She's On The Money - BONUS EP: The Federal Budget

Episode Date: May 12, 2021

Okay. So words like 'Federal' and 'Budget' are huge. But if unlike us, you didn't get your closest gal pals around to watch the budget with - we've got your back! In this bonus ep, Victoria will chat you through the highlights of the budget that most relate to you - our beloved community. Once you've devoured this, pop on over to our facebook community and let us know what you reckon.As mentioned in todays episode, there are some great services for reaching out if you're in a vulnerable position including lifeline and Safe Steps.PLUS, because you’re a SOTM listener, use the code POD50 and you’ll score $50 off the course. Head to our website here: https://www.shesonthemoney.courses/masterclass to find out more today!Love the pod but looking for a more hands-on approach to your money? Look no further. Our budgeting & cash flow masterclass is the tool you need to help overhaul your finances for good. Join Victoria as she steps you through your budgeting and cash flow with all of the smarts and none of the intimidating jargon. Finally, if you're in a money mess and need help untangling the muddle - we've got you sorted - simply record your question and send it through to us at [e-mail] and you may just end up on the podcast! The advice shared on She’s on The Money is general in nature and does not consider your individual circumstances. She’s on The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. Victoria Devine is an Authorised Representative of Australia Pacific Funds Management Proprietary Limited ABN 34 132 463 257 - AFSL 339151.See omnystudio.com/listener for privacy information.

She's on the money. She's on the money. Hello and welcome to She's on the money, the podcast for millennials who want financial freedom. And you're probably very, very surprised that this little episode has popped up in your feed today. It is a budget extravaganza exclusive special bonus hippity-hoppity-eppity-soad. Yeah, an eppity-soad.

I love that. I love that. It's also Wednesday the 12th of May, which for those of you who are as excited about the budget to me, it's like New Year's Day but for the budget. Yeah. So it's party time, right? So you know that the second Wednesday of every May, it's a party. You're hungover because you've been celebrating the budget and no doubt everybody that's listening

to this has just woken up and they're like, oh my God, what did I do last night? Oh, I watched The Budget. I learned about finance. Not one person has said that. Not even I have said that, Tony. But that's okay. I'm glad we're excited about it because to be honest, Tony, what happened last night? The Budget.

Yeah, but like I took the team out for dinner and we watched The Budget on a laptop. At Pancake Parlor. Yeah, because we're really classy. And for those of you who don't know and haven't listened to that Friday Drinks episode, Tony, why is the Pancake Parlor special to us? because I, for a little while, voiced their campaigns. I was the official VO for Pancake Parlour. She used to do the singing of the Pancake Parlour ads.

Anyway, you guys are not here to hear about Tony's escapades being the Pancake Parlour voice. What you are here to listen to is about how last night Treasurer Josh Frydenberg told Australians how the Morrison government plans to spend taxpayers' money for the next four years. And while that doesn't sound super sexy, it does mean a lot for us.

and to be honest it is something that we should as young people be interested in and I think that it's very hard and Tony you and I were having this conversation literally before we hit record about why it's important because I watch the budget and when you and I talk about it and you know the first home super savers game yeah the next question I always have is well what does that mean great it's gone from thirty thousand dollars to fifty thousand dollars what does that mean how does that work and how does that fit into my life what does that change for me yeah and what does that change for you know our community and how can we help them fully understand this and so that's what this episode is about we're not going to touch on absolutely everything that happened in

the budget because that would be incredibly dry but we've pulled some main points out that we really think are going to benefit our community and we want to contextualize them and explain them to you so that you know one we get it but two we can just be like yeah tonight over dinner we're going to be the most intellectual people because you'll be like sorry in the budget do you watch it last night and they'll be like no and you'll be like yeah okay well I'll just well I'm full bottle on this so I can talk to you ready I think it's also about including people into a side of the government and socially into something that they might not ever think that they fit into or that they were educated enough to actually chat about because I know personally

for me I mean I'm 27 it wasn't until a few years ago and I started working in the arts that I was like actually I do need to know what's going on in the budget because that's going to affect whether I can work and you know how much money there's going to be for for the arts and you know different types of industries that don't automatically get lots of funding so I think it's really important as well for people listening that if you don't know much about the budget that's okay but that's why we're here we don't want anyone to feel stupid we don't want anybody to feel left out this is just one of those things that as you get a bit older it's important to make sure that you are educated and you know how things can affect you exactly and that's what you're

to get here right you're going to get what the she's on the money team thinks is important for you to understand out of the budget that does not mean it's the entire budget and you know it's actually up to you to do a little bit more research and look into if you've got a specific area that you want to understand more deeply google it to be honest there are so many great news websites out there one of my favorite ones is actually the daily oz on instagram and they've done an entire series covering all the topics that happened in the budget with a here's why it's important this is what's happened and i really liked it and they literally posted it last night as the budget was happening and i was like wow these guys are wizards with content

