1 00:00:10,960 --> 00:00:14,040 Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm 2 00:00:14,120 --> 00:00:17,520 Speaker 1: James Kirby. Welcome aboard everybody. It's been a long time 3 00:00:17,560 --> 00:00:21,480 Speaker 1: since any government moved to change wealth taxes, but this 4 00:00:21,520 --> 00:00:25,000 Speaker 1: week at the Economic Summit in Canberra, I think we 5 00:00:25,079 --> 00:00:30,120 Speaker 1: may be looking at a serious redrafting of investment rules 6 00:00:30,200 --> 00:00:32,600 Speaker 1: as we know them. We've got a lot to talk about. 7 00:00:32,920 --> 00:00:36,080 Speaker 1: My guest today is Will Hamilton of Hamilton Wealth Partners. 8 00:00:36,120 --> 00:00:37,959 Speaker 2: How are you well, very well, Thank you very much 9 00:00:37,960 --> 00:00:38,400 Speaker 2: for having me. 10 00:00:38,960 --> 00:00:41,080 Speaker 1: It's good to have you on. You know, I had 11 00:00:41,080 --> 00:00:43,040 Speaker 1: an idea to put you on because I know that 12 00:00:43,080 --> 00:00:47,000 Speaker 1: you're very politically alert as well as being a financial advisor, 13 00:00:47,360 --> 00:00:49,320 Speaker 1: and you will be across what's happening at the summit. 14 00:00:49,360 --> 00:00:52,519 Speaker 1: But to my surprise, but it's also a very interesting signal. 15 00:00:52,600 --> 00:00:56,320 Speaker 1: I think just this week, in the middle of the summit, 16 00:00:56,520 --> 00:00:59,920 Speaker 1: barely receiving any wide attention, of course, the government did 17 00:01:00,120 --> 00:01:04,040 Speaker 1: something very interesting. They lifted the deeming rates. The deeming 18 00:01:04,080 --> 00:01:06,320 Speaker 1: rates are the rates, of course, at which the government 19 00:01:06,360 --> 00:01:09,560 Speaker 1: deems you are making on your investments in the control 20 00:01:09,680 --> 00:01:13,800 Speaker 1: pension access, and by lifting the deeming rates, they tighten 21 00:01:14,080 --> 00:01:17,280 Speaker 1: pension access. It's a move I see, and I've actually 22 00:01:17,319 --> 00:01:20,520 Speaker 1: sort of mentioned many times I thought it was coming 23 00:01:20,560 --> 00:01:23,639 Speaker 1: because it hasn't been changed since twenty twenty one. Scott 24 00:01:23,680 --> 00:01:25,600 Speaker 1: Morrison was in power when it was in and I 25 00:01:25,600 --> 00:01:28,480 Speaker 1: think it is one of the first steps if you like, 26 00:01:28,760 --> 00:01:31,839 Speaker 1: that this government is taking to tighten up both wealth 27 00:01:31,920 --> 00:01:35,560 Speaker 1: taxes and pension access, which are very much actually more 28 00:01:35,640 --> 00:01:38,319 Speaker 1: or less the same thing because they all basically work 29 00:01:38,360 --> 00:01:42,200 Speaker 1: out as wealth tax you've been watching the summit, tell 30 00:01:42,240 --> 00:01:45,400 Speaker 1: me what in terms of the risk that there will 31 00:01:45,440 --> 00:01:48,960 Speaker 1: be more taxes, wealth taxes in particular coming down the line, 32 00:01:49,160 --> 00:01:50,520 Speaker 1: where are you coming from? What do you think? 33 00:01:51,760 --> 00:01:53,560 Speaker 3: Well, I've been saying for a little while that I 34 00:01:53,600 --> 00:01:57,280 Speaker 3: don't think it'll be increases in taxes, but it will 35 00:01:57,320 --> 00:01:59,520 Speaker 3: be decreases in. 36 00:02:00,160 --> 00:02:01,600 Speaker 2: Tax breaks, so to speak. 37 00:02:01,680 --> 00:02:05,920 Speaker 3: So cutting the CGT discount from fifty percent to twenty 38 00:02:05,960 --> 00:02:09,720 Speaker 3: five percent, you know, playing potentially with negative gearing. So 39 00:02:09,760 --> 00:02:13,200 Speaker 3: it's those things where people get a break, and it's 40 00:02:13,840 --> 00:02:16,079 Speaker 3: even when you look at the performance tests where they've 41 00:02:16,120 --> 00:02:19,120 Speaker 3: been playing with that. I've read a book called Abundance, 42 00:02:19,160 --> 00:02:24,160 Speaker 3: which is Jim Charmer's favorite book. Now I read it 43 00:02:24,360 --> 00:02:27,200 Speaker 3: so I can understand where the government's coming from on things. 44 00:02:27,360 --> 00:02:29,280 Speaker 3: It's actually a really good book and it's a very 45 00:02:29,280 --> 00:02:33,560 Speaker 3: interesting reading. And the thing is with these concessions, it's 46 00:02:33,600 --> 00:02:37,040 Speaker 3: the top taxpayers that naturally benefit from this, the lower 47 00:02:37,080 --> 00:02:39,160 Speaker 3: taxpayers don't, So this is where they're coming from this 48 00:02:39,240 --> 00:02:42,320 Speaker 3: and also with the performance test, it's about providing supply 49 00:02:42,600 --> 00:02:45,920 Speaker 3: because of the doubling of the price of the income 50 00:02:45,960 --> 00:02:49,320 Speaker 3: required to buy house and over the last twenty years. 