How does the budget impact your property investing?
A lot of dancing, singing, jumping up and down, I don’t like the music and can’t understand a thing they are saying. The sleight of hand would make David Copperfield blush.
See below infographic source: “KPMG.”
The budget contains a range of explicit measures aligned with the philosophy of the Albanese Government, which pivots the economy towards one where the government plays a greater role.
Cue alarm bells!!
The hope is that this budget is a political success no matter how many serious economic and social problems it creates. This budget has been published assuming there are more people who don’t understand economics than there are those who do, leading to a net increase in votes for those who employ its policies.
Economics is the study of how efficiently or inefficiently we use our scarce resources which have alternative uses.
In other words, if the government had $1 of our tax money, its performance is to be judged on how efficiently or inefficiently they deploy that $1 for the betterment of people and country. Unfortunately, the process has become so unnecessarily complex that we, the taxpayers, can’t track where, how, and when that $1 is being spent.
The government’s goal is to be re-elected. Therefore, they will utilize that $1 not in the best interest of the people, but in the interest of staying and increasing power.
No matter where or how any government spends the $1, there is going to be an opportunity or a foregone cost because that $1 is finite and scarce and can be used for an alternative purpose.
By its nature, economics is about incremental trade-offs, not about solutions. Therefore, any government purporting to provide “solutions” is always dubious.
Ask yourself, how is the government increasing its spending at the same time cutting taxes? In what world does this work? Not in the real one.
The problem is they don’t pay the price for being wrong and incompetent. We do, yet the circus goes on.
Speaking of tax cuts, looks to be shown to do “something” and really do nothing at all. In 2025 if you earn $100,000, you save approx. $2000 in tax that year. WOW! $2000?!!
Put that together with the $300 rebate and now you have $2300. Thanks a lot. Better than nothing. Or is it? In this case, no, it’s not.
The budget estimates the coming year’s deficit at $28.3 billion. But if the government had taken no decisions on anything since its election, then the deficit would have been $8.9 billion!
“The Treasury forecasts suggest the Australian economy will remain weak over the forecast period and only start to return to rates of economic growth similar to long-term averages in 2027-28”
We are planning to stay broke intentionally until 2027 at least!
In summary, the government has spent all our money, it is in debt, printing more money to get deeper into debt, so that it can increase its reach. Not backwards in coming forward with their ill-advised intentions.
Love to hear your thoughts, you know how to find me.
Warm regards and wise investing,
Shehan
