Housing disaster in Australia.

 WELCOME TO BRISBANE AFFORDABLE RENTALS, YOU ARE INVITED. IN THIS BLOG, WE WILL DISCUSS RENTAL PROBLEMS THAT WE MAY INCOUNTER WHEN RENTING, AND THE PROBLEMS OF RUNNING AFFORDABLE RENTALS. WE WILL ALSO DISCUSS, WHAT THE GOVERNMENT CAN DO TO HELP THE RENTERS PAY THEIR RENT, AND THE OWNWES RUN A BETTER AFFORDABLE RENTAL SERVICE TO THE COMMUNITY. 

Anyhow, the farmers' problem in this article is similar to the rental problem that we have today, because the social security system can help both, if the assets test is modified. So, we are writing several articles, where we will talk about the rental problems and the Social Security System. 

This blog can be found at this link, http://affordablerentals.blogspot.com/))

And here are other links to our internet articles

http://menfranco-re.blogspot.com/, http://manneedsgod.blogspot.com,  http://menfranco.blogspot.com, 

http://ifyoubelieveingod.blogspot.com/, http://genzanoit.blogspot.com/, 

https://sites.google.com/site/prayersofreconciliation/,https://sites.google.com/site/menfrancoreconciliation/

This article can also be found at this link, Housing Disaster in Australia and What Can Be Done.

I have been waiting for the federal budget, hoping that there was something positive, that could solve the rental problem, but the federal budget 2023, has not done enough to solve the housing market, they knew about the problem and they promised that they would build affordable rentals themselves. They believe that they can solve the rental problem that way, but I think that it is not enough, and I am writing about what else needs to be done in this article. 

Welcome to, Housing Disaster in Australia and What Can Be Done.

Dear readers, we are writing about social issues that effect our way of life, and this is blog, No. 8.

To solve the rental problem, we must ask ourselves why this housing disaster is happening.

Today to buy or rent a residential property in Australia is not easy. Yes, we had these same problems in the past, but it was not as bad as now.

So, we must look for the reasons why this is happening. I believe that, for this to happen there must be negative forces that keeps the housing supply not growing fast enough to keep pace with what is needed. So, what is the cause and what can be done, we may ask?

To ease the rental market, the federal government, and the local governments must start building lots of affordable rentals, and rent them at no profit, or at a loss, this will help to keep the price of rental down. But this by itself will not be sufficient to solve the rental problem. So, what else needs to be done urgently to make it better? I believe that they need help from the private investors, but today most investors are not interested in having affordable rental properties, because there are lots of problems running them and not enough money, compared to other available investments.

Therefore, the governments involved should make and pass laws that will help to private investors to build and own properties, at a moderate profit. You see, nobody wants to be involved, if there is nothing for them, especially if they can lose their hard-earned money, if they are not careful. Having said that, now, let us talk about how the the rental problem can be solved.

 

 Let us talk about the rental problem.

I believe that, TO SOLVE THE RENTAL PROBLEM, THE ASSETS TEST ON RENTAL PROPERTIES MUST BE REMOVED.

As we have said above, today to buy or rent a residential property in Australia is not easy, because there are negative forces, that keep the housing market down, so, hereunder I want to say what I believe needs to be done as soon as possible, to stop this rental disaster becoming worse. One of the negative forces is the ASSETS TEST. And it needs to be removed. 

Anyhow, it seems to me that we need to build lots of new houses and rental properties. The problem today is that everything is going up in price, and there seems to be a shortage of builder and building tradesman. There are a few building firms that are going broke, so, this problem is going to take time to solve, but it can be solved, if we look at the reasons why this happen, and the politicians change the laws that need to be changed.  

Anyhow, as we have said the federal government, and the local governments must start building lots of affordable rentals, and rent them at no profit, or at a loss, this will help to keep the price of rental down. They can afford to do that, because the money they spend is taxpayer money. 

But this will not be sufficient. I believe that they need help from the private investors, but most investors are not interested in having affordable rental properties, because there are lots of problems running them and not enough money, compared to other available investments.