51 00:02:49,520 --> 00:02:52,040 Speaker 1: So you see them coming in with a we're changing 52 00:02:52,080 --> 00:02:56,760 Speaker 1: the terms and tightening the terms rather than headline grabbing, 53 00:02:57,160 --> 00:03:01,000 Speaker 1: you know, brutal straight up web taxes. So interesting, isn't 54 00:03:01,000 --> 00:03:03,160 Speaker 1: it that the deeming race, as I say, hasn't changed 55 00:03:03,160 --> 00:03:06,640 Speaker 1: since Scott Morrison was in power the budget, which was 56 00:03:06,680 --> 00:03:10,359 Speaker 1: the obvious opportunity to do so. Amanda Rishworth, who was 57 00:03:10,400 --> 00:03:13,240 Speaker 1: the minister at the time, said no, we're not changing 58 00:03:13,280 --> 00:03:16,280 Speaker 1: the deeming rate. But this week, this week when they're 59 00:03:16,280 --> 00:03:19,240 Speaker 1: having a summit discussing these sort of things and this 60 00:03:19,280 --> 00:03:22,120 Speaker 1: is on the agenda, they move for the first time 61 00:03:22,560 --> 00:03:24,560 Speaker 1: in over four and a half years on deeming and 62 00:03:24,560 --> 00:03:26,760 Speaker 1: they make it a bit tighter. Is that something of 63 00:03:26,919 --> 00:03:28,320 Speaker 1: a sign of things to come? 64 00:03:29,760 --> 00:03:30,000 Speaker 2: Yes? 65 00:03:30,280 --> 00:03:33,760 Speaker 3: And I think that they're aware also you know, it's 66 00:03:33,800 --> 00:03:36,640 Speaker 3: projected that we're going to get to twenty seven expenditure, 67 00:03:36,680 --> 00:03:39,040 Speaker 3: getting to twenty seven cent of JEDDP, which you know, 68 00:03:39,080 --> 00:03:41,720 Speaker 3: people like Costello I think from memory it was twenty 69 00:03:41,760 --> 00:03:43,560 Speaker 3: two percent. He wouldn't allowed to go above that, say 70 00:03:43,640 --> 00:03:47,360 Speaker 3: in our full five percentage points above that. And I 71 00:03:47,400 --> 00:03:50,680 Speaker 3: know that's projected, it's not where it is. But they've 72 00:03:50,720 --> 00:03:54,040 Speaker 3: got to catail expenditure and the people have got used 73 00:03:54,080 --> 00:03:57,080 Speaker 3: to this middle class welfare so to speak as they 74 00:03:57,080 --> 00:04:01,000 Speaker 3: call it that's come out, especially since COVID and even 75 00:04:01,080 --> 00:04:03,480 Speaker 3: needing to tell that, so that they're going to start 76 00:04:03,520 --> 00:04:06,520 Speaker 3: to do that. And this is the first sign because 77 00:04:06,600 --> 00:04:08,720 Speaker 3: it's two sides of the equation. There's one is revenue 78 00:04:09,520 --> 00:04:12,560 Speaker 3: and the other is expenditure. And I think Governor Low 79 00:04:12,840 --> 00:04:15,400 Speaker 3: I will form a Governor Low of the Reserve Bank, 80 00:04:15,720 --> 00:04:18,359 Speaker 3: very critical as well and outspoken on the extent of 81 00:04:18,400 --> 00:04:21,360 Speaker 3: expenditure of the government, you know, And it makes me 82 00:04:21,400 --> 00:04:23,920 Speaker 3: realize also just some of the things. Having read Abundance, 83 00:04:23,960 --> 00:04:26,279 Speaker 3: and I do recommend that people do read this. It 84 00:04:26,400 --> 00:04:28,520 Speaker 3: helps you see where the government's coming from. 85 00:04:28,760 --> 00:04:33,040 Speaker 1: Yes, because it's like a manifesto basically, and to some extent, 86 00:04:33,080 --> 00:04:36,200 Speaker 1: every government has one, or at least many governments have one, 87 00:04:36,240 --> 00:04:37,800 Speaker 1: and you get an idea of where they're coming from. 88 00:04:37,839 --> 00:04:40,159 Speaker 1: That is a book across written in the US. It's 89 00:04:40,160 --> 00:04:41,599 Speaker 1: a client Eklin. 90 00:04:41,960 --> 00:04:46,400 Speaker 3: Yeah, ezral substitute America for Australia as you read it. 91 00:04:48,520 --> 00:04:52,720 Speaker 1: Well, let's hope it don't substitute it directly. So in 92 00:04:52,839 --> 00:04:58,360 Speaker 1: terms of reading Tea leaves. In terms of politically feasible moves, 93 00:04:58,440 --> 00:05:00,920 Speaker 1: let's look at the two sides we talked about how 94 00:05:00,960 --> 00:05:03,960 Speaker 1: they can. Basically there's the revenue and there's the expenditure. 95 00:05:04,400 --> 00:05:07,480 Speaker 1: We see some things at the summit like NDIS, perhaps 96 00:05:07,520 --> 00:05:11,480 Speaker 1: some structural reform to NDIS. We see the deeming rate 97 00:05:11,560 --> 00:05:15,039 Speaker 1: basically being pinched. Where else do you see? What do 98 00:05:15,120 --> 00:05:17,560 Speaker 1: you see coming down the line you mentioned CGT. Just 99 00:05:17,640 --> 00:05:19,360 Speaker 1: what's your sense of where they'll move. 100 00:05:20,720 --> 00:05:22,400 Speaker 3: Yeah, I think it's going to be on tax breaks, 101 00:05:22,440 --> 00:05:25,039 Speaker 3: which is also about simplifying that the tax system, and 102 00:05:25,040 --> 00:05:30,400 Speaker 3: whereas I also thought on they make grandfather assets that 103 00:05:30,600 --> 00:05:33,920 Speaker 3: you're like Keating did in nineteen eighty five, boom, as 104 00:05:33,960 --> 00:05:37,360 Speaker 3: of tonight, this comes in. But if you're you're prior 105 00:05:37,440 --> 00:05:40,359 Speaker 3: of that your grandfather, you know, there's even talk that 106 00:05:40,720 --> 00:05:43,760 Speaker 3: you'll only be grandfathered for a period like five years, 107 00:05:44,160 --> 00:05:46,440 Speaker 3: So that that's a lot harsher than I thought. 108 00:05:46,600 --> 00:05:48,920 Speaker 1: For instance, explain what you mean there will that said, 109 00:05:49,080 --> 00:05:52,080 Speaker 1: not everyone would understand where you're coming from there about grandfathering. 