so definitely go check them out if you want some more information but tony why don't we get into this and maybe just bookend it with let's talk about topic a b c and d and we'll kind of have a heading and then maybe a paragraph below where we talk is that is that gonna work i think so i think that'll work all right so i feel like we should have a little bit of a chit chat before we get to the pièce de résistance the thing that's on everybody's lips what is that because I'm confused because I thought the entire budget was every everybody's lips well okay I'm sorry but don't spoil it don't spoil it we're waiting we're waiting the grand finale but um so we've obviously both watched it we know what's going on yeah um and we thought we'd go through a few

little bits and pieces that kind of stuck out that we thought would help our community that things we should genuinely understand because they are going to have an impact on our lives and on our communities so first up um mental health yes massive huge so there's going to be a new 487 million dollar network of 40 adult mental health centers which is massive and there's an additional 278 million in funding for headspace which is so good as everybody knows they are a great cause and I think that you know them getting so much more funding is just going to be so impactful for us and excitingly enough and I don't know if I should mention here that there could be like a bit of a trigger warning we are you know going to be talking about suicide and eating

disorders just in this I don't want anybody to be you know blindsided by that but when we're talking about mental health I would really like to have the ability and the flexibility to be really frank about these things because they impact our community they're really important and I care a lot about them but there's a new National Suicide Prevention Office which is so special and just steps in the right direction Tony. Yeah and I think it's also a huge like you just said step in the right direction but that these things are actually being considered massive bullet points in terms of the budget because many years ago not that long ago actually that it would just be considered part of the health part of the budget whereas now it's its own. But it's so much

bigger and as a financial advisor I see this in my office every single day and you know maybe historically it wasn't the case so when it comes to insurance and I'm always talking about the importance of having income protection and you know TPD and life insurance and trauma insurance and all of these things I've done a pod on it so if you don't know what I'm talking about definitely go back and listen to that but mental health comes up nine times out of ten with my clients because we are now seeking information and we're seeking help far more often than we were historically and it's actually promoted that we do that.

So it's not to say that these mental health issues didn't exist historically because they unequivocally did but the thing is we're now talking about them, we're now seeking more help for them and we're a better society because of it but because more people are seeking more help, we need more funding. So it is so nice to hear that the federal government

has committed more than $2 billion in additional funding to prevent and treat mental illness which I think is so special. Do you think that they've seen a real uptick in I know that through COVID there was a big increase in people accessing free mental health services. Yeah. Do you think that that probably inspired this change in attitude? Yeah I absolutely think that that's what has happened because it's something that once you get help and once you start you know seeing someone it can be a massive step to take. You go I wish I did that earlier. And so many people reached out during COVID because they were in crisis mode. And a lot of people don't seek mental health support until they are in a crisis, which is, you know, great

that we have that resource, but we should really be seeking mental health support before we reach crisis stage. And so knowing that this is going towards preventing mental health as well as looking after us is just so helpful. I think it's so important to discuss the impact that mental health has on us has on our ability to work to produce money to look after our families to interact with friends to literally live our lives like if you are not mentally well like nothing else in your life is going to work yeah so i think it's really really special that they're doing this and to dive a little bit deeper into that that means that a half a billion dollars so much money has been set aside for new adult mental health centers which we're in dire need of which is great

The federal government really hopes that these centres, known as the Head to Health Network, is going to help adults with moderate to severe mental illness and we do need more support in that space. And then they've also set aside $278 million in funding for Headspace and that's a part of the push to really improve services for young people with mental illness, which includes $26.9 million for supporting people with eating disorders, which we don't speak enough about. and so many people experience and it's not something I've ever spoken about before but I've been through that and I know what that is like on an incredibly deeply level it is something that I struggled with for years and to just know that that is now being put as a priority is just so important because when I was going through it I was in my teenage years and the support I genuinely don't think was there for my family I was kind of like you know and not to talk too much about my own mental health although I'm really happy to it's just not the point of this

podcast when I was going through this I did need to be hospitalized it was very serious but I was in limbo I wasn't an adult but I also wasn't a child so I ended up in a different facility that wasn't actually catered towards you know the teenager that I was yeah I ended up in a child facility I actually ended up on a pediatric ward and you know I actually needed to be surrounded by you know people my age going through something similar when in actual fact I was surrounded by young kids and you know like it's not the worst I'm so grateful that I ended up getting the help that I needed and the support that my family was afforded at that time but knowing that there's more support going into eating disorders for me personally is really special. I think as well like

you said you were shoved into a ward that wasn't really specifically for what you needed you're talking like not having nurses that are qualified in what what you need and also not prepared to deal with what you're going through. So not only is that taking a toll on your mental health because you're not being supported in your family and friends, but also the people that are working in these situations, helping people through things that they haven't been trained to deal with is incredibly difficult. And I think that you've hit the nail on the head because the fact that we're putting money into specialised parts of mental health rather than being like, oh, one size fits all kind of help and response it's not the case like mental health is so much more than just mental

