The "Dirty" Economy Of Australia | Economics Explained
ฝัง
- เผยแพร่เมื่อ 29 ก.ย. 2021
- The economy of the land down under is reliant on dirt. Yes, literal dirt. Here's why.
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i tried to download with the QR on may phone and your link in the description but nothing was working for me. When add my +61 it keeps adding +1 frist
@Economics Explained 1:22 YOU CAN'T KEEP GETTING AWAY WITH THIS!!!!!!!!
Some sponsor... The app isn't available in Australia!
Where can I get the links to the sources? Very interested in checking out the data for myself
my good sir I'm a big fan and I'd really want to try your recommendation but I'm from the Philippines and this isn't available in my country. Neither is Acorns. :( Do you have a recommendation that might be used anywhere in the world?
Australia is the world's oldest and best prison.
As an Australian I can confirm :)
It’s a penal colony run by psychopaths.
@@wangking4259 your government seems to really hate you guys... Watching how they speak to your people during press events is wild. So douchy
@@WiseOwl_1408 Guess who elected them?
I’d say it’s better than the ones that started it.
@@WiseOwl_1408 Not as much as we the Australian people hate ourselves, unfortunately.
My tutor once summed up our Economy in the following sentence "we are a first world country with a third world economy and a bunch of rich people on the coast just buying houses off each other to feel richer".
Seems like that also summarises your video hahaha
Great stuff as always, from a fellow Aussie!
Luckily Australia's low value commodities they dig out of the ground is abundant and can support a population a lot larger than the actual population. One day this will begin to run out and cause all those service businesses to collapse; and right now there will be no industrial base to take over.
what computer do you buy, and why is that?
BS. 99 percent of 2 mln property investors are MnDs. WRF are you talking about?
@@minorityofone1510 our services sector is so exposed to either mortgages (so resi property), or the resources industry, or both. So if they are stressed, so will these financial services
@@borismatique unsure what you're saying what. MnD? WRF?
It amazes me greatly the way I move from an average lifestyle to earning over 63k per month, utter shock is the word. I have understood a lot in the past few years to doubt that oppor-tunities abound in the financial markets, The only thing is to know where to focus....Thanks so much Rahul Sahil Gupta....
Working with a financial professional could truly help you get ready for life. Since I was actively cashing out from my portfolio and finally made over 370k just in the first quarter while everyone else was whining about the downturn, I'm delighted I was able to contact my coach Rahul Sahil Gupta. early this year...
I needed to see this today, and here it was. After my divorce, I've been having financial difficulties, and only recently did I learn about his impressive resume when I Googled his name. I count it a godsend that I came across this comment section.
Gupta Rahul Sahil. Many traders and investors out there have benefited from strategy; thanks to his program, I was able to quickly recoup my losses during the crash.
Was he the owner of FTX?
1.2 k bots? Yikes
Canada has a similar profile. Overly dependent on dirty resource extraction. Overheated urban real estate. A history of innovation that we can't hold on to. Declining industrial base.
I will add in Canada we are facing the decline from rural areas.
Liberal ultra left.
oh really, that sounds bad. Cause I''m gonna move from Australia to Canada in next few year.
@@thongthaophamtruong9019 are they better than vietnam?
You guys underestimate how mining drives this world
To sum up Australia's mining and real estate economy in a single sentence:
"Australia is blessed with vast natural resources, the biggest of which is a bottomless pit of stupidity we can mine forever"
- mdsee, Marcobusiness commenter, 2019
That mentality persist because there is enough resource to last more than a lifetime. The can gets kicked further down. It's not my problem after I have enjoyed the riches, retire comfortably, and then die. What happens after I am dead and buried is not my problem.
It's a slowly ticking time bomb, much like climate change, which is why it's very hard to make the current generation take it seriously.
@@bangscutter so will mining industry be able to go like it currently does for the rest of the century? Just wondering.
@@LegendNinja41 probably longer but is it sustainable considering the rest of the world is moving everything they can to cheap renewable stuff that is capable of being produced in a lab so sure they can make trillions more but will the world want to buy it that's a different question.
@@abdiabdi3225 That applies to coal. Not iron or aluminium. And only thermal coal, not coking coal.
Without the money for, China… both industries are doomed
"If you love something, you want to make sure it doesn't hurt itself"
Shows koala
To be fair, koalas have the smoothest brain
watch casual geographic, koalas are terrible
@@BowlOfHotDogs so they joined r/wallstreetbets, nothing wrong with that
@@dane1382 TierZoo also had a video on the subject, IIRC.
we have no koala's left coz of the Aussie bushfires
Please do a "dirty economy of Canada" next because it's pretty much the same. Oil, logging, education as a commodity and real estate.
Yes, I would like to know more about economy of Canada as well. But Canadian economy is more diversified than its Australian counterpart.
They have Pratt and Witney
@@SCP-5000 Bombardier as well
3 words in the case for Australia and Canada... THE LIBERAL GOVERNMENT!!!!
@@user-be1jx7ty7n **Labor, stooge!
as a UK resident the whole concept of depreciation of a house, and it having a nominal 20 year lifespan before needing to be rebuild just fries my brain! Where I live, a 20 year old house is viewed as 'nearly new'... and houses don't depreciate unless they 'actually' fall down
Don't place too much emphasis on the included hypothetical example - I'm an Accountant and if a homeowner submitted a tax return with those hypotheticals, they'll get audited very quickly indeed.
Yeh, Im german and I usually dont even consider "rebuilding homes". Is there even a standard for that? We got a house from 1870 in your street, somehow survived WW2.
20 years is not considered old here In Australia either usually when older houses (60/100years) get demo'd it's because they were built on a half acre block 10 to 15mins from the city centre and get replaced with as many units/apartments that will fit on that land.
It funny how people in Australia and America are reluctant to live in a house because someone once died in it. ( Elderly, natural causes). I imagine a 400 year old house in the UK has had plenty of people die in it.
You have to rewire them every 30 years though. And if your plumbing is galv, that will all need replacing. How long does your roof last? Gutters? Drains?
"Imagine a country whose exports are almost entirely made up out of raw materials and live stock. You're probably imagining a developing country at best, but more realistically you're thinking of an undeveloped country"
*cries in brazilian*
but brazil has 10x more ppl.
could be worse, we could be argentina
@@hyy3657 having more people does not make a country better. A small country with a little people like Singapore can be the most developed, how? You’ll have to educate your citizens. To sum it up, a 100,000 smart/educated people can help the country more than a 1,000,000 ‘not so smart’ people; Look at Niger and Nigeria for example.
