Scratching your head trying to make sense of the 2021 Australian Federal Budget? Dan runs through Treasurer Josh Frydenberg's budget hand down and Blaize asks all the questions including; what's in it for me, who is getting money and where does all the money to spend come from? Join us for a deep dive on all things budget related.
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Disclaimer
We Talk Cents is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This podcast should not be considered to constitute financial advice. Accordingly, reliance should not be placed on the podcast as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.
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BlaizePengilly 00:09
Personal Finance budgeting cash flow andinvesting don't have to be scary words. The We Talk Cents podcast is here tohelp you learn more about money and take control of your personal finances.
BlaizePengilly 00:26
We Talk Cents podcast is not a financialadvisor. This podcast is made for entertainment and educational purposes only.All information shared is of a general nature and does not take into accountyour personal situation. You should consider whether the information isappropriate for your needs and where appropriate seek professional advice froma financial advisor.
DanJovevski 00:45
For more information, please check outwemoney.com au slash disclaimer. Hi, welcome to the episode of We Talk CentsThis is episode number 29. I'm Dan your resident finance expert,
BlaizePengilly 00:57
I'm Blaize a millennial learning about money.How are you going today?
DanJovevski 01:02
doing absolutely fabulous Blaize recently beenon a plane for the very first time after a year and a half. And I've got to sayit was quite a quite a great experience. I'm sure my my next trip will probablybe resentful going to the airport. But it was great to be up in the air for thefirst time in a long time. How about you?
BlaizePengilly 01:19
Very nice. You've been out there stimulatingthe economy. Good on you damn traveling grounds.
DanJovevski 01:23
I'm doing my part by $10 coffees at airportsBlaize.
BlaizePengilly 01:26
My gosh, I do not miss airport price productsare ridiculous. That's really good news Dan. I am great. And I'm excitedbecause today we are going back to what we did in our very second episode. Ifwe cast our minds back to October, the very second episode we have a record ofWe Talk Cents was the Australian Federal Budget. And of course it was inOctober because of everything COVID COVID. Related it was pushed back lastyear. But we're revisiting it again today. And as always, I've got plenty ofquestions for you because the budget still doesn't make a lot of sense to me.But before we get into that, we always talk about regular money knees. Seeingas the whole podcast today is essentially a big news bulletin. Have you got anypersonal money news you'd like to share down?
DanJovevski 02:13
Blaize the personal money years that I'vegotten is for the avid followers of Dogecoin, who have been following alongsince we bought it a few episodes ago. I think we'll be shocked to say that theprice of Doge has gone down ever since. Ilan musk appeared on Saturday, livewhere the price of the famous cute fluffy doggy coin has gone down by almost40% on its peak. So it's interesting to see the volatility in these marketsplays and especially for people that have got captivated by doze. It soundssounds like a puppet Ilan is turning and becoming a little bit more or lessenthusiastic about crypto in general.
BlaizePengilly 02:55
Speaking of Dogecoin and crypto, I do you knowwhat I did? I'm excited. I bought my first crypto. Oh, thank you. So after ourdiscussions on the podcast a couple of weeks ago when we learn more aboutcrypto, I had a friend who minds crypto come over and teach me how to use awebsite and I bought some my own crypto and I know that you're supposed to do alot of research before you invest but part of me just wanted to get on thetrain. So I did buy a little bit of a little bit of Bitcoin and a little bit ofDoge and yeah both of those have dropped significantly since I purchased themso the markets volatile and uh, you know, I only use money that I could sparebut yeah, Mr. Masks stop being a couple of words for Mr. musket he can changethe whole outlook of an entire cryptocurrency. It's crazy. So yeah, that's mynews. And also I'm not sure if you can tell seeing as we are behind computerscreens, looking at each other. We're not actually recording in the same room.But can you see anything different about me?
DanJovevski 04:00
I'm having to look plays or there is somethingthere is something I don't know what it is. The skin is looking fantastic asalways. So that hasn't changed.
