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Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm

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Speaker 1: James Kirby, the World editor at The Australian. Welcome aboard everybody.

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Speaker 1: You do know that we have a budget coming up

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Speaker 1: in March March twenty five. Most people don't realize. They

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Speaker 1: expect the budget to be of course in May, but

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Speaker 1: because it's an election year, we have a pre election

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Speaker 1: budget penciled in from March twenty five and then we

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Speaker 1: will have an election. Not only is there a budget

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Speaker 1: coming up sooner than you might have expected, but of

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Speaker 1: course we are going to have something of a giveaway budget.

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Speaker 1: We're pretty certain about that because that's the nature of

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Speaker 1: election era or election time budgets, especially when you have

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Speaker 1: an incumbent administration. Also, interestingly, of course we'll have a

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Speaker 1: new regime in our world. That is that Jim Charmers

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Speaker 1: will remain treasure, but it's goodbye. Stephen Jones, who was

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Speaker 1: Financial Services Minister and tried a lot of that rather

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Speaker 1: difficult parliamentary initiatives, such as they're trying to bring in

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Speaker 1: originally trying to bring in the super tax in its

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Speaker 1: original form. He also had a lot of issues with

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Speaker 1: the Big industry funds and Seeva's sort of running a

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Speaker 1: mock last in twenty twenty four, So that is a

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Speaker 1: very difficult job, to be honest, And then people say, oh,

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Speaker 1: Stephen Jones, you know he was a terrible financial services minister.

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Speaker 1: They say the same thing about Jane Hume. They said

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Speaker 1: the same thing about everyone I can ever remember. In

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Speaker 1: that job. It's a really hard job because the treasurer

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Speaker 1: gets to basically get all the glamour, and the Financial

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Speaker 1: Services minister, who was also in charge of super gets

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Speaker 1: to basically front up to all the difficult press conferences

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Speaker 1: and do a lot of really tough stuff behind the scenes.

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Speaker 1: So in my experience, that particular post is something of

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Speaker 1: a hospital pass politically, So keep that in mind in

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Speaker 1: any event, Budget's coming, What could we expect this time round?

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Speaker 1: And a few other things I want to talk to

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Speaker 1: do too about today. The ideal person, of course, is

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Speaker 1: my favorite budget guest and joins me every year for

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Speaker 1: the budget specially it's Will Hamilton of Hamilton with Partners.

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Speaker 2: How are you will very well? James? How are you?

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Speaker 2: Thank you for having me?

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Speaker 1: You all ready for March twenty five? You're ready to

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Speaker 1: do a mark? We have never done a March budget,

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Speaker 1: have we. We've had some funny ones in COVID. But yeah,

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Speaker 1: in fact, that whole thing about the federal budget always

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Speaker 1: being in first Tuesday in May has sort of been

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Speaker 1: sort of knocked around a lot this last year or two.

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Speaker 1: But what in your world? I don't really want to

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Speaker 1: talk about this macro situation, you know, are we in

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Speaker 1: what's the situation? Are we in the radar or whatever,

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Speaker 1: et cetera. I'm thinking more in terms of measures. Is

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Speaker 1: there for investors? Is there any aspect that they should

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Speaker 1: keep an eye on? Do you think of this looming budget.

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Speaker 2: I don't think there's any nasties that people need to

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Speaker 2: be looking out for. The governments do not take away

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Speaker 2: during an election. Budget so as simple as that, So

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Speaker 2: increase taxes or introduce new taxes, or look at ways

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Speaker 2: I'm restricting what people can do, so I don't think

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Speaker 2: they'll be that, but be prepared just for's some window

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Speaker 2: dressing on the expenditure side, so extension of things like

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Speaker 2: the redbait on electricity and things like that. I really

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Speaker 2: think it's going to be a bit of a yawn,

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Speaker 2: But if anything, there will be a few goodies rather

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Speaker 2: than nasties here.

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Speaker 1: I never I take that attitude going into a budget, Will,

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Speaker 1: And I'll tell you something without naming names. There are

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Speaker 1: people who go into the budget and they have decided

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Speaker 1: what they're going to do and what they're going to

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Speaker 1: write and what they're going to say before they go in.

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Speaker 1: I don't do that. I'm very old fashioned, and I

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Speaker 1: don't look at the press releases either for what it's worth.

