in the future by the same proportion. However, keep in mind CGT has 50% discount (if held for more than 12 months) so it is still favourable to claim the annual depreciation due to the discount and for cashflow purposes.
        
        larndis on 04/07/2023 - 10:51
        
        @jaycee: @jaycee
        
        Depreciation is a deductible expense, it does not 'reduce the cost base'.
        
        See Rental expenses you claim over several years and Cost base of assets
        
        Specifically, you can only add items to the cost base that are not deductible. I am not aware of anything that reduces the cost base.
        
        jaycee on 04/07/2023 - 12:31
        
        @larndis: Check out https://www.ato.gov.au/Individuals/Capital-gains-tax/Calcula… and the example: "When working out his cost base, Brett reduces the capital costs element by the amount that he was able to claim as a deduction". In that example the capital works deduction of $255 (due to annual depreciation rate of 2.5% apportioned over 124/365 days) is not included in the cost base when calculating the sale of the asset, whereas the remaining portion of $29,745 not already claimed as a deduction is included in the cost base. So in essence the portion already claimed as depreciation is not included in the calculation of the cost base, thus "reducing" it.
        
        larndis on 04/07/2023 - 16:18
        
        @jaycee: OK, in this example Brett reduces the capital costs element which is added to the cost base by the amount claimed as a deduction. The cost base however is not reduced, but it increases by a lesser amount because of the deduction.
        
        jaycee on 04/07/2023 - 18:03
        
        @larndis: Well it is a matter of semantics with it being “reduced” or “increases by a lesser amount”, but we can agree the cost base will be higher (hence a lower CGT) if no depreciation was claimed on the capital works right? It just balances it out in the end either a tax deduction through depreciation (lower cost base) or no depreciation and having the full amount added to the cost base (higher cost base).
        
        Duckie2hh on 04/07/2023 - 09:36
        
        @larndis: You are correct. I meant capital work deductions.
        
        Duckie2hh on 03/07/2023 - 22:39
        
        @kiitos: Nvm, made a mistake
      - ddilrat on 03/07/2023 - 22:22
        
        @Duckie2hh: Even if you move into it and claim primary residence?
    - bawdygeorge on 01/07/2023 - 14:39
      
      +1
      
      You wouldn’t be taxed on the income if you won from a lotto ticket
    - cadwalader on 01/07/2023 - 18:35
      
      lol, it doesn't cost anything for a "mom and pop" investor to incorporate a business and do the exact same thing with property. Businesses and SMSF are allowed to own property
      
      Besides, negative gearing only increases prices by 1-4% and would also increase rents and decrease new builds
      
      https://grattan.edu.au/wp-content/uploads/2016/04/872-Hot-Pr…
      https://cdn2.hubspot.net/hubfs/2095495/_Communications/NGCGT…
      https://www.domain.com.au/news/negative-gearing-changes-woul…
      https://www.cis.org.au/app/uploads/2018/03/34-1-tunny-gene.p…
      Australia’ https://cama.crawford.anu.edu.au/publication/cama-working-pa…
      
      In Australia, lottery winnings aren't a taxable event so investing to generate non-taxable income is not tax deductible.
    - nujee on 03/07/2023 - 20:33
      
      -1
      
      Not even close. You are helping taxpayers who are also investors subsidise housing for people who can't afford it. Some people still pay out of pocket even after neg gearing.
      - Drakesy on 03/07/2023 - 20:36
        
        @nujee: Sorry but theres zero altruism to it. Everyone is there to make the most amount of money from renters.
        
        nujee on 03/07/2023 - 23:53
        
        @Drakesy: Ll’s are not price makers. That’s supply and demand. Case in point- covid when rental properties were sitting empty because all the students went home; no demand. Prices plummeted and LL’s had to get creative to retain tenants.
        
        While there isn’t a pure altruism factor to it- renters in most cases are getting a property and a roof for less than they would if they had to buy it outright. Doesn’t have to be altruistic to benefit both sides.
- tsunamisurfer on 30/06/2023 - 17:14
  
  +10
  
  **** negative gearing is all i can say :)
  
  NG has very little to do with what's happening today.
  - Drakesy on 30/06/2023 - 17:24
    
    +10
    
    People are holding onto loss making investment properties in the hope that they'll make a capital gain in 5-10 years time.
    NG has a lot to do with what's happening today
    - tsunamisurfer on 30/06/2023 - 17:45
      
      +12
      
      People are holding onto loss making investment properties in the hope that they'll make a capital gain in 5-10 years time.
      