BlaizePengilly 04:10
You pretty close there. Because Do you knowwhat I went and got? I used money with Maddie who we had on the show last weekwho came on for beauty hacks. She had that really awesome hack about findingFacebook groups in your area of beauty students looking for models. So you goon and go to spray tan and I
DanJovevski 04:29
got that's what it is. Are you there was a glowthere somewhere close. But that is that's fantastic.
BlaizePengilly 04:36
It was awesome. So I was really excited byMaddies hacks last week on how to save money for beauty items, checked out mylocal group. There's all sorts of things like facials and massages And so yeah,last night I went and got a spray tan. And I can't wait to it was $5 comparedto a usual 40 To be fair, it's not something that I would usually regularly getbut i thought you know what, why not try it. yourself. Amazing winter's coming.Let's pretend that it's not with the color of my skin. So yeah, that was areally awesome hack by Maddie. And if you haven't listened to the last week'sepisode, and you want some beauty hacks I highly recommend because Maddie hadsome really, really good ones. As you can see, I've already jumped on board.She's convinced me so yeah. loving it.
DanJovevski 05:20
you look great.
BlaizePengilly 05:21
Thanks, Dan. Now that's enough of my moneynews. Shall we talk the biggest money news of the week, potentially even of theyear? Shall we talk federal budget?
DanJovevski 05:31
Let's dive.
BlaizePengilly 05:38
Australian Federal Budget. What exactly is it?I know what happens every year? And I know it's a really big deal forjournalists. And you know, it's all over the news when it happens. But whatactually is the federal budget and why should we care about it?
DanJovevski 05:52
The federal budget Blaze is the accountants ofAustralia all coming together and setting the scene about Australia's financialfuture and planning over the course of the next year and beyond. And every timethat a budget comes, typically the month of May last year due to COVID. It wasobviously postponed. And we had a intervention at a later period of time laterthe year, in October. This year, we've been delivered a budget that helpsAustralians get ahead from the looks of things and I've got to just take my hatoff to Mr. frydenberg. He is fastly developing as a competent treasurer. Certainlythe eyes of the media because I haven't really heard one negative thing abouthim just yet. And I'm sure for Polly, I totally use router, what he's doingwhat PR agency he's using. But it seems like he's come off relativelyunscathed. Because sometimes these budgets can count incredibly controversial.But we've been delivered a what you would call a meat and potatoes budget,there is something for everybody. It's pretty boring, in some cases is reallyexciting, and some others. But there is nothing huge and big and supercontroversial about, you know, this budget, there's no tax increases, whichoften is the bane of a tax payer. And there's nothing in here that's actuallytaking individual balance sheets incredibly backwards. Yes, there's a few littlebits and pieces of the economy that have missed out. But all in all, it'sactually quite a fair and sensible budget.
BlaizePengilly 07:28
So Josh frydenberg is the treasurer, he doesthe announcement, when it comes to actually allocating money. Well, where's themoney getting the government from to spend?
DanJovevski 07:40
What does the government recover is effectivelythe collective of every single person living in Australia contributing andpaying tax, and that tax being funneled to essential services like roads,school, public education, transport, basically, all these digital services thatwe take for granted almost every single day. And the budget is really alignedon making sure that we allocate our dollars to the things that every singlecitizen in Australia uses and gets the benefit from. So really, when we thinkabout the government, all we really think about it is our electedrepresentatives as contributing our tax dollars towards helping them allocatemoney across all the services that we use every single day.
BlaizePengilly 08:25
So the way that I'm seeing this is that it'skind of like the treasurer, Josh frydenberg is the head of the household. Hehas all of the money to spare, and he's kind of going when it's budget time,he's going, Okay, deciding how much pocket money each kid gets. So maybe theeldest kid is aged care, and he's going, Okay, you can have X this amount ofmoney, and then the next kid is childcare. And it goes, he can have this muchpocket money this week, but except it's at a bigger scale for a year. And it'sreally whole industries and like massive groups of people that are beingaffected by these decisions.
