Money

Stop all the cheering, cut off the champagne. Prevent the pollies from barking and silence the drums. The piddling interest rate cut didn’t even happen.

Today’s widely expected drop of 25 basis points was the catalyst for plenty of chest beating. Treasurer Wayne Swan tried to unleash righteous fury, the banks tried to cry poor, the unions said the banks are squeezing ordinary Australians, and not in a good way. Nothing happened. The Reserve Bank of Australia decided to keep the cash rate steady.

But was all the hullabaloo justified in the first place?

Continue reading "Interest rate barney barely even rates as interesting" »

You can’t blame Hope Rinehart for trying to get her Mum to pay for a cook, a housekeeper and a bodyguard. Optimism isn’t even her middle name - it’s right up there.

And who among us wouldn’t have a fairly ambitious birthday wish list if Mum was the richest person in Australia?

So Hope asked Mum for a cook (AND showed her willingness to negotiate by including a salary ranging from $40,000 to $225,000+ which means she’d presumably gun for Jamie Oliver but be happy with a Subway “sandwich artist”). 

Continue reading "The Rinehart whine came straight from the heart" »

She checks what the time is in their far-flung time zone and then looks into the distance. It is so long since they have been back in this city, back at home. What exotic locale are they exploring today? Who are they spending time with? Are they safe? 

These could well be the musings of a parent surveying a nest emptied of backpacking children. But they are in fact the reflections of a child, a middle-aged child left in the wake of the fastest growing class of traveller – The Silver Mobility.  The Silver Mobility are superannuated, silver-haired (underneath) and they’ve got very itchy feet.  It’s not only pneumonia that hits seniors hardest - wanderlust is just as bad. 

The Silver Mobility sweated it out for over 40 years. They sent more of us than ever to private schools, supported more of us than ever through tertiary education, funded unprecedented material comfort, and then they waited for us to move out. And then they waited some more for the ones that moved out, and then moved back, to move out again. But finally, we’re gone. Which means it’s time to dust off the suitcase, fill a few prescriptions for Brufen and Lipitor and get the hell out of there.

Continue reading "Grey Nomads choosing Bordeaux over Play-doh" »

Just when we thought that politics had started its summer holidays, and the “big questions” were put aside for a while, the Remuneration Tribunal released its report on Commonwealth parliamentary salaries and entitlements. The public reaction was immediate, and in the overwhelming majority, intensely negative.

The cause of the anger was the proposal to lift the basic salary of a member of parliament from $141,000 to $185,000 per year. The Tribunal provided its justification: the need to “remunerate them sufficiently so as to attract and retain men and women of appropriate capacity”. No argument about the aim. We would all like our representatives to have the “appropriate capacity” to serve us.

Currently many people who would be good parliamentarians could not tolerate the party apprenticeship demanded to win pre-selection, especially for a safe seat. In the Labor party, the gene pool of “capacity” seems increasingly restricted to those showing dedicated service to the party, a union and/or faction, and often service as a ministerial minder.

Continue reading "A well deserved payrise for these upstanding citizens" »

Global financial markets are going completely bananas. Again.  Financial experts worldwide are calling on leaders for some direct action to bring certainty to the struggling Greek and southern European economies. So what does all this mean for us? Australian treasurer Wayne Swan has described it as a dangerous new phase, while other economists have urged the RBA to take immediate action to avoid being caught up in the recessionary sweep. Eager to find out what all that actually means, The Punch asked Saul Eslake, senior economist at the Grattan Institute to give us the low down.

1. How much could the current crisis affect Australia? How worried should we be?

The current ‘crisis’ reflects (first) the increasing likelihood (as markets see it) that Greece will default on its debts, resulting in losses that may render some banks who hold large amounts of Greek government debt insolvent, and that in the aftermath of a Greek default other countries (Portugal, perhaps Spain or even Italy, the latter two being much larger than Greece) will be more likely to default; and (second) the increasing likelihood that Europe and/or the US may slip into a second recession, in which case governments and central banks would have very little capacity to respond in the normal way (by cutting interest rates or doing fiscal stimulus).

Continue reading "Punch Q&A: GFC #2 and what it means for us" »

Dick Smith, the former electronics giant, is a household name, an Australian icon. A former Australian of the Year, he was awarded an Order of Australia in 1999 “as a benefactor to charitable organisations”.

By any measure, he has earned the right to vent his opinion in public. His recent argument in favour of naming and shaming Australia’s mega-rich who do not give philanthropy garnered headlines nationwide and would have raised eyebrows – and probably voices – at the top end of town.

