Economy gets big tick (TheAge)

[Willo]

Willo

Most people suffer from the Supermarket broken trolley wheel syndrome. They remember every time they get a dodgy trolley but not so much when they get a good one.

So people remember rises in prices but not falls. In the December quarter prices for vegetables went down 5.7%, audio visual and computers 4.3%, pharmaceauticals 3.5%.

The CPI is not a complete cost of living index but it is a good model. It works out what the average household spends in certain categories and tracks the changes in price of those items and services. Now some households use more electricty, some have smokers, some have larger consumers of alchohol, some eat out more etc etc so circumstances will change for each for each family but it provides the best data we've got to track price increases.

The 2% figure doesn't mean each item goes up 2%, some go up 10% some go down 5%. The CPI is imperfect but it is a good indicator or whether we live in a country with price infaltion issues or not. We clearly live in a LOW price inflation economy - JUST FACT Willo.

Now the CPI excludes some items such as mortgage interest. If you factor that in cost of living pressures have DECREASED even more (about $5-6000 a year for someone with an average mortgage) with interest rates faling form 6.75% under Howard to 3% under Gillard.

For the vast majority of Australians the cost if living has clearly dropped.

The evidence is pretty clear.

The fact that people have convinced themselves that there is a cost of living increase is an indictment on them, the media and of course the liberal party

Thanks for taking the time to reply.
Cpi may be the best statistical tool available, but to me the "fixed basket" may not always tell the full story.

Sorry, I don't agree with you that the cost of living has dropped. I'm going on the $ increases in my household bills.
(I'm not talking about plasma tv's, a new car or super mobile phones for every family member, I don't buy too many new clothes etc etc.cheapies if I need something) Just the necessities. Power, rates, insurances, car rego, gas, fuel. Just the basics. They've all increased substantially. While I can agree that necessities such as food prices have in some areas (especially bread & milk) dropped, some food prices have gone up (quality meat). Yes you can always substitute, which is what many do. So it's not actually like for like. But that's my view.

Not having a go at you Lambsy.


Maybe you should take up the case for Victorian clubs arguing against Sydney's extra cost of living allowance, especially if, as you believe it's fact that the cost of living has dropped ;D

 

[lamb22]

Willo the point I am making is that the cost of goods and services has gone up but only marginally, it s about 14% over the last 5 years.

In that times average wages have gone UP about 20%, income taxes have gone DOWN, benefits have gone UP and interset rates have gone down, so for most people the cost of living has gone DOWN.

As an example if a family has two income earners on $50k (roughly the average wage) in 2007 with two kids:

1. The price of goods and services has gone up 14% so lets say they need to find an extra $14,000 on the basis they traditionally spent all their income in goods and services and didn't save.

Over the same time their incomes would have gone up 20% - extra $20,000
income Tax cuts of $4000 a year x 5 years $20,000
Interest rates own from 6.75% to 3.00% on 300,000 mortgage $ 5 -6000 a year
School kids bonus $ 1200 -1600 a year.

So prices have gone up (they almost always do) but they go up benignly and we need prices to go up to increase profits and pay higher wages and employ more people in the absence of real productivity gains in an industry or other decreases in the costs of production (eg price of materials)

But our wages have gone up more, our taxes have gone down our benefits have gone up and interest rates have gone done so for most the cost of living has gone down.

Willo if you do a breakdown of your revenue and expenditure in 2007 and now I think you would be surprised.

If you think petrol is expensive imagine what it be like if the dollar was US.65 cents under Howard - It would be close to $2.50 a litre.

As a real life example my mom lives on a pension and another smaller source of fixed income. She has no debt and owns her own home. She is now 82. In 2009 she was making ends meet. Since the big rise in her pension in 2009 she is saving those extra $4,000 a year. That increase was a very big deal to a lot of people, mum included.

 

[Willo]

Willo the point I am making is that the cost of goods and services has gone up but only marginally, it s about 14% over the last 5 years.

In that times average wages have gone UP about 20%, income taxes have gone DOWN, benefits have gone UP and interset rates have gone down, so for most people the cost of living has gone DOWN.

As an example if a family has two income earners on $50k (roughly the average wage) in 2007 with two kids:

1. The price of goods and services has gone up 14% so lets say they need to find an extra $14,000 on the basis they traditionally spent all their income in goods and services and didn't save.