      That's their business isn't it?
      
      Or is there a rule that loss making entities must be divested? If there is why didn't you call for Qantas to be dissolved? It makes a loss and there's obviously no hope of recovery right?
      
      What about Shares? If there is a bad year, an investor MUST sell and crystalise the loss on your say so?
      - ColtNoir on 01/07/2023 - 10:53
        
        +11
        
        @tsunamisurfer: Loss making investments that are purchased from the beginning, knowing it’s a loss is an issue.
        Combine this with the 50% CGT discount they get at the end, it’s ridiculous.
        We shouldn’t incentivise loss making ventures.
        
        Duckie2hh on 01/07/2023 - 19:45
        
        @ColtNoir: Who would want to invest in a loss making venture? It makes no sense.
        
        Start a brand new F&B Business, in most cases you will start out with losses for the first few years whilst the business establishes itself and you gain customer. Are those businesses also considered loss making and shouldnt exist?
        
        ColtNoir on 02/07/2023 - 08:49
        
        +1
        
        @Duckie2hh: That’s my point. Business might lose cash in the beginning but if successful they’ll be profitable and taxed over time. If they don’t, they’ll fold.
        
        Do you know how many property brokers I’ve seen who actively encourage interest only and loss making properties, in order to reduce your tax liability (far too many). These property will never be profitable by the wage the loans are designed.
        
        To be clear, negative gearing on business that’s eventual goal is to be profitable is fine. Structuring a business for the purpose of tax concessions isn’t.
        
        My vote is to remove negative gearing from properties to prevent this type of behaviour. You can still claim expenses against your rental revenue, just not against your other income.
        
        roozmik on 03/07/2023 - 09:36
        
        @ColtNoir: should just bump up the rent then so landlords always make a profit
        
        ColtNoir on 04/07/2023 - 10:25
        
        @roozmik: What? The people doing this at getting properties rented out at $600-$900/week. You can’t bump it more due to that already being top of the market (for the properties I’ve seen).
        
        wackedupwacko on 05/07/2023 - 13:48
        
        @ColtNoir: Guess what happens when you remove NG. The WHOLE supply side suddenly wants to bump up the price. Every landlord will want to be positively geared.
        
        Want to see what happens to rent when that happens? Can guarantee you itll go up and sharply.
        
        Its only at the "peak" right now because we have a equilibrium. You completely annihilate the status quo, you'll get a completely new price point.
        
        ColtNoir on 05/07/2023 - 15:33
        
        @wackedupwacko: That’s why grandfathering existing IP’s should be part of the transition. No new NG properties
      - Drakesy on 01/07/2023 - 14:52
        
        +1
        
        @tsunamisurfer: Qantas who received $860 million in jobkeeper, moved maintenance offshore and paid none of it back?
        
        Divested? no
        Forced to pay back $860 million of taxpayer money that they handed out to shareholders whilst subsidising their own labour costs? yes.
        
        tsunamisurfer on 01/07/2023 - 15:50
        
        -3
        
        @Drakesy: Now you are just spouting unrelated shit.
        
        Drakesy on 01/07/2023 - 15:51
        
        +2
        
        @tsunamisurfer: You brought it up, i just provided the numbers :)
        
        cadwalader on 01/07/2023 - 18:38
        
        +1
        
        @Drakesy: That is the cost of having an Australian based international airline.
        
        I'm happy to let it go bankrupt and let it be acquired by an Asian or Middle Eastern corporation. Are you? Are Australians?
        
        Note: I agree its been badly managed and that can improve but we're talking about government benefits for Australian entities.
      - Diji on 03/07/2023 - 05:27
        
        +1
        
        @tsunamisurfer: Shares aren't a basic human need
    - xavster on 02/07/2023 - 01:01
      
      That's the whole point of investing.
      
      Hoping shit goes up.
      
      Welcome to capitalism.
    - netjock on 03/07/2023 - 09:15
      
      +1
      
      I'd suggest people spreadsheet it.
      
      Say you're on $70k. Buy a property for $300k (say it doubles in 7 years). NG $10k a year.
      
      By my calculation you end up paying extra $4k at year 7 because you offset your income at 32% but the year you sell you get pushed into higher tax bracket. Also don't forget if you reach $250k you get additional tax (+15%) on your concessional super contributions too.
      
