Phil Tarrant and Liam Garman compare France's fiscal position with Australia's, arguing the tax and spending settings here are closer to breaking point than most Australians assume. They also cover the ATO's approach to small business, new underquoting and auction disclosure rules in NSW and Victoria, and what the SMSF residential ban has done to development pipelines.
France is paying 64 billion euros a year just to service a debt of around 1.4 trillion euros, and its bond yields are climbing because lenders are no longer sure the country can cut or tax its way out. Liam Garman argues Australia should stop feeling smug about the footage coming out of Paris. On his numbers, public servants make up 8.57 per cent of the French population and 9.41 per cent here, while annual public sector employment growth sits at 0.6 per cent in France and 3.3 per cent in Australia. His view: we are a few years behind, with a narrow window to change course.
The tax comparison is the part that stings. Garman walks through France's 2014 experiment under Francois Hollande, a 75 per cent rate on earnings above a million euros that raised 420 million euros while the country shed 23.8 billion euros in taxable assets between 2007 and 2016. Side by side, top personal rates are near identical (45 per cent in France, 45 plus the Medicare levy here), but Australia's company tax is higher at 30 per cent, and under the indexation model capital gains can be taxed close to 47 per cent against a flat rate in the 30s in France.
He then turns to Greece as the warning about cutting too hard. The IMF assumed a fiscal multiplier of 0.5, meaning a billion euros pulled out would cost the economy half that. The real multiplier landed between 0.9 and 1.7. Australia is nowhere near Greece, Garman says, but the local signals are already flashing: 55,000 fewer people employed than a year ago, stamp duty receipts possibly down by a billion, and, in Sydney and Melbourne, very little capital gain left to tax for anyone who bought in the past five years.
Phil Tarrant's response is blunt. He accepts the window exists but says the people in power lack the ability to use it, calls this the worst performing government in Australian history, and predicts a royal commission into the ATO's conduct that he believes will overshadow RoboDebt. The credit card surcharge decision draws particular anger, along with the commissioner's suggestion that only businesses in trouble pay tax by card. Tarrant expects the government will be forced into a U-turn on its property tax changes, noting Keating reversed course in roughly 26 months, with the Coalition and One Nation both taking rival policies to the next election.
Garman uses the segment to issue a correction. Last week he said One Nation had confirmed a capital gains tax discount for two properties. It is negative gearing for two properties. Within 48 hours he watched buyer's agents and property professionals repost the slip as policy, which becomes his broader point: fact check the reel, the selling agent and the podcast. The pair then move to NSW underquoting rules in a falling market, where a vendor revising a price down after knocking back a higher offer may be exposed, and Victoria's new requirement to publicly disclose reserve prices.
The property consequences get concrete. An AFR piece puts 11,500 dwellings at risk as a direct result of the SMSF residential ban, while emissions costs are lifting cement and concrete prices (Garman flags his own figure here as unverified). He is harshest on first home buyers pushed into the 5 per cent deposit scheme and now sitting in one and two bedroom apartments in markets like Brisbane and Perth, which he says fell six or seven per cent last quarter. Add selling costs and the first rung has gone backwards. For investors and brokers, the message is to price policy risk, not just rates.
Speaker 1: This is a Momentum Media production.
Speaker 2: G'day Phil Tarrin, Property Buzz Friday morning, dialing in from North Sydney, just come back, early start today, the AI Fest 2026. down the height regency uh in town uh lots going on lots of activity everyone talking about ai financial services law everything connected would have a little bit about a chat about that today plus all the regular stuff that we talk about on property bars lane garment how you going my co
Speaker 3: Good film. Good. It's been um it's 10 20 and it's been a long day already
Speaker 2: it's been a long day already good start good fun down there at the ARFest
Speaker 3: been fun hundreds of people hundreds of people um good good time i'm gonna if i can use this for a plug we recently launched banking daily obviously i think a lot of our listeners would would know property bars because they've probably listened to us on spi in the past listen to yourself on spi for you know over 10 years and you've been a a really good vocal point of the real estate industry for industry for a very long time and off the back of that and off the back of this big accumulated knowledge um we launched banking daily only a few months ago and it's the second event that banking daily is supporting and we've got a few hundred people there that are looking at ai and financial services so if you want to know what's going on in financial services read about the market jump on banking daily.com.au
Speaker 2: There
Speaker 3: yeah
Speaker 2: you go. Nice plug.
Speaker 3: nice plug well seamless seamless
Speaker 2: Seamless. Well, lots of banks are. Yeah, just look at the headlines, right? Lots of banks are really downsizing their stuff
Speaker 3: They
Speaker 2: at the
Speaker 3: are.
Speaker 2: moment.
Speaker 3: They are. It's massive. And there's an irony, and I'm not going to go too deep into it, but there is an irony where people that have even championed some of the AI reforms, which may have contributed to some of the downsizing have been downsized themselves.
Speaker 2: Yeah, there you go.
Speaker 3: So bite the hand that feeds you. But I'm always going to take this chance to do a quick plug for our... for an opinion piece that I penned for Banking Daily as I spent hours on this, but you and I talk about the economy a lot. And I thought I'd do a bit of a deep dive because obviously we've been following not on this podcast, but the world's been following the riots that has been happening in France over recent weeks. And I think the world's looked at it that this is a country where there aren't many options because we see what happens in France whenever you try and raise say the pension age. Or you try and institute any kind of cuts and they burn the country down. And you've got that on one hand. And then on the other hand, with the backdrop of, you know, I think their interest bill alone, their interest bill alone is 64 billion euros a year. They've got a debt in the area of 1.4 trillion euros. So quite big. And this is going to only increase. What we've seen recently is the bond yields are also increasing off the back of this. What that means is what a lot of commentators want to look at. to modernized spectators of cities, there are actually a lot of lenders that are saying, gosh, I'm actually not even sure France will be able to either cut their way out of it or tax their way out of it. So if we're going to lend to the French government, if we're going to buy French government bonds, we're going to need a bit of a risk adjustment. So at the end of the day, 1.4 trillion euros in debt, if they do have bond yields that go up by 1, 2, 3%, that means the yearly interest repayments are going to go tens and tens and tens. billions and billions of euros up every year, just on interest. That's just on interest. So what opportunities they have, either they can't, as I mentioned, or they tax more. And this is a lesson which I thought, wow, we as Australians really need to learn this because I was actually looking through the French taxation regime. And I remember 2014, the French socialist president Francois Hollande, he instituted a 75% tax for any earnings over a million euros. And what we saw at that time was that And hundreds and hundreds and hundreds of millionaires just left France,
Speaker 2: Mm
Speaker 3: which
Speaker 2: -hmm.