But we should be grateful for his candour. Few people have such courage, fortitude and leadership. And whether you loved or loathed his comments, he has done an important service in kick-starting a critically important conversation.

Continue reading "Dick Smith’s guilt trip for the mega rich" »

You can list things that “satisfy” on one hand. Snickers bars, finishing a crossword, running a half-marathon after months of training. Your first drink on a Friday afternoon, weekends…

But no matter who you are, and what you earn, “salary” will never fall into this category. Money in the hand, is by definition, money to burn; and for this reason, you can never earn enough.

Strange then, that researchers at the Household Income and Labour Dynamics Association think it’s perfectly reasonable to have come up with a figure that suggests otherwise.

Continue reading "We’re never happy, no matter how much we earn" »

Asking people to do anything is tough. Asking them to give you money is even harder. Yet that’s what charity and social cause organisations have to do every day. Nearly all of their advertising focuses on one of two ways to unlock peoples’ wallets to raise money.

It’s either:

1) A rational message: Providing statistics that show how important the charity is, and how large the task at hand is. For example, how many lives are at risk, how many people have died, how many degrees the earth has warmed up and so on.

Continue reading "Hair’s how to raise more money" »

When former Sydney real estate agent Mary Donaldson married Denmark’s Crown Prince Frederik in 2004, one of the couple’s first, big post-honeymoon tasks was to sort through the monster pile of wedding gifts.

Apparently their haul included five cars (including a stretch limousine and a Saab convertible), a $200,000 yacht, six bicycles, a row boat, two Harley-Davidson motorcycle jackets, a traditional sealskin outfit from Greenland, 93 ceramic badges, a $3 million crockery set, a handcrafted Iranian rug, a miniature lounge suite for a royal baby, and a 120-kilogram stone swan.

In addition to the 37,000 gifts sent by Danish subjects, offerings from Australia included an anthology of Tasmanian love poems (from a writing centre), a stand of trees (from the government) and a hamper of Tim Tams (from Arnott’s).

Continue reading "Cash or cheque? The delicate art of marriage merchantry" »

My wife and I came from traditional working class backgrounds and single income families. We are now considered middle class as we live in our own home, we own a newish car and enjoy a comfortable lifestyle because we have worked hard and saved for the future. 

Our home, car and assets are insured and we have managed our finances carefully in order to access such benefits as private health insurance. In the current economic climate we are regarded as “haves” but we seem despised by some elements of the community who consider themselves the “have nots”

American pollster John Zogby sees a growing number of the community falling into the “have not” category. He calls them the “Dreamless Dead” being those who no longer believe in the existence of hard work to achieve success in life.

Continue reading "Financial responsbility can reward when disaster strikes" »

On April 1, health insurance premiums rose across the board by an average of 5.56 per cent. The increase happens every year, while the percentage that premiums increase by differs. This year’s increase, according to research by iSelect, equates to around five million baskets of groceries or eight million tanks of petrol. It would also be enough to buy groceries for 100,000 families for a year. In individual dollar terms it works out to an average annual increase in premiums of $190 per family.

So last week I did a number of radio interviews, talking about the increase and suggesting ways that consumers can try to reduce their personal cost while making sure that they have appropriate cover. And one question that I was asked (fortunately off-air, because it took me aback a little) was whether I thought it was fair that everyone – regardless of size or health – paid the same premium.

It’s a version of a question that I’ve been asked a number of times: Should health insurance should be medically underwritten. In other words, should the overweight, underweight, smokers and otherwise-unhealthy among us be paying more for their health insurance? The crux of the reasoning, of course, being that the healthy consumers in the population are paying more than their fair share of premiums. And that’s not fair, right?

Continue reading "Are healthy people ripped off by health insurance?" »

When I was 9, I found a $20 note on the ground.

Back then, it was an astronomical amount of money for a nine year old.  And as I glimpsed it, beneath a moving crowd, I stopped dead in my tracks, staring and pointing until mum yelled ‘Just pick it up!’.

Then, something even better happened. Mum said I could keep the money.  Suddenly, I was rich.  I clutched it in my sweaty little hand all night.  I put it lovingly in a black case and checked on it every day.  And then when my birthday came around, I spent it on an extravagant doll from Big W.

Continue reading "Bank error in your favour!" »

Michael Carroll, UK binman, won $15 million and blew it all in eight years on drugs, cars and women. He’s now scraping by as a tradie.

His is a sad tale, and reading it made me think sanctimonious thoughts about how we need to support people through such drastic life changes, particularly those with vulnerabilities like alcoholism.