health and to know it's being broken down is really great and I want people to just be you know it sounds entitled from my perspective I just want people to be grateful for the opportunity that we have to live in such a beautiful country that affords us so many luxuries and securities and can you imagine other countries around the world putting so much money into mental health we are so special. Yeah, we're very lucky. The additional thing on the mental health thing is also the suicide prevention, which is massive, Tony. They are allocating $298 million for suicide prevention. And the main new initiative there is $158.6 million for aftercare plans, which hopes to ensure every person discharged from hospital following a suicide attempt is actually properly

cared for in the months after they attempt suicide. How great is that? I think reading these things just doesn't seem like something that would ever be prioritised by our government and it's just really, really exciting that these things are being taken into consideration. Yeah, so let's stop talking about mental health and, you know, it's been really special, but what is the next interesting topic that we should touch on in this budget wrap chat? Okay, well, like you said, any change is good change and now I want to chat about the environment. It's kind of like from little things that big things grow. And that's like about like trees and stuff.

So that works for the environment, right? Oh my God, I'm better at this job than I thought. Yeah, you're welcome. But the environment's really important to us and it's important to the She's On The Money team and, you know, arguably our community. So it's, yeah, really important for us to cover this topic. Tony, what are the headliners?

So I think that people were shocked that there wasn't more going into the environment than there is, but still, small change, good change. the federal government is planning on putting 1.2 billion dollars towards low emissions technology and a new national recovery resilience agency to improve Australia's response to natural disasters which obviously is a reflection after the fires and flooding we've experienced over the last couple of years so that's really really exciting that they're like we were talking about with the mental health stuff prevention is better than cure and so that they can talk about you know

in advance like all right if we do have another national natural disaster that there's actually things in place beforehand that can help people like farmers or you know all of those things and I'm sure that that includes aspects of mental health being put into that as well. Yeah absolutely so I think that this one was an interesting one because when we talk about the overarching topic of environment I was actually really disappointed with the outcomes because there was not that much for renewables and I felt like that was a bit of a kick in the guts given we're trying to move towards being more sustainable but I can kind of see how this is eventuated right again let's remember it's a budget and we had a set amount of money to allocate given we've just gone through

COVID-19 and gone through the bushfires which so many people tend to forget happened because COVID was such a straight away and it came straight away I think given we've been through all of that it kind of makes sense for the government to have allocated it to the immediate needs of our people having suffered bushfire disaster and making sure that you know we're sustainable moving forward and that you know we are okay coming out of COVID so it's a bit disappointing to have seen that you know there's not much for renewables because there was actually no new funding for renewables in the federal budget except for one thing which was 30 million dollars for battery and microgrid project which is going on in the northern territory which is

great fantastic I'm glad that's happening but I think with this a lot of people are up in arms because, oh, my God, there wasn't enough contributed to renewables. I get it. I was really looking forward to that as well. And when I actually heard it for the first time, I was like, oh, my gosh, this is so disappointing. But then looking at it, going, they had a budget, they had to allocate it,

and what I think they've done here is put their people first. I think that's really important to preface as well and remember that they're trying to make decisions that are best for us, even though renewables is important. Like, I think our people are arguably more important in this here and now, having gone through literally two national disasters. and they needed to prioritize the exact same way that we as individuals need to prioritize our own

budgets and we need to say okay this is affecting us right now what can we do and yeah whilst it is a bit of a letdown I think that most people would be able to see the reasoning behind that yeah absolutely and I think it's important to have these conversations as well because I would assume that you know a lot of people don't see it the way that we do and go okay well why would they have done xyz and i'm taking a bit of a stab in the dark here i'm assuming those people who are up in arms about it probably didn't suffer dramatically from the bushfires that's a good point i don't know if it's the right point to make but we're making it here and now um let's move on to women who we love i do love women we're women we love women i love women

women all around oh my god let's talk about us um so an incredible statistic actually coming out of the federal budget that 1.1 billion dollars is going to go into the frontline workers and the frontline of domestic violence services and financial support for women experiencing domestic or family violence yes and i love this because it's just something that we get behind it she's on the money all the time we talk about it we try to give you as many financial resources as possible if you're experiencing domestic or financial abuse or violence and a new scheme which is going to be trialled is trialling up to $5,000 in financial support for women experiencing domestic or family violence which honestly could be the key for a lot of people to be able to

escape a situation they otherwise wouldn't have been able to and I think that that is so cool like so flipping cool that our government is now trying to support us in a way that we haven't been supported historically and please don't get me wrong they absolutely have been doing a lot historically to try and work out how to best support us and a lot of banks have been doing this as well where they give grants of you know a thousand dollars or two thousand dollars if you're experiencing disadvantage to help you out in this situation but to know that our government is now stepping in and going do you know what we're going to trial this see how it goes and I low-key have no doubt that this trial is going to go well. Yeah I think it's just like you said very powerful

to give people that beacon of hope and that light to be like you know what you actually can reach chat for help because it is actually available and like we said earlier about the mental health chat this might be a bit triggering for you there's lots of places that you can contact like safe steps yeah and we'll put a whole heap of them in the show notes for you if you're experiencing this that's absolutely something that we want you to be able to seek help for and to be honest if you're too overwhelmed and don't know how to do it please dm us we have this happen sadly too often where people dm us and they're like hey this is the situation what do i do we are happy to be that friend that helps you on your way and make sure that you get connected with the people that you