Speaker 3: is very easy to do when you're in the European Union because you can just domicile somewhere else, right? Domicile somewhere with a lower tax rate and you can kind of come and go. Now, that would obviously question the domicile effects. But when there are no passport checks and you've got Schengen, you can just kind of do whatever you want. What they did is they raised 420 million euros, but between 2007 and 2016, the country lost 23.8 billion euros in taxable. assets. People move their money away. So there was a massive saturation point where people, you try to tax more, you raise less money. Now, a lot of our people at home would know this is the Laffer curve. I choose not to use that term because the Laffer curve invokes a bit of a throwback to Reaganomics or the Thatcher era. And I don't want to make it political. This is just data, right? This is just... Taking the politics out of it, you get to a point where you tax people more and you raise less money because the productivity is gone or the capital flows away. So I thought, well, what is the state of the French economy at the moment and especially their tax versus the Australian tax? Because we see a lot of millionaires do leave France every single year. And I thought, well, I'm going to compare this to Australia. Now, the top personal income tax in France is 45%. In Australia, it's 45% plus the 2% Medicare levy. The tax-free threshold in France, €11,600. In Australia, $18,000. So quite similar so far. The income tax brackets are very similar to ours. plus or minus a few percent here and there, very similar. What they also have in France, a 25% company tax rate, 30% over here, bar some eligible smaller companies at 25%. The capital gains tax in the 30s, in the 30s, and it's a flat tax in the 30s. And of course, with the indexation model over here, well, I mean, you're going to be up to 47%. And now at the moment, inflation is running quite hot. So you will get some level of inflation index cgt discount but let's say the government gets all together and inflation goes back down two percent you're not getting too much of a discount and you will be getting close to that 47 so our capital gains tax way higher our company tax is higher and our income tax is same same now france does have a few things that a little bit different they do have a wealth tax and they do have an inheritance tax but when we're talking about the day-to-day the day-to-day we're very similar Now, this is a country that has observed that this is their tax-breaking point. They've tried to go higher, people leave. They tried to go higher, productivity drops. And now they're in this impossible situation where they can't cut and they can't tax more. Now, How far away are we from this in Australia? Now, one thing that a lot of Australians would say is, yeah, but France has this bloated public service, this bloated public service. Well, per capita, Australia has a higher. and bigger public service. So public servants per capita in France, 8.57%. And in Australia, public servants per capita, 9.41%. We have more public servants than France does for our population, which is a mind blowing thing because we look at France and this is the point of what I was trying to argue on this op-ed, which is, you know, we in Australia, we look at the images of what's happening in France. We're a little bit smug about it. Well, that will never happen to you. Oh my gosh, you're French. The French economy, that's in a state. How many years away are we from this? Because also at the same time, annual public sector employment growth, it's only growing by 0.6% in France. It's growing by 3.3% here. So we're actually growing at a faster rate. Our government spending is growing at a faster rate. And the French bond yields, they're not waiting. They're looking at this like a ticking time bomb. They're moving north. We're moving north too. And There is going to be a very small period here where we can correct the trajectory. So what we saw in the credit crunch in the European Union. Now, the IMF, when Greece was forced to come, the IMF said that their fiscal multiplier, so basically how much money is going to come into the economy and the impact on that in the economy, they said that if you basically took a billion euros out of the Greek economy. economy, it should only drop GDP by about $500 million. So a 0.5 multiplier. You take a billion out in government spending, the economy should only be hurt by about $500 million. What they actually found was the multiplier fell between 0.9 and 1.7, which means that when they took a billion euros outside the Greek economy, it actually had an aggregate impact of a 1.7 billion euro drop in the Greek economy. And that's why Greece was, Greece needed austerity, but the austerity was more acute and it impacted the economy more than they realized because it was an economy that relied like crutches on public spending.
Speaker 2: Hmm.
Speaker 3: So a dollar out hurt more than that dollar to begin with. So what does this mean for Australia? Now, the IMF knew and they know with a lot of their countries that, oh gosh, our previous maths probably ain't correct. And if you cut a dollar from government spending, it actually hurts more than a dollar in the economy. We're going to be very careful about that, especially for countries that rely on it like a crutch. Now, Australia obviously isn't where Greece was. Greece's GDP dropped by about 25% in the course of a couple months, right? We're not at that level. But how far away are we? Joblessness has gone up 55,000 people. 55,000 fewer people are employed than this time last year. As I highlighted before, we'll ask damn duty revenues receipts for the government probably going to drop by a billion. You can't tax capital gains if there's no capital gains. And you and I talk about property all the time. And the data is pretty clear that if you bought a house in Sydney, now this is on average, if you bought a property in Sydney or Melbourne in the last five years, that's not on average, they're no capital gains to actually tax if it's an investment property, the smaller capitals are catching up. up around 18 months if you bought in the last 18 months there's no capital gains to tax you're going to be raising zilch so We've implemented a discount where a lot of the progressive left has said that, well, it's a tax break for the millionaires. Oh, it's a handout for the millionaires. It's a handout for the investors. Congratulations, you're not going to raise any more money. You're actually going to lose money by what's happened. We have a very small period here in Australia that we can correct this course, but it's not going to be forever. And if we're sitting here on our high horse looking at... What's happening in Europe, we're only a few years behind.