      I think if NG was that much of a loss the ATO could have closed it down, I think there is enough brains to realise it is a net gain for them rather than a net loss.
      - greatlamp on 03/07/2023 - 13:56
        
        +1
        
        @netjock: Public servants at the ATO don't decide tax law, politicians do.
        It doesn't matter how good or bad it is for the economy.
        
        Negative gearing will continue until a political party decides to remove it (and doesn't get voted out before hand).
        
        netjock on 04/07/2023 - 10:34
        
        @greatlamp:
        
        It doesn't matter how good or bad it is for the economy.
        
        Of course. It is how good it is for them. If they close it down it is more money for them to spend.
        
        As it stands everyone when they sell unless it is their PPOR will likely to trigger higher tax band and probably higher super taxes.
        
        You think they are going to tell you the truth that is is cheaper for you to carry the loss until you sell?
        
        Since when has the politicians help you save money? All I have known is government seems to raise taxes and still run out of money.
      - ColtNoir on 04/07/2023 - 10:28
        
        @netjock: The ATO can audit all they want, if it’s in the rules, they can’t close it down.
        
        The politicians won’t close it either as it will have an effect on their own IP values.
        
        netjock on 04/07/2023 - 10:35
        
        @ColtNoir:
        
        The ATO can audit all they want, if it’s in the rules, they can’t close it down
        
        You still think with your instant gratification brain.
        
        I'd suggest you pull out a spreadsheet and do the numbers. NG to offset your taxes at lower income tax rates then still end up collecting more when you sell after 50% CGT discount is the real magic.
        
        ColtNoir on 04/07/2023 - 10:43
        
        @netjock: I’m thinking holistically, at the overall impact of NG and the behaviour of some investors/FA/brokers.
        
        Yes, based on one property they might collect more but if you don’t think by the time they sell and the CGT event is triggered, they won’t have a strategy to reduce that further, you’re kidding yourself.
        
        netjock on 04/07/2023 - 10:49
        
        @ColtNoir:
        
        by the time they sell and the CGT event is triggered, they won’t have a strategy to reduce that further, you’re kidding yourself.
        
        Please tell us how?
        
        If you bought an investment property under your name for $300k. It doubles in say 7 years. You are on a $300k profit.
        If you have a $70k income (32% tax rate) and you NG $10k pa. CGT discounted. You have $150k + $70k tax the final year.
        
        Only way you can get out of it is if you use the 5 year rule for concessional super contributions (if you have less than $500k). There is no more funnies.
        
        ColtNoir on 04/07/2023 - 12:50
        
        @netjock: They purchase other IP’s, renovate other IP’s etc, wash sales of shares.
        tax minimisation strategies don’t rely solely on one investment.
        
        netjock on 04/07/2023 - 13:40
        
        @ColtNoir: Oh god. You think that is how you get rich.
        
        Start a business or get a career - that is the advice. You actually need one of the two to actually get investments in the first place.
        
        I guess business or a career is undeserved windfall.
        
        ColtNoir on 04/07/2023 - 18:53
        
        @netjock: Tell me you don’t know the power of inter-generational wealth, and the power of property in Australia. The way wealth has been generated over the past 30yrs.
        
        How hard is it to accept that negative gearing is a farce. You can’t negatively gear share CGT losses, so why can you do it with poor IP choices.
- the wiz on 05/07/2023 - 16:12
  
  -1
  
  There is no such thing as negative gearing. Nobody pays tax on profits they haven't made. Why should they?
  
  Imagine if you got taxed $10k for buying a single textbook. Same thing.
  - the wiz on 06/07/2023 - 17:54
    
    +1
    
    I say again, YOU DON'T PAY TAX ON PROFITS YOU HAVEN'T MADE.
    
    A socialist idiot has taken offence at the idea of someone owning more than they do.
Gdsamp on 30/06/2023 - 16:33

+16

Didn't the people who are now retiring mostly earn their money?

Yes, perhaps they did. But housing used to cost 3-4x the average household income, which may previously have been a single average income. Now it's closer to 5-6x (or more) of a household income, that may be two professional incomes.

Additionally, annual wage growth between 2000 and 2010 was around twice that between 2010 and 2020 (3-4% vs 1-2%).

I understand part of it comes from real estate gains that are harder to get now. But isn't that luck?