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Speaker 1: I actually look at the budget measures and the budget

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Speaker 1: papers and I go through them systematically, and it is labor.

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Speaker 1: Let me tell you, it's hard work because these days, folks,

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Speaker 1: it's on a PDF. It's like a two hundred and

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Speaker 1: sixty page PDF, and you're locked in there for six

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Speaker 1: hours reading this pdf. But if you do dig in,

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Speaker 1: and if you are if you know how to read

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Speaker 1: those budget papers, there's always interesting things in there question

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Speaker 1: of finding them. One of the things I was thinking, Will, was,

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Speaker 1: you know, they did one very smart. I think it

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Speaker 1: was very smart how they cut personal taxes and then

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Speaker 1: how they got a second ring of the belt by

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Speaker 1: basically moving the by enhancing taxes in the middle brackets

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Speaker 1: and reneging on promises for higher salary tax cuts. They

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Speaker 1: did that in this in the recent times, and politically

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Speaker 1: I might be wrong, but I have a feeling that

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Speaker 1: might have been one of the smartest things that they

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Speaker 1: have done in their entire time in this is the Abbot,

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Speaker 1: This is the Abbot, the Albans administry and the Chalmers administration.

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Speaker 1: It's interesting. I'm thinking of Chalmers and I'm thinking of

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Speaker 1: a line he said in a profile recent He already

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Speaker 1: said I'm the treasure that Albanizi needs. And I said

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Speaker 1: to myself, that is a devilishly ambiguous line. What on

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Speaker 1: earth does that really mean? What does that really mean?

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Speaker 1: But we'll assume Chalmers is there, We'll assume he's in

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Speaker 1: this our same state of mind. Do you think that

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Speaker 1: in the way of giving out goodies as opposed to nasties,

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Speaker 1: which we can sort of assume is a theme of

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Speaker 1: this election, is there anything we might see on that?

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Speaker 1: So I do think is there anything you're hearing in

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Speaker 1: your world that people are braced.

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Speaker 2: For not hearing now? And I think it's going to

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Speaker 2: be a bit of a nothing, because we've also got

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Speaker 2: to remember that there are macro implications if they go

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Speaker 2: out handing out too much and you're going to bring

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Speaker 2: inflation back under focus again and therefore interest rates and

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Speaker 2: they're going to want to avoid that discussion. So there'll

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Speaker 2: be something here, is something there. I think the big

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Speaker 2: thing is post the election, and because I think it's

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Speaker 2: odds on that we're going to have a minority government.

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Speaker 2: I'm not saying which side because I think that's too

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Speaker 2: difficult to predict, but.

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Speaker 1: As a financial operator, which would you regard as more difficult,

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Speaker 1: this administration or a minority government?

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Speaker 2: Yeah, well, no one likes minority governments because yeah, there's

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Speaker 2: been a difficult government with respectors of working in air industry.

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Speaker 2: But I think that if they're going into negotiations, you

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Speaker 2: just need to be very aware of what the other

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Speaker 2: side could be looking for. If they're looking into a

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Speaker 2: minor minority government, So.

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Speaker 1: Are you assuming a labor minority government, a labor led

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Speaker 1: minority government.

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Speaker 2: Or if it's coalition, you know they'll be they'll be

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Speaker 2: negotiating with a handful of teals.

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Speaker 1: So that's right, a handful of teals. That's assuming there's

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Speaker 1: any teals left. It would be very interesting to see.

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Speaker 1: It would be very interesting to see, all right. And

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Speaker 1: I don't mean to be facetious there. I really don't.

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Speaker 1: But some of the you know, got in a very

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Speaker 1: slim margin, and you know it would be difficult to

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Speaker 1: get in again. I would think, all right, okay, now, also,

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Speaker 1: will I want something I just wanted to bring before

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Speaker 1: we go to the break. I wanted to ask you

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Speaker 1: one quick thing, which is and this is a totally

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Speaker 1: different subject, folks, it's about term deposits.

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Speaker 2: We are.

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Speaker 1: In the era now of where rates have peaked and

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Speaker 1: their due to decline, and we all talk about how

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Speaker 1: decline with repeated cuts we hope in the future. So

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Speaker 1: we've all talked about that in terms of investment in

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Speaker 1: how its stokes investment. What about term deposits. You were

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Speaker 1: skeptical about sort of returns people were getting in any

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Speaker 1: event up to now. But what do you suggest to

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Speaker 1: people as term deposit rates inevitably start to get cut

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Speaker 1: in the backs of doing it already?