need to be connected with because I don't want anyone in our community feeling like they don't know who to reach out to or what the first step to take is and sometimes it's really hard to talk to a friend but we are that friend my friends so slide into our dms if you need anything literally but more on domestic violence services more than 200 million dollars in additional funding has been put aside for frontline domestic violence services which you mentioned before but of that 26 million dollars is also in this year's federal budget for Indigenous Australians experiencing family violence and so something that I think is really special here is that they've carved out a specific amount whereas more often than not it's just for all Australians when in reality their

experience is often very different to that of you or I and you and I can't relate to that but what I want to know is that they are well supported and have the tools and resources available to them because more often than not, they get left at the sidelines when that is not what should happen at all, ever. Everyone has the right to feel safe and reach out for support. And like we said, there's going to be, there's lots and lots of good resources out there if you're experiencing any hardship. Yeah. And something else I just want to touch on, Tony, because it really relates to women, and I think it's really important, is the $450 superannuation guarantee threshold removal, which sounds like a mouthful, but essentially what that means is up until now, if you earned

under $450 a month, you didn't get paid any super at all. Which is so scary. Which is so scary, but also it means that so many women are maybe going back a couple of days a week while they're being mums or they're unable to work or they're experiencing disadvantage, so they just work once or twice a month you know keep mentally stimulated so that's actually being removed which means that every dollar that women earn is now going to also earn them superannuation which is really special and tony that move is actually going to see more than 200 000 women in australia benefited how good is that it's just you just don't think that those things exist and that it's going to affect that many people but 200 000 people are now going to be paid superannuation

because of our budget this year that is so powerful Tony and because they're being seen you know the federal government have actually said like look this affects this many women across our nation that we can actually make a difference and you know we don't need to gender it budget isn't gendered but at the end of the day we are women and we obviously as a whole experience significant disadvantage when it comes to finances like the gender pay gap still exists But these are nice steps towards making sure we can be more financially stable. And then the second thing when we're talking about women, Tony, it's actually childcare. And, you know, it's not because just women use childcare.

But from the 1st of July 2022, the government is going to be removing the $10,560 cap on the childcare subsidy, which benefits 18,000 families. Not 200,000, but like still 18,000 families is a lot of families. But wait, wait for the numbers that I've got for you soon. late on me this this subsidy is also going to increase for families who have more than one kid under the age of five in child care by 30 which is good up to a maximum of 95 but this child care change is actually aimed at boosting workforce participation and women's economic security which means that 40 000 more women are going to be able to work an extra day a week oh how good is that an extra day a week of work for women regardless of the financial security that's going

to provide for them and their families another day a week for them to contribute to their careers or their jobs or their financial security and their future security in their jobs that's wild I love that and also their mental health and their own identities exactly we've talked to lots of new mums that have said oh you know like working that one day a week just makes so much difference it makes me feel like me and I gained so much from that one day even though it might not be actually financially but mentally you just feel so good and the thought that that one day is going to now turn into two for so many people is more women in the workforce more often you love to say it yes come at me anyway that's my side rant on your topic of women

so we can move now into the 13 billion dollar boost into the ndis yes that is so special as well um and a statistic that really shocked me well i guess not really shocked me but knocked me over a little bit um is that the ndis is accessed currently by roughly 450 000 australians Yes. And we're talking about $13 billion extra going into help all these people, like the mass amounts of people that are accessing it. And it's actually set to grow to $122 billion over the next four years. Yes, which is crazy numbers. But at the end of the day, I think I really get really frustrated when people say, oh, it's going to cost taxpayers X amount. Can we stop using this language? Because it's not going to cost you more. You're actually

just going to continue to pay tax if you said to me hey victoria like how do you want your tax distributed i obviously want the ndis supported and i'm grateful that that's what it's being allocated to could we just say hey taxpayers money is going to be allocated to this special cause or you know this outcome which is so much more powerful than oh it's going to cost taxpayers xyz it's such an entitled way of talking about money like we are and i've said this a million times and I even said it already on this specific podcast episode we are so lucky to live in a country that cares so much about us that is a privilege that is denied to so many people around the world and I genuinely am so grateful to live here and I just hope that you know obviously I

want to change the financial lives of heaps of people but I also want to be able to change the mindset of entitlement and what that actually means and change this mindset of paying tax as being a bad thing to being something that we're grateful for and I've said this so many times like the more tax you pay the more money you're earning the better it is like how great is it let's stop going oh I can't believe I had to pay tax really you can't believe you had to pay tax have you not been paying it for like the last 10 years that you've been working have your parents not paid tax like where did you get this idea that you weren't going to pay tax this year yeah that you're just very surprised that that's what what a shock I had to pay tax oh wow I didn't even know

