Latest / Money Grows on Trees / #337 - Mindset and Money Pressure Explained

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#337 - Mindset and Money Pressure Explained · Money Grows on Trees

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  It's interesting because this is what people are suggesting is the budget's not helping young
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  people at all. When they say tax the rich, I think they mistaken
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  the rich for people who have just come across money, like won
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  the lotto or something, where they've not worked for it. But the thing is, wealthy people are
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  wealthy because they give and deploy the most value to the world. That's why
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  Elon is the wealthiest, because he's provided the most value to the world, solved the biggest problems.
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  The government in Australia has dressed up the budget changes
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  and policies into helping younger Australians but that is absolute BS
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  So how can Australians trust people with almost no business
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  You can't. The fact that we... Alright now we get to do reactions where I
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  watch a reel mainly of the government making dumb decisions and then get to
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  react to them which is me hating the government. So if you're ready for to see
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  What I'm annoyed about is that that
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  narrative is wrong. This budget will not
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  help younger people get into a home. By the way,
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  the very people who are supposed to have caused this intergenerational inequity,
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  the older people, they've been protected because
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  effectively they've been grandfathered on any gains that they've made to date
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  The government in Australia has dressed up the budget changes
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  and policies into helping younger Australians, but that is absolute BS
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  because all it does is grandfather the people who already got the gains, make it
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  harder for them to move into various investments because of negative gearing changes,
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  and made it hard for CGT gains in shares and things that have nothing
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  to do with property. So it's dressed up as helping younger generation, but the reality is
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  I can end the deficit in five minutes. You just pass a law that says
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  that any time there's a deficit of more than 3% of GDP, all
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  That's very true. So what Warren Buffett's talking about here is incentives. So
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  if you incentivise their jobs with the fact that
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  if the budget doesn't fall within 3%, then
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  they lose their jobs. That's setting incentives. So
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  when you set incentives you get the outcome. The challenge is that no
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  one in Congress is going to pass a law that dictates that.
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  And that's the challenge we have in politics where these laws should be in place but the very
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  people to place them in there are not going to do it because it's the absolute surety they're going
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  to lose their job. So there's no incentive for them to set the laws to get the
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  incentives right and it's the loop of incentives that nothing ever happens. Which
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  is why China has had such crazy growth, because they
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  have a benign dictatorship that seems to work better than
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  Let's tax the rich. Screw them. First things first, let me
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  kill the lie. The government says we're just taxing the rich. You
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  cheer. That's a bad idea, because you don't understand how the rich actually
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  work. Now, let me explain something to you. The rich don't save their money in
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  cash like most people do. You think they're sitting on $3 million worth
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  of savings? Nah, they'd be stupid too, because it loses value
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  Leave it in the... When they say tax the rich, I think they mistaken
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  the rich for people who have just come across money, like won
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  the lotto or something, where they've not worked for it. But the thing is, wealthy people are
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  wealthy because they give and deploy the most value to the world. That's why
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  Elon is the wealthiest, because he's provided the most value to the world, solved the biggest problems.
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  So wealthy people get that way by solving problems. That
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  is great for society and part of the problems they solve includes you
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  having a job because the wealthy build businesses and businesses employ
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  people and people need jobs to make money. So if you are in a job, the
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  person who built that business is rich. So you're saying tax the rich, you
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  know, but how are we going to incentivize innovation and growth if all
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  we're doing is taxing the innovation and growth,
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  the very thing that we need. It's like a penalty for risk taking.
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  And the reason why Australia is going to do poorly is if we tax them at the highest
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  rate for starting and building and selling a business, we're not going to attract any
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  capital to Australia. And we're going to just be look what's happening in the UK. They're
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  taxing the rich, taxing the rich and the rich are leaving. So if you disincentivize
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  wealth building and success, you're going to have people leave. It's what's happening in
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  America, in New York, they'll leave in New York. multi-billionaire Ken
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  Griffin, he left New York and he's building in Florida. And Florida and
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  Texas are the fastest growing states in America and California and
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  New York are the lowest growing states because they're taxing the rich. It's obvious
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  Going overseas is about to get more expensive. Now,
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  this is one of the sneaky ones that came up in the federal budget. It's
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  called the Passenger Movement Charge and is essentially an
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  exit fee to leave the country. Now, I'm going
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  to be honest, I'm pretty outraged at this. I didn't even know about it. It's $70 every
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  time you buy a plane ticket or a cruise ticket. The government wants to
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  raise it from $70 to $80, so only an extra $10. But
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  It doesn't surprise me the government's doing this because the government's great at creating taxes
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  that for no value in return they don't there's no value exchange
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  because the airports pay 99 year leases
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  to the government for the land the airlines pay the airports
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  for the use of the terminals etc the retailers in
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  there pay the lease to the airport to sell stuff to you and
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  the and the airlines make you pay for tickets there's nothing
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  in there that's valuable for the $80 nothing Zero.