110 00:05:52,440 --> 00:05:55,000 Speaker 3: So if you have an asset, yeah, so on on 111 00:05:55,120 --> 00:05:59,080 Speaker 3: things like SAG on CGT, they're talk Yeah. For instance, 112 00:05:59,120 --> 00:06:02,640 Speaker 3: they're talking about and fathering assets that you already hold. 113 00:06:03,279 --> 00:06:03,479 Speaker 2: Yeah. 114 00:06:03,480 --> 00:06:06,840 Speaker 3: The discussion that I've heard is, you know, you'll only 115 00:06:06,839 --> 00:06:09,480 Speaker 3: have a five year break on that, not as in 116 00:06:09,600 --> 00:06:12,440 Speaker 3: tonight at the new rate of a twenty five percent 117 00:06:12,480 --> 00:06:15,040 Speaker 3: discount comes in on assets that you purchase from tomorrow 118 00:06:15,760 --> 00:06:17,320 Speaker 3: and the assets that you hold today are at a 119 00:06:17,320 --> 00:06:20,360 Speaker 3: fifty percent discount. They'll only that that grandfathering will only 120 00:06:20,440 --> 00:06:24,000 Speaker 3: last for a number of years. Now, that's also telling 121 00:06:24,040 --> 00:06:26,200 Speaker 3: you they want that that's a chase for revenue. 122 00:06:26,520 --> 00:06:30,080 Speaker 1: Yes, okay, So just to bring listeners into the picture here, 123 00:06:30,160 --> 00:06:34,599 Speaker 1: just in case. The perhaps I suppose the outstanding piece 124 00:06:34,680 --> 00:06:37,200 Speaker 1: of speculation as to what they might do, almost as 125 00:06:37,200 --> 00:06:41,000 Speaker 1: a process of elimination, is that at the moment there's 126 00:06:41,040 --> 00:06:44,160 Speaker 1: the CGT discount, if you have an asset of any description, 127 00:06:44,440 --> 00:06:46,640 Speaker 1: if you hold it for more than a year, then 128 00:06:46,839 --> 00:06:49,840 Speaker 1: the tax that's applicable only it is reduced by fifty percent. 129 00:06:50,480 --> 00:06:54,000 Speaker 1: And the rumor basically is that they'll turn that down 130 00:06:54,040 --> 00:06:57,680 Speaker 1: to twenty five percent. And you're explaining that also, they'll 131 00:06:57,680 --> 00:06:59,560 Speaker 1: only have a limited number of time by which you 132 00:06:59,640 --> 00:07:02,200 Speaker 1: have to by which you can sell the asset and 133 00:07:02,240 --> 00:07:04,760 Speaker 1: not get it with that tax, because that's called grand furthering, 134 00:07:04,760 --> 00:07:06,360 Speaker 1: and they have this sort of safety period. Isn't five 135 00:07:06,400 --> 00:07:09,480 Speaker 1: years enough? Most people get their backt together in five years. 136 00:07:10,280 --> 00:07:12,920 Speaker 3: Oh yes, it's enough. But I think that what I've 137 00:07:13,640 --> 00:07:15,600 Speaker 3: was envisaged in as I said they would do like that. 138 00:07:15,840 --> 00:07:18,000 Speaker 3: It was done in September eighty five with Katine when 139 00:07:18,040 --> 00:07:21,080 Speaker 3: he sort of brought in SGT an asset SGT free 140 00:07:21,120 --> 00:07:25,240 Speaker 3: an acid. Yeah, is now accessible, but no that's not 141 00:07:25,360 --> 00:07:28,200 Speaker 3: the case. So that mains their main business. 142 00:07:28,240 --> 00:07:31,920 Speaker 1: Yeah, yes, I think it's I mean, tell me what 143 00:07:31,960 --> 00:07:35,360 Speaker 1: you think. But it's also interesting if you think about 144 00:07:35,360 --> 00:07:39,840 Speaker 1: what really matters for investors at this summit, and it's 145 00:07:40,240 --> 00:07:41,920 Speaker 1: nothing short of entertaining to look at some of the 146 00:07:41,920 --> 00:07:44,880 Speaker 1: submissions and everything's on the table. I mean, death tax, 147 00:07:45,080 --> 00:07:49,480 Speaker 1: inheritance tax, well tax of European style. I think they 148 00:07:49,480 --> 00:07:52,280 Speaker 1: should all be should be aware that they're all on 149 00:07:52,320 --> 00:07:55,440 Speaker 1: the table and that they are being bounced around basically 150 00:07:55,480 --> 00:07:58,840 Speaker 1: at this time. But in terms of hard data, hard 151 00:07:58,880 --> 00:08:02,200 Speaker 1: facts so far are I thought the most interesting thing 152 00:08:02,400 --> 00:08:05,480 Speaker 1: was that, first of all, Jim Chalmer said, hey, super 153 00:08:05,520 --> 00:08:08,600 Speaker 1: tax is going through us. I've planned. Even Andrew Fraser, 154 00:08:09,400 --> 00:08:12,960 Speaker 1: the former Queensland treasure close friend of the treasure who 155 00:08:13,000 --> 00:08:15,400 Speaker 1: put in a late application if you like, a lead 156 00:08:15,440 --> 00:08:17,560 Speaker 1: submission to the someone and said look there's another way 157 00:08:17,560 --> 00:08:20,600 Speaker 1: to do this and don't do unrealized gains. He got 158 00:08:20,640 --> 00:08:23,000 Speaker 1: shot down basically, and Charmer said, no, we've got our 159 00:08:23,040 --> 00:08:25,880 Speaker 1: plan we're sticking with. So I think hard message from 160 00:08:25,920 --> 00:08:28,200 Speaker 1: the summits is that super taxes going through us planned. 161 00:08:28,200 --> 00:08:31,040 Speaker 1: What do you think too much? Do you think that's accurate? 162 00:08:32,360 --> 00:08:32,760 Speaker 2: I think so. 163 00:08:33,040 --> 00:08:36,640 Speaker 3: Look everything that both the Prime Minister and the Treasurer 164 00:08:36,640 --> 00:08:39,760 Speaker 3: have said, they haven't buckled one little bit on this, 165 00:08:40,280 --> 00:08:42,520 Speaker 3: and you know what I might think, And you have 166 00:08:42,679 --> 00:08:46,160 Speaker 3: others like Andrew Fraser just mentioned on unrealized capital gains 167 00:08:46,200 --> 00:08:46,720 Speaker 3: it's coming. 168 00:08:47,679 --> 00:08:52,360 Speaker 1: Yeah, So that's super tax, CGT, YEP, pension access. We've 169 00:08:52,400 --> 00:08:55,560 Speaker 1: got three sort of major items there. Anything else you 170 00:08:55,600 --> 00:08:58,000 Speaker 1: think we should talk before the break in terms. 