DanJovevski 09:03
AbsolutelyBlaize a great way to put it.
BlaizePengilly 09:05
I would be a very nervous man, if I was Mr.frydenberg. Doing. I mean, the public speaking alone would make me very nervousin such in front of such a large group of people, but also telling people howmuch money they're getting. There's a lot of scope for backlash there. But as yousaid, there's this is a pretty good budget. What what's the theme of thisbudget? And what overall What does this budget look like for Australians?
DanJovevski 09:29
Why is the government has done a really goodjob in separating these two forward reports. So really, the key themes arenumber one, creating jobs rebuilding our economy, number two, guaranteeingessential services. Thirdly, improving women's safety and economic security.And fourthly is building a building a more resilient and secure Australia. Sothey have really just put her into four key areas and there's different subpoints in those four key areas which she can go into today. But it's A fairlygood and robust budget that covers a lot of bases.
BlaizePengilly 10:04
Yeah, nice one.
DanJovevski 10:06
And what Josh frydenberg has said part of thisbudget, in quoting his exact words, the best way to repair the budget is torepair the economy and get more people to work. Because when that happens, yourtax receipts go up, and your welfare payments go down. So he was fairly sort ofclear that this is a job led budget, designed to get people back into theworkforce, and productive, so the tax receipts go up. And then we have theability to decrease the overall tax costs for individuals. So I think Josh hasdone a great job in really just summarizing what the goals and ambitions arefor this for this budget.
BlaizePengilly 10:50
Awesome, then when it comes to where money isactually going. First, my first budget specific question is, what's in it forme? What am I getting out of this budget?
DanJovevski 11:02
Oh, BlaizeI think most people will be glad toknow that there's been $7.9 billion in tax cuts for low and middle incomeearners, worth about 1000 and IBV individuals in about 2160 for dual incomecouples. So there is quite a bit more money that will go into the economy bythe mere virtue that more people will be taxed less and you know, $1,000 eachand every single year for an individual. Now it's quite a bit of cash, thatpeople could go off and do whatever they want with, which will of course gotowards simulating the the economy. And so it's my understanding is that it'sup to $1,080, depending on if you if you're eligible and fit between the ifyou're low and middle income, and how can I actually figure out how much I'llget back specifically, if you want to find out how much you can get back. Oryou can simply head to the budget or golf to the website, and there is acalculator that tells you how much you'll get back individually for yoursituations, you just have to create a few key details about your income, andthen you'll be able to find out how much you'll be saving in your tax bill eachand every single year.
BlaizePengilly 12:09
Well, that does sound like really good news.And when it comes to tax, so I'm assuming that I will that means at the end ofthe financial year I'll be paying less or is it that it accumulates throughoutthe year and I'm getting a small amount I'm getting taxed a smaller amount eachweek, or is it sort of an end of financial year thing? How does that big partof it work
DanJovevski 12:29
From what we understand this is a end of yearevent. So the taxation amendments slide the COVID relief, I think was special.But this time, I'm pretty certain that the tax amendments will come as of thefirst July so you can expect your tax to be reflected in the new financialyear.
BlaizePengilly 12:49
Yeah, awesome. I heard something about therebeing changes to superannuation as well for low income earners. what whatwhat's what's for that
DanJovevski 12:59
There's also some good news for low incomeemployees earning less than $450 per month at the moment, your employercurrently does have to pay you the superannuation guarantee, because change atany that low income earners will be able to get the same super as everyoneelse. And this impact will probably have for about 300,000 people aroundAustralia, and nearly two thirds of whom are women.
BlaizePengilly 13:20
That's awesome. I didn't know that that you hadto meet a certain threshold to be paid super. I assumed everyone got the isthat 9% or 9.1%? That was not in half yet. Okay, awesome. Speaking of women,now, there has been, you know, I've heard on the radio side in the papers,there's been a big package focus towards women. Is that right? And what'sactually in it?