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  The government's not doing anything for that. They're just deciding to increase it.
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  It's just a mindless toll. It's
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  just typical of this government. Let's just squeeze every morsel out
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  of these poor people who are trying to live a life. It's just a joke. Everywhere you
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  go, there's a new tax, a new tax. And if you keep doing this to a country, eventually
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  people just leave. What started the revolution in America was getting taxed
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  2%. And here we are getting taxed at 30-47%. There's a
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  thing called the Laffer Curve, and the Laffer Curve is
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  the fellow that invented it, sorry his last name was Laffer. Anyway,
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  the curve says if you tax people to a certain point, it disenfranchises or
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  disincentivises work. And if you get it to a certain point, people
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  stop working. And so if you tax continuously forever, people
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  will just stop working. So one or two things will happen. Either they'll stop working and
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  they'll all get onto welfare and the economy will collapse, or
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  they'll leave the country and the economy will collapse. So you choose which
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  one it is, but you can't just keep taxing people over and over again and expect them to cop it on the
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  chin. They will leave. It's already starting to happen in Australia. People
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  are already leaving. So keep doing it. They're already leaving New York. They're leaving California.
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  Those states are losing people because they're taxing them too
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  much. There is such a thing that is warranted from the Laffer
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  curve that suggests that if you tax them too much it disincentivizes work and
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  we don't want to do that. Just quickly, if you're ready to take control of your finances but
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• 6:42
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  Quick question on negative gearing. I borrowed to invest in
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  shares. I can still effectively offset
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  that loss against my taxable income? We're just carving out property? Is that
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  Yes, because I think something like 98% of negative
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  gearing is property. And so the focus in
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  negative gearing is on Property the focus in
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  capital gains is across the system And
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  and again, that's deliberate we're trying to deal with the main challenges here around the
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  fact that laboring Yeah, so I didn't know who's borrowing
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  That would not be a good idea It's a fair question, but I don't know how many are
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  doing it and the real challenge they're trying to solve is housing speculation
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  in property investments by people just claiming too
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  much tax concessions for negative gearing. Now what that is is a tax grab
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  from the government for that, but it will disincentivize folks
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  from investing in property outside their PPR. So
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  that will help, hopefully, alleviate some of the housing bubble.
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  It's not such a bad idea. The fact they've actually aligned it with
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  new housing would incentivise off-the-plan housing. So
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  it would incentivise housing supply. So I actually think one of the few things
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  that they've done well with the budget is actually just move negative gear into new
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  homes and get away from second-hand homes. It's just re-shifting
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  the incentives. Yeah, but I don't know how many people would be boring
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  to buy shares. I don't think in Australia they even really allow it too much these
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  Thank you Mr Speaker. Tonight I deliver a budget for all
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  Australians. For young Australians attempting to buy their first house
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  but never will. For working families doing it tough. For small businesses
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  under enormous pressure. It's brutal out
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  here and we did that. And
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  of course for older Australians who've worked hard, saved hard, invested wisely
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  and somehow own six townhouses in places they've never been. This is
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  a budget about fairness. It's fairly, fairly, fairly fairness. Now
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  we all know circumstances have changed. Not our values, not
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  our priorities, just our promises. For too long,
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  young Australians have been locked out of housing. They've worked hard, saved hard,
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  they've skipped holidays and skipped coffees and hope and
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  Oh, this is an absolute piss-take. It's hilarious. Yeah, it's
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  interesting because this is what people are suggesting is the budget's not helping young
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  people at all. It's really, it's grandfathered a lot of this stuff, so all the
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  people are already in. They're going to sustain it. Those trying to get in, they're going to be hamstrung a
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  little bit. And the fact that they're taxing capital gains at the highest rate
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  for things like shares that have nothing to do with the real estate market, is interesting
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  they are taxing certain businesses but small businesses get away from it I think people
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  don't realize that that small businesses don't really get affected that much because there's
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  concessions for small business if they sell it and it's concession if you
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  keep your business over 15 years too so if you read some of the details it's not it's
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  not that bad I think some of the things that are irritating for
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  people are the capital gains incentives or
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  capital gains tax-free threshold or 50% discount has changed
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  but it's changed on shares not just housing and
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  Yeah, rent vesting is not as effective as what it used to be under the new
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  negative gearing laws, which is hurting some people's feelings, which would happen. I
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  don't disagree with negative gearing stuff. It should be on brand new property. The
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  indexed CGT, it sucks, but it is what
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  it is. You can't change it. What
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  I don't like is how the government is trying to repair the budget. They're
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  trying to repair the budget by making it harder for people to get ahead rather
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  than repairing the budget by stopping spending
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  on dumb shit. That's the difference. That's what irritates me.