Speaker 2: We'll observe. And what I would say to all that, Liam, is yes, you do have a moment in time to correct this. However, we do not have the people in power with the ability to correct this. And I think Australia is absolutely waking up to that right now. What's going on in Australia? right now and there's been this sort of veneer of of a safety net sort of overlaying over the last period of time if this was france people will be riding in the streets and i don't want to incite violence at all i think that's absolutely appalling and what makes australia great but the state of play right now it's it's cascading and it's it's brewing and it's bubbling and it's going to explode and We were going to get an opportunity to have a vote in 18 months time, and I think that's going to be very interesting for one of the most interesting elections ever. And this current government, not to be political, but I will be, will go down as the worst performing government in the history of Australia. And I'm saying that right now. There's a lot for Australians to be angry about right now. And, you know, I cover a lot of ground and I've never, ever. In the 20 years I've been doing this, I have seen Australian businesses in the state that they are right now. It's the worst they've been, much worse than COVID. And everyone thinks everything's okay. It's not. The cracks are there and they're getting wider and wider and the government at the moment is absolutely asleep at the wheel. And unfortunately, it's going to be hard. Yes, Australia will get through this, no problems. However, it's going to take a decade to repair the damage that's being done. done right now across a whole bunch of different levels um you know there's a flurry of stories out over the weekend and i've been chatting to people about this the way that the ato is behaving right now is absolutely appalling it's going to be And I'll telegraph it now, there'll be a royal commission into the tactics and the attitudes and the way that the ATO is aggressively pursuing Australians. It's going to be worse than the RoboDebt scandal. And no politician would say this, but I'll say because this is a very pragmatic thing, the government will have blood on their hands as a result of what they're doing right now. That's pretty bold and callous claim, but. The pressure that the Australian government and the pressure that the Australian tax office is putting on people, on Australian businesses, I hate to think of how some people are going to react to that. And it really, really, really, really concerns me.
Speaker 3: I don't think it's bold. I don't think it's bold. I think it's correct. It's correct. I mean, you and I have spoken about the ATR. We'll just go microscopic on this, like the credit card surcharges, right? Now, you and I have spoken
Speaker 2: Sorry,
Speaker 3: about that.
Speaker 2: did you hear what the commissioner said?
Speaker 3: Oh, they didn't. They...
Speaker 2: Oh,
Speaker 3: Yeah.
Speaker 2: we just thought only people who are in desperate trouble pay their tax on their credit card. Yeah. Like it is
Speaker 3: Yeah.
Speaker 2: no one in the ATO has any small business experience.
Speaker 3: Yeah.
Speaker 2: You know, no one in the government, like I've seen Katie Gallagher on Senate estimates. She's a finance minister, right? she must be the most inept politician to ever exist in that role
Speaker 3: Yeah,
Speaker 2: they have no idea she gets questions and queried on um on consultation with small business right and they go yeah we're consulted with small business i think she was getting
Speaker 3: yeah
Speaker 2: pushed by um bob bragg or something other right it's like yeah yeah we spoke to some body that represents small businesses that that they have no idea like the australian government The Labor government have no idea what business does in Australia and they
Speaker 3: yeah
Speaker 2: have glib remarks saying, oh, we were in consultation with us, but they've got no idea.
Speaker 3: with
Speaker 2: No idea.
Speaker 3: the with the the credit card point right oh it's only that the businesses are struggling that do it like it's some infinitesimally small portion well when we're talking about blood on our hands well the government's blood on on their hands rather um They're the ones that now have no ability to at least have that extra line of credit to buy themselves a few months.
Speaker 2: Now, it's absolutely appalling. So it's
Speaker 3: Yeah.
Speaker 2: the worst I've ever seen it out there right now for business in Australia and also property investors and people who invest in property. You know, again, I'll make a bold statement. The government is going to need. To do a U-turn on their property taxes that they introduced through the most recent federal budget. We're coming up to, what is the end of my IFR, whatever,
Speaker 3: Yeah,
Speaker 2: you know,
Speaker 3: yeah,
Speaker 2: financial year. I can see already they're jockeying to see what's going to happen with the election coming up. But I'll tell you something, both the coalition and One Nation are going to be taking very vocal. and ambitious policies to the election in relation to property taxes.
Speaker 3: Yep.
Speaker 2: And you've got different versions of it. I think the coalition's current status is they'll just put it back to where it was. And One Nation's got some similar type of things where they might limit the number of properties you can Is negatively
Speaker 3: this
Speaker 2: hear.
Speaker 3: your point to offer my retraction?
Speaker 2: It may be. Just give me one sec. But there is no way that the government isn't going to have to take a very similar. plan to the election they're going to have to if you've got on one side people saying we're going to give this back to all australians and it is for all australians so many angry young people out there right now so many angry young people who have been curtailed to invest in property as a result of these changes a whole bunch of young people out there who are angry because you know property might not have been their vehicle might have been ets or some other issues who are getting hammered now on capital gains tax why are you why are you trying to push down the youngest people in the economy and the future of the australian economy by sucking the life out of them through tax right now so they're going to have to take it they're going to have to take a u-turn and i think by memory when keating uh did this in the 80s it took about two years or 26 months or something for him to reverse it so you're going to find it's about exactly the same time and treasurer jim chalmers he might be a doctor right he's got a philosophy doctorate or something or other it was It was on Paul Keating,
Speaker 3: Yeah.
Speaker 2: right? So that's
Speaker 3: He could
Speaker 2: his hero.
