10 May A Field Of Dreams – Build It & We Will Come

A FIELD OF DREAMS – BUILD IT & WE WILL COME

Back when Kevin Costner was great (and made movies that were less than 2 hours long) he starred in one of his beautifully shot movies a Field Of Dreams. Costner plays the part of Ray Kinsella who plows a baseball field in his corn field after hearing voices in his head and seeing visions in his dreams.

The Voice: If you build it, he will come.

The 2017 Federal Budget is a bit like that in that the Federal Government is dreaming big time in it’s budget for Fairness, Security & Opportunity

The Winners

Monies being spent on infrastructure, modifications to the super system to allow 1st home buyers to save monies in a tax effective manner & allowing persons > Age 65 (who have owned their home for > 10 years) to sell the home & put up to $300,000 each into super without having to be employed. Those people who lost their concession cards due to the Assets Test on 1/1/2017 get them back and all pensioners are getting a one off payment (small as it is) by 30/6/2017.

John Kinsella: Is this heaven?
Ray Kinsella: It’s Iowa.
John Kinsella: Iowa? I could have sworn this was heaven.
Ray Kinsella: Is there a heaven?
John Kinsella: Oh yeah. It’s the place where dreams come true.
[Ray looks around, seeing his wife playing with their daughter on the porch]
Ray Kinsella: Maybe this is heaven.

Small Business Owners continue to enjoy the $20,000 per asset instant write off up until 30/6/2018 & the small business tax income offset continues to increase over time.

Any Financial Institution That Isn’t The Big 4 & Macquarie – no extra taxes on them either, so this may introduce more competition in the general marketplace (or that is Sco Mo’s intention anyway).

Investors large & small who will provide affordable housing will either get a concessional treatment on investment returns or increase in CGT discount to 60%.

The Treasurer Sco Mo & Prime Minister Trunbull (no that isn’t a spelling mistake, just the American interpretation of Big Mal’s name) looking to neutralize every argument that the other side of politics has. Who would have thought that a Liberal Government would put a tax on Banks & increase effective tax rates (medicare levy) to provide more money for Education & Health ?

Ray Kinsella: I did it all, I listened to the voices, I did what they told me, and not once did I ask what’s in it for me!
Shoeless Joe Jackson: What are you saying, Ray?
Ray Kinsella: I’m saying… what’s in it for me?
Shoeless Joe Jackson: Is that why you did this? For you? I think you better stay here, Ray.

Anyone who decides to ring Centrelink and not wait on hold for 45 minutes as…..gasp they are going to employ 250 Call Centre operatives

Bank Bashers in general – Big Banks can be fined up to $200m for dodgy behaviour, Executives can be sacked or disqualified by regulators & lose bonuses & the Productivity Commission will provide a report on every aspect of competition into Banking and related Finance over the next 18 months

The Losers

Well not that many. The Big Banks yes (or shareholders/depositers/those that owe monies to Banks), but anyone who thinks that they won’t pass on the effects of the new tax is just kidding themselves – either higher interest rates on loans or reduced rates on deposits, or fees of some sort. Either that or dividends may be crimped to pay for the effective tax (remember the tax only represents 5% of actual Bank profits), or more cost cutting (job losses, automation). Think about the tax this way as it is like the Super Pokies tax put on “Pub Barons” here in South Australia

Financial Institution Executives who for the first time will be in the firing line from regulators & anyone still jockeying for a Royal Commission into Banks.

Foreign owners of residential property – can’t own > 50% of new apartment dwelling developments. Will be slugged with a fee for vacant properties (not used for > 6 months of the year) & lose the principal place of residence CGT exemption

Uni Students – will pay more for their Education as from 2019 and have to start paying back HECS/HELP loans once they earn $42,000 pa (down from $54,000 odd) – but let’s be realistic here Uni degrees are still heavily subsidized (around 50% of actual cost) and Government own statistics says that 30% of HECS/HELP debt will never be collected.

Anyone who brings a person in from overseas to work for them will pay increased fees (Hire an Aussie First the new Political Slogan !!)

Finally anyone who believes that the Federal Government can deliver a Budget Surplus in 2020/21 !!!!

Ray Kinsella: What are you grinning at, you ghost?
Shoeless Joe: “If you build it -” [gestures toward catcher, who is Ray’s father, John Kinsella] “- he will come.”
Ray: “Ease his pain. Go the distance.” It was him!
Shoeless Joe: No, Ray. It was you.