@@hyy3657 yeah, but we are not 10x richer, not even close to that 🙃
@@nazbmn242 I don't even think it's an issue of education. Education does have a lot of space to improve in Brazil, but corruption, a lack of stability and the middle income trap play a huge role in keeping us where we are. I would suggest Economics Explained's video on Brasil for more detail, I agree with almost everything he's said there.
As an Aussie who //doesn't// yet own property, I think about this all the time. The only way to forge out a meaningful existence in Australia is through property ownership, and it makes everything feel like the country is just dumb as rocks. How do we go about addressing this, bringing back domestic manufacturing and entrepreneurship, and moving away from property investment dependence which only seems to make housing unaffordable in Australia.
Copying Hong Kong is really a bad idea. XD.
btw it seems piggybacking off local students is a viable option for some international students for Australia.
Only solution is to pop the housing bubble. Or ideally simply prevent house prices from rising by banning foreign ownership, having high capital gains taxes, having taxes on empty properties, etc. Also force companies to build cheap housing for first time home buyers.
We need more tourism and transhumanism in our culture.
Stop voting Labor and Liberal (and Greens). Just STOP.
With the way the markets are moving, I think a video on "How to profit from the present market amidst the recession" will be more appreciated. I mean, I have heard of people still making more than a 100K within a few months, and I'd like to know if it is still possible in these times.
@@buryatiaduckyBIiIy8143 Great tips. Generally, diversification is a key factor. Pragmatic... I have been into all of these for some time and though I won't say I have lost a fortune, I have squandered quite a lot... Do you mind recommending a specialist whose platform has diverse investing choices? I anticipate your response.
@@buryatiaduckyBIiIy8143 The world itself is a zero-sum game.
@@buryatiaduckyBIiIy8143 Nice one. I study the charts thoroughly. 2 -3 months back.
Scam. Shame on you
I'm an Aussie, and the cost of property here was eye-watering for me, even 20 years ago! I decided no to, putting money into non-tangible assets that follow me wherever I go on the globe. I think Asia will be good to retire in, on AUD, and get more for less.
That's my plan too 👍
Asia has become a far more liveable place than Australia
Asia ( outside of China) is better than Australia.
That's why Aussies can be found in many South East Asian countries. Malaysia and Singapore are most conductive to Aussies due to both countries having high prevalence of non-native speakers of English.
@@abellyold4859 three of them ARE colony of UK.
"Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people's ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise" Donald Horne 1964. True then and true now.
i think as a people we are in a better position than most countries to hold leaders accountable for their actions. corona has shown in times of trouble we still come together and generally act in good faith to our neighbours. it would be a serious issue for us to rise up of the couch, put down our tinnies, and with pitchforks demand a leader held accountable. that ever looming threat to someone's career is not only enough to yeet the highest offices in service to the country, but an entire government. "ladies and gentlemen, well may we say 'god save the queen', because nothing will save the governor general". - 1975, gough whitlam
@@seanbirtwistle649 >Able to hold leader’s accountable better than most countries
>Has the most restrictive and longest lockdown and brutal police response to protests against it and surveillance state monitoring dissent
Lol
Cunning is not intellectually brain straining
@@arftejano2284 And yet our economy has performed far better then most during COVID. Likewise, we have some of the higher vaccination rates against COVID and will come out of it far better then most countries. It's a compromise, a country can either have a few less freedoms now and but being much better off later (and to an extent now), or have more freedoms but be worse off. We have choosen the first option, and if we have the resilience it will pay off.
Also, we haven't had the most brutal polic response by far, it's just we're the only ones still in lockdown and thus the only ones having anti-lockdown protests which require a police response. I haven't seen any buildings on fire yet like the US had last year.
@@lachie5687 Ironic, I seem to recall Australia having quite a few buildings on fire last year.
The term 'The lucky country' has nothing to do with Australia's recent uninterrupted economic growth. It was coined by Donald Horne in the 1960s and was ironic. Of course, Australians couldn't see the irony and adopted it as a statement of fact.
Self confirming expectations, or really lucky someone else spilled crumbs?
Australia is lucky in many ways. However, it never has the government the Aussies deserve.
A troll on Australians 60 years and running. Lol.
Lucky country ? The emus, rabbits, toads, crocodiles , tarantulas , venomous snakes and mice beg to differ.
I was typing this comment myself until I got punched in the face by more stupid/offensive "back when we were nothing more than a wee tribe of convicts". Like STFU kid.
As an Australian who has spent quite a lot of time overseas, I can say that Aussies don't take their jobs seriously, they however take themselves very seriously.
Could you elaborate?
@@malachir2418 For example, look at the culture around manufacturing (when there was any) and how poor quality and low standards were considered acceptable, while internationally, trying to give the impression that Australia is somehow above reproach and social problems such as crime, corruption, poverty, etc. just don't occur here.
@@JohnnyPunchClock Expect nothing more when the easy approach is always accepted and not trying to compete on a global level
I married a Aussie and have been there four times in 10 years. The growth of Sydney from 2012-2019 is amazing BUT the population isn’t really growing so I can’t figure out who lives in all the 100 story high rises in the major cities because all our friends and family live far outside the CBD’s of Sydney, Canberra or Brisbane, even though they work in the CBD, because it’s too expensive. Thank you for explaining it to me.
Chinese.
Exactly. Who lives there?
i have to disagree, the traffic is getting worse here because of the population growth
You seriously think the population isn’t growing? We’ve hit milestones we shouldn’t have hit until 2040 because the government keeps packing immigrants into Sydney as a lazy way to stop economic recession
@@imho2278 correct 💯
Negative gearing is a blight on the Aussie economy. It makes it impossible for regular Aussies to buy homes and only benefits those who already have enough money. It is literally everything wrong with the Australian economy.
100% EE did a good job at explaining how broken and archaic the aussie taxation system is and how its affecting ordinary hard working Australians. I ended up getting fed up with it all and with bunch of other reasons I moved to a different country a few years back - where I now (thankfully) own my own home, at long last!