Speaker 3: learn a thing or two,
Speaker 2: That's
Speaker 3: right?
Speaker 2: his hero, right? Like he's going to go down as the worst treasurer in Australian history. He's going to do more damage to this nation than anyone else has done. It's going to take years and years and years and years to repair it from both a structural point of view, but from a mindset point of view, you're sucking the life out of Australians. You know, you're sucking ambition from all Australians. it's this most Australians I know just can't be bothered why would I give it a go what why do I care you know if I want to craft a career somewhere I think AO is going to take my job and I'm not going to be able to do anything you know there's a lot less security in work that's not good right and for those people who are out there trying to make a buck for themselves it's impossible to make money in business today it's impossible you know and everyone talks about productivity you got a productivity commission Right? I don't know anyone. I know a lot of people in Australia, a lot of very, very senior people. None of them, none of them got invited to sit on any productivity commissions or the commissions or the people that sit on these productivity commissions are just, you know, quasi not for profit or some other sort of committee and none of them have any experience doing anything. You know, and what does the government do? Oh, more regulation. Okay. And people go, well, what's that got to do with productivity? It's because small businesses now need to spend so much time, money and effort on keeping to these onerous and draconian rules that the government just invents every single time to try and make it harder to do business. It's sucking the life out of Australia, mate. And I'm really, really worried. I'm really, I'm more worried than ever before.
Speaker 3: No, I couldn't agree more. That summarizes exactly what I think. And to your point about people worried, you have to put money into the economy for the money to keep growing. And one thing in economics that it's been observed for hundreds of years, when people stop discretionary spending and when they get nervous, I'm not going to have that coffee today. I'm going to put that $5 into my bank account. instead of buying the coffee that has that multiplier effect to hurt small businesses the most and no i couldn't agree more and there's going to be a whole generation of people out there unless this is reversed brutally and quickly they just won't have trust to invest even in shares you
Speaker 2: trust mate trust the one thing you want your leaders is trust and i think australians generally they might have not agreed with leadership at different points i mean you just need to go back through history there's so many times Those are people have disagreed with leadership, but there's always been an inherent trust that the people in power are doing the right things for the good of all of Australia, right? These guys down there in Canberra now, they're spending like drunken sailors, they're running out of money and they're attacking Australians now in order to... Keep the coffers
Speaker 3: Mm.
Speaker 2: alive.
Speaker 3: Yeah.
Speaker 2: Why aren't they cutting costs? Someone should go in there. If I was in charge, I'd rip 20 to 30%. out immediately of the public service
Speaker 3: Mm.
Speaker 2: gone you wouldn't notice any difference you wouldn't notice any difference in a heartbeat you know but no one's brave enough to do that no one's brave enough to do that you know you've got a government there that's that's a puppet of the unions you know you can't push anything through an Australian 12 percent of Australians now or 13 percent whatever the number is a part of a union member but why should that be determining the outcomes for the majority majority of australians and australians work and i'll tell you right now we are in a recession we've been in a recession for a couple of years yeah immigration which has which has put a sort of veneer over that which has caused all the issues around housing affordability not being xenophobic there i'm talking about immigration in general doesn't is irrelevant where people come from um it's been masked you know that's just how vulnerable this nation has been has been masked Because of that, and you're seeing it already when unemployment starts rising. and people start losing their jobs and they lose trust in the system is when that realization that we're going down a pathway that's not good and australians strap in australian workers you're going to start losing your jobs
Speaker 3: I mean, it was so predictable. This was so predictable six months ago. And not to sound like a broken record, but you and I, when this started being flagged in Feb, and then the war in Iran happened and then the CPI data came out. When I looked at it and it was like, oh, it seems like a really dumb time to push these policies. I actually don't know if Chalmers will continue pushing the CGT negative gearing changes because that is genuinely really dumb time to do it. I'm not sure whether we'll do it. And that was my position even up until the two or three weeks before the election. I'm like, oh, mate, looking at this economic data, there is no way you would rock the boat like that. And he did. And that's the thing. Anyone who's worked in business, anyone who's invested, actually anyone that reads the data. like anyone that reads a data would be like this is a terrible time
Speaker 2: I
Speaker 3: to do
Speaker 2: don't
Speaker 3: it but
Speaker 2: know if they know how to read the data. And,
Speaker 3: no
Speaker 2: you know, my issue with it's this is it's
Speaker 3: popular it's left-wing populism
Speaker 2: left-wing populism, right? The lack of accountability by the government. So they get questioned on stuff, right? And they go, oh, the modelling says this or
Speaker 3: Yeah.
Speaker 2: the modelling says that. And they always disconnect themselves. They make the decision, but they disconnect themselves with the information to orientate and inform that decision. And I say it time and time and time and time and time again. I don't think those people actually know the numbers.
Speaker 3: No, they don't.
Speaker 2: They don't know the numbers. You see in Senate estimates,
Speaker 3: I mean,
Speaker 2: you sit
Speaker 3: that's the Katie
Speaker 2: there.
Speaker 3: Gallagher just like.
Speaker 2: I
Speaker 3: kick everything down the road
Speaker 2: reckon if you had a better finance minister. it would absorb a lot of these idiot decisions that the treasurer is making right now.
Speaker 3: you reckon i
Speaker 2: I'd like to think so because I don't know if she knows.
Speaker 3: mean we're talking about the same party that during their national conference wanted to take away the independence of the rba right
Speaker 2: But they
Speaker 3: they
Speaker 2: have done, they've just loaded that with their own folks anyway,
Speaker 3: have they
Speaker 2: right?