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  That's why people are taking the mickey out of them because they could have easily just cut
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  out the fraud in the NDIS and saved all the money they needed. But they're not making
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  the hard decisions on spending. And some of the stuff that they'd be spending
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  money on for the wokes, it would just be atrocious. I
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  think at the state level and the government level, once a new party
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  gets in and they do a, if there's a Royal Commission, I think there's so much
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  corruption happening. Amongst the labor politicians,
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  I think it will be found out and I think that they'll be dragged across the coals at some point.
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  Some of the net worths of those who are on like 150 grand
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  a year is obscene. Like there's a lot of money either going through the
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  CFMEU to them, something's happening, but a lot
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  of money is being wasted because we went from zero debt 20 years ago
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  from under the Liberal government to 1 trillion
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  in debt. It's obscene. In 20 years. So the money's going
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  somewhere. And I'll tell you where it's not going. It's not going into everyday Australians because they're getting
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  taxed more and more and more. It's going into the politicians' pockets. Even
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  Albanians who got a pay rise yesterday at
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  $57,000, they're just lining their own pockets. All of them. And
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  I think there's absolute corruption happening. And I don't think we're going
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  to see it come to light until a new government's
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  formed. But I think it's happening for sure. It just seems, yeah,
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  You wouldn't trust an untrained pilot to fly a plane. Correct.
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  So how can Australians trust people with almost no business
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  You can't. You can't. You can't. The fact that we get people who
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  have had no real world experience running a business, running the biggest business
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  we all have, which is our country, is absurd. If you're an alien from
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  outer space looking down at us going, oh, they get the most retarded, incompetent
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  morons that have never really had any business experience to run the
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  biggest business in the In our world, which is the country, they
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  think we're a bunch of idiots. We're not even choosing the wisest. We're
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  not even choosing the wealthiest. We're choosing... I don't know
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  what we're doing. It's a weird thing. It's like the most incompetent
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  are running the country for the most competent. It's strange. It's
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  Farmers handed down what many are calling the worst federal
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  Our reforms are about backing aspiration for
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  all, bringing the great Australian dream of home
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  Now here's where this story... If
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  they wanted to make home ownership more achievable, that's the first thing they could do is just drop
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  immigration because less people, less competition for homes. It's the easiest thing. You
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  look at Canada and New Zealand and America, they've done that there and that's exactly what
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  they've done. They've alleviated rent pressure by 30%. Massive, huge changes.
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  There's one lever that Albanese needs to pull and it's immigration. He
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  ain't pulling it. He will be forced to pull it because One
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  Nation is now challenging him in a big way to leadership. And if they don't change
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  it, they're cooked. Now, as far as I'm concerned, I hope they don't change
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  it. I hope they do get cooked. I want to beat them out and get rid of them. No good.
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  I think they're corrupt. But what
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  they're saying and what they're doing are two different things. And I feel like they're gaslighting the
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  Australian public because they're saying things in a condescending, patronizing way that
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  you can see straight through it. They're not doing those things because everybody
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  knows all they need to do is Depart from
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  net zero, drop immigration and
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  start to utilize our resources more effectively to
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  bring back industry and create better jobs and
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  a multi-faceted economy that's more complex than it
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  is. It's just too basic. Dig holes, sell stuff. All
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  right, hope you enjoyed that. Hope it makes a lot of sense. Never
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  easy to run a country, but a lot of these policies are impacting everyday Aussies, you,
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  me, everyone. And I think you don't have to be a genius to work out that what's
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  happening right now is not in the favor of Australians. And that's why I hope we
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  see a change in who's leading our country so we can have more pro-growth
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  and pro-innovation and wealth building for Australian citizens,
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  not for those outside, but for those who live in this country and built this country. So
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  if you like this, share it with a friend. I hope you enjoy it and get a
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  laugh. Leave us a comment. And yeah, it's one of my favorite segments.
• 14:54
  So enjoy. Thanks for listening to Money Grows on Trees. If you enjoyed
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• 15:05
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• 15:08
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