DanJovevski 13:43
100%, and I think the focus on women,particularly women with safety and economic security has been a major focus.And so the key points here, are really going to be addressing, you know,violence against women and children, given that has been an epidemic, really,and really focusing, making sure that our households are safer. Ensuring shrineworkplaces are free from sexual harassment. And he proven the ability toquality women's health services, as is really good. I think there is a massivefocus from the government into every single initiative that's focused on thebetterment of women and female outcomes, which is absolutely amazing. And sothis puts up somewhere around sort of $345 million dollars is a health packagefor women and girls and includes a $47 million towards things like depressionservices for expecting mothers and new mothers as well as $100 billion toimprove cervical and breast cancer screening programs. In addition to all ofthis, there's almost a billion dollars towards the reduction of the domesticand family violence and supporting survivors for the next four years. And interms of some other areas around 42 million dollars has been committed to offer230 scholarship placement for STEM that science, technology, engineering andmathematics industries. So it's a great way to include protect and empower morewomen inside this budget, which is a fabulous outcome. And it's good thegovernment's paid attention to this area.
BlaizePengilly 15:21
This is awesome. If I the the money towardshelping women escaped domestic and family violence is incredible, because, youknow, cast your mind back to when we had Amanda Cassar on the show. And shereally, really pulled back the curtain and opened my eyes to see that, todiscuss what financial abuse is, and how common and prevalent it is in allaround Australia. And I didn't even know if an actual abuse was a thing. So tosee. I think it's really good to see the government dedicating a huge amount ofmoney towards assisting women getting out of these situations that can be justso dire as we heard of some of those stories. In our in our episode with AmandaCassar
DanJovevski 16:07
Absolutely Blaize, it's really lifting up thevial and uncovering the parts of their financial lives that we often don't talkabout such really amazing. That's great. Kevin's put this front and centerinside the federal budget and dedicated quite a bit of money, but also quite a bitof focus, which is really awesome to say,
BlaizePengilly 16:25
Yeah, now Dan, if I cast my mind back to lastyear, the big standout from the budget for me, and it's still ingrained in mymemory is that there was a million initiatives all starting with that threeletter word J O B, there was job maker, job keeper job training job seeker. Isthere any other mentions of that this year? Is there any other job initiativesto look out for?
DanJovevski 16:48
Yes, there is there is an extension to the jobtrainer program with $506 million with the funding. And the program is expectedto deliver about 163,000 low fee, or free training courses to areas that haveskilled shoulders at the moment. And in particular, this is gonna have a focuson two areas in aged care and also in the digital skills courses arena.
BlaizePengilly 17:12
So there's not another million initiatives, andthey haven't added any new ones to the mix. But they're extending job trainer,which has an existing program. So that's good to say it must have been, it mustbe working well for them to continue it.
DanJovevski 17:25
Absolutely.
BlaizePengilly 17:26
What about if you're a first home buyer, oryou're someone looking to enter the property market? Will they will thegovernment be providing any further assistance to people in that boat,
DanJovevski 17:36
There will be given the meteoric rise inproperty prices all around the country, this could not come sooner. So there isan extension of the first home loan deposit scheme, which is been extended byanother 10,000 places. And what this does is helps first home buyers enter thehousing market with less than 20% deposit. So under the scheme, the governmentacts as a guarantor for the first home buyers, enabling them to purchase orbuild a new home with a deposit as little as 5% without needing to pay LendersMortgage Insurance. And if you recall that episode, the typical cost of amortgage insurance premium. So this is the cost that you have to pay to thebank, in the event that you don't have a 20% deposit on a typical, say $500,000mortgage, this could be somewhere in the tune of about $20,000 that you have topay just for the benefit of borrowing money without a 20% deposit. So I thinkthis is absolutely excellent 10,000 places are also healthy amounts, and whichwill not only stimulate more people getting on the property ladder, but also ifthere is more construction going on, create new homes, which has a role andbenefit to more construction workers and people in the building industry forthem to also keep employed, which is fabulous.
