“Aspiration” is code for property speculation

Via The Guardian:

Scott Morrison has declared the passage of the government’s $158bn tax cut package through the Senate a victory for “quiet Australians”, after Labor capitulated and joined the Coalition to vote for the 10-year plan.

Speaking after the package passed with only the Greens voting against it, the prime minister said parliament had voted to “reward aspiration”.

“This is a win tonight not for the government, not for the Liberal or National parties, this is a win for those hardworking Australians quietly going about their lives,” Morrison said.

On queue, the AFR profiles a “quiet Australian”:

Falling interest and tax rates will save Taku Ekanayake, 30, more than $10,000 a year on his income and portfolio of six properties, which he plans to reinvest in his new business.

“Creating a portfolio of properties and starting a business does not come without its fair share of stress,” said Mr Ekanayake, who recently became a mortgage broker after earlier careers as a technology consultant and Uber driver.

…“That will improve cash flow,” he said. The balance of the savings will be from reduced tax.

And there it is. Your rolled gold path to aspirational Aussie wealth. Can’t get a job so work underemployed at Uber, exploit the tax payer to get into property speculation and become a mortgage broker.

Mr Ekanayake has followed precisely the incentives laid out in the mass immigration model, the tax system, and then doubled down with his debt on other’s debt. Australia’s prime lifter versus parasitic leaners that renting from Mr Ekanayake.

As noted yesterday, ScoMo is hell bent on boosting these ‘quiet specufestors’:

  • installing a huge first home subsidy from early next year that effectively reduces the need for first home buyers to save a 20% deposit to just 5%, with tax payers guaranteeing the balance;
  • force feeding unprecedented flows of people via mass immigration;
  • the drive for a surplus will force the RBA to cut the cash rate to 50bps in the next six months or so. And tax cuts are just more income for mortgages.
  • pushing APRA and ASIC to ease lending standards.

One day in the not too distant future this economic illusion is going to come apart.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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