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Speaker 2: While as skeptical as we were saying, a lot of

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Speaker 2: people at the end of twenty three lock in five

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Speaker 2: percent two days, and they were going out as far

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Speaker 2: as six months because you could, you know, people could

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Speaker 2: could lock that in at that stage, and some people

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Speaker 2: thought getting five percent was fantastic. Yeah, it's rest free.

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Speaker 1: Well, it's government guaranteed risk free.

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Speaker 2: I understand that, and you should always balance and looking

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Speaker 2: at balancing risk and return and asset allocation and with

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Speaker 2: which we do and we think that's very important. But

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Speaker 2: by putting one hundred percent in two days at five percent,

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Speaker 2: I thought that was a bit silly. And yeah, when

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Speaker 2: you've seen the market rally since October twenty two, the

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Speaker 2: US market and US dollar terms, and I understand the

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Speaker 2: strand dollars gone down seventy percent versus you would have

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Speaker 2: picked up approximately thirteen percent totally in returns in tds.

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Speaker 2: That's why asset allocation, that's why looking beyond just one

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Speaker 2: asset class, be at astrain equities as well. The fact

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Speaker 2: is you do need to diversify, you need to take

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Speaker 2: into account risk and I think that's very important.

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Speaker 1: Okay, all right, all right, very good. All right, Well

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Speaker 1: take short break, folks, and we'll be back in one moment. Hello,

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Speaker 1: Welcome back to The Australian's Money Puzzle podcast. I'm James

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Speaker 1: Kerry talking to Will Hamilton, regular on the show. Hey,

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Speaker 1: well you mentioned I just want to clarify, but what

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Speaker 1: you were talking about there before the break about the

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Speaker 1: diversification and keeping things balanced, and you were skeptical about

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Speaker 1: five percent that basically what you're saying is five percent

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Speaker 1: is not as good as it sounds when you've got

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Speaker 1: inflation of whatever two and a half, et cetera. And

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Speaker 1: then you were saying about balance. Is there a risk

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Speaker 1: I haven't put this to anyone on the show, but

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Speaker 1: is there a risk that many of our listeners who

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Speaker 1: did listen to us all through the year, who did diversify,

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Speaker 1: who did actively diversify into US shares, particularly through ATFS

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Speaker 1: or whatever, that they are now out of balance because

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Speaker 1: they are equities and their shares and their American shares

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Speaker 1: particularly have surged and they've blown out. So as a

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Speaker 1: part of the pie, they've become not dangerously big, but

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Speaker 1: bigger than they were supposed to be.

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Speaker 2: Absolutely, so we are reviewing a strategic acid allocation at

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Speaker 2: the moment.

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Speaker 1: Now.

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Speaker 2: We do that. We look annually at what the long

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Speaker 2: term forecasts are. And you know the fact is that

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Speaker 2: US shares, global shares, but in particular US shares have

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Speaker 2: had a very very strong two and a big years.

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Speaker 2: The US is at a record level of its waiting

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Speaker 2: in the organ Stanley Capital Index AQUISO or country World

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Speaker 2: Index ex Australia, So that's the other thing that you

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Speaker 2: need to take into account. I do think that we

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Speaker 2: have an administration in the United States that is going

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Speaker 2: to be is definitely pro growth. But after two and

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Speaker 2: a big years of stellar growth performance in the US market,

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Speaker 2: don't expect to see another very strong year. I think

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Speaker 2: we're going to get a good year, but it's going

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Speaker 2: to be very bumpy. But the reason why you invest

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Speaker 2: in equities is for growth, and too many people invest

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Speaker 2: in the Australian market for dividends or income. And it's

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Speaker 2: interesting that the fact is there's been a lot written

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Speaker 2: about the decline in the size of the ASEC, as

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Speaker 2: there also has been in the UK. Yeah, and you

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Speaker 2: square Peg, for instance, when they came out with their

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Speaker 2: their announcements to the results at the end of thirty

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Speaker 2: first of December, said that.

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Speaker 1: If we just square Peg a square bigs.