Most of it seems to be tied up in an anger that the ladder to get into the property market has been gradually pulled up.
I concede it probably is a lot of luck
Successive governments with immigration policies that have multiplied Australia's population several times over the boomers' lifetime.
Other things like the erosion of medicare, having to now pay for tertiary education that was previously free.
things like overseas holidays may have been provided by parents who had wages growth and more affordable housing, and so younger folk may be less willing to sacrifice this.
Dropping 1-2k every other year on a new phone, or laptop, weren't things our parents did either, but are pretty much required in this day and age.

What is it the boomers should actually be doing according to the people complaining?

well its understandable that this generation may have become more conservative as they age, as they have wealth to conserve.
But given the more dire situation younger people now find themselves in, they may hope that older folks vote in ways that make wealth creation more accessible for the average person.
- bargain huntress on 30/06/2023 - 20:45
  
  Thank you that mostly makes a lot of sense to me. Not the last part though - what is it that we can vote for that makes wealth creation more accessible?
- xavster on 02/07/2023 - 01:08
  
  -6
  
  Not an accurate comparison.
  
  50 years ago: 3br post war fibro bungalow with a dunny out the back
  
  vs
  Now: 2 storey 5br 3bath, 2 kitchens, open living dining and outdoor entertainment deck with landscaping.
  - Drakesy on 03/07/2023 - 11:43
    
    +3
    
    If you look at what $1 million in Sydney and Melbourne barely buys you, you'd be surprised.
    
    Try a 1960's 3 bed 1 bath asbestos shack knock down job.
    The first home buyers get the privelege to scrimp and save to live in a dump.
    What a time to be alive!
- furyou on 02/07/2023 - 11:06
  
  +3
  
  I think it's just population.
  Right now, you can NG if you think NG is what made boomers rich.
  You can look at all those CEOs who quit HS, and you can quit at HS and start a business, not incurring HECS debt.
  You can buy land out at woop woop, where it's cheap, and wait 50 years for it to appreciate 20x.
  
  But you're so right, isn't it the "battlers" who sport the newest iphone every year on release day?
- nobro25 on 02/07/2023 - 11:17
  
  +1
  
  5-6 times the average income? Try 20- 30 times the average income. Also no, 90k is not the average income. More like 70k before tax.
- drfuzzy on 02/07/2023 - 18:49
  
  Explain how dropping $1,000 - $2000 on a new phone every other year is required?
  - Talonparty on 04/07/2023 - 00:05
    
    Lol my phone cost $250 in 2020 and I'll probably keep using it until 2024, what kind of idiot thinks dropping 1-2k a phone every other year is required? my laptop pc was second hand, top of the line in 2016 - it still handles web browsing fine. What kind of gamer moron is buying a new laptop every year even corporate ones are rotated 3 years. Don't get where this narrative comes from honestly.
    
    I see people talking about this kind of stuff like it explains the divide in achievable living standards. My mum talked about dropping a months pay on a leather jacket when she was a youth and my dad used to buy guitars and motorcyle parts. People always spent on hobbies but now having a 60 inch TV that cost less than one weeks rent gives society enough justification to conclude the only reason stable housing eludes you is the gadgets.
AustriaBargain on 30/06/2023 - 16:40

-5

Wealth hoarding refers to the perceived accumulation and concentration of wealth by a small segment of the population while a significant portion of society faces financial challenges or struggles with economic inequality. It is often seen as a socio-economic issue where wealth is disproportionately held by a few individuals or families, limiting economic opportunities and social mobility for others.

The criticism you mentioned, often expressed by millennials or younger generations towards baby boomers, is rooted in the belief that previous generations had greater access to economic opportunities, affordable housing, and stable employment compared to the current generation. They argue that factors like rising living costs, limited job prospects, and increasing income inequality have made it harder for younger individuals to achieve financial security and accumulate wealth.

While it's true that many baby boomers worked and earned their money, the frustration stems from the perception that the economic landscape has changed, making it more difficult for younger generations to achieve the same level of financial success. Additionally, real estate gains and other factors that contributed to wealth accumulation for some baby boomers may be viewed as a matter of luck or timing, rather than solely a result of their efforts.

Regarding what the boomers "should" be doing, opinions may vary. Some individuals believe that wealthier individuals should contribute more through taxes or philanthropic efforts to address societal issues and reduce economic disparities. Others advocate for policy changes or reforms aimed at providing greater opportunities for younger generations to build wealth and improve their financial situations.