BlaizePengilly 18:53
Okay, that's that's really good news, becausethe first time land deposit scheme, if I recall correctly, they they've beendoing it quite a bit. We talked about it in I believe it was Episode 17 the insand outs of the first time land deposit scheme. And I think that must be up to40,000 places they've offered, it seems that every time the government extendsthis program, they extend it by 10,000 places. And if I recall correctly fromthe episode that we discussed it, we're at 30,000 places. So they've nowextended it by another 10,000 which means they're assisting 40,000 peoplearound the country and during the property market. What about Dan? We've alsodiscussed the first home Super Saver scheme before, which is where you can makevoluntary contributions to your super account and then withdraw them and itsort of gives you a tax benefit. You're getting tax list if you do that, too inorder to buy your first home for a home deposit. Has there been any news onthat front as well?
DanJovevski 19:55
Yes, there has a the government has nowincreased The voluntary contribution from 30,000 to 50,000. So if you makeadditional contributions to superannuation, you want to withdraw them at thetime that you buy home, you can now do that up to a rate of $50,000, which isquite a bit of money that you can take out of your super for a deposit when youget by home. And so that's really good, it just increases the dollar amount,which basically means that you probably buy, you know, a slightly larger home,or a home probably closer to a city using those voluntary contributions to yoursuperannuation.
BlaizePengilly 20:33
That's awesome.
DanJovevski 20:34
And also, lastly, about property, there is anew family home guarantee scheme, which has also been introduced. And this isdesigned to assist single parents with dependent children by home a little as2%, which is pretty big when you're a single income earner in your household. buyinga property with a large deposit can be very tricky. And if we look at the WestAustralian landscape, West Australia has a very similar program with keystart.That is for couples, of course, but it does allow you to buy property with aslow as two to 3% in some cases. So it's good that this is being nearnationalized, and also a focus on single parents, which is a very challengingspace to buy property if you've only got one income.
BlaizePengilly 21:19
I just did the maths really quickly on my computer.No, sorry, on my phone, not in my brain. So don't freak out. Yeah, mycalculator says that 2% of a the median house price, which I think is about$500,000 in Australia at the moment is $10,000. So that is such a small depositto be able to buy a house. I think it's really awesome that the government isassisting people to get into the into the home buying market. But yeah, I don'tknow what it's going to do. But given that property prices have increased sodramatically over the last year. Guessing prices will continue to rise becauseso much resistance has been provided that more people can enter the market.
DanJovevski 21:57
Absolutely. Just a very quick interruption aswe go through the budget if you want to take care of your own financial future andunderstand your own budget, and why not keep the WeMoney app a go.
BlaizePengilly 22:10
WeMoney helps you to manage your money,categorize your spending, track your net worth your credit score, and even setyour own money goals. You can download the WeMoney app via the Apple or GooglePlay Store. And if you use the code word podcast on sign up, you'll earn a free$5 when you connect an eligible bank account, I'll also Chuck a link in theshow notes so you can download straight from wherever you're listening.
BlaizePengilly 22:32
Alright, let's get back to budget chat. Dan,let's talk mental health. If I recall correctly, last year, the governmentextended the amount of sessions by subsidizing the mental health care plan from10 sessions to 20 sessions. what's been done in the way of mental health thisyear?
DanJovevski 22:49
Well, Mental health this year has become amassive focus with $2.3 billion mental health and suicide prevention measures.Heck, yes, the government initiative headspace, we get an extra $278 millionover four years. And there's cash for mental health services for FIFO workers,and also support families who've lost their loved ones to suicide. And usingheadspace as a model, the government is also setting aside $487 million for 40new services for people aged 25. And over. And this is called head to health.They're also working with states and territories to make sure that everyonewho's being discharged from hospital after a suicide champion gets access tomental health support. And finally, nearly 30 million has been set aside forthe National Suicide Prevention office as well. Why is this important? Wellplays I think, like we had it in the last COVID relief package budget, therewas a particular focus on mental health issues. Now. The fact that thegovernment's gone in and again and double down the space is absolutelyfantastic. And mental health is an area where each and every single day thatpasses further destigmatisation occurring on this topic. And the fact that thegovernment's put some pretty big dollars aside that is so wonderful for peoplewho are going through a difficult period or wanting to get help and supportfrom other people to help them get back on track. So really awesome initiativesfrom from the government on this front.
