Post-Budget Babble

150k Is The New Battler?

I didn’t find the budget to be too scary. I guess they ant single mums to go get jobs and mental health got a big boost – most likely because of things like the Anthony Waterlow case where you just couldn’t go pin it on the psychiatrist who signed off on him or the mental health worker who couldn’t ensure he stayed on his meds. What’s been more interesting is the dialogue surrounding the $150,000 p.a. income beyond which a lot of benefits disappear.

These included extending the freeze in the indexation of income limits on family payments, including Family Tax Benefits A and B, the baby bonus and paid parental leave until 2014, which will save more than $1 billion over the next four years.

The government will also phase out the dependent spouse tax offset, a $2200 concession received by taxpayers earning less than $150,000 a year with a dependent spouse and no children.
The Treasurer said $22 billion in spending would help deliver a surplus in 2012/13, taking pressure off the rising cost of living.

But Mr Swan told reporters in Canberra today he did not believe the $150,000 figure now represented a benchmark for “rich”.

“We are targeting our payments to families on modest incomes,” Mr Swan said.

“You raised the figure before – about $150,000 a year. I don’t believe those people are rich, but there are plenty of families on incomes of $60,000 or $70,000 a year.

Which is all very fine. If you head down to the comments you can see some doozies.

What’s causing some of the angst is that people of that income bracket want to send their kids to private schools. It’s understandable but some of these schools are charging 15-20k. If they had 2 kids, that’s 30-40k of post-tax dollars. For this argument, let’s say it’s 30k for the 2 kids.

If they have a mortgage on a million dollar bit of real estate, then that’s a good deal of money out the door. Assuming they had about $200k down payment, a quick calculation of paying off $800k in 20 years says that’s about $6k a month = $72k p.a. on repayments at 6.5%p.a. So that’s about 102k out of $15ok on post-tax dollars. Add in the lease on the de rigeur German imported car and you’re talking about another $15k. That makes it about $120k of the post-tax dollars on lifestyle choices. I don’t know how these people make ends meet, but I sure do see a lot of them driving around in their de rigeur  German imported cars, battling the Sydney traffic. 🙂

At some point you’d think that these people would admit that they’ve got some of their priorities wrong, if they can’t make 150k p.a. work for them. There’s nobody pointing a gun at their heads to make them send their kids to expensive private schools or make them take out mortgages on million dollar homes or drive that German car. Whatever challenges face them in balancing their books, it’s really not the government’s fault that they’ve got problems making ends meet on 150k. I mean, really.

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