Speaker 3: i mean yeah but they wanted to get rid of at least the veneer of independence and just and then artificially like lower interest rates um i do want to take this moment i'm going to offer a little bit of a A retraction from something that I said last week, Phil, which was last week you and I on our recording said, well, I said it, I said it that one nation has confirmed that they are reintroducing capital gains tax discount for two properties. I said the wrong thing. It was negative gearing, not capital gains tax, negative gearing. They're doing it for negative gearing for two properties. That's the one nation policy. They confirm that. And the reason I've got to offer this retraction, and I'm sorry to the senator. No, not that she would know, maybe. It's because I saw in the 48 hours after we went live last week that a lot of people took a slip of the tongue as gospel, and it was a good lesson for me. That's a good lesson for me because we were talking and if anyone wants to go back and listen to it, it was retracted within the few seconds afterwards because you and I kept talking about negative gearing and if you're listening to it. it was it was pretty clear that it was about negative gearing but if you're driving if you're listening to when you're walking the dog a few people clearly missed the retraction after it and i saw a lot of buyers agents a lot of property professionals online that took what i said and they ran with it and they were posting it on socials they were talking about it on socials i want to be clear it's two for negative gearing but shows firstly how many people watch this
Speaker 2: To be fair though, it's... maybe maybe you can have a and again policy on the fly maybe you could actually have a a construct where you got certain number of discounts on like a two-speed cgt system
Speaker 3: Yeah.
Speaker 2: just saying
Speaker 3: There
Speaker 2: just
Speaker 3: are options.
Speaker 2: saying what was our what was our
Speaker 3: It
Speaker 2: policy
Speaker 3: was
Speaker 2: yesterday
Speaker 3: getting
Speaker 2: last time is that you can you
Speaker 3: negative
Speaker 2: every child for every child born in Australia you get
Speaker 3: gearing.
Speaker 2: you get a negative yeah yeah okay
Speaker 3: Yeah, negative geared property. And hey, it fixes the birth rates. But I also want to turn this into a lesson, a lesson for our listeners, which is, yeah, within 48 hours of it going live, I saw all these people online talking about it. It's a good lesson. fact check everything you see on the internet because sometimes it was well meaning it was a slip of the tongue and now there are going to be a lot of people out there that think that's a policy now i don't think it wants to change your investment strategies off
Speaker 2: Are
Speaker 3: of that but
Speaker 2: you work of one nation? Is this like a subtle, are you getting a little, Liam, can you just make a mistake,
Speaker 3: no
Speaker 2: mate?
Speaker 3: no this is me saying there are going to be a lot of spruikers online that give bad property information we've seen them fact check everything that you read online because for me it was a slip of the tongue now people believe that for others other people are out there spruiking this or spruiking that always fact check what an instagram reel says always fact check what your favorite ba says always fact check what your favorite selling agent says always fact check what anyone says whatever anyone says fact check it because sometimes well-meaning mistakes do happen and
Speaker 2: Yeah, that's okay,
Speaker 3: that's
Speaker 2: man.
Speaker 3: what i'm gonna leave at yeah
Speaker 2: You forgive it. give it right if you're given it's all okay Didn't I
Speaker 3: realize how many people took my word for gospel.
Speaker 2: know who would have thought
Speaker 3: Yeah,
Speaker 2: who
Speaker 3: gosh,
Speaker 2: would
Speaker 3: don't do that.
Speaker 2: have
Speaker 3: No, I'm kidding,
Speaker 2: thought
Speaker 3: please.
Speaker 2: but um so speaking about and this is you know people talk about productivity all the time right and productivity is that how do you get people to work harder right or how do you use tools in order to increase efficiencies that that's one level or layer of productivity the other core level of productivity is that how do you enable people to have more time to do important things because
Speaker 3: Mm-hmm.
Speaker 2: they're not having to concentrate on things that aren't important and by that i mean government regulation and red tape it's ridiculous the rules that govern how to do things you want to set up a business in dubai you
Speaker 3: Yeah.
Speaker 2: can do it over a text message right you're in business you're operating straight away good luck trying to do anything in australia good luck even trying to like get a permit to put two more seats out the front of your cafe because
Speaker 3: Oh, good luck.
Speaker 2: some bureaucrats got some adverse rule in a book somewhere that'll it's stifling Australia, right? Absolutely stifling Australia. So what they've been very good at, the governments, the governments being, you know, I'm not saying this current government, but governments in general, state, federal, local, is making it harder to transact real estate. Now there's a lot of frustrations. transacting real estate from a lot of consumers where they say you know we've saved all this money and then we thought we're going to get this house and they said it was six hundred thousand dollars and we went to the auction and you know bidding started at 650 so we're about at the start i've put all this money on i'm
Speaker 3: Building pairs.
Speaker 2: building in pairs i'm emotionally invested i've seen ourselves in it we're going to get this and it's just you know and i get it right and it can be hugely frustrating so So the governments, mainly state governments, have been putting a lot of rules in there, etc. So property management, there's another whole cohort of rules that govern that, which is getting more and more complicated. But there's a lot of... new laws getting introduced underquoting laws in Victoria and
Speaker 3: Yes. In
Speaker 2: New South Wales that's only just come out and then also the fact that you've got to say what the prices are for properties in Victoria.