BlaizePengilly 24:19
Heck yes, I'll say I said it before. I'll sayit again. Heck, yes, this is awesome. I'm so stoked to see that such a hugeamount. What do you say 2.3 billion has been put towards mental health. I thinkit's so important mental health is something that affects everybody. And justwhile we have the opportunity. Lifeline is a number you can call if you'restruggling with anything and just like to share it now. It's 13 11 14. So Ithink it's awesome that the government's putting money towards it. And yetdon't forget there's free services you can access if you do need to talk tosomeone and it's all confidential. So that's 13 11 14 for lifeline. That's nCOVID-19 You mentioned that before What's happening? What's happening COVID-19wise, is there any extra money for that? Are we ignoring it? What's happening?
DanJovevski 25:09
Well, COVID-19 vaccines huge are focused $1.6billion will be spent on a vaccine strategy over the next five years. Andadditional $1.5 billion will be put towards the COVID-19 related healthservices, including contract tracing and testing. As a person who's recentlytraveled, what I can say is, my goodness, I think the government's actually gotsomething right. The airports are also down health workers everywhere. Everysingle nook and cranny of an airport is filled with a sanitizing Bay,everyone's going about their business quite safely, which is awesome.Obviously, not all that risk, but certainly the government is not pulling anystops, in terms of making sure that we're all safe, which is awesome. Andrecently, I've heard blows is that the goal is to get a majority of Australiansvaccinated by November, and I think the goal the targeting is, you know,somewhere over 75%, of Aussies getting vaccinated by, you know, before the endof 2019, which is absolutely fabulous.
BlaizePengilly 26:08
2019 we're a little bit behind. We're in thefuture.
DanJovevski 26:12
Well, that's pretty much all you did say. Bythe end of 2019. Yeah, by the by the end of 2021. And, as a bit of a side note,I thought was really interesting, not related to the budget at all. But whatwhat I've heard recently is in the United States, they're trying to increasethe degree vaccinations, what they're doing is offering like a weekly lotteryof a million dollars in the state of Ohio to get more people vaccinated. Idon't know if the government's government giving a really funky to pick up thatlast a lot of, you know, couple of 100,000 people. But it's, it's super interestingthat they've gone through a very methodical approach on getting as many peoplevaccinated as possible. So it's coming. And I think it will be fabulous forAustralia to all become vaccinated so we can decrease the potential risk whenthe borders to end up opening up.
BlaizePengilly 27:05
I wonder if Mr. Frydenberg, we'll take thatapproach of you know, offering the drop chance to go in a lottery to peoplethat get vaccinated. Because if that's the case, I'll be holding it until thestakes are high. And I've loved it. But be vaccinated, get that herd immunity,which is super important, and also have a potential have the opportunity to wina million dollars. That's a very smart, very smart way to do it. I've seen inAmerica as well. They have like drive thru vaccinations, the same people putselfies on the Instagram, and they get in their car. I'm like, I love like,America. They love that drive thru drive thru, drive through testing drivethru, vaccinating, puts it on the topic of America, international borders. Iknow, I heard that there's no real answer as to when they're going to open andthat it probably won't be this year. Who is affected by that over here? And hasthere been consideration about those industries in our budget
DanJovevski 28:03
Was quite a few industries that are impactedablaze but there's no additional support in a large way to travel relatedindustries like tourism, or travel operators. Surprisingly, I think most ofthose operators have diversified their businesses or adjusted businessoperations to basically tied themselves over until tourism packs up. But I cantell you, just like the property boom, that's force everybody to come intoauctions. in a safe environment. Of course, property prices go up to 20%. Iexpect that we'll probably see people queuing up at airports to get away oncewe're in a safe harbor to travel. And the destinations that Australians cantravel to increases with time and especially after vaccination. So all ourthoughts go to all those travel operators that I'm sure will be looking forwardto booking the 2 million flights to Bali. Once once that gets up and running.
