Barefoot’s Take on the Budget
A spinner from the Housing Minister’s office called me a couple of weeks ago:
“The Minister would like to invite you to Canberra to attend the Budget. There are a few changes we’re going to announce that, let’s just say … we think you’ll be very interested in”, he purred.
“Yeah, yeah. You blokes always say that. What’s the date again?” I asked, turning off my tractor.
“It’s the 12th of May”, he confirmed.
I pulled up my calendar.
On the 12th of May I had one all-day event scheduled:
“Colonoscopy.”
Yes, I’d booked an anal probe, completely forgetting my other Canberra clean-out with Dr Jim Chalmers.
Seriously, this column writes itself. (It would be funny if I wasn't completely TERRIFIED.)
It gets better though. As I lay on the cold operating table on Tuesday, my backside blowing in the breeze, the anaesthetist appeared hovering over my head:
“I just want to say I’m a huge Barefooter. Your book changed my life. You took some time off the column, but I’m glad you’re back. Now go to sleep … deep sleep …”
Meanwhile in Canberra, as a nation we collectively clutched our coits as Dr Jim pulled on his rubber gloves.
The changes to negative gearing and capital gains will make property investing less attractive. I’m happy to cop that if it takes a bit of heat out of house prices. My kids need somewhere to live one day. So do yours.
He also tightened the squirrel grip on trusts and capital gains tax. But you’ve already read a thousand boring headlines about all this since Tuesday so I won’t go on.
Yet here’s what I actually think mattered:
The Government did not touch the two tax-free foundations of the Barefoot Steps: your family home and your super. In other words, even though some rules changed on Tuesday, the Barefoot plan did not.
Finally, I know this is a lot. But if you’ve been sitting on the fence about calling your doctor and getting a full ‘Barnaby Joyce’, just make the call. Book it in. It’s the same rule as investing: the best time to pull the trigger is when you’re terrified.
Tread Your Own Path!
Your Questions & Answers
Albo Buried This on Budget Day – Let’s Dig It Up
We Are Going Under …
Against All Odds
Albo Buried This on Budget Day – Let’s Dig It Up
So I didn't make it to Canberra this week. Yet it turns out that Albo and I had something in common this week: we were both busy burying things somewhere the sun don’t shine. So, for the first time ever, I'm flipping the script — I’m not answering the first question, I'm asking it!
Dear Anthony,
All the headlines this week are asking whether you lied about negative gearing. I don’t care. You saw an opportunity and you took it. Good on you.
Here’s my question: why couldn’t you be bold when it came to our kids?
Australians are the world’s biggest gambling losers – forty percent worse than the country that comes second. That doesn’t happen by accident. It requires fresh-faced kids. And over a third of 12- to 17-year-olds are already gambling. Gamblers Anonymous is now seeing teenagers at its meetings.
The late Labor MP Peta Murphy handed you 31 recommendations, and her dying wish was urgent reform. You had bipartisan support. You sat on it for 1,050 days. Then, while every journalist in the country was buried in the budget lockup and I had a camera up my clacker, you quietly slipped it out.
Now, you could have gone on The Today Show and said:
“These companies have hijacked our sport and they’re targeting our kids. I’m banning the ads.”
(And I think every parent in the country would have fist-pumped their Weet-Bix off the table, even the ones who love a punt.)
But you didn’t.
Is it any wonder voters are done with the party machine? You’re the most powerful man in the country, Anthony. You just proved you can be bold when you want to be.
So why not for the kids?
Scott
We Are Going Under …
Dear Scott,
My husband and I are both 53, earning $120,000 each. Our 18-year-old is at uni and still lives with us. We have two younger boys (16 and 14) with ADHD, both on medication, both seeing specialists, and studying with tutors because they have difficulties at school. The medical bills are brutal.
We owe $35,500 in unpaid school fees and carry a $1.25 million mortgage. Fifty percent of our income goes to the mortgage alone. Some months we spend more than we earn. On top of that, both my husband and I have some pretty serious medical issues – and yet we’ve been skipping seeing specialists for fear of even higher bills. My husband took a new job to earn more money, but he’s not sure it will last. The tension at home is constant. We yell at each other about cheese.
We’ve seen a financial counsellor, who told us nothing new. We have tried the Barefoot buckets but there is not 10% left to put in any bucket. We don’t know whether to sell the house, rent it out, hold on, or let go. Scott, we are drowning. Please guide us.
Maria
Hi Maria,
I want to share something with you.
Many years ago, at a deserted beach, I got caught in a rip.
It happened so gradually I didn’t notice at first. I thought I was in control. Then I realised I was moving steadily out to sea.
At first, I panicked. I screamed and waved at the lone surfer on the shore. I stripped off my clothes, thinking it would help me stay afloat. It did. But only for a minute.
Then I got so tired I remember thinking I couldn’t go on. That I’d just let the waves take me.
That’s where you are right now, Maria. There are no boats coming. No one else can make this call. But if you're asking me what I'd do in your situation, here's the lifejacket:
Sell the house. Rent. Demolish the debt. Regroup.
You couldn’t afford it even if every one of you was in perfect health. But you’re not. Every person under your roof needs medical treatment, counselling, or extra tuition. These are needs, not wants.
And the private school? You’re paying overdue fees and private tutors. If they can’t get your kids across the line without backup, what are you actually paying for?
One rate rise, one car noise, one bad day at the new job, and you get sucked under and don’t come back up. You’re skipping seeing specialists for fear of bills. That terrifies me more than the mortgage.
Right now you have choices. That won’t always be true.
Reach out and grab the lifejacket, Maria.
Before the rip takes you.
Against All Odds
Hi Scott,
I’m a 25-year-old woman looking for help with my super. I was kicked out of home when I was 16, and due to this I have no parental figures to ask for guidance. After all that trauma, I’ve finally got to a place where I’m financially stable (mainly thanks to your book, The Barefoot Investor, which has been a godsend). I’m now looking to set myself up for retirement. I’m wanting to know what’s the limit to insurance on my super fund. How much in weekly fees for insurance is too much? I’ve got just under $30,000 in my super fund. I work a blue-collar job (parts and accessory fitter). I’m unsure what cover I need and what fees I should settle for. Please help, and thank you.
Sarah
Hey Sarah,
It sounds like the trauma you faced as a kid has defined you, in a good way. You want security, and from the questions you’re asking I have absolutely no doubt you’ll never be financially vulnerable again.
You are a winner.
Now, to your question:
Blowing out 25 candles kickstarts your super fund charging you for default insurance cover.
Is it worth it?
Bloody oath. Default insurance super starts off pretty cheap, around $300 a year for a combined policy that covers you for dying, being left totally disabled, or losing your income if you need extended time off work.
Of course, without kids or dependants you don’t have to worry too much about dying … it’s the cover for being ‘nearly dead’ (disability, loss of income) that’s important for you.
You got this.
Thanks for reading.
Scott.