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Speaker 2: Aventure capital company run by Pelbast but it's very widely

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Speaker 2: supported out there in the market. And they were sort

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Speaker 2: of talking about two of their investments in Fund one,

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Speaker 2: not Fund zero, which has got canvas in it. Fund

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Speaker 2: one rocked and air Wallocks of looking to monetize those

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Speaker 2: and they're looking at their full potential potential listings and

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Speaker 2: they're discussing Nasdaq. Like Atlasian didn't come on the AX,

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Speaker 2: it went to Narsdeck. Australian companies and they're looking at

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Speaker 2: they're looking at nas Deck as well. So people were

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Speaker 2: these growth companies, they're overlooking the AX and they're looking

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Speaker 2: at nars Deck.

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Speaker 1: That's a shame, isn't it. And then that's probably how

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Speaker 1: it's going to go. And you can see why that's

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Speaker 1: a problem all around the world. By the way, it's

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Speaker 1: a problem all around the World's problem in London, it's

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Speaker 1: a problem in Dublin. It's a problem in some of

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Speaker 1: the European exchanges. It's a problem in Hong Kong. This

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Speaker 1: sort of everything, well, as you say, will if seventy

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Speaker 1: percent of shares are in the US, it becomes self perpetuating.

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Speaker 1: Why would you list in your regional market when you

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Speaker 1: can go straight to the US. You mentioned too there.

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Speaker 1: I don't want to go too deep into that, but

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Speaker 1: one was Rocket. Now that's linked with the guy that

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Speaker 1: ran jet Star one time, isn't it, Bruce? And now

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Speaker 1: this is rocked RKT or OKT. What was the other company,

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Speaker 1: air well X air Warlex. Yes so too, the sort

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Speaker 1: of high growth unlisted companies the point being, folks, But

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Speaker 1: is that the sort of hottest companies along with Canvas,

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Speaker 1: sort of big name unlisted companies that are sort of

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Speaker 1: great hopes of the local economy just now all talking

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Speaker 1: about going directly to the US to list. So what

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Speaker 1: does that mean for the ESX Because if they keep

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Speaker 1: getting big takeovers like Insignia and Sydney Airport and New

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Speaker 1: Crest and they don't get the new IPOs, then guess

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Speaker 1: what it shrinks and shrinks into a very small exchange. Okay,

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Speaker 1: one last thing, will does Everyone's had a crack at

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Speaker 1: this private credit. Liam Short was on the show. He

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Speaker 1: more or less said, don't touch it. Other people have

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Speaker 1: more balanced because they say, oh look there's good and

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Speaker 1: there's bad in there. I wonder I just saw something

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Speaker 1: this morning. I wanted to tell you this. I want

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Speaker 1: to have you heard of Hamilton Lane them being the

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Speaker 1: other they're the other financial advisors, but people don't know

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Speaker 1: them like they know you. Because Hamilton Nane is very

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Speaker 1: big and it's listed on the Nasdaq, which is an

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Speaker 1: interesting thing for a financial advice network to do. The

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Speaker 1: only reason I mentioned them is because they put out

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Speaker 1: a survey this morning. It says nearly one third of

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Speaker 1: financial advisors plan to alley case one fifth or more

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Speaker 1: of client portfolios to private markets in twenty twenty five.

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Speaker 1: Now think about that. So we can't We've got to

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Speaker 1: be very careful here about what we call private investing

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Speaker 1: on listed investing, and we have to separate the good

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Speaker 1: from the bad, and we have to separate private credit

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Speaker 1: from private equity, et cetera. But if I may, will

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Speaker 1: just on that single issue of private credits, which is

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Speaker 1: what's been put in front of many investors by their advisors,

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Speaker 1: and there's more of it to come. If these guys

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Speaker 1: are talking about this sort of level, what do you

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Speaker 1: say to people who have no experience of this area

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Speaker 1: if they are, if their advisor or an advertisement or

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Speaker 1: anyone else puts it in front of them, what's your recommendation?

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Speaker 2: Know what you're doing. That's the first thing. Don't just

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Speaker 2: take it because you broke is offering it. Remember, they

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Speaker 2: get a stamping fee. I think that you need to

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Speaker 2: ensure that even within indiversified credit or private credit. Week. Yes,

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Speaker 2: we've looked at it. We've supported a firm ten eleven, twelve,

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Speaker 2: ye or something like that. However, you know, we have

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Speaker 2: decreased property. We decreased that in October twenty two. We

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Speaker 2: decrease it again this month, whilst the liquidity is there,

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Speaker 2: and I think that's a big thing. Look at the

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Speaker 2: liquidity and it's amazing. We've seen a lot of new

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Speaker 2: clients in the last month or so, and some of

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Speaker 2: them are with existing providers and then they say, oh,

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Speaker 2: but I'm in this fund and I'm locked up. And

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Speaker 2: it was a good thing at the time. They're sort

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Speaker 2: of not happy due to one or two other reasons.