China leasing the house for 99 years doesnt really seem bad now does it lol
Either way the chinese property investment are thriving just look at bubble evergrande created even with leasing stuff
@@apennington123 which country did you move too?
The worst part is that as soon as someone is in on negative gearing their savings are tied to it and they'll fight to the death to keep it. Most of our politicians and elites personally benefit from it at the expense of the average person.
@@bornstar481 UK
I think “lucky” here means that Australia can get away with a vulnerable-looking economy unscathed.
I think more lucky since they have huge deposits of extremely valuable mineral deposits, an extremely secure location, and neighbors that have a massive demand for those resources. Australia has some of the worlds largest rare earth metal deposits, massive coal deposits, and massive aluminum and copper deposits which are all things countries like China, India, and Japan need.
@@arthas640 the goverment should be hugely taxing these industries and creating internal demand.
@@simonhenry7867 that's the thing, you can really only use so much aluminum, copper, and iron and the environmentally conscious Australians dont like the pollution smelting or burning coal brings so they send it off to China and east Asia where no one cares about the environment. Their socialist system propped up by their mineral wealth so leaving that in the ground would mean slashing public benefits and paying more for subsidized goods and services while they converted their economy over to a service based rather than export based economy.
@@simonhenry7867 that's the thing, you can really only use so much aluminum, copper, and iron and the environmentally conscious Australians dont like the pollution smelting or burning coal brings so they send it off to China and east Asia where no one cares about the environment. Their socialist system propped up by their mineral wealth so leaving that in the ground would mean slashing public benefits and paying more for subsidized goods and services while they converted their economy over to a service based rather than export based economy.
@@arthas640 sure. but I believe what makes different australia from other mining countries is their political and economical stability. I'm peruvian and my country heavily relies on mining exports. that's been beneficial for us for 30 years but we're still a developing economy. we export copper, gold, silver, iron, tin, and even peru has some uranium and lithium reserves. but we didn't progress like australia does and we don't take much advantage of all dollars of foreign investment because goverment is either corrupt or inefficient at investing money. australia, like developed world has a strong ally on freedoms and that's what makes australia different from other mining countries like those ones in africa or latin america
You work for 40yrs to have $1M in your
retirement, meanwhile some people are putting just $10K in a meme coin from just few months ago and now they are multimillionaires.,,,,,
@@clarissastrosin5643I totally agree with you it has been an eye-opening experience for a lot of people.
Investment is the key to achieving success with the current pandemic slowing down so many businesses aww
Stacy Griffin successful stories are everywhere, all over the place
Is there anywhere I can get across to this woman for a startup
@Luó Huian thanks a lot, my prayers have been answered
Great content. It will be interesting to see your take on the economy of the Anglosphere (Australia, Canada, NZ, UK, USA) and its possible impact on the global economy.
@@da20082003 not sure why a "loser's club", although I'm not sure why anglosphere specifically as the only commonality is language.
Same with Canada - dependant on oil, mining, immigrants and their money. Colder.
@@da20082003 Your English writing is making my head sore with how bad it is.
@@da20082003 U feeling too proud of the English origins ?
Why does learning about economics bring me so much joy? This channel always brightens my day. Maybe it's the feeling of armchair criticizing entire countries despite my not knowing anything about the subject matter. "Haha! Foolish economies!" *sips beer*
😂😂😂
Because they teach you wrong simplified economics. Enjoy your manipulative brainwashing 😊
Cheers :)
Weird indeed, I find it incredibly depressing... swills vodka...
Cos you're a nerd
"some of OUR largest and most innovative tech companies", throws up Xero logo to troll Kiwis. Touche EE
Thank you for this video. I am from Canada and I can see a lot of parallels between the two countries. As for criticizing your homeland, I say do it, I always do! It is because we love our countries and want it to be the best it can be.
Yes , however Canada has a more diversified economy than Australia. Its true Canada relys on resources a lot, but not just a single resource like ore. Canada exports Timber, natural gas, crude oil, Diamonds, gold, Uranium, nickel , potash and others.
Canada also has a strong manufacturing sector, automotive being the biggest.
@@asleepcloud canada has large oil reserves, thats the difference, they are almost mirror economies, except canda has a low workforce particpation rate, at 59%, while most advanced economies wpr are in the 70% range.
Most people venture into investments to be a millionaire meanwhile I just want to be debt Free
I'm looking for something to venture into on a short term basis, I have about $6k sitting in my savings
Cry-pto currency will outsmart the banking system in the nearest future serving as a global fiat. Already making over 85% of my investment
I advice everyone to start investing and never rely on just salary. No billionaire made it through salary
Any specific guide?
@Dr Robert thank you I will write her immediately
As a kiwi what makes me nervous is that our property is tied to Australia's luck and both are currently tied to China. That coupled with our own real-estate makes me worried a snake eyes could hit our structural issues long and hard like it did in the 70s and 80s.
As a kiwi what makes me nervous is the fact Australians are already trying to claim Xero as their own :O
I think, no matter what happens, the best place to be when it does happen, would be australia. I grew up in 70s-80s in NZ and our family struggled, along with the rest of NZ through those times, I have returned to NZ after living in Australia for 10 years and can honestly say that I would rather be in Australia at the worst economic time than NZ at the Best, I don't think there has been any time in the last 50 years where you were better off in NZ sadly....
@@nix123ism As a property investor in NZ it is quite difficult (scary at times) with all the changes that have occurred over the last decade or so.
We can't depreciate property, can't negative gear, we have a new capital gains tax (although I would agree if it was inflation adjuated) and now the single biggest change... We are losing interest deductability on residential loans.
The govt is trying to get the housing market under control by punishing investors that can't afford to buy in cash (and taking a hefty bit of tax dollars in the process). But most investors will just increase rents to offset it and hurt the lower/middle class. It doesn't solve the problem of not enough houses being built.
Looking at our surge in our Debt/GDP ratio, I'll probably be jumping over to ozzy sometime soon.
I would rather be in nz than aus going fowrd with climate change. Aus is already either burning, boiling, or drowning. I cant imagine how worse it's going to get as the temp keeps risjng
@@GreenFingersFert glad I wasn't the only one who noticed that
Those who are interested in how Australia's politics and economy work may find the book "Game of Mates: how favours bleed the nation" (Murray and Frijters, 2017) useful. It explains why most Australians don't benefit from mining exports or the increase in land values in capital cities, and estimates how much it is costing the public purse each year in foregone revenues.