Today there are still a few old timers that have affordable rental properties for rent, but they are slowly giving it away, because of what they cost to run and because they are being discriminated. They are being discriminated on two fronts. One most people hate landlords, because the people that rent think that they are paying their rent to a rich person, when in most cases the owners are financially struggling to keep the rental business going. Then there all these charges from local authority to pay, one of these is the land tax that gives you nothing, but because you own this land you must pay them. This is like paying the stamp duty every year, like when you buy a property. All these charges plus maintenance, there will not be much profit left to run the property. The other problem is that, if you have a property for rent, everybody thinks that you are a rich person, when in fact this is far from the truth, as we will explain hereunder.

 

Let us talk about rental properties. 

Now let us talk about those people that have a house for rent or a couple of units. If they are pensioners they might lose their entire government pension, because of the assets test, when their properties can only earn a few hundred dollars after all expenses are paid. Which most likely is under 2% of the property value, according to today market. THIS IS THE REASON WHY, THE ASSETS TEST ON AFFORDABLE RENTAL PROPERTIES MUST BE REMOVED. If that is not removed nobody will want to save money to buy a rental property for financial security when they become old, and those that have a rental property will want to sell them, because they cannot afford to keep them, since they are losing money.

Now, you must understand that to solve this rental problem, we need the private people to invest on affordable rental properties, so, there need to be a small incentive, or at least some security that they are not going to lose their money, Australia needs those investors, because the governments will never be able to build and run affordable rental properties for everyone, and if they do, they will lose money. 

ANYHOW, IT CAN BE A LOT CHEAPER IF THE ASSETS TEST ON AFFORDABLE RENTAL PROPERTIES IS REMOVED.

Anyhow, if the assets test on affordable rental is removed, then investors may still try to own a property for rent, instead of keeping their money it in the bank earning interest, or some investment that earns money, and you do not have to do anything.

Today views on rental properties.

You see, today people think that those people that have no house, are the people that have been hit the hardest from this changing economy; but I believe that, it is the small residential investor has been hit the hardest from the changes. Because the small investor is being put in a disadvantaged position, not only they are in a disadvantaged position, but they also can be abused from the tenants. But what hurts most is that the government treats them as if they are rich people, when some of them are financially worse off than the tenants they are housing.

Because the tenants that are on a low income, can receive rent assistance from the government. But the landlords cannot receive any help from the government, because of the assets test threshold, even when their properties income is very low and they may be starving, so, we may say that they are being discriminated. 

Anyhow, because I want this article to carry the message that THE ASSETS TEST ON OFFORDABLE RENTAL PROPERTIES MUST BE REMOVED. I am not going to explain how the landlords of affordable rental properties are worse off than their tenants. But later I will write another blog later, to explain that. 

Now, in this article we have said that to overcome the housing shortage in Australia, the governments must build lots of affordable rentals, and rent them at no profit or at a loss.

We have also said that the governments need help from the private investors, but the rich private investors cannot be interested in affordable rentals, because there are lots of problems and not enough money, so, it is up to the mums and dads the small investors. But they are put in a disadvantaged position from the assets test. So, THE ASSETS TEST MUST BE REMOVED, or perhaps reset at a lower rate that reflects what those rental properties can earn. Instead of their imaginary and impossible 7.5 % when those properties may only earn about 2% or less net.

I believe that the rental market can be fixed, if the people in charge make laws that do not discriminate the small investors. Starting by REMOVING THE ASSETS TEST on affordable rentals, or modifying it to the right level, where the owners do not lose money, if they are on a government pension, they are jobseekers, or disabled. I hope I have explained it clear enough. You see nobody wants to be involved if they can lose money. 

I believe that I have said enough in this article, so, see you in our next rental article about, 

How to Fix the Housing Disaster, My Views.

To see more click on this link, Housing Disaster in Australia and What Can Be Done. 

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The Rental Problems Can Be Solved.

WELCOME TO BRISBANE AFFORDABLE RENTALS, YOU ARE INVITED. IN THIS BLOG, WE WILL DISCUSS RENTAL PROBLEMS THAT WE MAY INCOUNTER WHEN RENTING, AND THE PROBLEMS OF RUNNING AFFORDABLE RENTALS. WE WILL ALSO DISCUSS, WHAT THE GOVERNMENT CAN DO TO HELP THE RENTERS PAY THEIR RENT, AND THE OWNWES RUN A BETTER AFFORDABLE RENTAL SERVICE TO THE COMMUNITY. 

