Money House

Pollies buy votes with housing incentives

Just when we thought this federal election couldn’t get more interesting, ScoMo comes along and ups the ante with an effort to buy votes from – I mean appeal to – first homebuyers.

And it’s absolutely brilliant!

ICYMI, under the new home deposit scheme, the government plans to offer loan guarantees for first homebuyers, allowing them to buy properties with deposits of just 5 per cent.

At the moment, buyers need to save a whopping 20% of a property’s purchase price – sometimes you can get away with a 10% deposit, but in this instance you have to pay a hefty lenders mortgage insurance premium.

Morrison’s proposed scheme will fund the National Housing Finance and Investment Corporation to the tune of $500 million, with another $25 million earmarked to set the program up and research the housing market.

Should his party be re-elected this weekend, the program will be rolled out from January 1 next year, and will allow first home buyers with an income of up to $125,000 per person (or $200,000 for couples) access to the guarantee.

This is going to offer a massive leg up to those keen to buy a property – and in my view, it’s a golden opportunity for first time buyers to get into the property market.

It’s definitely preferable to the plans that Labor are proposing to roll out from January 1, which is to strip negative gearing benefits from established investment properties.

This will only result in investors fleeing the market, which will decrease the amount of rental supply and push rents up… making it very difficult for first home buyers to save their deposit.

Not everyone is in favour of the policy, of course.

Independent MP Kerryn Phelps is concerned “that if people are going to be borrowing 95 per cent of the cost of a house, and with the falling property market, if they get into mortgage stress and they’re not able to make repayments… then people may find they’re in a situation of having to sell that property and they owe more than they own,” she said during an interview with Sky News.

Following the Royal Commission, it’s hopeful that the banks will be cautious enough not to lend to people who can’t afford the loan.

What the public thinks of this policy will play out at the polls on Saturday – make sure your voice is heard! Find your electorate here.

Tax

Big companies dodge tax – why can’t we?

End of financial year is almost upon us, which means it’s almost time for the ATO to start issuing its annual warnings urging us not to scam the taxman.

“Don’t log deductions for work expenses that weren’t entirely for the purpose of work,” they warn. “And we are cracking down on those work kilometres you’re all claiming!”

This is all well and good – it’s the ATO’s job to make sure we don’t over-claim for deductions we’re not entitled to.

But I can’t help but wonder… what if they took just a fraction of the attention they pile onto everyday wage earners, and redirected it to the corporates who are fleecing them dry?

Pharmaceutical companies alone – the headquarters behind some of Australia’s most well-known brands, including Band Aid, Centrum and ChapStick – are getting away with avoiding paying tax to the tune of hundreds of millions per year, according to Oxfam.

Oxfam’s report, Prescription for Poverty, found that in Australia, the four largest global pharmaceutical companies are estimated to have unfairly avoided paying $215 million in taxes a year between 2013 and 2015.

Oxfam Australia Chief Executive Helen Szoke says that these actions, whilst not illegal, are not in line with the spirit of the law.

“Australians expect that the best known and trusted pharmaceutical brands would be doing the right thing when it comes to paying their fair share in tax, yet Oxfam’s research shows these four companies seem to be doing the exact opposite,” she says.

Across nine wealthy countries (including Australia), Oxfam found that these four companies, Johnson & Johnson, Pfizer, Merck & Co and Abbott, appear to have avoided $4.8 billion a year in tax revenues over the period.

“This report again highlights the broken global tax system… Shedding light on practices like these will help to hold companies to account, so that tax is paid where companies really make profit,” Szoke says.

Bottom line? These big businesses are leveraging unfair tax avoidance schemes to rake in massive profits.

It certainly makes me feel less guilty about the bordering-on-untrue uniform deductions I claimed last year…

Driving

New rules: Drink drivers lose licence on the spot

For the first time in four decades, the rules around drink driving are changing.

Not in Queensland, mind you; in New South Wales.

But if you live in or commute to Tweed, or anywhere south of the border, be warned: law enforcement has adopted a “no tolerance” policy when it comes to drink drivers.

Tough new laws have been introduced, effective May 20, which mean that any person caught drink driving in NSW will lose their licence immediately.

This applies to anyone caught over the legal limit – even low-range drink-drivers, who are blowing a reading just a fraction over the limit of 0.05 (or 0 for learner drivers and P-platers).

Not only will they lose their licence then and there, but drivers will also be handed a massive $561 fine.

Which is exactly how it should be, if you ask me…

Because, here’s the thing about drink driving.

It’s actually a criminal act.