Ofcourse it's obvious why most Australians doesn't benefit from mining exports all the profits goes to the government and the mining companies.
@@r0hith1999 *government's donors. If the money went directly to the government it can be distributed throughout the country through services that improve the lives of the citizens. Unfortunately that didn't happen.
@@BluePieNinjaTV then where did all the money go?
@@r0hith1999 to offshore bank accounts and the pockets of big business owners, their shareholders and the CEOs
@@r0hith1999 in particular overseas investors UK/US share holders. Unlike Norway where the a majority of profits remains in Norway, hence their trillion dollar sovereign wealth fund
Real Piece Of Informative Video Clip. Thank you PUBLIC for these valuable knowledge. Cheers
An English professor visiting Australia (20 years ago) when I was in University, summed it up brilliantly. According to him, Australia was series of circles of 5km radius from the centre of each capital city. As you keep going further out.....everything changes.
@Vittoria Australia is owned by the U.S you fool did you not watch the video.
The whole tax deductible/good debt/mortgage refinancing mojo is actually really interesting. It was explained in robert kiyosaki's book, why the rich are getting richer, and it's almost enlightening.
Isnt that whole Real Estate Tax Planning strategy available in other countries as well? Sounds extremely similar to what I can do in the US.
The rich get richer by making their money work for them instead of them working for money. In other words it is all about putting forth the effort to know, understand, and take advantage of the rules as written. Different countries have different economies and different tax structures so it is your job to know yours and use them, whether that is thru real estate or thru some other method.
yeah. It's really odd how backwards the taxes work when it comes to real estate.
You can have tax deductible on your mortgage that ISN'T the house you live in, but not the house you are living in? And politicians want to wonder why we have a housing crisis.
@@chriskasprzyk6235 facts. Similar rules all over the world. If u have $ u put it to work. My point about EEs video is that the RE Strategy is not specific to Australia as it can be completed in most places.
Are sure about that 1 paul getty said when ask y are u so rich nd other are not he said if i split my wealth it not nice but true within a year it woud be un equal again some woud gamble it some what ever and in the end some ppl will have more than its called human nature not nice but true and u never change it
Ah, so glad to see EE uploading something! I was probably checking back at least weekly to see if there was any new content
Agreed!
Join him on discord
As a resource rich province with a growing neighbor, it benefits from the work of industrious people and stable ordered culture in a stable market.
This has become my go to channel for economics. You guys rock, thanks
I never realised that negative gearing allowed you to claim a depreciation amount. The obvious issue here is because of the actual real maintenance paid for (20K per year per house in your example) the house doesn't actually depreciate much in its real value.
And the land value is always rising
Only the building and interior furniture is allowed to claim.
As Margaret said, the land value is the real driver of capital gain, the structure on it is actually likely to be worth less over time! So yes you can do depreciation on internal stuff that has a useful life of x number of years.
@@joebloggs3789 Except, if you can right off as a loss the maintenance costs to maintain the structure so it holds its value, AND you apply a depreciation value anyway, you have applied for tax deductions on the same costs twice.
@@lindsaycole8409
I'm not quite sure you understand - maintenance costs are not a loss, as they can be claimed as the infamous "R&M" - but cannot then be claimed again as Depreciation because that would be "double-dipping" and ATO would be onto you very fast indeed with their pet peeve - TAX AVOIDANCE. Deductions, once claimed, cannot then become something else. Taxpayer's "self-assessment" scheme is in place so that you get one chance to do the right thing, before they ping you. And the Courts love that! P.S. Lindsay, hire an Accountant for your work
You made a small mistake when talking about Germany: #1 Yes, the highest tax rate starts at 275.000€, but is only 3% higher than the tax rate below it (45% instead of 42%), but the lower tax rate starts at 58.000€ and both don’t include health insurance costs, so you end up paying about the same amount of taxes while earning less
In Australia for earning under 18k aud =no tax
18-30 =like 20% then 30k-50k = 25% tax, ect….. up until over 180k
Also it’s compounding. So if you earn 180k you only pay 45% on every dollar you earn over 180k
The first 18k of the 180 you pay not tax. If that makes sense
He made a huge mistake. He is comparing apples and oranges. In Germany employees pay an income tax (indeed 42% between 58kEUR and 275kEUR) but they pay social security tax of 20% from the first euros they make!!! You end up paying a marginal tax rate of 62% (or 65%) of income+social security tax in Germany while in Australia you would pay a maximum of 47% (45% marginal income tax rate + 2% Medicare levy).
@@tinos5230 yep, completely different structure it seems. His point though was more just saying Australian tax is quite high and Germany’s is a bit higher so the point remains true, just some details missed.
Australia's tax rate comes for social security and utilities for that tax as well
@@doaimanariroll5121 If you consider that paying a maximum marginal tax rate of 65% compared to 47% is just a bit higher... That completely changes the point he is trying to make as Australia ends up being a country where we pay much less taxes than Germany
That thing about Australian universities giving away degrees to people who can barely speak English is the same as the UK. I've lived with several Chinese students in the UK who can barely hold a conversation, and yet they all graduated with good degrees because the universities want their extortionate fees.
It's a Huge Scam , most think they understand and speak English but a quick chat tells you they have no idea at all what you've said nor if they understand I think they mostly copy paste their answers or pay others to do their essay's
My friend taught at an Adelaide university and truth be known he was a sociopath but none the less the one thing i admired from him was he told me he ,in my words,made huge waves at the uni and was virtually forced out because he wouldn't give pass marks to Chinese students. @@carlob517
Nice episode. I have always compared Australian economy to some of those in the Middle Eastern ones who rely on oil exports. Finite natural resources exports to sustain. If it doesn’t diversify it will collapse sooner than later.
I agree it can’t go on forever
We're not even remotely close to running out of ore. The question has always been how much do other countries want to buy from us.
Can’t last forever 😂 been a catch phrase for 100+ years. Australia will remain a wealthy country for as long as the industrial based global economy continues. Global economy is reliant on sustainable ecology. Unfortunately the global ecology is in free fall. There is nowhere to hide. However Australia is not a bad pick
Very good and accurate assessment of the Australian economy. Especially the negative gearing issue.
The way the governments are operating of late, pretty much destroys any confidence in the country's stability.