171 00:08:57,760 --> 00:09:01,400 Speaker 3: Of potentially negative gearing, you could say restrictions on negative gearing. 172 00:09:02,480 --> 00:09:04,160 Speaker 2: Shortened ran on all these things. 173 00:09:03,960 --> 00:09:06,680 Speaker 1: And short And ran on them and he lost an election. 174 00:09:07,600 --> 00:09:08,719 Speaker 3: Yeah, but I don't think it's going to be a 175 00:09:08,800 --> 00:09:10,520 Speaker 3: dramatic you know, they allow you to have so many 176 00:09:10,520 --> 00:09:13,400 Speaker 3: properties whatever. But yeah, but again, I think you'll see 177 00:09:13,480 --> 00:09:15,400 Speaker 3: some tightening of those concessions. 178 00:09:16,320 --> 00:09:21,360 Speaker 1: Do you think the public appetize and the context in 179 00:09:21,400 --> 00:09:24,040 Speaker 1: which you could bring in those has changed? In other words, 180 00:09:24,040 --> 00:09:26,600 Speaker 1: when short And tried to bring it in, everyone basically 181 00:09:26,679 --> 00:09:30,120 Speaker 1: jumped up and down. Do you think it's more receptive now? 182 00:09:31,400 --> 00:09:31,600 Speaker 2: Yes. 183 00:09:31,720 --> 00:09:34,880 Speaker 3: I think he tried to do this in twenty nineteen 184 00:09:34,880 --> 00:09:37,240 Speaker 3: from memory pre COVID. We're now post COVID, and I 185 00:09:37,240 --> 00:09:40,400 Speaker 3: think everybody does realize there is an issue, and it's 186 00:09:40,400 --> 00:09:43,319 Speaker 3: an issue. It's with the fact that we're overspending and 187 00:09:43,400 --> 00:09:45,840 Speaker 3: we're not and read there's a shortage of revenue, so 188 00:09:46,760 --> 00:09:49,080 Speaker 3: we need to look at both sides of the balance sheets, 189 00:09:49,080 --> 00:09:51,920 Speaker 3: so to speak. And you know, it's interesting, this isn't 190 00:09:51,960 --> 00:09:55,280 Speaker 3: just an Australian issue. You know, look what Starmer tried 191 00:09:55,320 --> 00:09:57,320 Speaker 3: to do. Correct then the issue is not going to 192 00:09:57,360 --> 00:09:59,760 Speaker 3: be with the people. It actually could be with his 193 00:09:59,760 --> 00:10:04,200 Speaker 3: own bench like Sarma had. When you have a large majority, Yeah, 194 00:10:04,360 --> 00:10:08,000 Speaker 3: sometimes people start flexing their muscles on the back bench. 195 00:10:08,160 --> 00:10:12,400 Speaker 3: And like what Starma was proposing was really towards curbing 196 00:10:12,800 --> 00:10:16,120 Speaker 3: I think it's called pit which is their ndis. 197 00:10:16,360 --> 00:10:19,040 Speaker 2: Yeah, and he was just trying to curb the excesses 198 00:10:19,080 --> 00:10:19,400 Speaker 2: in that. 199 00:10:19,720 --> 00:10:22,480 Speaker 1: And they've also tried non dom taxes and they're now 200 00:10:22,520 --> 00:10:25,640 Speaker 1: trying property taxes, aren't they. So it keeps coming. There 201 00:10:25,640 --> 00:10:29,760 Speaker 1: are waves of basically wealth tax efforts in a corresponding 202 00:10:29,800 --> 00:10:32,480 Speaker 1: economy the UK at the same time with interestingly a 203 00:10:32,559 --> 00:10:34,760 Speaker 1: labor government. Okay, we'll take a short break. We'll be 204 00:10:34,760 --> 00:10:43,040 Speaker 1: back in a moment. Lots to talk about. Hello, Welcome 205 00:10:43,040 --> 00:10:46,160 Speaker 1: back to The Australian's Money Puzzle podcast. James Kirby here 206 00:10:46,320 --> 00:10:52,120 Speaker 1: with Will Hamilton, regular guest of Hamilton Wealth Partners. I 207 00:10:52,200 --> 00:10:54,680 Speaker 1: tend to get Will on when I have very tricky, 208 00:10:55,080 --> 00:10:58,000 Speaker 1: urgent issues to talk about. We do the budget together 209 00:10:58,080 --> 00:11:01,560 Speaker 1: each year, and obviously this we have the economic Summit 210 00:11:01,880 --> 00:11:06,600 Speaker 1: just before we talk about what investors are doing ahead, 211 00:11:06,640 --> 00:11:09,000 Speaker 1: if you like, of the potential changes that are coming 212 00:11:09,000 --> 00:11:12,120 Speaker 1: down the line. You mentioned about housing. You mentioned the 213 00:11:12,160 --> 00:11:16,440 Speaker 1: performance tests. I don't know what you think, but I 214 00:11:16,480 --> 00:11:19,960 Speaker 1: thought that was a studied leak from the summit. I 215 00:11:19,960 --> 00:11:23,000 Speaker 1: thought it meant very little in the overall scheme of things. 216 00:11:23,480 --> 00:11:25,520 Speaker 1: The super funds will do what they want to do. 217 00:11:26,000 --> 00:11:29,000 Speaker 1: That they're making some teeny weeny change to the performance 218 00:11:29,120 --> 00:11:32,520 Speaker 1: tests to satisfy the super funds. Well, yeah, you know, okay, 219 00:11:32,520 --> 00:11:35,200 Speaker 1: and maybe they'll build more houses. Yeah, sure, perhaps in 220 00:11:35,240 --> 00:11:38,400 Speaker 1: the in the fullness of time. That's that's always a probability. 221 00:11:38,480 --> 00:11:44,160 Speaker 1: But I think the performance tests are worth having, and 222 00:11:45,720 --> 00:11:47,960 Speaker 1: they may not be perfect, they will never be perfect. 223 00:11:48,040 --> 00:11:50,760 Speaker 1: But I don't think that I think that's almost a 224 00:11:50,840 --> 00:11:54,840 Speaker 1: decoy basically, that performance test stuff. It's arcane virtually. What 225 00:11:54,880 --> 00:11:56,760 Speaker 1: do you maybe, do you think it's more than that? 226 00:11:57,080 --> 00:11:57,520 Speaker 2: No, I don't. 227 00:11:57,520 --> 00:11:59,800 Speaker 3: I actually like the performance tests as well. But I 228 00:11:59,840 --> 00:12:02,560 Speaker 3: do think this is about some attempt to try and 229 00:12:03,360 --> 00:12:04,760 Speaker 3: drive supply on housing. 