It's important to note that these perspectives are not universally held, and there is a wide range of opinions and experiences within each generation. Understanding the concerns and frustrations of different generations can contribute to constructive discussions and potential solutions to address economic inequalities and promote a more equitable society.
- whatwasherproblem on 30/06/2023 - 17:01
  
  +26
  
  Neo: "What are you trying to tell me? That I can see whether someone's outsourced their OzBargain comment to a chat-bot by running it through ZeroGPT?"
  Morpheus: "No, Neo. I'm trying to tell you that when you're ready, you won't have to."
- Deridas on 30/06/2023 - 19:29
  
  +3
  
  Well said, but it seems to come straight from ChatGPT XD
Drakesy on 30/06/2023 - 16:44

+25

Didn't the people who are now retiring mostly earn their money?

They also managed to pay their mortgage off within 10 years and are now dumping large amounts of wealth into superannuation where tax is minimal. They also then use that money to buy SMSF investment properties, constraining supply.

I understand part of it comes from real estate gains that are harder to get now. But isn't that luck?

The luck they had was being conceived at the right time, with a side of a conservative government creating a climate that favoured property investors. Anyone that missed out on the 2005-2020 boom is as much as 10 years behind those that were born into wealthy families or had a leg up.

What is it the boomers should actually be doing according to the people complaining?

It's not what boomers should be doing, its what the government should stop doing that benefits those with money while holding back those without.

International housing "investors" are allowed to snap up large portions of property - report found money laundering was rife in this sector, but because it propped up the market nicely for the developers nothing was really done.
Private health cover loading used to subsidise the pensioners (who own their own houses)
Negative gearing (that's subsidised by the taxpayer) - should be capped at 1 investment property
Millenials no longer get free education ($50k debt before you start work)
Effectively zero first home buyers grant
Pension increasing at CPI, whilst our wages stagnate
When wages do increase the tax brackets stay put.
Oh and the best one, over 55's restricted properties in wealthy areas set aside for downsizers.

That's what I don't understand.
- LVlahov on 30/06/2023 - 17:37
  
  +2
  
  "Negative gearing (that's subsidised by the taxpayer) - should be capped at 1 investment property"
  
  By reducing the returns to investors from property you reduce the entry of investors into the market which reduces the supply of new properties, which increases the price of the properties available.
  
  A refinement to your idea would be a limit of interest deductibility to one established property only, but allow for full deductibility for all newly built properties.
  
  The other alternative is to reduce immigration to a sane level, so demand for housing is reduced, dropping the rate outsized capital gains are delivered, lowering the incentive for investors to enter the market to achieve them, thus reducing prices back to within sustainable reach of the population. Migration is the lever that tends to effect all others.
  - Drakesy on 30/06/2023 - 17:42
    
    +5
    
    A refinement to your idea would be a limit of interest deductibility to one established property only, but allow for full deductibility for all newly built properties.
    
    Yeah, this probably would be a better outcome, and 100% agree with immigration limits. Funny how the party that prided itself on "stopping the boats" also had the highest immigration levels in history to make their economy artificially grow.
    - Ugly on 30/06/2023 - 19:17
      
      +7
      
      Funny how the party that prided itself on "stopping the boats" also had the highest immigration levels in history to make their economy artificially grow.
      
      If you thought that was funny then the next couple of years under Labor are gonna be hilarious.
      - Diji on 03/07/2023 - 05:33
        
        +4
        
        @Ugly: I didn't realise Labor prides itself on stopping the boats
      - ThithLord on 03/07/2023 - 11:26
        
        +2
        
        @Ugly: lol brainiac. Labor is completely overhauling immigration.
        
        Whereas LNP brought in any old low-skilled worker so wages were suppressed, Labor have overhauled immigration so majority of immigrants are highly skilled.
        
        We're in the worst labour shortage we've ever seen - you ever wonder why?
        
        But you don't care.
        
        Ugly on 03/07/2023 - 12:22
        
        @ThithLord:
        
        We're in the worst labour shortage we've ever seen - you ever wonder why?
        
        We’re in the worst housing shortage we’ve ever seen and Labour are setting new records for immigration. (Sorry - “overhauling” 🤣)
        
        But you don’t care about Australians being homeless.
        
        ThithLord on 03/07/2023 - 12:58
        
        @Ugly: Yeah mate. Watch Claire O'Neills address to the NPC, she outlines the overhaul in great detail.
        
        I know you won't bother cos unless it's put on a plate in front of you in an insanely inflammatory manner, you won't even bother to become even slightly more educated on the matter.
        