I dont think its of late it mite be because it has been brewing for a long wile we are fed up with we are all equal but some pple are more equal than others
Best chance to turn it around was when Labor promised to remove negative gearing from the tax code last election - and how did all the rich (and aspiring rich) people vote? They voted in self interest of course.
Good luck convincing the current government to diversify our reliance on such a tiny amount of industries and promote tertiary industries with investments and tax incentives - they've done the exact opposite removing funding from universities every other year. Likewise they'll never change the negative gearing that they reincentivized with Howard in 98 - it's made their voters too much money - at the expense of the younger generations being priced out of ever affording to own their own home.
We're not as corrupt as Somalia or Indonesia (but we almost are )
just vote labor in bruh
Compared to somewhere like America where they have Trump undermining democracy and are on the verge of civil war, I think we are doing ok
It's really impressive that Australia has a high standard of living when so much of national productivity has to be used for defense. You know, in case the emus start getting ideas.
Or the CCP....
Or the CCP....
I laughed much more than I should at this.
@@w0mblemania almost like that was the joke
One has to ponder what the fraction of the budget is spent by politicians on suing angry voters in social media, or simply fending of or burying FOIs and other suits against the same politicians.
Very good video Andrew. It's a little sad really that the economy here has been geared in such a way that unless you have a good income AND are financially astute and able to navigate the (to a lay-person) complex taxation laws, you are basically screwed. I know lots of great people who didn't work out how to play the game until it was too late - and honestly, most of them never even realized a game was being played.
Who's Andrew? His name is Michael.
Hello Joel
In Germany the top tax rate of 42% applies already for incomes over ~85k AUD. The value you mention only adds another 3% tax on top once you make more than ~400k AUD. This means that the mayority of Australians are way better off compared to Germany.
If you tell a story, tell the whole story and not only the part that fits your needs.
Finally! Always love an EE upload.
00:32 New Zealand be like:
I've mastered the art of standing so incredibly still, that I become invisible to the eyes
They don't exist, it's just a simulation.
Isn't New Zealand merely a plaything of the Chinese Communist Party?
Maps without newze
My god, New Zealand is literally invisible. Maybe this is the place to be.
Correction, Xero is a New Zealand company (founded in NZ) that listed on the Australian stock exchange.
Correct!
A family member of mine has worked for a couple of IT start ups in Australia - it’s near impossible to get investors interested in this country. They won’t touch it til Asian or American investors have invested in the start up first.
There is something that is lost in the tax bracket discussion here. Even though we have high income taxes, we have very low payroll taxes and other business expenses, so the rate between what a bisuness pays for an employee and what a consumer gets is lower. That is we have fewer hidden employment taxes. The rest is correct though.
One of the things I dislike most about tax systems is hidden taxes and double taxing. It makes it so voters don't see how much they actually pay.
The other main one is complex tax systems with many very specific cutouts and extra fees. It pushes people to do inefficient things, and means a bunch of bloat in accountants to figure out, and government bureaucrats to track.
On the other hand, Superannuation acts as an additional payroll tax.
The Tax goes to the worker, rather then the government, but its something that is considered when discussing wage growth between the Union and the business.
@@Peregrine1989 it is, but it exists in some form for all western countries, also it acts as a forced level of savings for the employee rather than an additional tax on the business.
@@varno It actually doesn't exist in some form in all western countries. EE mentioned that in a previous video. Our Superannuation scheme being compulsory is rather unique even in the OCED and is a big BIG part of the reason why we go back and forth with the Swiss as the richest people in the world.
Other countries have started to follow suit, but often they are non-compulsary, (like the US) or are exceedingly recent (Japan only recently started, and it still doesn't apply to everyone)
Only really Singapore has a compulsory scheme that covers everyone. And their scheme is very different to ours, in that its definitively NOT your money, unlike Super which is.
I don't see the difference between payroll taxes and income taxes.
Perhaps it's the "lucky" country because when you're born on top of a mountain of resources and you have essentially no natural enemies you don't really have to be all that smart to do pretty well
Yet Australia is filled up people who think this place is made of the cleverest people in the world . An entire continent of people suffering from the Dunning Kruger effect . The stupid who greatly over estimate their intelligence. The response to Covid has made this very clear . The aping of draconian mandates from China have been a disaster economically and socially yet many Morons living here are told to think otherwise, which they obedient do
When you only see the awesome outcome and don't actually consider the real cause it's pretty easy to assume that the cause is because you're awesome. And most people don't really think very hard, especially if they're generally pleased with how things are going
brazil says hello to y'all
@@fredsmith1813 you exemplify that Dunning-Kruger effect. Short term pain = long term gain, any smart investor knows that.
@@joaoinacio1525 That's a simplistic view
Truly outstanding video! I learned HEAPS!
Came here after your video comparing Canada and the US. Can you do a video comparing Australia and Canada directly to each other? Prospects for economic growth, housing prices, different innovative ideas in industry. Thank you!
It wasn't luck: it's largely the result of Hawke and Keating's actions in the 1980s, before that the Australian economy was going nowhere fast. Since those two left every PM Australia has had has been busy wasting away the benefits of the country's growth.
Rudd wasn't too bad, got us through the GFC and had more of his policy remained in place to this day, things would be a lot better for our economy.
@@TheDemocrab Agree with that Rudd was the last half decent PM, after that its been a revolving door of disasters.
The same Hawke that brought neoliberalism to Australia.
It's because they've been providing natural resources to China. The whole thing will fall apart when China's ponzi stops
Oh yer rudd was great selling us out to his Chinese mates lol
As a Belgian I can relate to the whole tax dodging through real estate speculation, we're only now starting to make inroads to clearing that whole thing up, here's hoping Australia can do it too for the sake of the average worker...
I hope so too. it would be sensible to:
1. abolish negative gearing and "notional" expense deductions from investment properties
2. apply tax benefits of negative gearing to "new / additional" properties/dwellings only = equals increase supply
3. provide limited / capped negative gearing to first home buyers
4. abolish supper franking credits - this is tax payer money to the rich
Also Australia has bad politics
Fellow Belgian here 😊
Thanks for reminding me that negative gearing is so destructive for the housing market. It is just so sad that younger people cannot afford to buy homes. Australian politicians are just lazy, this type of economy cannot go on forever. We need industrial development to stay in Australia. It will one day come crashing down.