230 00:12:05,000 --> 00:12:05,240 Speaker 2: Again. 231 00:12:05,320 --> 00:12:07,880 Speaker 3: I get back to their book abundance and they've they've 232 00:12:07,920 --> 00:12:10,079 Speaker 3: got to increase the supply and how do they do it? 233 00:12:10,720 --> 00:12:13,040 Speaker 1: And they won't ever get into trouble by trying And 234 00:12:13,080 --> 00:12:15,800 Speaker 1: they do try also, to be fair, they are trying 235 00:12:16,000 --> 00:12:21,000 Speaker 1: all sorts of things from incentives programs, shared equity and 236 00:12:21,080 --> 00:12:23,240 Speaker 1: now trying to get the big super funds, who will 237 00:12:23,280 --> 00:12:24,880 Speaker 1: in the end only do it if they can make 238 00:12:24,920 --> 00:12:27,240 Speaker 1: money out of it. And it's worth pointing out, folks 239 00:12:27,240 --> 00:12:30,360 Speaker 1: that the big super funds or well into the housing market. 240 00:12:30,400 --> 00:12:32,520 Speaker 1: They've build luxury apartments so you can find them all 241 00:12:32,559 --> 00:12:35,320 Speaker 1: over the country, bank rolled by SeaBus, et cetera. It's 242 00:12:35,520 --> 00:12:38,320 Speaker 1: just affordable housing. They don't want to do because they 243 00:12:38,320 --> 00:12:40,400 Speaker 1: can't make money out of it. All right, put that 244 00:12:40,400 --> 00:12:43,400 Speaker 1: to one side. Tell me what in terms of what's 245 00:12:43,400 --> 00:12:47,600 Speaker 1: happened so far, super taxes for sure, changes are coming 246 00:12:47,640 --> 00:12:50,200 Speaker 1: down the line. This is a second term labor government. 247 00:12:50,200 --> 00:12:53,640 Speaker 1: They've got the win behind them, they've got strong ratings, 248 00:12:53,640 --> 00:12:57,240 Speaker 1: they are in a position to do things. What are 249 00:12:57,360 --> 00:13:02,040 Speaker 1: investors doing ahead of this? Is there moves to chake 250 00:13:02,080 --> 00:13:05,040 Speaker 1: money out of super and if there is, for instance, 251 00:13:05,679 --> 00:13:07,760 Speaker 1: where are people putting it? And will it just be 252 00:13:08,559 --> 00:13:11,000 Speaker 1: a chase where they move to family trust and then 253 00:13:11,040 --> 00:13:14,000 Speaker 1: they government move on family trust and then they chase 254 00:13:14,040 --> 00:13:15,040 Speaker 1: them across somewhere else. 255 00:13:16,600 --> 00:13:18,320 Speaker 3: Look, we've seen a few clients want to do this. 256 00:13:18,400 --> 00:13:21,120 Speaker 3: We've said just hold off because there isn't any hurry. 257 00:13:21,320 --> 00:13:22,800 Speaker 3: You still, you know, you've gotten to the end of 258 00:13:22,800 --> 00:13:24,839 Speaker 3: this year and we need to see the legislation and 259 00:13:24,920 --> 00:13:28,080 Speaker 3: we haven't seen the legislation yet, but you know, basically 260 00:13:28,120 --> 00:13:29,880 Speaker 3: not what's coming, but we do. I think it is 261 00:13:29,920 --> 00:13:32,280 Speaker 3: wise when you've got time to wait. But no, Look, 262 00:13:32,320 --> 00:13:34,880 Speaker 3: there are one or two that have panicked, I think 263 00:13:35,040 --> 00:13:37,280 Speaker 3: is probably the right way to put it, and they 264 00:13:37,280 --> 00:13:41,160 Speaker 3: want to get things sort of pre last financial year. 265 00:13:42,040 --> 00:13:46,920 Speaker 3: And yes they are moving things into one is to 266 00:13:46,920 --> 00:13:50,840 Speaker 3: family trust. But will family trust get taxed? They've said 267 00:13:50,840 --> 00:13:54,480 Speaker 3: no new taxes, so you know, we have to therefore 268 00:13:54,480 --> 00:13:56,840 Speaker 3: rely on that that there won't be any new taxes 269 00:13:56,880 --> 00:13:59,839 Speaker 3: in this term. That doesn't mean there won't be in 270 00:14:00,080 --> 00:14:03,240 Speaker 3: the next term of parliament. The other thing is, you know, 271 00:14:03,840 --> 00:14:05,880 Speaker 3: one or two people have sort of where they've got 272 00:14:05,880 --> 00:14:09,400 Speaker 3: excess balance, have been using this to you nonconcessional contributions 273 00:14:09,440 --> 00:14:11,680 Speaker 3: to children and making their members of super funds and 274 00:14:11,720 --> 00:14:14,400 Speaker 3: things like that. So us send them some articles in 275 00:14:14,440 --> 00:14:17,200 Speaker 3: the paper that this is a common strategy we've had. 276 00:14:17,440 --> 00:14:19,560 Speaker 3: You know, we have seen some people want to do that. 277 00:14:19,640 --> 00:14:22,000 Speaker 3: You know, again we caution them because you've got different 278 00:14:22,080 --> 00:14:24,000 Speaker 3: risk profiles for different age groups. 279 00:14:24,080 --> 00:14:27,280 Speaker 1: Just to explain to listeners, that's moving. Traditionally, super funds 280 00:14:27,320 --> 00:14:28,840 Speaker 1: there was a limit on how many people could be 281 00:14:28,880 --> 00:14:32,640 Speaker 1: in them, and it's now six. So people are saying, oh, 282 00:14:32,680 --> 00:14:34,680 Speaker 1: there's just mom and dad so far. Let's open it up. 283 00:14:34,720 --> 00:14:38,160 Speaker 1: Let's put the kids in, adult kids in redistributing inside 284 00:14:38,200 --> 00:14:41,560 Speaker 1: super But you're saying that opens what cand of worms? 