Over the same time their incomes would have gone up 20% - extra $20,000
income Tax cuts of $4000 a year x 5 years $20,000
Interest rates own from 6.75% to 3.00% on 300,000 mortgage $ 5 -6000 a year
School kids bonus $ 1200 -1600 a year.

So prices have gone up (they almost always do) but they go up benignly and we need prices to go up to increase profits and pay higher wages and employ more people in the absence of real productivity gains in an industry or other decreases in the costs of production (eg price of materials)

But our wages have gone up more, our taxes have gone down our benefits have gone up and interest rates have gone done so for most the cost of living has gone down.

Willo if you do a breakdown of your revenue and expenditure in 2007 and now I think you would be surprised.

If you think petrol is expensive imagine what it be like if the dollar was US.65 cents under Howard - It would be close to $2.50 a litre.

As a real life example my mom lives on a pension and another smaller source of fixed income. She has no debt and owns her own home. She is now 82. In 2009 she was making ends meet. Since the big rise in her pension in 2009 she is saving those extra $4,000 a year. That increase was a very big deal to a lot of people, mum included.

I know you've simplified figures (no doubt for my benefit) and that's one particular family group.
Just a couple of points though.
I'm not sure how many people recieved 20% payrise over 5 years. I certainly missed out.
Not everyone received school kids bonus and doesn't that just replace the previous Education Tax Refund?
and of course some people rent and in some country areas rents have increased dramatically..

But off the top of my head, Private health care, water rates, land rates, electricity, gas, house & contents insurance, car insurance, car rego and fuels etc have all gone up in excess of any payrise & tax cut. But maybe, I'm the exception.

ps I'm glad your mum is doing well. Really I am.
Unfortunately many elderly people do find it a struggle. Some are better off than others, but that's the same in life in general.
(Sorry about the brief reply, I will add a bit to this later, but have to head to work. I've got large bills & taxes to pay ;D)

 

[poppa x]

lamby, if wages go up 20% then people DON'T get 20% extra in their mitts.
They pay tax on the 20% - and sometimes the 20% tips them into a higher tax bracket.

 

[Soda]

lamby, if wages go up 20% then people DON'T get 20% extra in their mitts.
They pay tax on the 20% - and sometimes the 20% tips them into a higher tax bracket.

Poppa - Tax on $50K in 2007/2008 FY was $10,350 (incl medicare levy) so you effectively took home $39,650

If that same person earns $60K in 20012/2013 they will be paying $11,947 in tax so taking home $48,053 - an extra $8,403 on their 2007/2008 salary

That person on $60K is a fair increase away from the next bracket ($80K). Every extra dollar they earn between $60 & $80K is taxed at 32.5c.

I don't think a 20% increase over the last 5 years is an exaggeration from Lamb.

Lamb - I'd like to know where I can get 3% interest rates

 

[mld]

Lamb - I'd like to know where I can get 3% interest rates

Become a bank, borrow from the reserve bank today and pay the reserve bank back tomorrow morning.

 

[Willo]

Some clarification in reference to Lambsys previous post.

Lies, damned lies and Labor claims
Date
March 6, 2013

I guess you've heard the news: the Gillard government has obtained new analysis of data from the Bureau of Statistics showing that Tony Abbott's election commitments inflict brutal damage on working families, particularly those in western Sydney, increasing taxes and cutting support to families.

According to Treasurer Wayne Swan, Abbott's commitments include scrapping the tripling of the tax-free threshold, axing the new schoolkids' bonus and abolishing family payments from the household assistance package introduced in June last year.

The government tripled the tax-free threshold from $6000 to $18,200 a year from July last year, we're told, delivering tax cuts to all taxpayers earning up to $80,000 a year. Most of these people received savings of at least $300 a year, with many part-time workers receiving up to $600.

The household assistance package increased payments to families who receive benefit part A by up to $110 per child and by $70 per family for those receiving benefit part B. The median family income in Fairfield is $106,000. This family, with two children both in primary school, father working full-time on $86,000 a year and mother working part-time on $20,000 will be almost $1500 a year worse off, we're told. The mother will pay $600 more in tax and they will lose $820 in schoolkids' bonus and $72 in other benefits.

The median family income in Penrith is $118,000. This family, with two primary and one high school student, the father earning $70,000 and the mother on $48,000, will be $2300 a year worse off, we're told. The father will pay $250 more in tax, the mother will pay $300 more, and they'll lose $1640 in schoolkids' bonus and $108 in other benefits.