Expectations. I was born in a timber framed 2 bedroom house in the outer suburbs, we used the louvred porch for bedroom 3, spent very little on clothing and entertainment, never ate out, used the bus and trains, walked to the shops....home improvements were very gradual.
Now compare it to the huge tv's, game consoles, multiple bathrooms, new car, suv's, bbq and pool, solar panels, meals delivered to you...
If you want this lifestyle you have to pay for it.
Live leaner in a smaller house for starters.
@@imho2278 "Live leaner in a smaller house for starters"
Except all those smaller houses, and apartments smaller than them, have also become disproportionately more unaffordable when compared to average income. All the empirical research on the Australian housing market shows that incase you don't want to admit it.
Just admit what all the actual economists are saying rather than trying to create endless moralistic arguments about how younger people are apparently more greedy and lazy than you, despite the generations before yours claiming that your generation were the lazy entitled ones.
There are serious structural issues in the housing market. And it's having distortionary impacts on both housing affordability and on the broader economy through the way it heavily impairs efficient labor mobility, contributes to spatial mismatch, distorts consumption pattern and contributes to economy wide capital misallocation.
While moralistic cranks like you make up endless excuses in order to avoid taking responsibility for the bad public policy decisions that you failed to vote against, which helped lead to this situation, people with an actual education in economics are slamming their head against a brick wall in frustration over the distortionary effects that an unaffordable housing market has on the broader economy beyond the housing market.
solid, no-nonsense analysis.
Amazing how you can make such complicated topics so much easier to understand!
Tax depreciation (or more accurately a Division 43 capital works deduction) of a building is only available for new buildings (or new construction) and is capped at 2.5% per annum, so you would only get a $25,000 deduction per annum on the purchase of a new house with construction costs of $1m.
Also the designed service life of new construction residential houses is about 20 years with the consensus in the industry being that this is pretty accurate for the expected lifespan of the building. Australia as it turns out has also innovated over the last 50 years heavily in lower cost construction materials and methods to keep the labour and profit portions of the price as high as possible. Our industry is so cost driven that buildings often take 2-3 times as long to build as other developed nations to a lower quality level and entire skills (like the ability to build a load bearing brick wall) have vanished. We also build wood frame (with green wood) houses in termite populated areas and now often build housing estates in flood plains.
Belonging as I do to a body corporate, I have given thought to how large building maintenance budgets should be for multi-storey brick construction. Does 2.5% per year usually underestimate maintenance needs? Not that it's germane to the subject .
@@SurmaSampo I've heard from quite a few people in construction that a lot of these new "estate" houses are starting to fall apart before they're even finished.
@@chrisyorke6175 I'm not sure a TH-cam comments section is your best source of inforrmation here. Maybe speak to your accountant - your personal accountant, not one engaged with the property for best results.
@@Jablicek Of course, I don't seek professional advice on this forum. But living in a block of flats, I know maintenance work is obligatory. My view is that 2% a year is a fair allocation for low-rise brick construction. This is usually enough for small blocks. The costs for rectifying serious deterioration in ferro-concrete high-rise blocks can be horrifying.
I owe you, this video made me question my tax consultant about why they had not claimed depreciation on my unit... Thank you.
I have no background in economics, and tried to learn it myself, but every time my eyes just glaze over in boredom ten minutes in. This video makes it relevant and tangible (even though I'm not an Australian).
It’s gone from being quite an advanced economy for its population size ,to Saudi Arabia of iron ore,real estate, finance and overseas students
Imagine Indonesia starts to "rise up".
No need to go to Australia anymore. Except if you're somekind of white supremacist people that only love visiting European countries(yes, Australians are Europeans. Mostly)
Imagine indonesia starts to built up their education, health industry, and stuff like that. It will happen btw but not that quick. Indonesia will be the 4th strongest/biggest economic power in near future.
Indonesia right now is already a G20 member. All they need to do is slowly stay away from exporting their raw materials and starts to produce their own products. "made in Indonesia" products.
And also starts to move to service sectors. Especially animation, game, hi-tech stuff.
When developing countries(especially with big population like Indonesia, India, Brazil) starts to making their own products, it's the beginning of the fall down of some developed countries. Because they import lots of raw materials.
Like Japan for example there.
Unfortunately in these countries population works against them ,they have 200million people and less natural resources and lots of corruption, than Australia that also has better infrastructure, manufacturing capabilities and only 25 million to share it with , Saudi has 30 million the most oil in the world ,the US has 300million but it is the most abundant country’s in the world on every level, but the so called rich countrys doesn’t always make the people the most happy
@@DBT1007 What kind of garbage comment is this? Just because I prefer European countries doesn’t make me a white supremacist. I just feel safer in these kinds of countries and I like the culture better.
@@hamishfullerton7309 US stats are misleading. Billionaires included in the average salary.
Overseas students go to work in Australia, they earn money, pay for their fees and send money home. No foreign money is injected into the Australian economy.
We have had so many opportunities to diversify our economy..
Yes. And as he mentioned, we can be innovative but even that is being lost with the gutting of CSIRO and the continued corprotisation of our uni's who have to make a profit as their main reason to exist, not research and educate.
@@gnrl_mayhem unfortunately gutting the CSIRO has been one of the few bipartisan decisions of the last 20 years.
To be honest, I'm not sure what Aus has to offer. Whatever it can diversify into, other nations with better global connections can often do for cheaper. Even high end manufacturing can be done for less (for most customers) in Europe, North America or Japan and Korea because of the distance. We see that play out with innovations that get manufactured abroad.
Mate, I know this too well; I've got family members who are academics, it is quite shocking how this economic environment has placed such a chokehold on Australia's potential.
What's worse is that our country is going through a brain drain, a lot of our most brilliant and creative minds have no choice but to go overseas to pursue their expertise and passions.
Remember when we were the only developed nation to survive the GFC, had an opportunity to establish a world-leading NBN that would have given us the fastest internet and digital infrastructure in the world, potentially leading to a whole new major export sector in technology, and instead decided to vote out the party that got us through the GFC unscathed and installed a government that went for copper wiring internet that has seen us fall below Kenya for average internet speeds and left us pathetically reliant on mining and artificially inflated real estate that not only destroys the land, but shuts out the majority of its citizens from ever owning their own home in the city they grew up in? Because I do. Good times.