Speaker 3: New South Wales starting off there and it's a very interesting point of view. So the former REIA president, Langdon Siemens CEO, Leanne came out this week talking Leanne. Liam Pilkington came out talking about the underquoting laws in New South Wales. And there is a risk because, I mean, a lot of these laws, they're a little bit opaque, right? There is opacity with it. And especially in a market which goes down rather than up, it's a very important thing to discuss. So let's say you believe that your house is worth 1.1 and the agent says a mil. Okay, so we're going to go online a mil and then you get an offer for 1,050,000 and you as a vendor, you're like, no, no, no, it's worth way more than this and you're on the market for a few months and now, whoa. I wanted to sell, but now I have to sell. My husband lost his job. I lost my job. Something's happened. I have to sell. Now the market's gone south a little bit. It's gone south and now you're not going to get over 950. And if you revise, there is a risk, now this isn't guaranteed, but there is a risk that if you revise it down, this is just what a few property experts have flagged to now 900, but you had an offer. over that say that 1 million to 50 that you are now breaking under quoting laws because you've entertained offers that you've turned down and now you've dropped them online so just a few things for property professionals to be aware of on that front now i'm sure that it'll be ironed out and perhaps you know this isn't legal advice but maybe you might be fine if people like well the market's gone down heaps there's not much you can do that's one part of it second is um new auction rules coming out in victoria where vendors have to publicly disclose their exact reserve price. And this likewise has kind of divided opinion, I guess is a good way of putting it, divided opinion. So one opinion is that it's not good. It's really bad for the industry. The other opinion feel from some experts in property is, hey, it's a buyer's market at the moment. And a lot of agents out there have a lot of listings. They can't get the listings. of their hands. They're just sitting on them for days and days and days, weeks and weeks and months and months. At least if you had a publicly disclosed reserve price, the people that are inquiring are going to be the real deal and it will actually help the transaction of property. And some people are very firm on that side. That just means that the buyers you get through and the people visiting your open home are the real deal. Bit of a divided opinion there. Still early days. I mean, it's one of those times where we are in a unique market at the moment. I hear from a lot of agents that even getting anyone through an open home is tough. So maybe honesty, transparency, maybe that is the policy forward because at least then we can start rebuilding that trust like we said before and you'll only have serious buyers.
Speaker 2: Yeah, I think I saw on the thin this week. Again, something we... absolutely telegraphed. And I can't fault in the article very quickly, but just indicating just how much developments have been impacted by the SMSF
Speaker 3: Mm.
Speaker 2: resi ban.
Speaker 3: 11,500.
Speaker 2: It was that the number
Speaker 3: Yep.
Speaker 2: of 11,500 as a direct result of that, right?
Speaker 3: Yep.
Speaker 2: And so back to Senate estimates, I don't think anyone in Treasury would now pin do it all or Minister Gallagher could actually just, I think maybe Senator Bragg was doing the questioning, could actually. especially say how many properties they're planning to build this year like no one knew the numbers like it's that bad so these impacts of these changes are so considerable and again we're just going to see it time and time and time and time and time and time and time and time again that we're going to say we're sorry but we told you so
Speaker 3: Hey, you know what another one is? And I only heard about this the other day. I'm not going to be able to pull up the data fast enough, but the impact. on cement and concrete prices as
Speaker 2: No
Speaker 3: a result of emissions trading in that industry but the price of producing cement and concrete has gone up i'm going to pluck a figure here so everyone at home this is one of those times that i warned you about fact check but it's gone up like threefold or something because now the concrete producers are spending so much on their emissions targets and they have to basically pay levies and taxes and stuff that that now just gets passed on um yeah
Speaker 2: So red tape regulation,
Speaker 3: red tape regulation but
Speaker 2: red tape and regulation.
Speaker 3: you know we spend we we talk about the impact of the global supply chain crisis and the impact of wages going up hey here's actually something that you can fix immediately like genuinely like we can immediately lower the price of concrete and cement like straight away If we wanted to.
Speaker 2: Well, this comes back to the point, you know, we've got this moment in time to actually change the trajectory, but do we have the bold, ambitious leaders with the skills, capabilities, knowledge, tenacity to do it? I think for them, it's like nothing to see here. This is all what we planned and Australia is going to be rejoicing in years to come because of the bold, ambitious tax policy they've put in place right now.
Speaker 3: Well, you know what? On the flip side. There is a huge ethical consideration to this and we touched on it before, but the generation, and I'll say it's a generation, the generation of young Australians that were lied to over the first home buyer, the first 5% deposit scheme. The generation of Australians that were lied to over that, that they were lied to, you know, get your first foot on the ladder, get the first rung on the ladder, get your entry-level home. And not to be generational, but it's that kind of boom advice, just get on the property ladder, get on the property ladder. get on the property ladder whatever you do just get something and hold onto it firstly don't trust the people just telling you to do that you have to be just do your research do your due diligence is buying a property for the sake of buying a property because you've been told buy anything to get on ladder is it worthwhile probably not and what we're going to see now is a lot of these people that have bought that first rung with ladder now The data is divided on this. Typically, the biggest price reductions have happened in that quartile one market, as you and I have discussed in the past, a lot of the very expensive suburbs that price reductions in the tens of millions, you know, we're talking about that last episode, but there are areas and you can look at Brisbane and Perth now, look at Brisbane and Perth now, they've dropped like seven, six, seven percent in the last quarter. Yeah, that's right across. That's right across the city. You know, there are a lot of areas. is that we're artificially inflated by first home buyers as well so you're going to have a whole generation of first home buyers that are stuck in their one two bedroom apartments which they thought was going to be the first rung on the ladder sorry mate it's actually dropped a fair few percent um and i know you drop stamp duty on it there's going to be two percent selling costs on the way out oh you're 100 grand worse off and had you done nothing uh the war in iran you know and then shamans will push back the war in iran you But it's appalling, you know, it's appalling and there are going to be a whole generation of young Aussies out there that they're going to think twice about, you know, do I have kids because now I can't fit them in my apartment because this was meant to be my first step. I was meant to be out of here in five, 10 years. Now it's five years later and I'm stuck where I was before. It's heartbreaking.
Speaker 2: Yeah. Well, have you got any positive stories to talk about? What a great time to be in real estate.
Speaker 3: Oh, positive stories. I mean, like,
Speaker 2: Well,
Speaker 3: I don't know.
Speaker 2: this
Speaker 3: Yeah.
Speaker 2: comes back to the earlier point I made around the consequence of government decisioning right now is going to be both structural,
Speaker 3: Yeah.
Speaker 2: but it's also going to be psychological.