Terrible, eh? There's just one small problem. This stuff is so misleading as to be quite dishonest.

For a start, this is just politically inspired figuring, which doesn't deserve the aura of authority the government has sought to give it by having it released by the Treasurer with a reference to ''new analysis of Bureau of Statistics data'' and allowing the media to refer to it as ''modelling''.

It's true you'd have to look up the bureau's census figures to get the details of the median family in a particular suburb, but after that the ''modelling'' could be done on the back of an envelope.

There's a key omission from Labor's description of its wonderfully generous household assistance package: why it was necessary. Its purpose was to compensate low and middle-income families for the cost of the carbon tax. Since the Coalition promises to abolish the carbon tax, Abbott has said that all the compensation for the tax will also go. (Strictly speaking, the schoolkids' bonus is linked to the mining tax, but the Coalition is also promising to abolish this tax, and Abbott has said the bonus, too, will go.)

The trick is that Abbott has yet to give any details of how or when these concessions would go and what they'd be replaced with. But this hasn't inhibited Labor. It has happily assumed what the Coalition intends and is presenting its assumptions as hard facts.

The most glaring omission from Labor's calculation of the hip-pocket effect of all this is its failure to acknowledge the saving households would make from the abolition of the carbon tax.

Based on Treasury's original calculations, this should be worth about $515 a year per household, including $172 a year from lower electricity prices and $78 a year from lower gas prices.

Some Labor supporters argue that even if the carbon tax is abolished, prices won't fall. This is highly unlikely. The state government tribunals that regulate electricity and gas prices would insist on it. And a Coalition government would no doubt instruct the Australian Competition and Consumer Commission to police the wider price decrease.

Labor's repeated claim to have tripled the tax-free threshold from $6000 to $18,200 a year has always been literally true, but highly misleading. That's because it conveniently ignores the complex operation of the low-income tax offset.

When you allow for this offset, which Labor has reduced and changed without removing, the effective tax-free threshold has increased by a much smaller $4500-odd from $16,000 to $20,542. This explains why the tax cut arising from the seemingly huge increase in the threshold is so modest (for many, $5.80 a week) and also why the move yields no saving to anyone earning more than $80,000 a year. For them, the threshold increase has been ''clawed back''.

The idea of a Coalition government bringing about an actual increase in income tax is hard to imagine. Labor omits to mention Abbott has promised a modest tax cut, though he hasn't said when it would happen.

Labor also omits to mention that the generous schoolkids' bonus replaced its earlier 50 per cent education tax refund, which offered savings of up to almost $400 a year on the eligible expenses of primary school students and up to almost $800 for secondary students.

Labor has assumed that Abbott would merely abolish the schoolkids' bonus without reinstating the education tax refund. Maybe he would; maybe he wouldn't - he hasn't yet said. But only a one-eyed Labor supporter would trust Labor to read Abbott's mind.

It didn't take the announcement of an election date to ensure the informal election campaign would begin as soon as we were back at work in January. It's a daunting thought.

But at least it gives people like me plenty of time to demonstrate the dishonesty of the claims being made.



Read more: http://www.smh.com.au/opinion/politics/lies-damned-lies-and-labor-claims-20130305-2fivr.html#ixzz2MjzeU8sO


Some actual facts.
But I'm sure it will be brushed off as another Murdoch inspired editorial piece, facts or not.


Just a question.. What is "middle class"?
Is it the suburb you live in, regardless of income?
Or income regardless of where you live?
If it's income, what $ figure defines it?
Or some other definition?

 

[KnightersRevenge]

Lamb - I'd like to know where I can get 3% interest rates

I can get you better http://mortgagerates.monitorbankrates.com/florida/melbourne-fl-2 but I wouldn't personally be getting on the property ladder in South Florida that thing looks a little rickety to me.....

 

[lamb22]

Some clarification in reference to Lambsys previous post.

Lies, damned lies and Labor claims
Date
March 6, 2013

I guess you've heard the news: the Gillard government has obtained new analysis of data from the Bureau of Statistics showing that Tony Abbott's election commitments inflict brutal damage on working families, particularly those in western Sydney, increasing taxes and cutting support to families.

According to Treasurer Wayne Swan, Abbott's commitments include scrapping the tripling of the tax-free threshold, axing the new schoolkids' bonus and abolishing family payments from the household assistance package introduced in June last year.