So I think that maybe that's coming from my place, you know, a bit of a place of entitlement where I can afford to pay tax and I absolutely get it. But I think that, you know, we are so lucky to live in a country that is so well supported. Like if we get sick, we go to a hospital that is free. We get services for free. And, you know, if we compare to what is the greatest country of all, America, that's not the case. They could go to hospital and it would be hundreds of thousands of dollars if they end up with an illness that they didn't foresee coming. like it is insane to think that we can just freely get access to health care and benefits that we genuinely need yeah so well said and i think that lots of people saying that don't think

that they're ever going to need to access these services that their taxes pay for and god forbid you don't have to but that's what they're there for let's change our mindsets and see it as a thing that we're grateful for rather than a burden that we carry because i guarantee when you start meeting the people that are engaging in these services they're just so grateful to have the support because they so desperately need it and you know you're helping someone and that's never a bad outcome no never and speaking of bad outcomes maybe it's a good outcome who knows here we are bad outcome no here we are where are we we're at the grand finale oh okay hold on hold on guys I don't even know what she's planned for the grand finale I just have a whole heap of notes

in front of me to prepare for whatever she might throw at me so Tony Lodge what is the grand finale what are you most excited about about the budget okay so everything that we've seen online everything that people have been talking about inside our cheers on the money community um everywhere first home super saver is that where we're going here we go all right the first home super saver scheme all right so tell us about what it is for anybody that doesn't know give us a little brief little tidbit of tidbit tidbit tidbit i don't know i also don't mind i hope everyone's still listening to us waffle on i love the bamps between us i hope everybody else loves them as much as i do all right well now we're getting our tit bits out and we're going to talk about the first home

super saver scheme or the fh double s um was actually introduced by the australian government in the federal budget for 2017 2018 to reduce the pressure on housing affordability which is very nice thank you government for that and a lot of our community has now used that and the first home super saver scheme enables you to use your superannuation fund to help you save for your first home. Sounds amazing. Yeah, sounds amazing. And what you could do historically was contribute up to $30,000, so $15,000 each financial year into your superannuation fund to help you save for your first home. And the benefit here was that instead of being taxed at your marginal tax rate, So, for example, if you earn between $37,000 and $90,000, that's 32.5% of your income, you actually get to make use of the tax rate inside your super fund, which is only 15%.

So, you get to pay less tax, which means that you end up with more cashola to spend on your future home. So, it's kind of like the government going, oh, we'll give you a bonus if you do it this way. and for a lot of people it's a no-brainer because you can dump that money in and then take it out for your first home and the government's doing all the work for you they're doing all the work for you and all of the super funds are actually really well equipped to make sure this happens easily and well i think one of the only catches here is that it's hard to withdraw if you decide not to purchase property because you will have to pay additional tax you don't just get to put it in pull it out and then get it at the 15 which would be a money win right so i think that for us that

sounds good that sounds great so the first home super saver scheme has gone from being the thirty thousand dollars i just mentioned up to fifty thousand dollars huge which is more money and that is great what does that mean tony what does it mean no you have to tell me oh okay i'm asking you so historically if we did the maths on that and when i say if tony i mean i did the maths on that i wanted to share i had to sit here while you did it and you said does this make sense and i went yes victoria yes victoria and vine can we please get to the show but i really wanted to talk numbers because so many people are like, great, well, what does the $50,000 thing mean for me? So historically, if you put $30,000 into your super fund and you earn between $37,000 and

$90,000, which is what a majority of our community earns. So we're just going to use that as the example. And your marginal tax rate was 32.5%. The net value of $10,000, and let's just break it down to 10, even though I know it's 30 and 50, the net value of $10,000. So Tony, if you earned 10 grand and then it was put into your bank account after tax, that would be $6,750 for you personally. Yes. That's what I take home. That's what you take home. So we're talking take home pay. But if you instead decided to do a first home super saver scheme and contribute more money to your super and you put that same $10,000 into your super fund instead of your personal bank account, the net value of that $10,000 is $8,500 instead of the $6,750. So that's more money. So

that means that if you put 10 grand into your super to save for your first home, instead of putting it into your bank account and just saving for it in the way that everybody else would, it means you have an additional $1,750, which is an additional 21% of your income. That's a pretty good, like if we're going to compare it to investment return, that is pretty good, right, Tonerati? And 21% just sounds good as well. You're like, oh yeah, an extra 21%. Well, yeah, they're going to give you an extra 21%. Obviously, if you earn more, that is going to change in terms of what you would save. So, hypothetically, if you earned between $90,000 and $180,000, obviously, because you then pay 37% on tax instead of 32.5, that saving would actually be $2,200. So,

you'd actually have 26% more money having used the first home super saver scheme. So if we actually calculate that out, that $30,000, if we'd put it into our first home super saver scheme, we would have made $5,200, but now it's increased to $50,000. We're going to make $8,750 by making use of this scheme if we're buying first properties. And to me, that's a lot of money that could go towards like part of your stamp duty. It could go towards paying your solicitor. it could literally cover so many things and who says no to free money when it comes to purchasing property right well you'd be crazy too especially from the government exactly so that's a lot of numbers it's a lot of jargon that's a lot of you saying percent and those kinds of things so

