by Scott Pape - May 4th 2010
The Barefoot Investor dissects the Henry Tax Review announcement from his hotel room in Omaha, Nebraska in the United States. But what he finds within the review is far less than many people in the finance world were hoping for.
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19 comments
What did you think of the Henry Review?
Hey Scott,
Not sure that we should be taxing our strongest industry 40% on profits, won't this cause investment in the mining companies to head offshore?
Daryl
I think that the superannuation increase to 12% is a good move, especially with the increasing age of the population. They should take the tax off the big miners and throw even more tax onto cigarettes!
Was expecting some more tax reform, as were you Scott. Stamp duty and payroll tax still are the bain of my existence!
Mine too. The Government is going to increase taxes over time to fund the massive costs going forward of an aging population – get used to it!
It is a good move – but only if the Cooper review reins in the super cowboys. They've just been given a payrise which they don't deserve.
Of course. And the most important thing is that mining companies don't vote.
Of course. And the most important thing is that mining companies don't vote.
Hi Scott,
Loving the tribe talks and that you would take the time to comment on the Henry review from Omaha. Thanks. So what was Buffett like and how can we buy shares in Berkshire Hathaway?
I have to agree with you Scott regarding how the Rudd government will be set to release several more tax changes more closely leading up to this years federal election, mostly relatively minor changes in comparison to the 40% resource super profit tax and ones which “general” Australians can relate more strongly to (e.g. lowered tax on savings, option to have an ATO tax assessment in lieu of filling out your own), in an attempt to win votes. Although it has to be said that Labor is undoubtedly going to win, despite the coalition surpassing the incumbent Labor government in the latest Newspoll for the two-party preferred vote which will just be seen as a blip on the radar and a strategic one at that as Rudd cleans out the closet of the ETS, insulation, child care, etc.
Business groups are champing at the bit for a major overhaul of the Australian tax system, and that it exactly what the Henry has proposed after it's long and awaited review in the last 2yrs. You can only presume this overhaul is for the better, and so you hope whatever government is sitting after this election that they make some real strides towards achieving this. Because let's be honest, what the Rudd government is doing with the resources super profit tax and it's flow-on effects of putting the revenue into superannuation, infrastracture, and drop in company tax, it is major and it will make a difference, but it IS NOT a reform in the slightest.
I'm not against the 9% to 12% increase in the superannuation guarantee, but I think the feeling that this is so advantageous to us has been blown out of proportion. Firstly, it wasn't even in the Henry tax review!!! I believe Henry proposed a reduction in tax on the 9% rather than an increase in the employer contribution, which he specifically suggested against. If a group of economic experts over the course of 2yrs make this suggestion, it is probably the one which has the greatest economic merit. We can only postulate the reason why the Rudd government went the other way on this – didn't want to reduce tax revenue, to win voters? In the wake of the GFC, I think we are making moves to increase our national savings, which it is reported the superannuation changes will add $85bil over the next 10yrs to a $1 trillion pot – so maybe the government wants to achieve this whilst still reserving tax revenue, so that Rudd is effectively having his cake and eating it too. Also, commentators (probably Liberals!) have been saying the increased superannuation guarantee will hit small businesses and the bottom line of corporate so that flow on effects will be seen in reductions of income growth. So effectively, the Rudd government is forcing us to save for our retirement and have less in our pocket now. However, I'm skeptical about these views because when we look at the implementation of the superannuation, we saw a 0% to 9% change (in what I think was actually a shorter time-frame than what is being done by Rudd) and yet income growth and other parameters didn't take a hit.
I interviewed him, and his son Peter. Really great people. You'll have to watch Barefoot Investor on Channel Ten to see the results!
I agree with your sentiments. I'm thinking about going to the 'lock-up' in Canberra for next week's budget. I can only assume there will be a lot of juicy goodies in there given that it's a re-election budget, and that Rudd has been smashed in the media for not having the ticker to implement more of the Henry Review.
Hi Scott,
Where's the best place to put my savings towards a first home deposit? Are there any incentive schemes backed by the government to help young people to save for their first home deposit?
Thanks, Marion
Hi Marion, yes there is. It's called a First Home Saver Account (FHSA), and we have done a tribe talks on them. If you have any questions ask them under that video.
Are there any incentives for buying a home for people who have previously owned a home?
We are now a single income family with 3 children, currently renting, and it seems that everytime we start to think seriously about buying a home, prices jump higher – first home owners grant, increased building costs, housing demand. I was secretly hoping that prices would drop after the GFC (very selfish I know – don't tell anyone)!! We have managed to put some income aside as savings, but currently our capacity for adding to this is limited.
the only thing I can think of is that we buy a small home, cramming the kids into sharing a room for a while – but not sure our mental health could stand it – they might kill each other too.
Hi Scott….saw the new show and found the new website from the old days.
Subscribed again(lost me in the old website)
Anyways doing a great job…but not sure why my email on the 15 no reply?
I post here for assistance and future topic or link to past episode:
Hi Scott,
My parents had been ripped off by their financial adviser for years who received more kick backs than money they made from investing with him in the sharemarket.
The property advise paid off though!
They finally left him and I was able to convince them to use YOURSHARE.com.au to get 50% of commisionfees back on their portfolio.
They wanted another financial adviser to review their pending retirement.
They looked, but could not located a UPFRONT FEE only adviser!!!!
Where are they??
This new guy(INFOCUS MONEY MANAGEMENT) was very eager to ensure it was their decision and they were happy with what he offered.
From the plan he produced under, INFOCUS MONEY MANAGEMENT, I note that he has charged an Upfront fee to write it up of over $1000.
He has recommended they move their investments within the IOOF fund they have and clearly shows the ongoing commissions he will receive. Is this normal to be charged twice for initial setupreview and then receive ongoing commissions????
Now I hammered on about UBANK as I use them myself.
The adviser recommended ING and I know they pay less, but I note he gets a commission….ahhhhhhh. Parents being parents…too much hassle and I will stick with advise I paid for thankyou very much…ahhhhhhhhhhhhh!
I read your 1st May article and my parents are prepared to pay BIG bucks for independent advice, but they can't find an UPFRONT FEE financial adviser!
(you find one son and will consider it)
Please let me know of a list of candidates in Brisbane!
Regards
gfdsgsgsfdgsdf
Hey Greg. What your parents are looking for is a financial advisor who charges like a professional – hourly. There are advisors around who do it – finding them is a little difficult however, and I don't feel comfortable in recommending anyone as the way advisors charge for their services is only one arbiter of value, and should be looked at in context of a range of other qualities. Has anyone else had this problem?
Tuesday evening will be interesting – any budget in an election year is!