The government tripled the tax-free threshold from $6000 to $18,200 a year from July last year, we're told, delivering tax cuts to all taxpayers earning up to $80,000 a year. Most of these people received savings of at least $300 a year, with many part-time workers receiving up to $600.

The household assistance package increased payments to families who receive benefit part A by up to $110 per child and by $70 per family for those receiving benefit part B. The median family income in Fairfield is $106,000. This family, with two children both in primary school, father working full-time on $86,000 a year and mother working part-time on $20,000 will be almost $1500 a year worse off, we're told. The mother will pay $600 more in tax and they will lose $820 in schoolkids' bonus and $72 in other benefits.

The median family income in Penrith is $118,000. This family, with two primary and one high school student, the father earning $70,000 and the mother on $48,000, will be $2300 a year worse off, we're told. The father will pay $250 more in tax, the mother will pay $300 more, and they'll lose $1640 in schoolkids' bonus and $108 in other benefits.

Terrible, eh? There's just one small problem. This stuff is so misleading as to be quite dishonest.

For a start, this is just politically inspired figuring, which doesn't deserve the aura of authority the government has sought to give it by having it released by the Treasurer with a reference to ''new analysis of Bureau of Statistics data'' and allowing the media to refer to it as ''modelling''.

It's true you'd have to look up the bureau's census figures to get the details of the median family in a particular suburb, but after that the ''modelling'' could be done on the back of an envelope.

There's a key omission from Labor's description of its wonderfully generous household assistance package: why it was necessary. Its purpose was to compensate low and middle-income families for the cost of the carbon tax. Since the Coalition promises to abolish the carbon tax, Abbott has said that all the compensation for the tax will also go. (Strictly speaking, the schoolkids' bonus is linked to the mining tax, but the Coalition is also promising to abolish this tax, and Abbott has said the bonus, too, will go.)

The trick is that Abbott has yet to give any details of how or when these concessions would go and what they'd be replaced with. But this hasn't inhibited Labor. It has happily assumed what the Coalition intends and is presenting its assumptions as hard facts.

The most glaring omission from Labor's calculation of the hip-pocket effect of all this is its failure to acknowledge the saving households would make from the abolition of the carbon tax.

Based on Treasury's original calculations, this should be worth about $515 a year per household, including $172 a year from lower electricity prices and $78 a year from lower gas prices.

Some Labor supporters argue that even if the carbon tax is abolished, prices won't fall. This is highly unlikely. The state government tribunals that regulate electricity and gas prices would insist on it. And a Coalition government would no doubt instruct the Australian Competition and Consumer Commission to police the wider price decrease.

Labor's repeated claim to have tripled the tax-free threshold from $6000 to $18,200 a year has always been literally true, but highly misleading. That's because it conveniently ignores the complex operation of the low-income tax offset.

When you allow for this offset, which Labor has reduced and changed without removing, the effective tax-free threshold has increased by a much smaller $4500-odd from $16,000 to $20,542. This explains why the tax cut arising from the seemingly huge increase in the threshold is so modest (for many, $5.80 a week) and also why the move yields no saving to anyone earning more than $80,000 a year. For them, the threshold increase has been ''clawed back''.

The idea of a Coalition government bringing about an actual increase in income tax is hard to imagine. Labor omits to mention Abbott has promised a modest tax cut, though he hasn't said when it would happen.

Labor also omits to mention that the generous schoolkids' bonus replaced its earlier 50 per cent education tax refund, which offered savings of up to almost $400 a year on the eligible expenses of primary school students and up to almost $800 for secondary students.

Labor has assumed that Abbott would merely abolish the schoolkids' bonus without reinstating the education tax refund. Maybe he would; maybe he wouldn't - he hasn't yet said. But only a one-eyed Labor supporter would trust Labor to read Abbott's mind.

It didn't take the announcement of an election date to ensure the informal election campaign would begin as soon as we were back at work in January. It's a daunting thought.

But at least it gives people like me plenty of time to demonstrate the dishonesty of the claims being made.



Read more: http://www.smh.com.au/opinion/politics/lies-damned-lies-and-labor-claims-20130305-2fivr.html#ixzz2MjzeU8sO


Some actual facts.
But I'm sure it will be brushed off as another Murdoch inspired editorial piece, facts or not.