basically what it boils down to is is this good you're gonna have more money to save for your first home so arguably if you put fifty thousand dollars into your first home super saver the difference between you putting it into super and saving for it outside is eight thousand seven hundred and fifty dollars which is massive very big savings yeah i know jigs cute we're cute together um which is eight thousand seven hundred fifty dollars which is obviously a massive amount of money but something i wanted to touch on tony touch it okay so one of the things that we were talking about in the office this morning and someone passed comment on was like well most home deposits are more than fifty thousand dollars yeah which is true absolutely we're not saying use

that scheme to save for your house deposit and that's all you're going to get like you're still going to be expected to have to save outside of super yeah it's not that good a deal they don't just pass you the check and go here's your house deposit yeah you've got 200 grand here you go it's not going to happen that way but the benefit here is up to 50 000 you can make extra money on that so let's see that is the value because a lot of the comments i've seen recently are like well what house am i going to buy with a 50 000 deposit well firstly a lot of houses they're just not near the Melbourne CBD or any CBD in Australia. But then two, I get that, but that is not saying that that's the only deposit you're saving. This is just a part of your deposit and you're going

to be saving in a bank account as well to reach your goal. And I think that it's really important to preface that because it's not the entire amount, but we just calculated that you're going to be $8,750 better off. I'll take it. Yeah. If you don't want it, I'll have yours and I'll have 16 grand to play with. Exactly. Thank you. Thank you. Unfortunately, that's not true I can't take somebody else's but if if you could like I would definitely think about sharing it with you thank you I appreciate that I will share with you another thing I actually wanted to touch on there which I had a heated conversation about last night because obviously I get really into the budget and what it means what and so what we yeah no I bet you didn't see that coming

I'm so surprised shocking um so what the conversation was about was you know this first home super saver scheme is increasing which obviously is going to increase the amount of first home buyers who are able to access the market quicker which is great but they're like okay but we actually have a demand problem and a supply problem and does that not mean that the real estate market is going to become more competitive yeah it's like I get that absolutely but let's look at the flip side of this and historically so one of the benefits of being 65 years old was that you Apart from the fact that you don't have to work anymore. Well, if you'd saved and invested properly and if you hadn't done that,

maybe you were in a little bit of a pickle. But one of the benefits of being 65 years old is you have access to the downsizer scheme, which means you can sell your family home and contribute $300,000 to your superannuation if you need to top it up. Really? And obviously you and I, Tony, can't contribute $300,000 to super. They wouldn't let us do that. Fine.

But that's a massive benefit and that's obviously going to be a really great boost. but what they've done is they've reduced that age to 60 years old instead of 65 which means people get an additional five years before what we call the preservation age or retirement age and five years is a long time if you're putting money into super to retire yeah and because they've decreased that age to 60 I genuinely think that there will be an increase in the amount of you know people who are pre-retirement downsizing their homes which hopefully will help us with the demand problem that is going on and we'll have an increased supply therefore we'll be able to meet the changing nature of people wanting to buy homes versus what is available because at the

moment the problem is that we just don't have enough properties for the amount of people that want to buy them and that happens with population growth because as you know the population has grown therefore the houses that were existing before aren't enough to meet the current demand and I think these two things are going to work in conjunction with one another to meet that supply demand issue so ultimately there's basically no downside no absolutely not we're giving people that it was 65 is now 60 the opportunity to downsize beef up their superannuation and live their best life exactly and i've run the numbers on this as well because i think it's really important when did you find time we i just really like numbers anyway we have a number of listeners

who are actually in their 60s which is so fun because they dm me and like hey i know i'm not like your quote target market but like I really appreciate it and I'm like I'm sorry like I know we've got this like perceived target market but if you resonate with our community you are welcome I don't care who you are all friends come on in yeah we're all friends here anyway I want to contextualize this again because what does that really mean so putting an additional three hundred thousand dollars in super sounds great but bringing it forward five years right that's that's giving you time for compound interest to actually work some of its magic obviously the longer it's in there, the more impact it's going to have. But if you sold your family home and put in another

$300,000 in superannuation at the age of 60 and you were planning on retiring at 65, you continue to work, right? Like you just dumped your 300 grand in still, you know, let's disregard any other super contributions. We're just talking about that $300,000. If the average rate of return is seven and a half percent, which we use on the pod as usually an average, because it's an easy average, it's very normal. Sometimes it's higher, sometimes it's lower. That's our average. but if it compounded at seven and a half percent, that $300,000 over five years is going to generate you approximately $136,000. So by making that decision, that's how much more money you would have. So instead of retiring with an additional $300,000 in super, you're going to retire with

an additional $436,000 in super. And that is really, really powerful because so many people just go, oh my God, I'm so stuck. Like I need additional super. And that's actually going to help them when they actually need it, not at the time that they're retiring, so that they can access it. Because so many people don't think about retirement until it's arguably a little bit too late. And so many of us are like, oh my gosh, like, what am I going to do? And so many of us just don't consider it until it is too late. And we're lucky that we've got Shears on the Money. And hopefully in the future, this isn't going to be a problem. But for so many people who didn't have the tools and resources that didn't have it, because superannuation only