285 00:14:42,760 --> 00:14:46,120 Speaker 2: Well, you've got to they're our members, your super fund. 286 00:14:46,120 --> 00:14:48,120 Speaker 3: You've got to me as long as you're doing things 287 00:14:48,160 --> 00:14:52,440 Speaker 3: I think with governance in there, and yeah, there's transparency, 288 00:14:52,480 --> 00:14:56,040 Speaker 3: there's openness, and just remember, you know, make sure everybody's 289 00:14:56,080 --> 00:14:59,000 Speaker 3: in the right risk profile because generally a person who's 290 00:14:59,080 --> 00:15:02,800 Speaker 3: in their thirties they've got thirty ideas until they can 291 00:15:03,000 --> 00:15:05,200 Speaker 3: access super and so they're going to have a different 292 00:15:05,280 --> 00:15:07,240 Speaker 3: risk profile than somebody who's in their sixties. 293 00:15:07,680 --> 00:15:10,480 Speaker 1: Yeah, exactly, So mom and dad are they're sort of 294 00:15:10,560 --> 00:15:16,520 Speaker 1: possibly preserving to some extent, and adult children brought into 295 00:15:16,520 --> 00:15:18,720 Speaker 1: the SMSF for the first time because there's a new 296 00:15:18,800 --> 00:15:20,960 Speaker 1: you can now have up to six people, isn't it. 297 00:15:21,080 --> 00:15:24,480 Speaker 1: In smsfs, they could be looking at extremely different where 298 00:15:24,480 --> 00:15:26,840 Speaker 1: they could be looking at growth stocks, they could be 299 00:15:26,880 --> 00:15:30,160 Speaker 1: looking at ethical concerns that weren't on the table perhaps 300 00:15:30,200 --> 00:15:33,840 Speaker 1: twenty years ago. Is that what you're referring to. 301 00:15:34,160 --> 00:15:36,320 Speaker 2: Yeah, look, there's different needs. 302 00:15:36,360 --> 00:15:38,360 Speaker 3: It's just it's the same as when you get different 303 00:15:38,400 --> 00:15:42,000 Speaker 3: generational changes and people looking at your paths and you're 304 00:15:42,720 --> 00:15:46,200 Speaker 3: in your one age groups wanting to give to more 305 00:15:47,240 --> 00:15:50,960 Speaker 3: environmental causes, whereas the older generations are wanting to give 306 00:15:51,040 --> 00:15:53,400 Speaker 3: to your more health related So you've got to be 307 00:15:53,480 --> 00:15:57,000 Speaker 3: aware of the generational issues you're bringing into yourself. And 308 00:15:57,080 --> 00:15:59,000 Speaker 3: it's super fun when you do that. And you've got 309 00:15:59,000 --> 00:16:02,480 Speaker 3: to make sure that the eypinness and transparency is there. 310 00:16:02,840 --> 00:16:06,840 Speaker 1: Okay, past folks, by the way, are the philanthropic tax 311 00:16:07,080 --> 00:16:12,120 Speaker 1: shelters basically public that are very good and useful but 312 00:16:12,200 --> 00:16:14,640 Speaker 1: for very wealthy people. Really all right, And we have 313 00:16:14,800 --> 00:16:16,560 Speaker 1: had someone on the show in the past if you 314 00:16:16,600 --> 00:16:17,960 Speaker 1: want to have a look at that. One last thing 315 00:16:18,400 --> 00:16:21,640 Speaker 1: will which I thought was really interesting. We've been talking 316 00:16:21,680 --> 00:16:24,760 Speaker 1: on the show about the almost like something under your 317 00:16:24,840 --> 00:16:31,200 Speaker 1: nose basically for people are planning around potential wealth tax changes, 318 00:16:31,240 --> 00:16:34,320 Speaker 1: and that the sort of opportunity that's under everyone's nose 319 00:16:35,360 --> 00:16:38,840 Speaker 1: is that it's all income is tax free up to 320 00:16:38,960 --> 00:16:42,440 Speaker 1: eighteen thousand or so, and so many people don't have 321 00:16:42,520 --> 00:16:45,080 Speaker 1: to have everything in super but I see some suggestions 322 00:16:45,120 --> 00:16:47,720 Speaker 1: that could be closed off too to income that it 323 00:16:47,760 --> 00:16:49,800 Speaker 1: could only be for Saturdy. It wasn't that interesting. 324 00:16:50,640 --> 00:16:53,160 Speaker 2: That was interesting. I sort of looked at them with horror. 325 00:16:55,240 --> 00:16:57,400 Speaker 1: Well, it's like on the show, we've not that we've 326 00:16:57,440 --> 00:16:59,360 Speaker 1: just discovered it, but we have been talking about it, 327 00:16:59,400 --> 00:17:01,680 Speaker 1: and many people have been talking about it, and then 328 00:17:01,720 --> 00:17:04,240 Speaker 1: suddenly you see, oh, there's a couple of submissions saying, hey, 329 00:17:04,280 --> 00:17:08,200 Speaker 1: close that off. That's a escape corridor. So that's what 330 00:17:08,440 --> 00:17:09,840 Speaker 1: do you think is that realistic? 331 00:17:10,000 --> 00:17:11,280 Speaker 2: I don't think that one's realistic. 332 00:17:11,400 --> 00:17:11,440 Speaker 3: No. 333 00:17:12,520 --> 00:17:14,359 Speaker 2: Again, I think there could be quite an outcry on 334 00:17:14,359 --> 00:17:14,640 Speaker 2: that one. 335 00:17:14,680 --> 00:17:17,280 Speaker 3: And I think they're going to make decisions where is 336 00:17:17,520 --> 00:17:18,520 Speaker 3: less noise. 