So weird, i literally just watched a video about how rich Australia is, and I had no idea, there was a mention of our economic system and I’d never heard of it, so decided I was going to look into, and then before I had a chance, two days later this video pops up! So thanks TH-cam, your algorithms couldn’t be more spot on 😂😂😂
You and your videos are phenomenal
I’d say it’s mostly due to location. Oz is pretty remote, so it can’t exactly be a manufacturing hub as you’d want one to be as central as possible.
It's also directly adjacent to the worlds main manufacturing hub. Giving people little to no reason to put factories in Auz instead of SE Asia. If you were to build factories somewhere else you'd place them closer to the primary customers US/EU to save on shipping cost/time. Plus Auz factory workers would cost about the same as an US/EU worker but still have a high shipping cost. A no win situation unless they can come up with some brand new category that no one else is doing yet.
On the other side of the coin, shipping really isn't very cheap at the moment, so when you're remote you do want a bare minimum of local production to cover the basics for everyone
As a more pertinent issue, China stopped buying dirt and has rolling power outages across 26 provinces which directly impacts its ability or manufacture. So, its always handy to have some manufacturing capabilities up your sleeve
This is true. Although I'll temper that by saying I'm in manufacturing industry in sydney. Which a lot of people may not believe but there are pockets of high tech still around. However it's not Australian owned.
Australia is great in developing tech. Think Cochlear, WiFi, that sort of thing. But it's remotes like OP said makes shipping super expensive. A pallet of our goods ships out for about $800 per pallet. Furthermore our labour costs are incredibly high
@@krissteel4074 Speaking of the power outages, is this a sign that they want to boycott Australian coal so badly that they're willing to get power outages instead of buying from us?
@@steverogers8163 But we ship all the ore overseas for other to manufacture. Granted low wages overseas/ China have made it difficult along with our high energy costs.
But times are changing and so should we. The future is automation and robotics, a robots wages are the same in China as in Australia. Plus we save on shipping the ore!
Its time to roll out the scientifically proven safe and safest form of energy, nuclear power and work on introducing thorium plants. We have huge resources of both. Too bad we think breaking an atom is very very bad, oh too difficult and scary for us morons downunder. Or maybe its an agenda to have our future as an energy starved back water.
The top tax bracket in Australia starts $20,000 below the average salary where I live, if prices in Australian cities are like US cities, they'd need to be living in near poverty to pay less than the maximum amount of tax
Australian prices are usually higher than american prices for almost every type of product or service.
Yep, Australia is a tax nightmare.
There’s a very generous welfare system which isn’t taxed.
We have many ways to make deductions.
If you're a reasonably high earner, you can make voluntary contributions to your superannuation, known as salary sacrifice. The does 2 things. Reduces your taxable income by at most $26000 ($27000 come next FY) which is only taxed at 15% rather than your actual tax rate. This money is then invested by your fund and can make a massive difference in your retirement fund.
Self education expenses like courses or even an entire degree can be deducted from your taxable income, if it is related to your profession. Car expenses, charitable donations. Even transport costs and work uniforms can be deducted from your income.
And that's before all the stuff about multiple properties and capital gains. Also, if you own a successful business you can have the business assign things to you like cars, properties, phones etc and all that becomes a business expense rather than a personal expense.
On the living expenses side, if definitely isn't cheap to live in the major cities. A household income of about $250k with no children and no extravagant expenditure can go a long way towards a comfortable living standard.
My wife is 210k salary and I’m on 190k but we offset in a different ways to counter high tax!! Regardless Australia is way ahead of USA in every way ! Lifestyle, people, Medicare even welfare system
We also model ourselves on prison wardens. The TV drama “prisoner” was our most successful TV product in our history, and when we tried to export it no one wanted it and thought we were crazy.
I would love a video like this about Norway, specially the last part with all those scores.
I laughed when you mentioned Norway because Polymatter literally just uploaded about Norway’s Oil
Norway is basically a hedgefund, an oil company and a nice place to visit. Nothing wrong with only having a few strings in your bow if you do it well.
Funny, I was already going to watch that one next.
@@somethinglikethat2176 they are using this hedge fund to diversify from that oil
@@somethinglikethat2176 It's also a country where a crappy pizza costs $30.
"Tell the truth, Australia's hands down number one export ever,,, AC/DC with the top rocker of all time Bon Scott."
Don't forget INXS and Mike Hutchence!
The same Bon Scott who hails from Scotland?
@@ck867
Ronald Belford "Bon" Scott was an Australian singer and songwriter, best known for being the lead vocalist and lyricist of the Australian hard rock band AC/DC from 1974 until his death in 1980. Scott was born in Forfar in Angus, Scotland, and spent his early years in Kirriemuir. "I have been corrected!" Australian by the way of Scotland, love his brand of rock and roll just the same. All hail AC/DC and legendary top rocker Bon Scott. All hail!
@@durwinpocha2488 You know the rules :). If they are successful we call them British, if they are a failure we call them Scottish, think Andy Murray.
I am ashamed to say that it is only now, from this video, that I learnt what negative gearing is.
For further context, I did economics in high school - and just graduated university this year with a major in economics
Thanks EE!
What!!!!! A graduate with major in economics. WHAT do they teach you, political correctness??
@@cranegantry868 all universities teach these days is that there are 500 different genders and that straight white men are all evil
I did an economics degree at the University of Melbourne finishing in 1986 and I know understand what negative gearing is without ever having to use it in my various workplaces. Standards of Economics teaching are falling, obviously.
Having an agricultural economy is the same as having a "renewable Products" economy, if it's managed properly.
Australia also has a unique natural beauty not found anywhere else on the planet. All the Aussie citizens I have had the pleasure of lifting a pint with are people of good humor and intelligence. On those counts, I would say that you are all wealthy.
An Aussie rating Australia below New Zealand, you must be objective 🤣 btw Xero is not an Australian company, it just eventually moved its listing from NZX to ASX
Just like how aussies stole the flat white and Russel Crowe from us, they want to take Xero too!
00:32 What's New Zealand? Quit making up countries that don't appear on any map.
@@SamForViceroy not the first time...
Newzealand is it a country lol 😂🤣🤣 .
@@imgood6535 troll
I wouldn't give a 10/10 for "stability and confidence" given that Australia has had 6 Prime Ministers over the past 13+ years, which means the average tenure is about 2.2 years. I don't know of any other advanced economy that changes its head of government as frequently as Australia.