Anyhow, the farmers' problem in this article is similar to the rental problem that we have today, because the social security system can help both, if the assets test is modified. So, we are writing several articles, where we will talk about the rental problems and the Social Security System. 

This blog can be found at this link, http://affordablerentals.blogspot.com/))

And here are other links to our internet articles

http://menfranco-re.blogspot.com/, http://manneedsgod.blogspot.com,  http://menfranco.blogspot.com, 

http://ifyoubelieveingod.blogspot.com/, http://genzanoit.blogspot.com/, 

https://sites.google.com/site/prayersofreconciliation/,https://sites.google.com/site/menfrancoreconciliation/

This article can also be found at this link, Australia Rental Problems Can Be Solved.

Block of unit in Brisbane, some unit are up for rent. 

There are a lot of units around Brisbane for rent, and we need more to satisfy the rental market. But the problem is that they cost a lot to build and buy, and is the problem to run them. So, most small investors keep away from buying them, because they are risky and hard to run.

Welcome to our article, Australia Rental Problems Can Be Solved.   

Dear readers, we are writing about social issues that effect our way of life, and this is blog, No. 7.

Today the people that are renting, complain that they cannot afford to pay the rent, and the landlords complain that it is hard to keep the rental properties going, because there is not enough money in this business, and some of them have given up renting, because there are too many problems and not enough money.  So, this is becoming a real problem. What people do not realize that the Australian rental shortage problem can be solved, if the politicians do what needs to be done, after we pinpoint the reasons, why this is happening. Because in the past, if there was any rental shortage, it was not as bad as it is now. But I believe that the people in charge do not know what to do, or, they do not want to know what to do, because what needs to be done may favour the small investor, which is the middle class that nobody wants to know about, since they can look after themselves, if they are in a plain field, so, nobody cares about them, even though they are the people that make the economy work in a balanced way.

Anyhow, let us talk about the rental problem. These days, we can hear every day in the news, that there are a lot of people in Australia that cannot afford to pay their rent or buy a house or unit to live in. People believe that in the past it was easier to buy or rent, and I believe it myself that it was easier. So, in this article, we are going to discuss what could be the reasons, and if there are ways to improve the situation. To do that we need to compare what is different today, and if there are laws or by laws that make the rental properties more expensive to run, and therefore, it is harder for the property owners to rent their properties at a lower affordable price.  

Now what I am writing here is plain common sense, that anyone should be able to work out. So, I wonder why the smart politician have not picked it up, what they are doing wrong, because I can see a few things myself that could make the rental situation better. In fact, I believe that to restore the rental affordability issue, it is a lot easier than most people think, it all depends, if the politicians do what they must do the right way, and they must not try to impress people just to gain a few votes, like what they are doing now, they want to tell the owner, that they cannot increase the rent of their properties, when for about ten years or more, the rent have not gone up like everything else, but the charges to run their property has. So, today the owners are forced to pass the entire charge increase, that they are asked to pay from the authorities in charge, and some of them ask the owners to pay, just because they need the money. We will say something about this hereunder.   

 

The rental affordability issues. 

 Having said that, now let us start discussing this affordability issues. We believe that in the past properties were more affordable, so, we must look at what has changed to understand the reasons. This is not easy to do since the Australian economy is suppoused to be a capitalist economy and free to run its own way. So, most prices are automatically set, from the supply and demand market, when there are not enough properties on the market the price will go up. When the prices go up, more properties will be built and come on the market, so, the market will go down, and it is self-balancing, and sometimes it is good, at other times it is not.

Anyhow, for me that I have followed the rental market for a while, I believe that in the past it was easier to rent or buy, but the greedy politicians have changed the laws, so, there are a lot more expenses today than in the past , in some cases 50% of the rent covers the bylaws charges levied on that property, therefore some property owners cannot make enough money from their rental investment, for this reason people that were going to invest in properties, they do not see enough money coming in and they do not invest in properties. People need an incentive to invest their money on rental properties, or at least know that they are not going to lose their money if they buy rental properties. 

 Anyhow, it is a well-known fact that people with a lot of money, knowing that the residential rental market is risky, they keep away from it, so, it is up to the small investor, with limited money and struggling that invest in rental accommodations, but even these people are kept back from the never ending expenses, that the authorities levy on their property, not only that, but today while I am writing this blog, some politicians in Canberra are talking about limiting the rent increase that the properties’ owners can charge. Okay, it sounds good, and it might work for a very short time. But if they pass this law, then the few rental property owners left, may have to sell their rental properties and there will be less properties for rent.

