In the Centrelink office, people waiting to be called.
Welcome
to article,
Dear readers, we are writing about social issues that effect our way of life, and this is blog, No. 5.
In this article, we are looking for
a better social security system, where everybody gets a minimum payment, which
is equal to the minimum pension or unemployment benefit.
Dear readers, we believe that the Australian Social Security System must be equal for everybody, but it is not, as we have said in our previous articles, starting with, Farming Today Is Still a Risky Business, then, Australian Social Security, then, The Australian Parties, then, Australia can do better than this, and then, The Assets Test Dilemma, now in these articles we were talking about how the Australian Social Security System works and helps people. So, we have found that the Australian social security system, is good but not perfect, since some people cannot receive it for one reason or another; therefore, the social security system needs to be changed, to fix these unforeseen failures to help. Australia cannot claim to have a good social security system, when it fails to deliver help to those that need help.
Having said that, we need to study the situation and come up with an answer for this
social problem, because, the Australian Social Security system, must be equal
for everybody. We believe that everybody in the community must be given a
minimum of help, when they need help. So, we are going to write and suggest our
views, hoping that somebody important reads them and does something about it.
Now, what we want to write here is not going to be popular, because it criticises the existing social security system. Anyhow, we believe that they need to avoid what is happening to the farmers, so, they must put in place a better system, where people in need are helped, even if they own properties.
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Talking about the
ideal social security setup
What
we are writing hereunder is an idealistic way for the social security system to
adapt, if they can. I said if they can, because it is unlikely that this system
can be approved now, because Australia cannot afford it today, however, it is
important that something like this exists. We hope that future politicians,
start working on this idealistic social security system that we are talking
about.
We believe that Australian citizens and residents, should be granted from the government an amount of money that is equal to the minimum government unemployment benefit or pension, it would be like receiving a small wage from the government. Now, we believe that this is what is needed in Australia, and we believe that one day can be done, if we can organise ourselves to achieve that, after all Australia is a rich country, so, we should be able to do that. Now let us see how this will affect the community and which group of people will benefit from this change.
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The people that can benefit from the change.
The people that
will benefit from this change, are those people that today don’t receive any
payment from the government, and those people that don’t receive enough, so,
they are forced to live below the poor threshold. In this case the poor
threshold is set, as equal to the minimum government pension that today is
about, $900 per fortnight for a single person, or $700 each for a couple. This
is the minimum of money that people need to live, and we believe that it must
be equal for everyone.
As things stand
today, there are people that must live with less than the minimum government
pension, because of the anomalies in the system. One of those anomalies is
caused from the assets test, where the pensioners receive a smaller pension,
the rest of their earnings is supposed to come from their assets, which are
supposed to earn about 7.8 %; but most of the rental properties, can only earn at most 2%, as we have shown you in our previous article, The Assets Test
Dilemma, where a house valued at $650,000 did only make $8500 in a year, which
is about 1.3%. So, we believe that the assets test on afforable rental properties must be
set accordingly, if the government believes that we need
mums and dads to invest in rental properties and keep the Australian real
estate going.
You see, people believe to invest in rental properties, but soon they will become aware that to own a second house, can be a problem when they apply to receive their pension, because the assets test will reduce their pension more than what they can earn from them.
My views are that
the assets test on rental properties, must be set at a level, where it is
possible for the owners, to earn at least as much as they loose from the
pension. Now my views are that the assets test on rental properties should be
one third of what they are now, so that the pensioners will lose one dollar per
thousand, instead of three dollars per thousand. But even this might not be
enough, you see if you have a property valued at one million dollars, you
cannot receive any pension. The question here is; will this property earn the
owner about $24,000 per year net. I don’t think so. Anyhow, these are our
views.
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The property owners’ other problems.
As we
have said in our previous articles, to own a rental property is a problem and
not a benefit, because people lose their pension or unemployment benefits, so,
to own a second property is not the way we should plan for better retirement,
since the assets test reduces the pension payments 3 times as much as you can
earn from your properties.
But there are more negative
things in owning a rental property, the worst of all is the land-tax. The
land-tax in Queensland is $1.7 per thousand, this means that if you have land
valued it one million dollars, every year you must pay $17,000 to the
government just because you own this land. They don’t give you anything at all,
you just must pay, because they need the money.
Some people still
believe in owning properties, because their price go up all the time, so, they
think that they are better off having properties, you see, they don’t realize
that there is this gain tax that will take away all their earnings and more,
let me give you this example.
You own a rental
house that you have bought several years ago for $250,000, which was the right
market price, today you must sell the rental house, because you need to move to
another town, where houses are about the same value, so, you think that it will
be easy; you sell the house for $650,000 and you buy another one about the same
price. But that is not going to happen, because the $400,000 dollars that you
have gained is taxable. This is called the gain tax, which may well be around
$100,000, it is hard to be more specific. So, in this case you may lose
$100,000 dollars because of the gain tax.
The figures in this
article, might not be correct, but they are close enough to what they are
supposed to be for showing our views.
This is all I can
say today; this setup is not fair for anybody that owns properties, because
those properties in the assets test, cannot earn half the money that they will
receive from the government pensions or other benefits, if they had no
properties. So, for them it would have been better to have no properties; since
the assets test affects the pension and other benefit adversely, starting from
the farmers, as we have said in, Farming Today Is
Still a Risky Business.
So, people are discouraged to own properties and to save for rainy day, THAT IS THE REASON WHY TODAY THERE ARE NOT ENOUGH AFFORDABLE RENTAL PROPERTIES. We believe that the ASSETS TEST MUST BE ABOLISHED, Or reduced and be set in a way that gives the property owners a chance to earn at least as much money as they lose, from the government benefit. It is not fair that people lose money because they have worked hard and saved money.
Anyhow, we believe that everybody should be treated in the same way from the goverment social security system. But they are not, and that is why there are problems, starting with the rental market.
I hope that somebody in the government reads my articles, and then thinks what can be done to make them fair, for those people that have worked hard.
See you in next article,
To see more klick on this link,
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