But mostly I just thought: Shit yeah! I’d love to squander stacks of cash in one big disgusting binge. I’d like to roll around naked in piles of dirty, stinking cash, bathe in French champagne, live a rockstar lifestyle.

Continue reading "$15 million buys a lot of sex, drugs, and rock ‘n’ roll" »

Twenty years I’ve been in the workforce. That’s 20 years of deadlines, jumping on planes, working late into the night and, ultimately, furthering the fortunes of companies and proprietors who are decent enough – sorry, lucky enough – to have me.

During those two decades, how many times do you reckon I’ve asked for a pay rise? Most years? Biannually? Nope. Just once.

Not a savvy thing to admit, but a quick ask around friends and colleagues reveals the same: Women don’t ask for pay rises.

Continue reading "Sisters should ask for pay rises themselves" »

Each and every day millions of Australians pay financial institutions to access their own money.

Some pay more while others pay less, depending on the way they do it. Sometimes, as with EFTPOS transactions, the price consumers pay for their own money is largely invisible, being factored into the prices of goods and services. In other cases, the cost of using your own money is embedded in bank fees, or else in forgone interest from transaction accounts with negligible rates of interest.

One of the most expensive ways for Australians to access their own money is by using a third-party automatic teller machine - that is, an ATM not provided by their own bank. In most cases, third-party ATMs charge $2 for every transaction, including checking one’s account balance. In other words, $2 is the price consumers pay every time they are disloyal to their bank.

Continue reading "Owning an ATM is money in the bank" »

In 1983, money came out of the closet. Up until then any discussion about money was taboo and considered uncouth. No-one ever talked about how much their house was worth, or what shares to buy, or whether to buy Aussie dollars now to get the best rate before they went on holidays.

Term deposits were considered financially sexy. No-one had heard about managed funds, superannuation or property syndicates unless you were among the rich and famous.

At that time treasurer Paul Keating floated the Australian dollar and deregulated the financial system.

Continue reading "Stop talking about your money, spend it!" »

Last weekend - while you were taking the kids to the beach, buying those extra back-to-school necessities, or for many, still counting the toll of recent devastating floods – unleaded petrol prices in capital cities rose an average 15 cents a litre at Coles and Woolworths outlets to a massive 143.9 cents per litre.  And those ridiculous rises were matched in part by the Independents and other chains.

So what’s the story?

On Saturday, the wholesale price of petrol actually dropped by more than half a cent, yet on the weekend we were hit with a massive 15 cent increase.  The size of the hike was described as “staggering” by FUELtrac general manager Greg Trotter.  He rightly pointed out that the prices we are now paying at the pump rival those records in 2008 when oil hit a peak of $US145 a barrel.  The big difference is that the current price of oil is only around the $US90 mark.

Continue reading "Labor is turning a blind eye to price hikes" »

This time yesterday Australians were merrily preparing for the Race that Stops the Nation, confident in the economists’ predictions the RBA would avoid the un-sportsmanlike act of hiking interest rates on Cup Day.

Just 24-hours later all hell has broken loose.

The RBA might have turned on the rates tap with its 25 basis points rise in official interest rates announced at 2.30 yesterday afternoon, but the Commonwealth Bank forced open the flood gates with an immediate move to put its own rates up 45 basis points.

Commbank boss Ralph Norris is not talking this morning, instead letting the Australian Bankers Association make the running.

Association chief executive Stephen Munchenberg said: “What the Commonwealth Bank is saying is that that marginal effect has built up 2 basis points or 0.2 per cent each month, and that’s now built up over nearly a year since the banks last moved interest rates, so there’s a cumulative effect there.”

Westpac just announced its profits have risen 84 per cent in the last 12 months. Yes, that wasn’t a typo - 84 per cent. In the 12 months to September 30 the Gail Kelly-steered Westpac made a net profit of $6.346 billion.

Apparently Kelly is due to make an announcement later today. Wonder what on earth that could be.

Continue reading "What a bunch of bankers" »

With official interest rates set to rise and the costly festive season looming large on the horizon there’s no doubt Australian’s budgeting skills will be put to the test over the next few months.

Financial skills are incredibly valuable but it’s often not until you get older that you begin to appreciate the small lessons about saving and spending your parents may have taught you when you were a kid.

Growing up on a farm meant my Mum and Dad generally made the most of having me and my two siblings around during school holidays to do the jobs that needed to be done. Often we were given the opportunity to make some cash carting hay or working in the wool sheds.