I believe that the government needs to think what they are doing, because if they want cheaper rent, then their levies on properties must come down a lot, it is outrageous that in some case, a rented house, may only earn one per cent of its value in a year, when everybody else make a lot more. Anyhow, there is very little money to be made in rental properties, but there are a lot of problems to run them. So, the few investors that are left wonder, if they will continue to stay on the market or sell out, if they can find a buyer. But it is very hard to find anyone because rental properties do not earn enough money to run them at a profit.

 

Some discussions on rental issues. 

Anyhow, I have called this article, Australia rental problems can be solved, so, in a way a have promised that I can suggest a solution, so, I must come up with a theory, how the rental issues can be solved.

I believe that there are at least two choices, one, all the governments involved in rentals must chose, whether to build lots of affordable rentals themselves, and run them at no profit or at a loss, and this can cost several billions and may keep the government budget in the red for a long time. And let us not forget that this is out tax money. 

The other way is that the government authorities charge less levies on rental properties and do other things that keeps the small investors interested in rental properties. So, let me tell you a couple of things that come to my mind.

Here I am talking about the small investors only, because I do not care if the rich people lose money. Anyhow, one of the charges that hurts most small investors in Queensland is the land tax. The land tax is a levy from the Queensland Government, these days, they charge $1.7 per thousand of the land value. So, a property that is on a block of land of ONE MILLION, will be charged, about SEVENTEEN THOUSAND DOLLAS, per year, then there are other charges from other local authorities. Now, you can see why rental properties are not worth keeping. The government may argue that they need the money, but that is not helping the rental market, and it is driving the few small investors away.

I believe that the government authorities do not care for the small investors, or anybody that owns a property, and they are treated in a way that makes me think they are discriminated, when they deserve better, to prove that I am pasting an article I fount on the internet. (And I quote).

Public Trustee leaves pensioner without money for food and takes 40 per cent of his income.

There's growing concern about the treatment of some of the country's most vulnerable people by a government body that manages their finances. In Western Australia, the public trustee charges higher fees to people with assets, even if they have little cash to spare. (End of quote).

 ------------------------- 

I hope you can see what I mean, this pensioner, would have been better off, if he had no assets. This behaviour of this government body above, it makes me think that most government bodies are like that. So, the small investor, would be better off, if during his life, he would have spent his money to enjoy himself, instead of saving to buy a property investment, that in the end make life harder instead of better.

 

 

 How we can solve these rental issues. 

Now let me go back to the rental problem. Apart what we have said above, the other thing that comes to my mind is that years ago, the assets test for pensioners sickness benefit and other, was 1.5 dollars per thousand, but today it is three dollars per thousand, so, a pensioner is deemed to earn $7.5 per cent, on their rental property value, when in fact, he may earn only one per cent. You see why I think that the small investor is in a disadvantaged position and is being discriminated. And nobody cares.  

My view here is this. If the authorities want to save Australia from a huge debit by building lots of affordable rental accommodations themselves, they can choose to abolish the assets test, not only on the house you are living in, but also on the first rental house or unit that is rented, or on the market for rent. This will keep some of the small investors in the rental market, and the problem is half solved. Anyhow, this is my view how the rental problem can be solved.

What I am suggesting here, is a possible way how to solve the rental problem for good, and will save the governments billions of dollars, because they may need to build fewer rental properties themselves.

You may say that what I have suggested will cost the government money. I know it will, but it will be a lot less than if they build all the affordable rental themselves. 

There is more that can be said, but I will say it next time I write something about rentals. See you soon in Housing Disaster in Australia and What Can Be Done.

To see more click on this link, Australia Rental Problems Can Be Solved.   

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Australia Rental affordability issues.

WELCOME TO BRISBANE AFFORDABLE RENTALS, YOU ARE INVITED. IN THIS BLOG, WE WILL DISCUSS RENTAL PROBLEMS THAT WE MAY INCOUNTER WHEN RENTING, AND THE PROBLEMS OF RUNNING AFFORDABLE RENTALS. WE WILL ALSO DISCUSS, WHAT THE GOVERNMENT CAN DO TO HELP THE RENTERS PAY THEIR RENT, AND THE OWNWES RUN A BETTER AFFORDABLE RENTAL SERVICE TO THE COMMUNITY. 