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Speaker 2: They're looking to move and now they've got buyers remorse

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Speaker 2: because of the illiquidity of some of these funds. So

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Speaker 2: make sure you understand one hundred percent what you're investing

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Speaker 2: in and and the dispersion in the quality. You know,

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Speaker 2: even in the property sector between a tier one manager

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Speaker 2: and there's some really good ones, but there's also some

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Speaker 2: that yeah, I've just decided, well, property is running, Property

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Speaker 2: debts running, so I'm going into that will avoid them

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Speaker 2: like the plague or mezzanine debt. You know that there's

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Speaker 2: a story of one manager having to walk into a

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Speaker 2: project and the mesa has been written off and so

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Speaker 2: that's one hundred cents in the dollars. So suddenly you've

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Speaker 2: invested in the second tier debt and you've lost one

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Speaker 2: hundred percent of what you invested in.

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Speaker 1: So I think, folks, it's hard to go too deep here.

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Speaker 1: But a private credit it's fine for someone like Will

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Speaker 1: who went in ten years ago, who knows that area,

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Speaker 1: who knows who's who, and you know, who knows who

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Speaker 1: are the good ones and who are the bad ones.

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Speaker 1: And unfortunately there's not sort of one shop shop on

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Speaker 1: the internet where you can just have a look up

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Speaker 1: and say, well, who's good in private credit and who's bad?

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Speaker 1: What you can do? What you can do, I think

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Speaker 1: very usefully is keep an eye on financial media like ourselves,

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Speaker 1: the Australian or any other publications which are covering the area,

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Speaker 1: because there are incidents every other week of private credit

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Speaker 1: managers having to go in and take over projects of

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Speaker 1: there's no way that they want to take over these projects.

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Speaker 1: That was not what their business is. Is just quickly

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Speaker 1: realized that. Did that rattle you? What's going on? These

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Speaker 1: stories we're seeing of private credit managers having to basically

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Speaker 1: take over property properties and try and sell them. Which

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Speaker 1: is that. I'm sure that's that is. They will tell

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Speaker 1: you it's all normal. I wouldn't like to hear that

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Speaker 1: if I had a fund.

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Speaker 2: Yeah, well, first of all, if one of the things

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Speaker 2: we do is we want to know about the recovery process.

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Speaker 2: So when we're when we're looking at a manager, so

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Speaker 2: how have they reacted? Have have they gone? What's the track record?

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Speaker 2: And never believe if a fund manager says to you

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Speaker 2: have never had a default, run.

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Speaker 1: Right, ask that's a very simple question. Then pick up

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Speaker 1: the phone. Just ask him one thing. Have you had faults?

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Speaker 1: What were they? How did how did how did? How

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Speaker 1: did you deal with them? If they've never had one?

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Speaker 1: At such a good point, will I'll just close on that.

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Speaker 1: I remember a very similar thing. I was on the

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Speaker 1: board of a super fund once upon a time relating

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Speaker 1: to a large newspaper group. I was like the very

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Speaker 1: young I was just I was reporter. I want on it.

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Speaker 1: I went down it for experience and I was like

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Speaker 1: the worker rapp or whatever, and was that hedge funds

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Speaker 1: were just coming in, Yes, I think it was hedge funds,

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Speaker 1: and they were all the rage. So this is going

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Speaker 1: back twenty years ago and someone came in and they

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Speaker 1: were launing theres Someone who was used to fund, was

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Speaker 1: friends with, who had done other business with them, came

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Speaker 1: in and they were launching a head fund and there

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Speaker 1: was a long presentation about this hedge fund. And I

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Speaker 1: remember asking have you ever launched a hedge fund before?

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Speaker 1: Is this new to you? And they said no, we

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Speaker 1: haven't done one before. This is our first. I remember thinking,

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Speaker 1: I will say anything now, but when these guys go,

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Speaker 1: I'm just going to say, why on earth would you

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Speaker 1: go with someone who hasn't any experience when there's plenty

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Speaker 1: who do. Okay, we will leave that tangled not to

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Speaker 1: one side for the moment and we will take a break.