Just a question.. What is "middle class"?
Is it the suburb you live in, regardless of income?
Or income regardless of where you live?
If it's income, what $ figure defines it?
Or some other definition?

Gittins is a very good economic journalist and the article is Ok but not up to his general standard. However it does not contradict my posts which are basic facts that most wage earners have received tax cuts of around $2000 since 2008, that pensions have gone up by over $4000 in real terms since 2009, that an average mortgage holder is paying about $5000 less than in 2007 and that child care rebate was increased to 50% from 30% or that the school kid bonus gives and extra $820 a year for a SC student and $410 for a PS student.

What Gittins talks about is the likely "cost of living' changes if Abbott gets elected. Already Abbott has said he would abolish the school kids bonus and the superannaution co contribution to low income earners.

Labor is right to argue that if Liberals reverse the carbon price compensation that means reversing tax cuts and pension increases. In the absence of a detailed policy from LNP such arguments are valid.

In economic theory Gittins is also right that if an input cost is removed (carbon price) it should lead to a decrease in the price of goods supplied. However what Ross doesn't do is look at the fact that we will still need to reduce emissions and that a market mechanism is regarded as the cheapest option.

At the moment polluters pay the price and the benefits go to households. Under Direct action taxpayers pay and the benefits go to polluters. I think the Grattan Institute worked out that to get 5% reductions from 1990 levels direct action would mean an additional $1400 per hosuehold.

Willo I suggest you read more of Gittins as he is good value.

http://www.theage.com.au/comment/by/ross-gittins

 

[Willo]

Gittins is a very good economic journalist and the article is Ok but not up to his general standard. However it does not contradict my posts which are basic facts that most wage earners have received tax cuts of around $2000 since 2008, that pensions have gone up by over $4000 in real terms since 2009, that an average mortgage holder is paying about $5000 less than in 2007 and that child care rebate was increased to 50% from 30% or that the school kid bonus gives and extra $820 a year for a SC student and $410 for a PS student.

What Gittins talks about is the likely "cost of living' changes if Abbott gets elected. Already Abbott has said he would abolish the school kids bonus and the superannaution co contribution to low income earners.

Labor is right to argue that if Liberals reverse the carbon price compensation that means reversing tax cuts and pension increases. In the absence of a detailed policy from LNP such arguments are valid.

In economic theory Gittins is also right that if an input cost is removed (carbon price) it should lead to a decrease in the price of goods supplied. However what Ross doesn't do is look at the fact that we will still need to reduce emissions and that a market mechanism is regarded as the cheapest option.

At the moment polluters pay the price and the benefits go to households. Under Direct action taxpayers pay and the benefits go to polluters. I think the Grattan Institute worked out that to get 5% reductions from 1990 levels direct action would mean an additional $1400 per hosuehold.

Willo I suggest you read more of Gittins as he is good value.

http://www.theage.com.au/comment/by/ross-gittins

Yes I will read a bit more.
Just one thing, the school kids bonus actually replaced the ETR, they may have upped it a bit, but it really was to bring the payment forward to the start of the year instead of at the end of the year. Good idea all the same. But they took one and replaced it with another.
Is the school kids payment "means tested"?

Just a question Lambsy, how do you define "middle class"?
I've asked the question before (in general, not directly pointed at you) but it's obviously been missed or some don't know or have an answer.
I'm curious as to the definition as some posters keep referring to "middle class welfare". I'd like to know exactly how they define it.

 

[lamb22]

Yes I will read a bit more.
Just one thing, the school kids bonus actually replaced the ETR, they may have upped it a bit, but it really was to bring the payment forward to the start of the year instead of at the end of the year. Good idea all the same. But they took one and replaced it with another.
Is the school kids payment "means tested"?

Just a question Lambsy, how do you define "middle class"?
I've asked the question before (in general, not directly pointed at you) but it's obviously been missed or some don't know or have an answer.
I'm curious as to the definition as some posters keep referring to "middle class welfare". I'd like to know exactly how they define it.

The economists will have some point where you are classified middle class. For mine middle class is when you are not working poor, namely that you are not on subsistence wages but that your income allows you to survive and also to enjoy leisure and culture and also to save for greater security or luxury.

In that instance labor has been its own worse enemy in that it has worked hard to move millions of people out of the working poor category into the middle class.