Anyhow, the farmers' problem in this article is similar to the rental problem that we have today, because the social security system can help both, if the assets test is modified. So, we are writing several articles, where we will talk about the rental problems and the Social Security System. 

This blog can be found at this link, http://affordablerentals.blogspot.com/))

And here are other links to our internet articles

http://menfranco-re.blogspot.com/, http://manneedsgod.blogspot.com,  http://menfranco.blogspot.com, 

http://ifyoubelieveingod.blogspot.com/, http://genzanoit.blogspot.com/, 

https://sites.google.com/site/prayersofreconciliation/,https://sites.google.com/site/menfrancoreconciliation/

This article can also be found at this link, Australia Rental Affordability Issues. 

We believe that there are many types of properties for rent, of course some cost a lot to rent, like this one in the photo, but there are also affordable properties for rent, people should look into what they can afford, and try to be happy with what they can afford. 

Welcome to our article, Australia Rental Affordability Issues. 

Dear readers, we are writing about social issues that effect our way of life, and this is blog, No. 6.

Before we write this article, we want to point out that there are not enough properties for rent, because the assets test puts the small rental owners in a disadvantaged position. 

Anyhow, in this article of Australia rental affordability issues, let us start with what we find on the news and internet, to show you what we mean. So, hereunder is a shortened report.

 The latest property data from research firm CoreLogic reveals Brisbane has recorded a 3.8 per cent rise in housing rents in the three months to the end of September — the highest rise of any Australian capital city.

As Brisbane continues to face record low vacancy rates, rents have risen by 13.5 per cent state-wide in the past 12 months.

CoreLogic research director Tim Lawless said that equates to about a $68 a week increase for a typical rental dwelling, or $3,536 annually. (End of report).

Well, I hope you see what we mean. So, in this article, we want to discuss rental affordability, because they say that in Australia most people cannot find rental accommodation, and if they do, they cannot afford to pay for it. But what are the reasons for these days’ rental issues. It looks like that there are less property available for rent, but what could be the reason for this shortage, and what can be done to fix it.

Well, if the present government wants to fix it, they need to build more rental accommodation themselves, then rent them on low rent, perhaps at no profit at all or at a loss. But even if the government does that, will they be able to build enough rental property and solve the problem for good, I do not think they can do that, because that takes a lot of taxpayer money, and a lot of time to build enough rental properties, so, let us look at the reason why this is happening, and if anything has changed that has caused this shortage.

It looks like that in the past, when the rental property market was run from the private landlords, and there was some money to be made, these things did not happen very often, because a lot of small investors would invest on rental properties. But today there is very little profit in owning rental properties because they cost too much to run, and there are many taxes, starting from the local government, the state government, and from the federal government.

Because it is hard to make a profit, people that have money keep away from investing on rental properties. So, in this article let us try to find the reason this has happened and continue to happen. We want also to find the reasons why in the past it was better.

---------------------------------

Let us talk about the rental past. 

Rental properties in the past were more affordable, because there were more small investors in the market, they were people that had some money and instead of keeping it in the bank, they bought a rental property hoping that, when they retied, they could keep their affordable rental property rented, and they would be better off financially, in their old age, at least this is what they wanted, but today it does not work like that anymore, because of the assets test that is set far too high. 

Most of these people do not have enough money themselves, to become a self-funded retiree. So, they would rely on the government pension, for a modest living standard, but a lot of things have change, so, whoever is on a government pension, would be better off if they had no rental property.

Then, there are a lot of problems and a lot of overhead expenses to run the property. So, the small investors have stopped buying rental properties, since they give them enough trouble and very little returns. So, what went wrong one may ask? Well, let us try to answer that question.

We all know that most economies including Australia are set to run on capitalism, this type of setting requires that you need to make more money from the money you have, this works out well, when everything works the way, it is supposed to work, and you know what you are doing. But sometimes it does not work that well. This happens when unforeseen expenses pop up, and at the same time the rental market goes down, so, there is no money to be made, the worst part is when you know that you cannot make enough money, to run your properties at a profit. I believe that this is what has happened in Australia.