Italy comes close
Japan has had 8 leaders in last 13 years.
The systems of government (i.e. public service) are stable and widely trusted (except centerlink, but that's a policy problem with the blokes in charge), it's mostly the idiots at the top who are always 'succession planning' each other.
Japan: Hold My Sake
Japan and Italy are good candidates
I like your videos a lot man. Very good to listen to while cleaning my house
Most of the commentators ignore how important mining and its multiplier effect is to the economy of a country
I'm from Brazil and I study economics. Last semester I studied Venezuela's economic history and it seemed to be very similar to Australia today, but you guys have an economy a little more diversified than theirs. I hope that Australia don't have the same destiny
What about Canada? I only see Canada's economy becoming more trash every decade. Is there any type of miracle for us?
@@robin_4683 Sorry, i don´t know anything about Canada´s economy
Australia will never end up like Venezuela. Even the economy like Saudi Arabia is doing good. Australia is one of the US's closest allies, the technology transfer and investments between the biggest economy in the world and Australia have little or no barriers.
@@haha-eg8fj Yeap its about who u know than what you know or what you have. Many other countries would have gone bankrupt by now.
I wouldn’t be worrying about Australia’s economy if you come Brazil . 😂🤣😂🤣😂🤣
Interesting video and great to see EE posting again.
Big question here is, when will the luck run out?
Here we had similar rules regarding rental property tax write offs, which over the last 5+ years have slowly been removed.
The opposition party here had some policies to remove these tax write offs last election, but lost the election perhaps due to those policies being unpopular.
You truly are my favourite Australian economist 👍🏽
Thank you for the informantion.
You have been missing in action for a while my friend. Good to have you back
Funny that. I'm rereading Bill Bryson's "In A Sunburned Country" and just reached his chapter on Perth, in which he describes Lang Hancock's emergency landing and discovery of 20b tons of iron ore. This is what started Australia from sleepy, low rent imperial backwater to its current place as the world's quarry.
No, that was the gold rush of the 1850s. Australia was always important to the Empire.
generally agreed to be a Lang Hancock fabrication isn't it
I come from there and I remember my grandparent would talk about how everyone already knew it was there. A lot of people think the plane story was bullshit.
Well, one thing's true. Hancock tried to strike up a deal with Romanian dictator Nicolai Ceausescu. What a nice guy. Just like his daughter.
The phrase The Lucky Country was actually intended as a criticism not praise. It comes from Donald Horne’s 1960s book and his quote reads: “Australia is a lucky country run mainly by second-rate people who share its luck”
V informative thx
Damn EE production value going up
Great video. I’m going to use it with my news mba students to provide an overview of the Australian economy. I find most assume the AU economy is just like the US economy. On the surface this might be understandable; however, as this video explains, they are vastly different economies.
Don't do that. Get some quality research from elsewhere.
@Economics Ecplained You are right that in Germany the highest income Tax starsts very late at 270k BUT the not much lower previouse tax step at 42% starts at 57k (!).
The 45% step was just a political present.
Is this channel your full time gig now? Noticing more uploads. Also the video around intergenerational wealth transfer coming had me wondering wouldn't financial planners be seeing some employment/wage growth in Aus?
8:12 Ahh I see Australians still enjoy the pastime of claiming New Zealand successes as their own (Xero).
Sheeeeer
Two key points you neglected to touch upon ...
* 554 million tons of coal per year is a big part of that "dirt" you refer to, and it is killing not only the planet, but also Australia itself (fires, losing the GBR, etc).
* Australia basically shackled itself economically to China, which is turning out to be a mistake, as evidenced by the sustained product boycotts and now descending price of iron ore as China's building boom stumbles.
Killing the planet and Australia? Oh boy...
It's surprising to talk about Australia's economy and not bring China into the discussion, our economy is so heavily dependent on them and no government has even tried to fix this issue, I feel like it'll come to bite us over the next few years.
@@UltimateGattai Seems to be being fixed now. Australia is decoupling itself from China. Not sure who Australia will sell its raw materials too...but there you go.
@nick
I would say Chinas doing the decoupling . It's not like Aussie had a choice .
@@nickl5658 India
Cheers on being honest even with your own country. Learnt a lot!
Xero is a New Zealand Company with a head-office in Wellington. It would also be nice - ANZAC spirit that sort of thing - having a world map with your closest historical neighbours displayed.
The most disheartening thing about Australia is the rampant anti intellectualisim .
What do you mean?
@@tomlxyz go to the pub and try to have an in depth convo these days
That is happening everywhere now
The export problems sounds ridiculously similar to Brazil's. Industries have shrunk because governments have been abusing the "lucky" land great for agriculture, pasture and plenty of minerals.
The only made in Australia product I use in my daily life is Jira and Canva! I think Australian tech companies have a lot of potential.
Quanta saggezza e gentilezza. Grazie
Yours is a lovely country! I hope things can continue for many years to come!
I thought that Australia had high DIRECT taxes but low INDIRECT taxes; and that once overall tax take was taken into account, Australia was kind of in the middle. Ie lots of other nations with lower direct/obvious taxes have higher indirect/“hidden” taxes. A video that honestly looked into that (compared to other first world nations) would be good.
Very good .... And interesting 🤔
Man, you are good at Economy!
I would ahve though a video on Australia wouldn't be complete without mentioning net skilled migration over the past few decades - the biggest contributor to sustained GDP growth imo
Regarding the german income tax: Well yeah the highest tax braket might start earlier, but in Germany you pay 42% for everything earned aboth 57.052€ so compared to Australia Germany has the higher income tax
Also tax discussions are only half of the truth. Social security is also pocketing a really large portion of incomes, both visible (employee contributions) as well as invisible (employer contributions usually in the same size). High taxes and high social security rates are a pretty heavy cocktail
Thanks for highlighting this! I'm Aussie and lived in Berlin for 2 years. From my experience, the tax (all inclusive) is much higher in Germany, and jumps to 40+% really quickly.
@@george.brandon I'm a German living in Oz and I pay more than 40% tax. I never paid that much in Germany! You might misinterpret German social insurance, like pension, unemployment, health and care as an income tax but it technically isn't.
Wow! Learnt a lot as an Aussie!