People don’t think about it in those terms, but that is the reality. Having a few wines with dinner and then making the decision to get behind the wheel of your car, even if you feel fine, could be a decision that alters the course of your life.

If your alcohol blood reading is over the limit and you’re involved in a car accident – and if someone was to be injured or, God forbid, killed in that accident – you would be looking at serious jail time.

Andrew Constance, NSW Roads Minister, confirmed that the government is targeting everyone from very low-range offenders through to proper drunk drivers with the new policy.

“Anyone caught drink-driving in NSW, at any level, including low-range, can now lose their licence immediately,” he says. “This reform makes it clear if you break the law, you will pay the price. We are taking a zero-tolerance approach to drink and drug driving.”

Those who are found with drugs in their system while they’re behind the wheel will also lose their licence and be slapped with the same fine, provided lab analysis confirms the results.

Work Woman

Why are we working ourselves to literal and existential death?

We are becoming a culture of robots that lives to work, rather than working to live.

A thought-provoking article in the New York Times this week takes a deep dive into the culture of working insanely long hours, highlighting a New York couple that epitomises the (admittedly high-end) rat race: she’s a lawyer working 20-hours per week, and he’s a lawyer working up to 80 hours a week.

He earns 4-6 times more than his wife, though he rarely sees his children – and she manages absolutely everything within their household.

“I’m here if he needs to work late or go out with clients,” she says. “Really, the benefit is he doesn’t have to think about [anything at home]. If he has to work late or on weekends, he’s not like, ‘Oh my gosh, who’s going to watch the children?’ The thought never crosses his mind.”

This specific situation is one of great privilege; the couple earns big bucks and can afford to throw money at the problem, in terms of cleaners, childcare and other help.

What’s more, if they manage their money properly, they could afford to work hard for 10-20 years before both moving on to part-time, flexible working hours in their 40s.

But it brings up a bigger issue around the culture of working crazy-long hours. No one should be doing this – mothers, fathers, and non-parents alike. A person who is working constantly is not living their best life in any way, shape or form.

Instead, they’re working themselves to a literal and existential death.

We all know a person like this. Someone who works 14-hour days; who works all weekend too; who is on the laptop at night well after they’ve left the office; who just never switches off.

And we know that this comes at a cost. A massive cost.

To family life, to social life, to meaningful relationships, and to cultivating a balanced life with hobbies, interests and passions outside of work.

I read a phrase that sums it up perfectly: ultimately, you need to choose between your career resume and your obituary resume.

Because when you pass away, people will never talk about your big deals, your long hours, your industry awards or recognition.

They will talk about who you were as a person; what you contributed to your family, friends and community; what a great friend you were, or how you may have made a difference in someone’s life.

Arms Crossed

Is this age discrimination – or school of hard knocks?

You often hear about job discrimination in Australia in terms of our aging population. Older Australians are falling into poverty at an alarming rate – and single females are the most at risk.

What we don’t hear as much about is younger Australians being discriminated against.

Recently I was chatting with a friend of colleague, who I met at a networking event. She was raging about the “discrimination” her 22-year-old son had received during a job interview.

“At the interview they asked him his age, and when he told them he was 22, they said ‘we’re sorry, we’re looking for a junior to fill this position as we don’t want to pay adult wages’,” she said.

That was the end of the interview, then and there. He was understandably miffed. He went home and told mum, and she became apoplectic with anger. By the time I was chatting with her, two days later, she was ready to report the company to Fair Work Australia.

Let’s be clear: she has every right to report this company, because asking someone their age during an interview is illegal.

My question is: should she really bother?

The company was clearly hiring for a junior role – one with junior responsibilities and a junior pay packet attached to it. There are legitimate operational reasons for wanting to hire a younger person (and the fact that they got to interview stage without checking his age reeks of a sloppy employer to me…).

I remember a similar scenario happening to me when I was a student, aged 18. I applied for a casual weekend job working at a retail shop at Pacific Fair; the assistant manager and I had a quick chat and she said my availability perfectly fit with what they needed.

She asked me to come back the next day to interview with the manager. When I turned up, the manager said: “I’m sorry we won’t be going ahead with the interview; we’re really looking for someone 16/17 years old.”

Even at 18, I could read between the lines and knew they wanted someone “cheaper”. I didn’t think of it as discrimination; just one of those things that happens in life.
I moved on pretty swiftly and got an even better job at a company that didn’t penny-pinch.

Situations like this make you resilient, right? They remind you that things aren’t always fair and they don’t always go your way.

But if this family does decide to push ahead with reporting, I reckon mum should butt out and let her son report it himself. This is the stuff that grit, learning and growth is made of – and he’s 22. More than old enough to fight his own battles!