        Btw, it's spelt Labor.
        
        They are bringing the migration level up to speed with Australia's usual migration levels; there is absolutely no evidence or indication that immigration is causing this issue housing Australians. If they were, home come the issue is insanely exacerbated when we had no immigration for like 3 yrs?
        
        Ugly on 05/07/2023 - 17:43
        
        @ThithLord:
        
        They are bringing the migration level up to speed with Australia's usual migration levels
        
        “ Australia's net overseas migration (NOM) level, which represents the difference between incoming migrants and outgoing migrants over a 12-month period, is expected to be 400,000 in 2022-23 and 315,000 in 2023-24.
        
        Pre-pandemic migrant intake gain was around 235,000 per year.”
        
        https://www.abc.net.au/news/2023-04-29/australian-migrant-po…
        
        ThithLord on 06/07/2023 - 08:22
        
        @Ugly: Yep … so…. use your maths, mate …. figure it out …?
        
        Drakesy on 05/07/2023 - 13:41
        
        +1
        
        @Ugly: Actually the houses in the supply chain (approvals) are keeping up with immigration. The shortage is coming from delays in completion and investors stemming the supply of houses that people would otherwise owner occupy.
  - greatlamp on 01/07/2023 - 08:47
    
    +6
    
    This argument is so disingenuous. Expensive real estate owned by investors does not benefit renters when a large proportion of people are renting because they cannot afford to buy a house.
    
    By reducing the returns to investors from property you reduce the entry of investors into the market which reduces the demand for new properties (all properties), which decreases the price of the properties available.
    
    The two impacts would offset each other, both demand and supply of new properties - by investors- would be reduced, the price of stock would fall until it reaches a level where demand from owner occupiers would be enough to sustain the new price (again, many who aren't creating demand currently because they cannot afford housing). the net result would be more affordable housing for owner occupiers.
    
    Your line of thinking implies the construction industry requires high land prices to be viable
    - trapper on 03/07/2023 - 11:40
      
      -1
      
      Supply will also drop though. There will be fewer new houses being built in total, you can't ignore that.
      - greatlamp on 03/07/2023 - 11:44
        
        +1
        
        @trapper: I'm not, you are ignoring the passage of time.
        
        How long does it take for a new house to be built? How long does it take for an investor to put a 'for sale' board up?
        
        Builds under construction will still be built. New projects will be delayed, the impact will take around 2 years to affect the market.
        
        Prices will fall before the construction industry can respond. There will be a period were house prices are falling and supply is falling, until we reach a new equilibrium where house prices are cheaper
        
        trapper on 03/07/2023 - 15:08
        
        @greatlamp: You're actually agreeing with me.
        
        Except the 'new equilibrium', with fewer new houses being built, will be higher prices.
        
        It's a basic economic principle.
  - NigelPearson on 01/07/2023 - 10:05
    
    +1
    
    "reduce the entry of investors into the market which reduces the supply of new properties"
    
    I never understood that argument.
    
    Is it really only NG'd investors who can afford to build new properties?
    
    e.g. What percentage of project homes are built by NG'd investors?
    - trapper on 03/07/2023 - 11:42
      
      -1
      
      The exact percentage doesn't really matter.
      
      If demand is reduced by any amount, then supply will also reduce.
- JIMB0 on 30/06/2023 - 18:22
  
  +6
  
  Millenials no longer get free education ($50k debt before you start work)
  
  Apprenticeships are free, in fact you actually get paid while you do them. Then when finished there is a high demand for trades unlike some uni degrees. Often you'll earn more as well.
  
  A lot of immigration currently is skilled trades as we have a huge shortage. If more young people took up apprenticeships there would be less people coming from overseas creating demand for housing.
  - ssfps on 30/06/2023 - 20:49
    
    +4
    
    If more young people took up apprenticeships there would be less people coming from overseas creating demand for housing.
    
    So you're saying all the shortages caused by doubling the population via immigration in the last 30 years, is solved by taking in more immigrants? Brilliant.
    
    Not to mention, loads of the immigrants coming in are working professional jobs, not trades.
  - bargain huntress on 30/06/2023 - 20:53
    
    Goohle says they are only free if you are under 25. And dont they all need tafe courses which are not free?
  - brad1-8tsi on 30/06/2023 - 22:35
    
    +14
    
    Apprenticeships are free, in fact you actually get paid while you do them
    
    The irony is that when university was free, apprentices still had to pay for TAFE.
    
