Is the government doing its job?

How right Dr Lowe Governor of RBA is and his words in a recent SAS article should be read by all and given good consideration, reading between the lines he is really saying that nothing of any consequence is being done to help Australia’s current situation. The outlook is bleak.

The current generation of home buyers have only known record low-interest rates, and many of us can remember rates of 21%. Many have taken advantage of the low-interest rates without considering affordability should the rate increase even by 2% and have used the equity in their residential home to finance investment properties.

They have by one way or another ‘negatively geared ‘ the investment property, the purchase of which has often been recommended by financial advisers who have a vested interest in them doing so. Negative gearing is a mystery to most who leave such matters in the hands of their financial advisor to deal with foolishly placing their faith and confidence in the financial advisor’s ability, if not honesty.

This is nothing new, the problem has been around for decades, not only here for who can forget the American experience not so many years ago when people walked away in droves from unaffordable debt. Banks if you recall virtually stopped the supply of interest only loans for a while but of course business bottom line dictated that a return was inevitable.

Ironically those who, without the help and assistance available nowadays, paid off mortgages at a record high-interest rates are now suffering in their twilight years with record low returns on money in term deposits and such like. Therefore we have to accept that both ends of the age spectrum are suffering and it would be reasonable to think that the Government of the day would be seeking methods to improve the situation but regretfully this does not appear to be happening.

Government skirts around the edges of the problems selfishly worried about their future more than the long term Nation view. They continue to allow foreign investment with impunity, something that is unavailable or under the strictest regulations for Australians in other Countries. This has the result of forcing up prices unaffordable for ‘normal buyers’ in the major cities, and the Government continues not to invest in infrastructure or to offer businesses incentives to help relocation to regional areas.

The government will not take on the banks who show massive growth in profits whilst real living standard deteriorates for everyday Australians. It is evident from every angle that banks do not care about people; they have no interests in outcomes other than their increased bottom line.

Tax cuts to business is a waste of time; one would be very foolish to believe that as a result business will invest back into the business and employ more people – it just will not happen. The savings on a business with a turnover of $50,000,000 or less will be in real terms minimal and absorbed in general day to day business, perhaps lessening the pressures on owners a little but of no advantage to employees.

It is also unreasonable to expect an overall increase in wages or salaries as to do so will only increase the problems. The Government need to improve the plight of the lower paid, but this does mean an increase for everyone. The gap between lower and higher paid employees needs to be shortened. This problem needs to have acceptance and not a rivalry between Government and employee organisations.

We have an elderly section of the community who are getting further and further behind the eight ball finding it increasingly hard to manage and have a reason standard of living. The Government may help those with superannuation, self-managed or otherwise, and receiving a reasonable income plus a part aged pension, there are however those who through no fault of their own do not have that luxury and are finding it increasingly hard.

The Government can offer whatever it likes by way of incentives whether it be mortgage relieve, tax breaks, increased superannuation offsets or incentives to downsize their family home. All seemly good and helpful but no matter what they do or what they offer they continue to miss the major problem for pensioners and that is the base pension itself.

The base pension needs to be increased to a figure reflective of today’s living standards allowing those who do have not have anything else for incentives to help retain a satisfactory lifestyle.

No one denies that families and future families find are finding it hard to maintain the standard of living they have become accustomed to, and it is obvious the Government is appealing to them, the middle-aged and younger, for a future political benefit. It must be said however that the same generation has and is receiving more Government handouts than ever previously experienced. Meanwhile, older Australians and pensioners who worked hard for future generations have been left behind and basically forgotten.

Forget incentives, forget tax cuts, forget mortgage relieve, for the benefit of pensioners the Government must first make an honest no frills increase to the base pension bringing it in line with current values, then work from that base however they please.

Do you agree or do you believe the Government of the day is achieving that which, by mandate, it was elected to do?