Now, let us see why this has happened, who are the people that are interested in the rental market, and if there is a way to fix this rental shortage. I dare to suggest that the government may have to change some laws, that permits the landlords to run the properties at a small profit, because that is the only way to have enough properties in the market. Here I am not talking about the rich people that run large luxurious holdings and can make money, from their new units on high rent, because most people cannot afford that rent. So, we are looking for affordable rentals, that the workers or the pensioners can afford.

------------------------------

Let me state my views.

I believe that there are two ways to fix the rental problem, one way is that the federal and state governments, build enough affordable rental themselves, and rent them at no profit or at a loss, and this will take a lot of taxpayer money. The other way is to copy what we did in the past, because in the past there were more affordable rentals, since it was easier for small investors to have a property for rent, without losing money. Anyhow, what I am saying here is that we may have to go back and see what has changed, and if it is necessary, change it back the way it was before, since there were more affordable properties in the past.

Now we know that the private sector, can find ways how to supply all the rental properties required, but that must be done at a profit, so, the large companies are not interested to build affordable rentals, because there is not enough profit in them, then it is the small investors that can make the difference, and because there can be a lot of small investors that can be interested, if the laws permits them to have a rental property at a small profit, or as long as they do not lose other government entitlements, like the pension, then they could be interested to own a property for rent.

Now let me explain how it is possible to lose money. Small investor X lives in his own house and has a unit for rent, soon he is going to retire and hopes to receive the government pension, if he did not have the unit for rent, he would be intituled to receive the full pension, because the other assets he has, will take him past the limit he can have, before the pension is cut. But the unit is a real problem, because the net money he can make, is a lot less than the pension he loses, and that is the real problem, so, he believes that it was better if he did not have the unit. Then the last problem are the smoke alarms. Here the government makes laws that the landlords must employ a registered company to install the smoke alarms, but it does not say how much they are allowed to charge, so, they charge a lot, this can only make the rents dear. 

This is what the government should take into consideration. So, I dare to suggest that, if the government makes laws that the small investors can make at least from their rental properties, as much money as the government pension cut, then the small investors may be willing to invest in residential units, and the problem is half solved.

Anyhow, this is one of the reasons I can see, why this rental shortage is happening. I can write other examples that can explain better the rental situation. But I hope people understand what I am saying here. The only thing I can add here is this; it looks like that the assets test is the reason why there are not enough rental propeties anymore. 

This article is becoming too long. See you in our next article, Australia Rental Problems Can Be Solved. 

To see more click on this link, Australia Rental Affordability Issues. 

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The Social Security Must be equal.

WELCOME TO BRISBANE AFFORDABLE RENTALS, YOU ARE INVITED. IN THIS BLOG, WE WILL DISCUSS RENTAL PROBLEMS THAT WE MAY INCOUNTER WHEN RENTING, AND THE PROBLEMS OF RUNNING AFFORDABLE RENTALS. WE WILL ALSO DISCUSS, WHAT THE GOVERNMENT CAN DO TO HELP THE RENTERS PAY THEIR RENT, AND THE OWNWES RUN A BETTER AFFORDABLE RENTAL SERVICE TO THE COMMUNITY. 

Anyhow, the farmers' problem in this article is similar to the rental problem that we have today, because the social security system can help both, if the assets test is modified. So, we are writing several articles, where we will talk about the rental problems and the Social Security System. 

This blog can be found at this link, http://affordablerentals.blogspot.com/))

And here are other links to our internet articles

http://menfranco-re.blogspot.com/, http://manneedsgod.blogspot.com,  http://menfranco.blogspot.com, 

http://ifyoubelieveingod.blogspot.com/, http://genzanoit.blogspot.com/, 

https://sites.google.com/site/prayersofreconciliation/,https://sites.google.com/site/menfrancoreconciliation/

This article can also be found at this link, The Australian Social Security Must Be Equal. 

In the Centrelink office, people waiting to be called. 

This photo shows people in the Centrelink office, they go there to apply for their pension, their unemployment benefit, or other benefit that people can receive from the government. In this article here, we want to point out that, ther are some anomalies that need to be fixed. 

Welcome to article, The Australian Social Security Must Be Equal. 

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. 

----------------------------

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, Australia Rental Affordability Issues.. 

To see more klick on this link, The Australian Social Security Must Be Equal. 

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