Speaker 3: Yeah.
Speaker 2: And speaking on the psychological side for a moment, when you start... changing people's perception around how well they're doing in life you you create significant amounts of issues and
Speaker 3: Yep.
Speaker 2: the government we have today by and large those people who are responsible for for driving this economy forward and by that I mean those people who generate the income who would contribute to gdp right 26 26 26 percent gdp is tax in australia is that right that's a big chunk right but those people who contribute and provide positive influence to gdp i would say largely and i'm generalizing is that most people have a negative sentiment around their lot in life right now and that psychological damage is going to take a long time a long time to to work through yes you know you see it all on the internet right now and you know all these smart bright people are just going hey i'm getting out of australia i'm gonna go set up in dubai or singapore or someone like that because they're just so fatigued with it all and and
Speaker 3: everyone's
Speaker 2: and they don't see they don't see a way out That the ultimate responsibility of the government is the security and safety of the nation and of Australians,
Speaker 3: Yeah.
Speaker 2: both from a physical point of view, but also from a psychological and mental point of view. And I would score them so badly at the moment in terms of what they're doing and the consequences and ramifications of that were going to spread right throughout the economy. If you have business owners, if you have workers, you have people with jobs who are. nervous about the security of their employment, the consequences of that flows right down through families,
Speaker 3: Yep.
Speaker 2: right down through families. And the second, third, fourth order impacts of that are going to be extreme.
Speaker 3: Yep.
Speaker 2: You're going to see heightened divorces. You're going to see potentially a hike in domestic violence you're going to see a hike in all of these things which some people would wouldn't be able to link to it all but that's
Speaker 3: Mental all health
Speaker 2: because mental health is because you're you're messing with the fabric that binds Australia and binds Australians and that is the strength collective the collective strength of the nation and people work together for for a better outcome you know I think that the future is is that you know that the next generation probably going to have it worse than the current generation generation. And I think if you're going to score a government on whether they've been successful or not, that would be the core score.
Speaker 3: Yeah.
Speaker 2: And something that Australia has done up until this point is that every generation is getting a better than the past generation. Unfortunately, I don't think that's going to be the way moving forward. And I don't want to be a doom and gloom merchant around this, but I'd like the government to take heed of this and be a little bit more pragmatic and responsible in the way in which they go about. doing this stuff you know it's easy to be critical of the government we need to remember um and and and you know speaking political for one moment i grew up in a working class family in a labor household um and historically my whole family was was very much related to that Mm and
Speaker 3: -hmm.
Speaker 2: you think back to and i'm sort of old enough to sort of remember this that the hawk and and keating era yes they they were real labor you know all come out of the the union movement back in the day when there was probably more blue collar workers than white collar workers
Speaker 3: Hmm.
Speaker 2: you know the knowledge economy versus the physical economy it was very much at the heart of australian representing australian workers getting better rights for australian workers all this really really good stuff that took place you know they introduced superannuation which is which is seen as the gold standard globally labor did so many good things under under hawk and Keating, it was a good time for Australia. They were on the right of Labor. They were on the right of Labor. And that's not the Labor government we have today. That's not the Labor government we have today. It's so different. And I think a lot of Australians... were confused with or they're confused with what labor stood for at the point of time of when they bear the coalition and it was just a fatigue and a laser to sit in around the coalition at that point of time so i don't think and i remember saying it back then but be careful what you wish for because this is what's going to transpire and take place and pretty much it's it's extrapolated out of it so australians have a chance to vote
Speaker 3: Yeah.
Speaker 2: Soon,
Speaker 3: 18 months.
Speaker 2: Australians have a chance
Speaker 3: We're
Speaker 2: to vote
Speaker 3: going to
Speaker 2: soon.
Speaker 3: have whales in a couple months.
Speaker 2: Victoria.
Speaker 3: Victoria in a month.
Speaker 2: Yeah,
Speaker 3: As
Speaker 2: they reckon
Speaker 3: of
Speaker 2: it's going to
Speaker 3: today.
Speaker 2: be a landslide. Landslide, the coalition is what they say.
Speaker 3: Yeah, it's looking that That way. Hey,
Speaker 2: could
Speaker 3: Phil,
Speaker 2: be the first domino.
Speaker 3: I've got, I know we're a little bit early on our live stream, but I've got another REB podcast.
Speaker 2: Do you? Really? Right now?
Speaker 3: There's no rest for the wicked.
Speaker 2: Well, it's a good question come through and they said,
Speaker 3: We've
Speaker 2: what's that on
Speaker 3: got questions.
Speaker 2: the WhatsApp?
Speaker 3: And what's up?
Speaker 2: The
Speaker 3: And what's up?
Speaker 2: government continues to blame higher oil prices and inflation. Most countries are facing the same global price or price pressures, yet many have significant low inflation in Australia. So what is actually driving Australia's persistently high inflation? Are there deeper domestic issues that aren't being addressed and why do Australian households continue to bear the burden? Absolutely. Yeah, the biggest issue, Costa, thanks for that, mate, is government spending. Absolutely. Cut it.
Speaker 3: Yeah.
Speaker 2: Cut the
Speaker 3: I mean, yeah.
Speaker 2: NDIS.
Speaker 3: Yeah.
Speaker 2: Cut the public service. You'll probably be.
Speaker 3: I mean, the example of the building supplies before, right? The example of the building supplies are very important because there's two ways you look at it. it as tax can take money out of the economy and there is an argument that when labor entrenched the high income earner tax cuts or was it three or four years ago following on from the the previous libs there is a very reasonable argument that a lot of people a lot of economists were floating back then that it was inflationary but it's a very reasonable point to say that high income tax cuts a few years ago was inflationary because it gave people who had a lot of discretionary spending, more ability to spend and add to aggregate demand. So there is an argument that, yeah, you can kind of when it comes to income tax cuts or I think the better method would be GST and a consumption tax is a wiser way of doing it, but that is a way of pulling it back. However, Less so when the price of goods goes up. What is the driver of the price of goods going up? And if we talk about the example of the building and construction costs and materials that we gave before, if the costs of these goods are artificially 40% higher than what they otherwise would be,
Speaker 2: Amen.
