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Thread: Commentary from the recent Federal Election here in Australia

  1. #1
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    Commentary from the recent Federal Election here in Australia

    From Steve McKnight's newsletter:

    Winners & Losers As you can now hopefully see, we are in a period of immense change. While this will be the start of difficult times for those who are set in their ways, it also marks the beginning of massive opportunity for those who can adapt.
    Will You Thrive
    Or Just Survive?
    Here's a list of the losers and winners from the current political and financial landscape:
    Losers
    1. The Liberal and National Parties, and those organisations that support their power bases. All will need to reconsider their positions and start anew. This will take years.

    2. Battling homeowners who will take a hit in the hip pocket every time interest rates rise. You can't eat houses and those with big mortgages will have to think creatively as the financial burden increases.

    3. Investors who are negatively geared. The new lower tax rates will make negative gearing less attractive since less tax is levied, and so less tax can be 'saved'. Also, increased interest costs will only add to the cashflow shortfall.

    4. Speculators relying on general market growth. Rising interest rates will stifle demand which will result in flatter growth.

    5. Homeowners and investors who need to sell quickly and are forced to take a much reduced 'fire sale' price. The available pool of buyers will shrink as affordability worsens. If you can hold out then you may get your price, but those who need to sell fast will suffer.

    6. Consumers who bought using expensive debt products such as credit cards, personal loans, '24 months interest free' etc., and who are unable to repay the debt in full.

    7. Those who bunker down and hang on to loss making or poor performing assets believing that a loss isn't made unless the asset is sold. An inability to act or lack of access to cash will severely limit your opportunities to bag a bargain.
    Winners
    1. The Labor Party and new members of parliament who now enjoy the power to change the country.

    2. Trade unions and those traditionally aligned with the Labor movement. Union participation is currently at around 22% of the workforce. This will be the low point, with a revival starting from here.

    3. Service providers who have aligned themselves with the Labor party and will be awarded lucrative government contracts. While the tender process is somewhat transparent, party favourites will be rewarded for their loyalty.

    4. As interest rates drift higher, those who have fixed rate mortgages. Such borrowers will have secure finance and a historically low rate.

    5. Cashed up investors who have the funds to be able to snap up great deals, particularly in the commercial property arena, as a result of vendors who need a quick sales price.

    6. Developers with guaranteed pre-sales. The certainty of a pre-sale will provide comfort in an otherwise unpredictable market. Pre-sales will also help with gaining finance approval.

    7. Self-funded retirees, pensioners, and others who rely on interest income, since cash deposit accounts will attract higher returns.

    8. Property investors who can provide low cost housing, since the Labor party has promised tax credits and incentives for those who build in this market.

    9. Those who can capitalise on emerging trends and new opportunities.
    It's your choice -
    will you be a winner or a loser?
    Looking back over the list, are you poised to be a winner or a loser? There's still time to be victorious, but urgent action is needed.








    What's your opinion?


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  2. #2
    Banned Melonie's Avatar
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    Default Re: Commentary from the recent Federal Election here in Australia

    ^^^ the same scenario is being discussed for the USA as a result of a more financially 'liberal' gov't gaining a clear majority after the 2008 election. Arguably the USA has already seen some degree of these sort of economic changes as a result of a more financially 'liberal' gov't having won control of congress in the 2006 congressional election. I hate to discuss excessively political economic subjects, but for a fact elections do have consequences. And generally speaking, when gov'ts become more economically 'liberal' it usually means that the poor do well, that the very rich do well, and that the 'middle class' (outside of union employees and gov't employees and gov't contractors whose paychecks are 'supported' by the gov't) gets hammered.

    However, from the point of view of dancers, when 'middle class' guys have less discretionary money to spend as a result of more 'liberal' gov't economic policies being put into effect, it typically translates into lower dancer incomes ... since the poor and the very rich don't contribute a whole lot of spending at the vast majority of strip clubs ! Ironically, most younger dancers never take the time to make the connection between the economically 'liberal' political party they supported and the delayed consequences on their own declining dancer earnings potential after those 'liberal' gov't policies percolate through the economy to the 'hip pockets' of their best customers !


    In the specific case of Australia, the million dollar question (actually billion dollar question) is whether or not the new 'liberal' gov't will be able to keep its promises regarding lowering tax rates. It has already gone on record as maintaining existing 40% tax rates on those earning more than AU$180k a year. And the two million dollar question (actually 200 billion dollar question) is what the costs of complying with the Kyoto treaty will be for Australian industry and individuals i.e. proposed carbon tax / carbon credits market.



    typically, rising interest rates + rising energy prices (Rudd promised to immediately sign the Kyoto treaty) + high taxes = low/no growth + even higher taxes + reduced 'discretionary spending' by consumers (i.e. strip club spending)

    of course, as part of the deal, Australians get a former rock star as Environment Minister to manage the (economic) consequences of signing the Kyoto treaty ...



    ... and if Garrett does get in over his head, he can count on 'mentor' Al Gore (who is part owner of a carbon credits company) for expert advice !


    As I previously posted in a different thread, it will be extremely interesting to look back 2-3 years from now on the health of the economy in Australia (with a new economically 'liberal' gov't) as compared to the health of the economy in France (with a new economically 'conservative' gov't).

    ~

    ~
    Last edited by Melonie; 12-01-2007 at 09:45 AM.

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    Member Yas's Avatar
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    Default Re: Commentary from the recent Federal Election here in Australia

    I think as a dancer in Australia it will affect our earnings for various reasons but mostly because people are feeling insecure about the future (ie, interest rates, taxes etc..) and they are less likely to spend on luxury items (that would definitely include us) and I just can't believe the amount of dancers I spoke to who voted Labor....why?... they just made it that much harder for themselves. I am seeing the effects already, in 8 years of dancing this has been the slowest Nov/Dec I have ever seen and I am sure its because of the election. Aussies are too quick to forget the damage that Labor caused last time.

    Not happy.

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