It is extremely likely we will have a change of government at the next federal election this year. Therefore, I thought it appropriate to warn you of some of the financial changes’ Opposition Leader Bill Shorten will impose on Australians.
The good news is that interest rates should not increase this year and in fact, will possibly decrease. I’ll only hope that the banks will pass on the decrease to claim.
If you intend buying property this year be aware of the possible removal of negative gearing on existing properties if Mr Shorten wins the election. I believe that this will result in a further slide in property prices. It may also result in rents rising as investors will wait to recover money if they cannot claim tax deductions.
The major worry for the property market is the risk of unemployment growing if the building industry slows down. This is a real probability that this will happen in 2020. Rising unemployment will mean that mortgage stress will increase and people may sell their homes.
If anyone has any particular views on the housing market, we want to hear from you. If you’re after obtaining the latest trends in the economic data, contact our office.
Housing prices are falling, banks are making it harder to borrow money and the experts predict America will head into recession by 2020. Factors that should have made such propositions seem absurd.
These changes, if implemented will probably result in Australia heading into recession sometime in 2021. If you discourage wealth creation investors leave the market. This leads to a loss of jobs and more reliance on our overburdened social security system. Inevitably these changes will result in a massive blow out of our public sector debt. Currently, this sits at approximately $541 billion. I estimate we could have public sector debt in excess of $1 trillion in five years time if these changes are implemented.
Who will pay back all this debt? You can be guaranteed Opposition Leader Bill Shorten will not accept responsibility.- Richard SuttieCEO at Suttie Financial Group
Richard E Suttie Pty. Ltd. Trading as Suttie Financial Group.