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Speaker 1: I'll be back with some great questions. Hello, Welcome back

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Speaker 1: to The Australian's Money Puzzle podcast. I'm James Kirby talking

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Speaker 1: to Will Hamilton. Now, Will really good questions here. I'll

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Speaker 1: read the first one from Simeon and that's not Simon.

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Speaker 1: It's Simeon who sent a piece which was an article

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Speaker 1: and it says this article talks about pension fund exposure

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Speaker 1: to China and the difficulty they are having selling their

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Speaker 1: China acquisitions due to China's slowing economy and restrictive government policy.

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Speaker 1: I was wondering the extent to which Australian super funds

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Speaker 1: are exposed to China. Okay, Simeon, I'm just going to

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Speaker 1: break down that question and try and make it a

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Speaker 1: bit more feasible for Will to answer. I mean, the

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Speaker 1: exposure to China from super funds comes in a million guises.

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Speaker 1: I mean, if you had shares in Fortescue, well, you'd

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Speaker 1: have big exposure to China, right because that's their main business,

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Speaker 1: shipping our north to China. So it comes in different guyses.

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Speaker 1: But this very specific exposure in relation to pension big

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Speaker 1: pension funds going into China and having difficulty. To be honest,

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Speaker 1: I can only tell you about the news right that

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Speaker 1: I'm across, and last year several very large Australian pension funds,

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Speaker 1: among the biggest in the country that we all know,

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Speaker 1: the top five, several of them had big problems, big

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Speaker 1: write offs. But it wasn't in China. It was in

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Speaker 1: the US smack in the middle of the main game.

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Speaker 1: I haven't really seen any chakras out of China, have you?

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Speaker 2: Will not since Yeah, the Evergreen.

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Speaker 1: Yeah, which was ago more.

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Speaker 2: Yeah, but it's going to take an index approach depending

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Speaker 2: on risk. The risk profile. Emerging markets is going to

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Speaker 2: be six to eight percent of the total portfolio. China's

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Speaker 2: thirty six thirty seven percent of them index, so you're

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Speaker 2: looking at probably two point seven to five to three

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Speaker 2: and a half percent probably index. Yeah, they're therefore total

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Speaker 2: exposure if they're at index. But a lot of a

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Speaker 2: lot of fund managers and they're and also the industry funds,

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Speaker 2: they're taking a negative view on China and an underweight

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Speaker 2: view on China. So the exposure to China will be

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Speaker 2: I would say, significantly less than that.

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Speaker 1: Okay, that's interesting, And of course that was an international piece, Simeon.

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Speaker 1: And it would seem that our particular large pension funds

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Speaker 1: are not in terms of exposure in any way over exposed.

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Speaker 1: It would seem on that front. Rather that's an international problem. Okay,

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Speaker 1: hopefully that's useful to you. Can you see a question

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Speaker 1: from Tina?

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Speaker 2: I can. So I'm reading that property trusts A rates

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Speaker 2: are ready to rebound, especially if we have rate cuts.

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Speaker 2: What do you think, Well, Tina, they're up fifty cent

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Speaker 2: last year.

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Speaker 1: So oh they really it was the sector the sub

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Speaker 1: industries was a fifty percent.

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Speaker 2: Really, so forty percent of the RADI index approximately is

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Speaker 2: the Goodman Group. Oh, which is why they bounced me

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Speaker 2: on data centers, et cetera. So they've probably been bashed

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Speaker 2: around in the last twenty four to forty eight hours. Yeah,

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Speaker 2: that's exactly what happened. That a rates often look ahead.

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Speaker 2: They are liquid, remember, and so a lot of property

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Speaker 2: has been illiquid. Well, a lot of property is a

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Speaker 2: liquid and therefore people were looking ahead and that the

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Speaker 2: next moving interest rates was down and that sector has

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Speaker 2: run and it's run hard.