I think I said it before that Gough created the modern Australian middle class. When Gough left salar/wage earners took home almost 65% of Australia's GDP. That is before tax. Then Gough used those tax dollars to take out of working households the cost of health through medicare (then medibank) and the cost of education (especially higher education). there were also great reforms in divorce law, FOI and administrative law bringing in cheaper tribunals to settle matters rather than courts and trade practices and competition laws protecting consumers.

There was pretty much a disaster with Fraser and Howard in control between 75 and 83 and they almost destroyed the economy.

Hawke and Keating did an amazing repair job (aided ironically by the Murdoch press as cover) because in essence they took a lot of classical market policies (deregulation, floating dollar etc) and the libs didn't object. As such the percentage of GDP which went to wages fell from about 65% to 55% - this was in large part aided by the wages accord with the unions which limited wages growth - BUT the quid pro quo was the compulsary super scheme rolled out to all wage earners at 9% and the family benefits schemes ("no child living in poverty") which basically set up the working/middle class saftey net or perhap middle class welfare scheme.

Howard's contribution was to extend middle class welfare but in a rather random muddled headed way - baby bonus which didn't change birth rates - just a waste of billions and billions of dollars, the 30% health insurance rebate (unmeans tested) which again wasted billions of dollars as studies showed that the tax penalty for not taking out health insurance and the liftime loadings were sufficient to boost insurance numbers.

On the flip side Howard of course ran down public health spending, ran down education spending, took money off public education to give it to wealthy independant schools, introduced up fornt fees for unis which meant dumber rich kids got in in place of smarter poor kids, massively increased uni fees and of course his two signature policies the great new tax (GST) and workchoices which together adversely affected the cost of living for working families. As such I would suggest Howard narrowed the middle class by making health, education and housing (due to the credit created bubble - ie when Howard was elected a median priced house cost 3.5 years of an average wage - when he left it cost 7 times the average wage) more unaffordable for working people.

Rudd and Gillard have substantially rectified this. After workchoices the wages component of GDP fell to 52%. It is now pushing back up to 55% and of course peole have benefitted from low interest rates and low inflation and increases benefits (which are means tested) and increased expenditure in health and education and infrastructure (roads, schools, NBN).

 

[Willo]

The economists will have some point where you are classified middle class. For mine middle class is when you are not working poor, namely that you are not on subsistence wages but that your income allows you to survive and also to enjoy leisure and culture and also to save for greater security or luxury.

In that instance labor has been its own worse enemy in that it has worked hard to move millions of people out of the working poor category into the middle class.

I think I said it before that Gough created the modern Australian middle class. When Gough left salar/wage earners took home almost 65% of Australia's GDP. That is before tax. Then Gough used those tax dollars to take out of working households the cost of health through medicare (then medibank) and the cost of education (especially higher education). there were also great reforms in divorce law, FOI and administrative law bringing in cheaper tribunals to settle matters rather than courts and trade practices and competition laws protecting consumers.

There was pretty much a disaster with Fraser and Howard in control between 75 and 83 and they almost destroyed the economy.

Hawke and Keating did an amazing repair job (aided ironically by the Murdoch press as cover) because in essence they took a lot of classical market policies (deregulation, floating dollar etc) and the libs didn't object. As such the percentage of GDP which went to wages fell from about 65% to 55% - this was in large part aided by the wages accord with the unions which limited wages growth - BUT the quid pro quo was the compulsary super scheme rolled out to all wage earners at 9% and the family benefits schemes ("no child living in poverty") which basically set up the working/middle class saftey net or perhap middle class welfare scheme.

Howard's contribution was to extend middle class welfare but in a rather random muddled headed way - baby bonus which didn't change birth rates - just a waste of billions and billions of dollars, the 30% health insurance rebate (unmeans tested) which again wasted billions of dollars as studies showed that the tax penalty for not taking out health insurance and the liftime loadings were sufficient to boost insurance numbers.

On the flip side Howard of course ran down public health spending, ran down education spending, took money off public education to give it to wealthy independant schools, introduced up fornt fees for unis which meant dumber rich kids got in in place of smarter poor kids, massively increased uni fees and of course his two signature policies the great new tax (GST) and workchoices which together adversely affected the cost of living for working families. As such I would suggest Howard narrowed the middle class by making health, education and housing (due to the credit created bubble - ie when Howard was elected a median priced house cost 3.5 years of an average wage - when he left it cost 7 times the average wage) more unaffordable for working people.