Speaker 3: we can say reasonably with that CPI where housing's gone up at 9%. I can't remember the exact figures. figures but anchoring inflation higher rather than lower i mean the cost of um fast moving consumer goods the cost of food and stuff they're only sitting about 3.3 percent so that's anchoring inflation this is higher than that 4.6 percent that we're getting um that we can we can drop that like immediately But that is something that can be done immediately,
Speaker 2: Hmm.
Speaker 3: which would have those ramifications down. So tax cuts, not in an inflationary way, not tax cuts for income tax, but tax cuts higher up the supply chain. Yeah, that would drive down inflation like straight away, literally. And then if you have to make cuts on the other side, oh, I don't know, like the $6 billion of NDIS fraud. Yeah, that might even itself out. So you can kind of have a double cut there. there and there you go you produce aggregate demand by several billion dollars in a way that does not impact anybody
Speaker 2: If this was a business, if the government ran the economy, it was a business, right? So on one hand, you've got people saying we need to introduce this idea of coffee shops. need to be providing reusable cups for everyone and they need to pay for it right like and with a view towards recycling and all this sort of stuff on one side and then on the other side six billion dollars is that six billion dollars annually in NDIS yeah
Speaker 3: That's a guess, the estimated
Speaker 2: so
Speaker 3: figure,
Speaker 2: they're
Speaker 3: yeah.
Speaker 2: about wouldn't you sit there and just go Oh, this one's probably a bit more important than this one. I just don't think that happens.
Speaker 3: No.
Speaker 2: It's a sideshow.
Speaker 3: No. I mean, when you're looking at the ledger, $6 billion anyway is sort of gone. Tax cuts higher up the supply chain, so building construction costs are cheaper. There you go. They can even themselves out. Just means stuff's cheaper. anyway but anyway let's
Speaker 2: All right. Thanks, Liam. How do you get on to our WhatsApp?
Speaker 3: um so i'm gonna make sure our producer um if we can have the link to our whatsapp we've got a community group on whatsapp which kind of talk we kind of have a bit of a back and forth um we share tips we chat join the whatsapp group phil and i are on there uh we talk about all things property we get oh we don't get too opinion we joke around a little bit on there so um the link link to that will be in the show notes whether you're tuning in live on youtube now or whether you're going to be joining in over the weekend on apple play or spotify or anything like that it'll be in the show notes so join us we've got a whatsapp group going we just chat and um hey in the future it might turn into something cool we might do a little bit of a property buzz road show we might You know, check out Brisbane or might go a little bit further afield and have some pub sessions with some of the listeners.
Speaker 2: That sounds all right. Sounds right. Well, thanks for tuning everyone. You know, I don't want to be negative. I'm trying to avoid it. I'm trying to be a pragmatist and a realist. So I think every single property investor, every single business connected with real estate services in Australia and all businesses in general need to. be prepared Yeah. for what's going to be a tough road ahead i think um it's not going to get easier it will do in time but um you know strap in for the fun of what's going to get promised to you as we run up to the election yeah
Speaker 3: You have money. You have money. It's
Speaker 2: that's what they
Speaker 3: the oprah
Speaker 2: promise me and
Speaker 3: is the oprah meme.
Speaker 2: i still come back to it and i know you're sick of me talking about this but i still fume over the amount of
Speaker 3: Hex.
Speaker 2: money the government spent on reducing tax.
Speaker 3: Yeah.
Speaker 2: Give that back to taxpayers.
Speaker 3: Yeah. Well, you know what? I mean, my opinion is a bit more, it's a tough road or a new one. I don't know which one it is. just don't let people do dumb degrees. And that's not to be rude. I've done multiple degrees,
Speaker 2: Hmm.
Speaker 3: you know, and there's a lot of degrees out there that don't deserve taxpayer funding genuinely because what we're doing is we're lying to these kids when they're 17 years old or 16 years old and they're planning their lives and you see all the glossy brochures from a university I've never even heard of. It opened up three or four years ago. what the hell is this and they're all of these brochures out there and like you're going to get employment if you do this bachelor of business or this bachelor of that uh and then you leave these kids they leave on the other side with 60 70 grand worth of debt and they can't get employed because the employer knows like hell's this like i'm looking that's that's useless for me you know and it's a it's it might be offensive to some people but I'm not holding the kids. I'm not holding these 17-year-old kids when they're leaving high school or they're getting ready to do this. I'm not holding them liable. It's the adults. There are smart people in this country. There are adults here that should be saying we should not be loading up these kids with $60,000, $70,000, $80,000 worth of debt to do a degree which will get them nowhere. And it's that simple.
Speaker 2: Well said. Propertybuzz.com.au, lots of coverage every single day. You get your regular daily feed on everything that's happening in property. You can subscribe to the newsletter there as well. Follow all the social media stuff as well. Thanks for tuning in. Remember, keep the feedback, keep the commentary and keep the fight alive. Everyone out there, it'll all be okay. Don't worry about it. It's the Australian way. This is Property Buzz. I'm Phil Tarrant and my colleague, Lee and Gunn. Be on Garmin. We'll see you next Friday. Until then, bye-bye.
Speaker 3: The information featured in this podcast is general in nature and does not take into consideration your financial situation or individual needs and should not be relied upon. Before making any investment, insurance, tax, property or financial planning decision, you should consult a licensed professional who can advise whether your decision is appropriate for you. Guests appearing on this podcast may have a commercial relationship with the companies mentioned.
