Finance News

To tip? Or not to tip? No way!

Posted on Wednesday, November 13, 2019
To tip? Or not to tip? That is the question.   But in my view, it’s got a very simple answer: no.   Lots of things in our culture are becoming increasingly Americanised, with Halloween a couple of weeks ago a good case study. But one thing we don’t need to see creeping in is tipping.   The main reason for that, in my opinion, is that in Australia people are mostly paid a fair wage for the work that they do. Even our lowest paid workers are the beneficiaries of the highest minimum wage in the world. As a result, there’s generally no need to tip just to say, “thanks for doing your job”.   However, in the age of social media, there’s a new and better way to tip: leave a good review. A positive review on Facebook, Google or TripAdvisor for a business that provided amazing service is going to be far more valuable than slinging an extra tenner their way.   Similarly, jumping on your personal Facebook page, or your local buy, swap and sell p ... Read the rest of entry »

Assessing eligibility for the pension against the family home

Posted on Wednesday, November 6, 2019
At what point should the value of the family home be taken into account when assessing an individual’s or a couple’s entitlement for the pension? There’s been a proposal from an ACT academic to reduce the pension for older people whose homes are valued at more than $2 million. He says this would save the federal budget about $6.3 billion. I think this is an interesting conversation. From a technical economic perspective, taking into account all assets (including the family home) when assessing eligibility for the pension is the right thing to do. At the moment, all assets except the family home are taken into account. But if a government were to place a value cap on properties, whose assessment of value would be taken into account? Would it be based on rates notices? Or tax returns (which many pensioners no longer lodge)? Or something else? From a political perspective, making these sorts of changes to pension eligibility would be political suicide. No government – or opposition & ... Read the rest of entry »

Aussies set to spend $1.6mil on pumpkins they can't eat this Halloween!

Posted on Tuesday, October 29, 2019
Sometimes you come across a bit of information that makes you just about fall off your chair. Here’s one: this week Australians are going to spend more than $1.6 million buying pumpkins to carve into jack-o-lanterns. Yep, you heard right, $1.6 million! That’s 500,000kg of inedible pumpkin! The reason is that in Australia, Halloween has now become the second biggest day of the year from a costume spend perspective, second only to Australia Day.  Ten to 15 years ago you might have spotted two kids walking down the street dressed as ghouls, today it’s not unusual to find entire streets decked out in the scary gear. This is testament to just how big Halloween has become here. On average, every Australian household will spend $80 on Halloween this year, with households in some Sydney suburbs spending up to $1000 on lollies! Of course, this presents retailers and other small businesses with amazing moneymaking opportunities. From running Halloween-based promotions to creating pop-up sto ... Read the rest of entry »

The novel new way to fund your home reno - but there's a catch!

Posted on Tuesday, October 22, 2019

With the banks tightening up following the Banking Royal Commission, money is more difficult to come by than at any time in recent memory. This is proving a challenge for homeowners who want to sell but need to do a bit of work on their house before listing for sale.
 
To solve the problem, the building industry has come up with a novel new reno financing option that sees a builder funding home improvements.
 
The catch is that the homeowner has just 20 days to list the property for sale once the reno is done, and up to 6 months to sell it. This period is interest free, but if the property fails to sell, interest of 15% applies.
 
It’s an interesting new scheme designed to get around the difficulty of getting a loan top-up from the banks, and if all goes well it’s a great solution. But owner beware the interest charge if the property fails to sell!

The pros and cons of a congestion tax

Posted on Tuesday, October 15, 2019
Last week I was speaking at a business breakfast, when I asked the room of small business owners whether falling interest rates had had any positive impact on how they’re running their businesses. Not a single had went up.   The fact is that low interest rates have not created the high-confidence environment that the government and RBA had hoped would occur. What’s needed instead is large-scale reform, like a significant cut to the corporate tax rate or GST.   What’s not needed is a CBD congestion tax, which has been mooted once again by the Grattan Institute. Indeed, any state government even considering such a tax would likely soon cease to be a government.   The proposal is to implement a London-style congestion tax, which currently slugs UK drivers who enter the London CBD with a charge of up to 14 pounds per day.   From a business perspective, this could be disastrous. Retailers are already struggling to pay rent and landlords are struggling to find tenants. ... Read the rest of entry »

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