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Speaker 1: It's interconnectivity in some ways, it's kind of it's really

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Speaker 1: it becomes ludicrous, doesn't it that the Goodman Group is

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Speaker 1: a property trust in Australia were sold off midweek because

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Speaker 1: the Chinese startup that no one had heard of some

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Speaker 1: days ago. I'm sorry, not midweek, but if you remember

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Speaker 1: in at the very end of January, the Deep Seek

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Speaker 1: sell off, which was a Chinese startup that no one

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Speaker 1: had heard of, triggered a sell off because they seem

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Speaker 1: to challenge in Nvidia, and that triggered a sell off

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Speaker 1: on a day not a huge sell off, but a

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Speaker 1: sell off in Goodman Group, which is the leading property

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Speaker 1: to us in Australia. So properties in Australia were downgraded

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Speaker 1: on the back of a Chinese startup that no one

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Speaker 1: ever heard of, suggesting and promising that they had taken

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Speaker 1: on in Vidia, a stock that no one had ever

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Speaker 1: heard of a few years ago but was briefly the

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Speaker 1: biggest stock in the world. That is what you call

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Speaker 1: interconnectivity at its barmeest Okay, last question from Mick, something

433
00:23:37,359 --> 00:23:40,199
Speaker 1: I haven't been able to find a clear answer to.

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00:23:40,520 --> 00:23:43,000
Speaker 1: I know the family home is exempt from the age

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00:23:43,000 --> 00:23:45,760
Speaker 1: pension test in regards to pension eligibility, but due to

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00:23:45,880 --> 00:23:49,440
Speaker 1: high house prices, my wife and I haven't been able

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00:23:49,440 --> 00:23:52,879
Speaker 1: to purchase in Sydney and we're looking at retiring abroad.

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00:23:53,440 --> 00:23:57,760
Speaker 1: This is really interesting. Some are more affordable, most likely Italy.

439
00:23:58,680 --> 00:24:01,960
Speaker 1: Is an owner occupied home that is located overseas still

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00:24:02,000 --> 00:24:04,480
Speaker 1: considered exempt from the asset test if it is the

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00:24:04,480 --> 00:24:07,280
Speaker 1: only property owned and it has been used as our

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00:24:07,359 --> 00:24:11,679
Speaker 1: principal praise of residence. This is never advice, Mick, to

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00:24:11,760 --> 00:24:13,760
Speaker 1: all the mix in the world out there who might

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00:24:13,800 --> 00:24:18,160
Speaker 1: be thinking of moving from Australia. To your little Tuscan

445
00:24:18,280 --> 00:24:22,359
Speaker 1: farmyard with your lasagna on the terrace. The question is

446
00:24:22,760 --> 00:24:24,760
Speaker 1: is your house and it may not Besily, Oh, it

447
00:24:24,800 --> 00:24:27,480
Speaker 1: could be Bali, it could be anywhere. It could be Vietnam.

448
00:24:27,600 --> 00:24:30,000
Speaker 1: Is your house is still is your host exempt? I

449
00:24:30,440 --> 00:24:32,720
Speaker 1: have an over feeling it mightn't be. Have you any idea?

450
00:24:32,840 --> 00:24:35,800
Speaker 2: Well again I doubt it as well, But I think

451
00:24:35,800 --> 00:24:39,000
Speaker 2: what you've got to do is there are other It's

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00:24:39,040 --> 00:24:41,679
Speaker 2: not straightforward and what's happening in Europe at the moment,

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00:24:41,800 --> 00:24:45,800
Speaker 2: especially with the state taxes and duties and changes in

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00:24:45,840 --> 00:24:50,520
Speaker 2: government and the whole non dom, which is if you

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00:24:50,560 --> 00:24:53,760
Speaker 2: live in a country and you have assets elsewhere, you

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00:24:53,800 --> 00:25:00,119
Speaker 2: do need to get some very careful and detailed the

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00:25:00,560 --> 00:25:04,840
Speaker 2: planning advice and texas because you, yeah, unfortunately one of

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00:25:04,840 --> 00:25:08,320
Speaker 2: the things that is absolutely sure as we all die

459
00:25:08,920 --> 00:25:13,520
Speaker 2: or a state may become the property of the Italian government, So.

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00:25:13,600 --> 00:25:16,680
Speaker 1: Very careful on that to making anyone else thinking about that.

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00:25:16,720 --> 00:25:18,600
Speaker 1: And one an other. Sorry we didn't give you a

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Speaker 1: clear answer on that. We didn't give you clear answer

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00:25:20,840 --> 00:25:23,960
Speaker 1: on that because that is a very complicated question that

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00:25:24,680 --> 00:25:28,440
Speaker 1: unfortunately sometimes we can answer these, but not that one.