337 00:17:18,520 --> 00:17:20,400 Speaker 1: Yes, because they do seem to be in the end 338 00:17:20,440 --> 00:17:24,120 Speaker 1: a relative. How they move is quite conservatively. They bring 339 00:17:24,160 --> 00:17:26,680 Speaker 1: it up, they put it on the table, and then 340 00:17:26,720 --> 00:17:28,800 Speaker 1: they get it through. Well, if they were to be 341 00:17:28,840 --> 00:17:31,720 Speaker 1: re elected again, there was their procedure. They said, well, 342 00:17:31,840 --> 00:17:33,600 Speaker 1: we've put it to an election, We've been elected, so 343 00:17:33,640 --> 00:17:36,040 Speaker 1: we are absolutely given to go ahead, green light to 344 00:17:36,080 --> 00:17:38,880 Speaker 1: do whatever. That's how they did the super tax. Okay, 345 00:17:39,760 --> 00:17:41,720 Speaker 1: well that's a pretty that was a pretty juicy in 346 00:17:41,840 --> 00:17:45,040 Speaker 1: newsworthy session, folks with Will, we're going to now have 347 00:17:45,160 --> 00:17:48,520 Speaker 1: some questions. Some of them are on the summit, but 348 00:17:48,680 --> 00:17:51,520 Speaker 1: we've probably dealt with them. But there's some great questions 349 00:17:51,840 --> 00:18:09,200 Speaker 1: which we'll deal with in a moment. Back in a moment. Hello, 350 00:18:09,240 --> 00:18:12,280 Speaker 1: and welcome back to The Australian's Money Puzzle podcast. James 351 00:18:12,320 --> 00:18:17,200 Speaker 1: Kirby here with Will Hamilton of Hamilton Wealth Partners. Piece 352 00:18:17,200 --> 00:18:21,120 Speaker 1: of correspondence from Jeremy. Hello from Hobart. I've recently started 353 00:18:21,160 --> 00:18:24,600 Speaker 1: listening to your podcast while writing my indoor trainer and 354 00:18:24,680 --> 00:18:27,879 Speaker 1: I really enjoy the discussions. It makes the cold winter 355 00:18:28,000 --> 00:18:32,320 Speaker 1: garage sessions much more bearable. So thank you, Thank you. 356 00:18:32,440 --> 00:18:35,800 Speaker 1: Jeremy down there in cold Hobart. We're here and Sonny Melbourne, 357 00:18:35,800 --> 00:18:39,480 Speaker 1: our producer Lea is in rain SAWTN, Sydney. Jeremy's just 358 00:18:39,520 --> 00:18:43,400 Speaker 1: asking about the best structures and pros and cons around 359 00:18:44,400 --> 00:18:48,119 Speaker 1: basically for holding family investments. It's a very dark question, Jeremy. 360 00:18:48,160 --> 00:18:49,439 Speaker 1: We won't be able to get to it today, but 361 00:18:49,520 --> 00:18:52,040 Speaker 1: I think it would be worth listening to what Will 362 00:18:52,040 --> 00:18:53,960 Speaker 1: had just been saying at the end of the last 363 00:18:54,000 --> 00:18:57,560 Speaker 1: segment around alternatives. If you like to super that being 364 00:18:58,600 --> 00:19:04,520 Speaker 1: family trust, expansion, family truss, expanding the SMSF out to 365 00:19:04,680 --> 00:19:08,320 Speaker 1: anything up to six people. There are starters if you like, 366 00:19:08,359 --> 00:19:10,440 Speaker 1: we'd come back to that another time if we can. 367 00:19:10,800 --> 00:19:14,200 Speaker 1: None of this is advice, it's information only question from Demien. 368 00:19:14,280 --> 00:19:17,800 Speaker 3: There will yeah, So Damien asks, would you know what 369 00:19:17,840 --> 00:19:21,119 Speaker 3: the final dividend for twenty twenty five is on my 370 00:19:21,440 --> 00:19:27,000 Speaker 3: Vanguard ETF VSO's small caps is at three dollars ninety 371 00:19:27,040 --> 00:19:31,080 Speaker 3: eight per share. It seems extraordinarily high for an ETF 372 00:19:31,119 --> 00:19:33,400 Speaker 3: made up of some one hundred and ninety six separate companies. 373 00:19:33,400 --> 00:19:36,639 Speaker 3: They have a dividend yield of seven point eight eight percent, 374 00:19:37,520 --> 00:19:39,800 Speaker 3: and I can't seem to be able to track down 375 00:19:39,840 --> 00:19:42,679 Speaker 3: where it has come from. So if I was you, 376 00:19:42,840 --> 00:19:46,320 Speaker 3: I would have a chat with Vanguard and find there. 377 00:19:46,359 --> 00:19:51,919 Speaker 3: You know, there could be as with ETFs, the rebalancing occurs, 378 00:19:51,960 --> 00:19:54,439 Speaker 3: there could be some capital gains in that. But I 379 00:19:54,480 --> 00:19:56,640 Speaker 3: would have a chat with them and that they will 380 00:19:56,680 --> 00:19:58,639 Speaker 3: be able to give you that transfer, that that degree 381 00:19:58,640 --> 00:20:00,160 Speaker 3: of transparency that you are quire. 382 00:20:00,760 --> 00:20:03,080 Speaker 1: Very good and Damian, we've had questions like this before, 383 00:20:03,080 --> 00:20:06,040 Speaker 1: and often sometimes the mechanics of the ETFs are not 384 00:20:06,760 --> 00:20:12,080 Speaker 1: instantly obvious to the clients who buy the ETFs. You 385 00:20:12,119 --> 00:20:14,760 Speaker 1: know they mirror the stock market. Yes, but not always 386 00:20:14,800 --> 00:20:17,240 Speaker 1: in their dividend flows for instance. That could be due 387 00:20:17,440 --> 00:20:20,200 Speaker 1: to do with the mechanics or the timing, as Will 388 00:20:20,320 --> 00:20:24,359 Speaker 1: has alluded to. Now, the final question is actually this 389 00:20:24,440 --> 00:20:27,040 Speaker 1: is a reprise of a question because I wanted to 390 00:20:27,040 --> 00:20:29,439 Speaker 1: put it to you too, Will. We had it on 391 00:20:29,480 --> 00:20:31,800 Speaker 1: the show the other day that was really interesting. So 392 00:20:31,920 --> 00:20:34,480 Speaker 1: a guy called Drew. He says, I'm forty three and 393 00:20:34,560 --> 00:20:37,679 Speaker 1: every year the level of my earnings means that I 394 00:20:37,760 --> 00:20:42,600 Speaker 1: exceed the concession of super cap, the tax free super 395 00:20:42,600 --> 00:20:44,879 Speaker 1: cap of thirty thousand dollars, and I have to pay 396 00:20:45,800 --> 00:20:49,120 Speaker 1: the extra tax for high earners Division two ninety three, 397 00:20:49,600 --> 00:20:52,160 Speaker 1: and in the future two ninety six is coming down 398 00:20:52,160 --> 00:20:55,760 Speaker 1: the line, and he says, with limitations on super contributions 399 00:20:55,800 --> 00:21:00,119 Speaker 1: and penalties, I would like to explore the idea of 400 00:21:00,160 --> 00:21:03,879 Speaker 1: opting out of compulsory super contributions if your balance is 401 00:21:04,000 --> 00:21:06,560 Speaker 1: high enough, and take that payment as part of your salary. 