    I was on $52/week as a 17yo 1st year & $78/week 2nd year and my TAFE fees were $300/semester. I was also doing a Mech Tech Cert at night which was another $250/semester.
    In 3rd year ($117/week) we had to pay the fees and the TAFE teachers were on strike for half the year.
    
    As a boomer, I've only ever owned 1 house at a time but I did buy what I could afford, fixed it up (DIY), sold it and did it again several times.
    From 1979-1997 I generally worked or studied 50-60 hours a week over 6 days. This included shift work. I usually had at least 1 side hustle.
    Houses were cheap. Affordability was much easier. Mortgages were hard to get (money for lending was tightly controlled) and you generally needed 25% deposit.
    Cars, electronics, furniture, clothes, records/CDs, tools and almost everything else was expensive.
    I've always been a union member (how many of you chose not to be union members and wonder why you don't get wage rises?).
    I've always voted left.
    I refuse to let a government department (Centrelink) have any form of control over me so I've saved like buggery and self-funded my retirement.
    I've found easiest to stop moaning, get your head down and get on with it.
    - Juice-Wa on 03/07/2023 - 08:29
      
      +2
      
      Union is arse, membership for potatoes, run by potatoes.
      - brad1-8tsi on 03/07/2023 - 11:33
        
        @Juice-Wa:
        
        Union is arse, membership for potatoes, run by potatoes.
        
        Potatoes that got me a consistent pay rises, increments, regrades, bonuses, sick leave and other benefits for 35+ years without having to fight with management.
        
        I've never seen a non-union member refuse a benefit that was negotiated by the union.
        
        Juice-Wa on 03/07/2023 - 12:04
        
        @brad1-8tsi: It's the same principle as FF reward credit cards, some benefit but all have to pay for it. If you have a credit card you would be wise to benefit since you help to pay for it.
        
        The government bolstered bargaining position of the Union is the reason Australia's industry has dwindled to little more than natural resource exports and processing and why companies are trying their hardest to remove Enterprise Agreements and the union. The delegates tend to be selected from a pool of the dumbest members. So those braindead potatoes aren't quite capable of seeing much past getting as many $$$ as possible (given their pay directly relates to the remuneration of it's represented members). The EA requests are becoming more and more ridiculous until anyone with an sense just gets fed up and says bye bye to union members and hello to automation and contractors. Dude, I'm so here for you morons to be walked off, good thing you're nearing retirement.
        
        Also I find this hilariously ironic
        
        I've always been a union member
        I've found easiest to stop moaning, get your head down and get on with it.
- larndis on 01/07/2023 - 08:30
  
  -1
  
  They also then use that money to buy SMSF investment properties, constraining supply.
  
  How many people do this?
  
  Most of our welfare (income support, public health, etc) is a ponzi scheme. We can't afford them without continuing to import young taxpayers. How should we fund these programs if we reduce immigration? And are you happy to pay $200 to see the GP because we don't have enough doctors?
  - reactor-au on 01/07/2023 - 09:29
    
    +6
    
    Doesn't help if there aren't enough doctors for all the immigration either. Let's be honest, infrastructure isn't keeping up with immigration, that includes schooling and medical and housing and public transport.
    
    If you give The Strange Death of Europe by Douglas Murray a read/listen its like you can just about replace Europe with Australia; government is selling a lie that we need immigration.
    - larndis on 01/07/2023 - 19:47
      
      +1
      
      So you dispute that it's a ponzi scheme? You think our tax base can support our ageing population without immigration?
      
      Yes we need more infrastructure to go along with population growth, the main problem is that state and local govts are responsible for infrastructure and planning, while the federal government sets immigration policy and collects income tax.
      - reactor-au on 01/07/2023 - 20:03
        
        +3
        
        @larndis: With an aging population in a socialist state yes it's like ponzi scheme but it's a lie that immigration is the answer.
        Keeping the birth rate above 2.5 would produce a better result; Govt primary wants to keep GDP positive but GDP per capita is decreasing with immigration and that's the real quality of life measure.
        
        larndis on 02/07/2023 - 14:28
        
        +1
        
        @reactor-au: Governments are short sighted and immigration is much easier to control than the birth rate.
        
        I don't understand though how a higher birth rate solves the infrastructure and other issues? You still have the same ponzi scheme, just with different 'recruits'.
        
        It kind of sounds like you just don't like immigrants.

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