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00:25:28,880 --> 00:25:31,600
Speaker 1: We don't know enough for a start about the whole situation.

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00:25:32,240 --> 00:25:35,440
Speaker 1: But one thing I would add is that many older

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00:25:35,440 --> 00:25:38,600
Speaker 1: Australians I have discovered as they get older or whatever,

468
00:25:38,600 --> 00:25:42,240
Speaker 1: whether they're buying property overseas or spending time overseas maybe

469
00:25:42,280 --> 00:25:44,000
Speaker 1: a month a year or whatever you like to do

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00:25:45,440 --> 00:25:48,400
Speaker 1: that increasingly as you get older you can't get insurance,

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00:25:48,600 --> 00:25:52,120
Speaker 1: and health insurance is particularly difficult. But there are particular

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00:25:52,160 --> 00:25:56,080
Speaker 1: countries where there is reciprocal arrangements. Greece is one, and

473
00:25:56,600 --> 00:25:59,840
Speaker 1: almost such initially is another, so are the UK and

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00:25:59,880 --> 00:26:03,520
Speaker 1: I And that is something that's really worth checking. If

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00:26:03,520 --> 00:26:07,120
Speaker 1: you were thinking about as an older person moving overseas

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00:26:07,240 --> 00:26:10,120
Speaker 1: or living there, check out whether there's reciprocal health arrangements.

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00:26:10,119 --> 00:26:12,680
Speaker 1: That's really important because if there is, it's terrific, right,

478
00:26:12,720 --> 00:26:14,960
Speaker 1: so you're going to end up in hospital more often

479
00:26:15,320 --> 00:26:18,200
Speaker 1: than when you were younger. And if the country has

480
00:26:18,240 --> 00:26:22,440
Speaker 1: that's important as to whether you can be exempt from

481
00:26:22,480 --> 00:26:25,360
Speaker 1: the age pension. I know there's there's days, isn't there's

482
00:26:25,359 --> 00:26:27,000
Speaker 1: so many days you can be overseas. You can't be

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Speaker 1: overseas permanently.

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00:26:28,880 --> 00:26:32,680
Speaker 2: Whether you then become correct, do you become a well,

485
00:26:32,680 --> 00:26:35,840
Speaker 2: that's when the whole state tax thing also further kicks in.

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00:26:35,920 --> 00:26:38,920
Speaker 2: So it's a really really it's really complex, and there's

487
00:26:38,960 --> 00:26:44,440
Speaker 2: set there's specialist lawyers and accountants in yeah, therese international

488
00:26:44,480 --> 00:26:50,159
Speaker 2: matters and you're really I would get some very good advice, okay.

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00:26:50,240 --> 00:26:52,040
Speaker 1: And there is a thing about how many days you

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00:26:52,080 --> 00:26:54,119
Speaker 1: are overseas and how many days you can be to

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00:26:54,200 --> 00:26:57,840
Speaker 1: retain pension and pension entitlements and arrangements that I imagine would

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00:26:57,840 --> 00:27:01,640
Speaker 1: be pivotal for Mick and any thinking along those lines. Okay,

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00:27:01,880 --> 00:27:05,719
Speaker 1: but interesting question. We would like to come back to it.

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00:27:05,760 --> 00:27:08,760
Speaker 1: Maybe we got even more clarification on it than we

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00:27:08,760 --> 00:27:12,560
Speaker 1: could have a better crack at answering it. Okay. Thank you, Mick,

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00:27:12,680 --> 00:27:15,520
Speaker 1: Tina and Simeon, and thank you Will Hamilton. Great to

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Speaker 1: talk to you.

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Speaker 2: You're welcome, games, thanks for having me.

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Speaker 1: We'll be by the time we get to the budget

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Speaker 1: on the twenty fifth of March, we will be right

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00:27:24,760 --> 00:27:26,680
Speaker 1: up there and tuned up big time by the time

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00:27:26,720 --> 00:27:29,880
Speaker 1: we sit down together to do the Budget podcast. One

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Speaker 1: of the favorites of the year. Okay, that was Will Hamilton. Well, partners,

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Speaker 1: thank you very much for listening. Let's have some emails.

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Speaker 1: The money puzzle at the Australian dot com DOTU. Today's

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Speaker 1: show was produced by Leah Sammaglu. Talk to you Soon,