got mandated it only became compulsory in 1992 so people who were working before that they might have had super they might not have probably not probably not and it wasn't a priority because like that wasn't what they were thinking so for me this is massive because for those people who maybe hadn't been thinking about retirement did have their heads in the sand a little bit at the age of 60 now have this chance to kind of you know produce a little bit more income than they had before with a tool that you know not everyone wants to sell their family home but it is a really good option if you're in that position but if you at the age of 60 make that decision and I'm talking about this one obviously maybe it's not you maybe it's not related to you Tony but

how special is it to have more knowledge and have more interest because our parents are that age like we all know someone in this age bracket that this information could benefit right but also I'm probably going to work until I die not the point but if you're at 60 and you're like yeah I'm still young fresh happening I don't really want to retire at the age of 65 but like I'd like the option if you're going to say all right I'm going to work to 70 the power of compound interest means that $300,000 contribution will more than double and it will be worth $633,000 to you personally by contributing that additional 300 grand into super by making that decision which means your money made $333,000 over 10 years. What? That is literally you being able to retire on a boat

in Spain. Okay. That's not what it means, but it does mean that we are far more financially secure than we were before. Financially secure. Yeah. Tony's going to be on a boat in Spain. But I think that that's really important to contextualize because, you know, that sounds great. And you kind of say it in passing. And for a lot of us who watched the budget, we've been like, great like the the age has been dropped but five years is so powerful and that is massive and that is an opportunity that I think a fair few people will make but then it ultimately has this what domino effect so then more properties are going to be for sale and then more millennials are going to be able to purchase those properties and yeah it's just really important to understand that

everything does have a domino effect and somehow everything interrelates. So now that we've covered the first home super saver scheme and how that's going to affect people at both ends of the spectrum getting into the property market and also maybe downsizing and coming out of the property market in the way that they've known it for the past 40 years yeah here's the next big one oh gosh i know where we're going with this and i feel like a victoria rant is coming i'm so sorry but i'm also not sorry so we've seen this a lot so we're not talking about the first home buyer super saver scheme we're actually talking about the new single parent family home guarantee aren't me tony yes so up to 10 000 single parents will be able to purchase a house with a two percent

deposit yeah which sounds great in theory in theory but i'm going to throw out my opinion there and say i'm a little bit negative on it you're right there are going to be some people in our community that benefit massively from this so we're not disregarding this but i do think that this isn't as shiny as it looks if we break it down yeah so to summarize the government's new single parent family home guarantee means that single parent families of any gender could be eligible to purchase their own homes up to city state value caps so it's going to depend on what state or territory you live in with a two percent deposit and it doesn't need to be their first home so it's not the first home super saver scheme it's not first home it's any home oh but at the same

time, they've also said that there are 125,000 single parents, 80% of which are female, and these people will all be eligible for this scheme. So there's 125,000 people that would be eligible for a scheme that has 10,000 places. 10,000 spots, right. Great, fantastic. But what really stresses me is that they haven't considered the financial implications of single parent families or the fact that they usually have a very difficult financial reality. I am a bit savage on this because I genuinely feel like it's going to disadvantage more people than it's going to advantage. And I think it's putting a lot of pressure on the idea that buying a family home is the be all end all of success. And that is not true. If you're a single parent, sometimes buying

a family home isn't actually in your best interest at all. Sometimes investing in shares is going to be the best option for you because the financial commitment of a mortgage means that if you don't have an additional four grand that month to meet mortgage payments like you're in financial distress whereas if you don't have four grand that month to invest in shares like you're right we'll just invest next month like there's no flexibility in a mortgage and it's just a lot of responsibility and what is already a single income household and you know we've just gone through a pandemic where we've seen literally millions of people lose their jobs and never thought that they never thought that they would lose their job and everyone said oh it'll never

happened to me but now hundreds of thousands of single parents have less income and now they're being told oh but you can buy a house with you know two percent which is going to arguably excite a lot of people but then they've only announced 10 000 spots which is really disappointing but at the same time and now you have more money that you've borrowed and therefore as much as you only had a two percent deposit and interest rates are great you're still paying interest on money that you've borrowed and on almost the entire loan from yeah pretty much the entire loan and that's a financial impact in itself because over the long term you're going to be paying more interest or more money that you know other people wouldn't have had to do so we're backwards then

and I just feel like it is great and if you're eligible fantastic but I really just don't think that people have considered it and the eligibility criteria is so slim and it's just so many people haven't considered it and I'm just really frustrated about it because also let's think about this more deeply I don't think many banks are actually going to be approving loans of this either like how many banks are willing to take it on and we're already hearing from our community and I'm speaking to you every day and some of you have said well Victoria I have a 20% deposit but a bank won't lend to me and only last week we got a DM from somebody who said that their broker said hey yeah actually come back when you've got a partner to borrow the money which is absolutely