Rudd and Gillard have substantially rectified this. After workchoices the wages component of GDP fell to 52%. It is now pushing back up to 55% and of course peole have benefitted from low interest rates and low inflation and increases benefits (which are means tested) and increased expenditure in health and education and infrastructure (roads, schools, NBN).

Crikey!! Have you been saving that up? :hihi
I should have just asked for a $ figure ;D
So what would the $ figure be for "middle class"?

 

[1eyedtiger]

Crikey!! Have you been saving that up? :hihi
I should have just asked for a $ figure ;D
So what would the $ figure be for "middle class"?

Should the definition of middle class be defined by $$$$ ? In my opinion, wealth is relative to the cost of living therefore an actual $ value is irrelevant.

 

[Willo]

Should the definition of middle class be defined by $$$$ ? In my opinion, wealth is relative to the cost of living therefore an actual $ value is irrelevant.

"wealth is relative to the cost of living" is fairly ambiguous
So how would you define it?

 

[1eyedtiger]

In another forum, someone asked how to make the next generation wealthy. Well, you can't. As people improve their income and wealth, the cost of living increases to compensate. If the average wage was a million dollars a year, the cost of a loaf of bread would probably be $100. The masses cannot be wealthy compared to the cost of living as no-one would work. Then where would we be?

You're right that it's ambiguous in a way as it's possible to be very wealthy compared to the average person but living from week to week paying off your 5 million dollar mansion and Ferrari.

So, I guess you need to have a reference point somewhere and that would be the average wage against the average cost of living and generally over the last few decades, most people have been falling behind. Where once a single income was enough to house and feed a family, now they refer to it as 'household' income which usually means two incomes to provide the same lifestyle as one used to years ago. Soon, you'll have to rent out a few rooms to get by.

Ambiguous, yes but a dollar value makes no sense either.

 

[Willo]

In another forum, someone asked how to make the next generation wealthy. Well, you can't. As people improve their income and wealth, the cost of living increases to compensate. If the average wage was a million dollars a year, the cost of a loaf of bread would probably be $100. The masses cannot be wealthy compared to the cost of living as no-one would work. Then where would we be?

You're right that it's ambiguous in a way as it's possible to be very wealthy compared to the average person but living from week to week paying off your 5 million dollar mansion and Ferrari.

So, I guess you need to have a reference point somewhere and that would be the average wage against the average cost of living and generally over the last few decades, most people have been falling behind. Where once a single income was enough to house and feed a family, now they refer to it as 'household' income which usually means two incomes to provide the same lifestyle as one used to years ago. Soon, you'll have to rent out a few rooms to get by.

Ambiguous, yes but a dollar value makes no sense either.

So how is "middle class welfare" defined if "middle class" can't be defined?
Plenty on here refer to it, but I've yet to find out its actual "term'.
Is it just a throwaway line, just some *smile* jargon or is it something like ...a person receiving some government money that doesn't really need it? (Means test or not, such as the back to school bonus?)

 

[Giardiasis]

"wealth is relative to the cost of living" is fairly ambiguous
So how would you define it?

The ability to have human desires fulfilled.

 

[mld]

'Middle class' can have many definitions, depending on the context it is used in. The phrase 'middle class welfare' refers to government payments being given to people who don't need those payments to live.

I wouldn't call it a '*smile*' phrase, I find it quite effective in communicating what it is intended to. 'Middle class dole' might be better, with recipients being referred to as 'middle class dole bludgers'.

 

[Willo]

'Middle class' can have many definitions, depending on the context it is used in. The phrase 'middle class welfare' refers to government payments being given to people who don't need those payments to live.

I wouldn't call it a '*smile*' phrase, I find it quite effective in communicating what it is intended to. 'Middle class dole' might be better, with recipients being referred to as 'middle class dole bludgers'.

So in actual fact, you could have someone who is a low income earner but has low cost of living expenses.
Or alternatively someone or a household with a goodly size income but has higher cost of living expenses.
Either could be defined as "middle class welfare" recipients if they receive government payments? That doesn't seem logical, does it?

 

[mld]

So in actual fact, you could have someone who is a low income earner but has low cost of living expenses.
Or alternatively someone or a household with a goodly size income but has higher cost of living expenses.
Either could be defined as "middle class welfare" recipients if they receive government payments? That doesn't seem logical, does it?

Seems quite logical to me.