Continue reading "Giving kids an early start in learning to make ends meet" »

Somewhere in Sydney a punter is $30 million richer and doesn’t yet know.  NSW Lotteries is trying hard to find them. They’ve publicised it in the media and spoken discreetly to the agent who sold the ticket.  They’re keen to break the good news to their very lucky customer, and sincere and thorough in their efforts to do it.

This time next week the Lotteries will be owned by a private corporation which has also bought itself the right to keep that prize if they can’t find the person.

Leaving aside that this appears to be against the law that made the sell-off of Lotteries possible, how hard would you try to find a winner if you could pocket the money yourself if you can’t find them?  How hard would you make it to claim a prize?

Continue reading "Corporations don’t need to win the big one" »

“In this world,” Benjamin Franklin famously declared, “nothing can be said to be certain, except death and taxes.” A few hundred years on, corporate Australia seems hell-bent on making a liar out of him.

Death is still holding out -so no need to fear a business-suited army of the undead just yet—but the taxman has well and truly been given the slip, with billions of dollars from the public purse funneled through loopholes, lurks and perks.

Treasury figures have revealed that over the last decade more than half of all companies paid less than five per cent of their total income in tax: a far cry from the hefty amount individual taxpayers are slugged.

Continue reading "Debunking the myths of corporate tax" »

Does your new model six-cylinder car make you happier? What about that new in-home cinema, complete with HD-TV, surround sound, and reclining couches? You think so. How about the holiday you recently took with the family?

Unfortunately, as humans we are not that good at predicting, understanding, or acting in a way that makes us happy.  This lack of knowledge is even more pronounced when it comes to the relationship between what we buy and how happy it makes us. 

Have you even considered how happy various purchases you’ve made have actually made you? 

Continue reading "Money probably can buy you happiness" »

I recently attended the opening of the Templestowe Community Bank in my electorate. As a result of more than two years hard work by local traders and residents, the village has a bank for the first time in over a decade.

The branch was the 248th to open under the Bendigo Community Bank umbrella, one of the great local success stories of the past decade across Australia.

As the big banks closed their branches, and forced people to use ATMs and online services, many local communities lost an important institution. In some rural areas, this was devastating. In most, it caused considerable inconvenience to local residents.

Continue reading "Save money this year because thrift isn’t a four letter word" »

Have you ever thought that you were being taken for a ride on petrol prices? Well, you have!

So how are you being ripped off? It’s simple really – once, of course, you know the games that can be played by the big oil companies and Coles and Woolworths.

Let’s begin at the retail level.

Continue reading "Coles or Woolworths you get screwed either way on petrol" »

Last week we held a public event we call Sydney Conversations – a series of talks we host where, with the aid of a panel of speakers, we get to look closely at a topic that’s making the news, and get the news behind the news, so to speak. 

Our Conversation was around the topic ‘How much is enough?’. The idea was to look at the link between money and happiness, or money and unhappiness as the case may be. 

The Happiness Institute’s Tim Sharp talked about the sources of happiness: he said that having meaningful and purposeful pursuits is the path to happiness, coupled with the quality relationships we have in our lives. That happiness had nothing whatsoever to do with money.

Continue reading "Finding happiness in the middle of a crisis" »

The worst kept secret in the gambling world is the statement “the house always wins”. No casino on Earth hides this fact. In fact, they seem to proudly embrace the mantra as an open challenge to morons. And surely in the realm of unashamedly unfair advantages, Lotto is the mother of them all.

There’s an old saying in the poker game, “If you can’t spot the sucker at the table, then the sucker is you”. In the Lotto world, the saying should be “If you’re not the extraordinarily unlikely winner of bucketloads of cash, then you’re an idiot”.

As the Oz Lotto draw that stopped the nation entered its final week and the jackpot hit Def-Con Ridiculous, reportedly half of the adult population of Australia flocked to pay their idiot tax, salivating like St Bernards over the impressive $106 million bone, in the vain hope of striking it rich in the biggest possible way, and being able to tell their bosses once and for all, to shove it.

Continue reading "Win a truckload of cash or just be an idiot" »

Read it here.

I’d like to think I would be yacht shopping this morning, wearing a cravat, and being followed around by someone I’d hired specifically to top up my champagne flute.

But they’ve gone to work! According to a Lotto spokesperson:

When they got the call this morning solidifying their winnings, they said ‘I was hoping to hear from you this morning’.

They’re a Gold Coast couple so based purely on postcode there’s an increased likelihood $53 million isn’t all that life-changing. But I doubt it.

I’m especially happy for the other guy, who’s being playing Lotto for 20 years and plans to give some of the money to charity.

What would you be doing? Would you be at work?