foul but when it comes to the responsible lending laws like are we actually going to do this like is that what we're going to do we're going to put you in a detrimental position because it makes everybody else feel better and it makes the government feel like they've outstretched this olive branch to say hey yeah more people are in more property when in reality it's not putting their financial circumstances first how about you pay for us to get some financial advice like how about you pay for us instead of giving us a massive discount why don't you just pay financial advisors so that they can put people in the best possible financial position for them that's going to be far more powerful pay my salary I'll go do it do you know what I mean like yes

it's so frustrating because I see it and people go, yeah, but Victoria, I really want to own a home. And those lucky enough to afford financial advice and actually personalised advice. Some clients I've had who, you know, they have great incomes, they might be dual income earners. And I say, okay, cool. But like, these are your goals. These are your values. You said you also want to purchase a house in the future. And one of my favourite things to do is projections for clients, which you're probably not surprised about. But what I get to do is plug into this really fancy software, all of your life events and what your income is and what we expect it to increase to and you know how much kids are going to cost and we can factor everything in

and I can show you what your financial life looks like in an outcome to be like okay cool we'll reach retirement with x but if you didn't buy a house this is what it'd look like you know I have had clients turn around and say hey V you know how we said we wanted to buy a house now we've gone through this entire process we actually don't think that's a priority for us anymore like you deserve the choice you deserve that option you deserve to be able to see the clarity around your financial situation. Because I bet if I said, cool, you'll get to retirement, you might not own your own home, but you will have a free cash flow that comes in each and every single month and you'll never have to worry about paying a bill versus, hey, you're actually going to

financially struggle each and every single day. You're going to own your own home, but it's going to be a stretch and you're always going to have to think about scrimping on everything. Like those two situations are so different, but we have this value set that's ingrained in us that makes us think that we need to own property to be successful and it is not the truth. And I feel like we're actively trying to change the social landscape of the expectations that buying a house means that you're successful because gone are the days when you grow up, you get married, you buy a house, you have a baby. That's not what people's standards and requirements of happiness in life are. And if it's yours, great, that's fantastic. But I kind of want to be able to redefine what

success looks like and for me it's happiness it's wealth creation regardless of how that happens it's freedom of choice it's not just owning a house and being able to say this is my address and I own that address like what does it mean in the grand scheme of things arguably not that much and I know that that's again my entitlement showing a little bit because I am a homeowner but with home ownership comes a lot of costs and let's pretend for a hot second that I was a single parent you know I've owned my own home I didn't get access to this great scheme but like a couple of months ago before I moved house in my old house the skylights broke when we had that hailstorm and I'm really grateful that I was renting because that fee was covered by my landlords

but the skylights in my house was like three or four thousand dollars to get fixed and if you're a single parent having lumped on you a three or four thousand dollar cost that you have to fix because my roof was literally leaking because there were hailstones coming through it like I wouldn't have had that capacity as a single parent to go oh whatever an unexpected cost of three or $4,000. There's so much more to property ownership than just getting into the market and just getting that home deposit saved and then purchasing your house. It's not just the mortgage repayments, it's the rates, it's the water, it's the home maintenance, it's everything else. And then if you compare that to renting, nine times out of 10, renting actually ends up being more equitable

even if we compare it to the monthly mortgage repayments, which is what most financial advisors will do for you. They'll say, okay, well, cool, if you bought your own home and saved up, you know, your mortgage repayments would be $1,000 a month, Tony. But if you went and rented, oh, it'd be $1,100 a month. And you'd be like, oh, owning my own home makes sense. But they didn't tell you about the maintenance costs. They didn't tell you about the rates. They didn't tell you about all of the other unexpected costs or regular costs associated with home ownership that weren't taken into consideration. It's not just the mortgage repayment. Well, on that rant, on that Victoria Divine rant, I feel like is a safe space to wrap

Okay, well, I think we've hit some really good points. And I'm going to chuck a thread into the Facebook group once this drops, which will probably be very soon. And we can have a further conversation and discuss all of the main points and what's going on. The only thing I ask is that we remain kind about it. And we remember that it is a budget and it is, you know, someone allocating it based on what they think our needs are. And if it hasn't met your needs, then okay, that is okay. But we don't need to savage it. Like the She's On The Money community is a community of kindness. It's not one of savaging it and ripping other people down and saying your priorities are not mine

because in She's On The Money, everybody's priorities are valid. Yes. So on that, Tony, I think it is time to wrap the show officially. But before we do that, we'd like to acknowledge and pay respect to Australia's Aboriginal and Torres Strait Islander peoples. They're the traditional custodians of the lands, the waterways and the skies all across Australia.

We thank you for sharing and for caring for the land on which we are able to learn together. We pay our respects to elders past and present and we share our friendship and our kindness. Now, you need to remember that the advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or a financial decision.

And we promise I am an authorised representative of Australia Pacific Funds Management Proprietary Limited, ABN 34132463257, AFSL 339151. And as always, cheers to our mate Tony Lodge for whipping this episode together in record time to get it in your ears at a time that it is most relevant. Good. I've got to go.

I've got to go because I've got to go cut this. All right. See you later, guys.