402 00:21:06,880 --> 00:21:11,720 Speaker 1: With so many restrictions on super going forward, should this 403 00:21:11,800 --> 00:21:15,000 Speaker 1: be an option? So you get to the point now, 404 00:21:15,000 --> 00:21:21,119 Speaker 1: because they haven't changed this tax free pre tax consessional 405 00:21:21,280 --> 00:21:25,000 Speaker 1: cap for years and years, and they keep lifting the 406 00:21:25,119 --> 00:21:30,440 Speaker 1: Super innovation guarantee at twelve percent. That people are, whether 407 00:21:30,440 --> 00:21:33,119 Speaker 1: they like it or not, pushed into this higher tax 408 00:21:33,200 --> 00:21:37,160 Speaker 1: category because of mandatory super's and the same people don't 409 00:21:37,240 --> 00:21:40,800 Speaker 1: need is because by definition they don't need it. I 410 00:21:40,840 --> 00:21:42,800 Speaker 1: think it was like an oversight and what do you 411 00:21:42,840 --> 00:21:45,360 Speaker 1: think that people should be allowed at that level, at 412 00:21:45,359 --> 00:21:47,480 Speaker 1: that level where they're clearly able to look after their 413 00:21:47,520 --> 00:21:51,120 Speaker 1: super do something else with it, rather than fall into 414 00:21:51,119 --> 00:21:52,639 Speaker 1: line with the mandatory rules. 415 00:21:54,359 --> 00:21:57,600 Speaker 3: Look, and it's not just that it's yes, some people 416 00:21:57,680 --> 00:22:00,280 Speaker 3: have what you're led to back concessional contributions if they're 417 00:22:00,280 --> 00:22:04,760 Speaker 3: over the transfer balance cap. There's some there's planning that's 418 00:22:04,800 --> 00:22:08,000 Speaker 3: required around that as well. So yes, I do think 419 00:22:08,040 --> 00:22:10,800 Speaker 3: that it may make sense. The biggest issue for the 420 00:22:10,840 --> 00:22:14,119 Speaker 3: majority of people thought, is getting money into super. That 421 00:22:14,160 --> 00:22:17,520 Speaker 3: doesn't seem it's necessarily an issue that Drew's talking about, but. 422 00:22:17,720 --> 00:22:20,040 Speaker 1: It is the big issue. I mean, you can have 423 00:22:20,040 --> 00:22:22,560 Speaker 1: two million and super pend no tax, but you can't 424 00:22:22,560 --> 00:22:25,080 Speaker 1: put in more than thirty grand a year pre tax. 425 00:22:24,840 --> 00:22:28,359 Speaker 2: Which is so this was all brought in by Kelly Dwyer. 426 00:22:28,600 --> 00:22:31,280 Speaker 3: Yeah, by the Liberal government, and I think it's a 427 00:22:31,280 --> 00:22:34,639 Speaker 3: flaw in the system and the way you get money 428 00:22:34,680 --> 00:22:38,679 Speaker 3: in and some of those limits and therefore bringing in 429 00:22:38,800 --> 00:22:41,520 Speaker 3: division two nine three and then you've got division two 430 00:22:41,560 --> 00:22:44,840 Speaker 3: nine six is three rightly, says I think these are 431 00:22:45,560 --> 00:22:46,880 Speaker 3: this all needs to be redrawn. 432 00:22:47,000 --> 00:22:48,280 Speaker 2: I think yeah. 433 00:22:48,480 --> 00:22:51,280 Speaker 1: And actually one of the submissions, one of the key 434 00:22:51,280 --> 00:22:55,520 Speaker 1: submissions to the Economic Summit suckling back ever son see 435 00:22:55,520 --> 00:22:57,560 Speaker 1: to the economics some much, which we've talked about all 436 00:22:57,600 --> 00:23:02,520 Speaker 1: through from the start, was to lift that concession of 437 00:23:02,560 --> 00:23:05,720 Speaker 1: supercap from thirty grand to fifty. We had a piece 438 00:23:05,800 --> 00:23:08,280 Speaker 1: of that on that submission in the Australian a few 439 00:23:08,320 --> 00:23:10,000 Speaker 1: days ago and I think certainly that would make a 440 00:23:10,080 --> 00:23:14,160 Speaker 1: lot of sense. Very good, very succinct. We got through 441 00:23:14,200 --> 00:23:15,240 Speaker 1: a lot there, Will. 442 00:23:15,200 --> 00:23:16,919 Speaker 2: We did, James, thank you for having me on. 443 00:23:17,240 --> 00:23:19,560 Speaker 1: Thank you very much for coming on. That was Will 444 00:23:19,600 --> 00:23:23,480 Speaker 1: Hamilton of Hamilton Wellth Partners, which, as you've probably heard, 445 00:23:23,560 --> 00:23:26,720 Speaker 1: is an experience podcast guest. The way he bounced through 446 00:23:26,720 --> 00:23:30,520 Speaker 1: all that terrific. All right, let's have some emails the 447 00:23:30,560 --> 00:23:33,800 Speaker 1: money puzzle at the Australian dot com dot au. Lovely 448 00:23:33,840 --> 00:23:36,879 Speaker 1: to see those questions coming in in streams if you like. 449 00:23:36,920 --> 00:23:38,719 Speaker 1: So we're getting Someone comes in and they ask two 450 00:23:38,800 --> 00:23:41,280 Speaker 1: or three questions at a go, and I love that 451 00:23:41,400 --> 00:23:43,920 Speaker 1: because if you're making the effort to send in a question, 452 00:23:44,400 --> 00:23:47,480 Speaker 1: send in several. Very welcome. Okay, talk to you soon.