BlaizePengilly 28:56
Do you know what I'm imagining that classic adthe IKEA ad where the lady's running out. And she's got the like, she's got allthe amazing discounted things and she's running. She's like, stop that guy.That's gonna be a huge percentage of Australians that are lucky, fortunateenough and have the money and are able to travel once the borders open up.Start that plan. So yeah, I look forward to being one of those screaming peoplemyself running towards the airport. I
DanJovevski 29:27
Think I'm gonna join you Blaize.
BlaizePengilly 29:28
Very nice. Very nice. What about local travel?Is there anything in the way of local travel or domestic travel in the budget
DanJovevski 29:36
This is a really good point. So if you can't goto nationally, and the difficulty of quarantining and whatnot, has focused ainward look to where else can we go inside of Australia, as it has been $1.2billion dollars to subsidize the cost of domestic airfares to tourism regions.And this is designed to support domestic airports that receive regular publictransport flights. And this is absolutely fantastic because it means thatAustralians Can't get their plane fix, but they could do it within the bordersof Australia and you know, trap person, excellent locations that they probablywouldn't have thought about before with all the other potential internationaloptions at foot. So I think it will be fascinating to see what corners ofAustralia people end up traveling to and airports that probably wouldn't evenknow existed.
BlaizePengilly 30:19
Yeah, I think that's a really, really goodpoint. It's sort of Yes, it's Yes, it's a bit disappointing. And it must bereally difficult for people that are missing family and loved ones and friendsand whatnot overseas that are currently impacted by the international borders.But it's it's like that saying when one door closes, another one opens, thatborders are closed to the outside world. So now we're having to get creativeand travel around locally, which is exciting. And, you know, I've seen all thehalf of flights that the government's been offering. So maybe we should take WeTalk Cents on the road down and go, go travel domestically, hey, we built thisbudget funding. I would I wouldn't mind recording from somewhere like the, Idon't know, Adelaide Hills or even down in Tassie.
DanJovevski 31:00
Oh, lovely places, I always picture the theWeMoney combi that will pull up and open the back out as with a recordingstudio I'm liking it, it sounds like a sensitive, great idea.
BlaizePengilly 31:11
Hopefully there's a budget for that. Now, whatabout what about Mother Nature? Are we doing anything for the environment? Oris this all just jobs and economy based,
DanJovevski 31:22
There's nothing directly in this budget, whatwhat we've really got is an extension of pre budgeting periods where there issome initiatives that the government has put in place that is still being firedfor pride budgets, but there's nothing really in particular, that's focused onMother Nature in this particular budget, that is a standout. So potentially anarea of improvement, certainly for the government. That was obviously notignore that there's pre funding periods that are supporting some goodinitiatives in that space.
BlaizePengilly 31:50
All right, that is a little bit disappointing,but I suppose can't have it all. Would be nice to see focus in the future andthe environment. But that it, like you said before, it seems like Joshfrydenberg has gone on a really big spending spree, he's become the Oprah ofAustralian politics, you get a car, you get a budget, you get cash, you getmoney for this, so that that part is exciting. Now I have I have heard the worddeficit thrown around. And like, I understand that this is a really expensivebudget, and we are spending a lot of money. But how is it that was spendingmoney that we don't have? How does the government do that? And how do we get Ijust can't get my head around? Yes, we're doing all this spending. But where isthe money coming from? If we are putting ourselves into deficit? Is that thesame as going into debt? Is it the same as taking out a loan? How does itactually work on a federal level Christian blows, and just
DanJovevski 32:43
Like our own personal balance sheets, when werun into a deficit, it means that the Australian government needs to find thatmoney elsewhere. And in a deficit situation, what the government does is itgoes out and raises money from international markets by issuing bonds. So thesebonds are effectively like getting a mortgage. And we pay those bonds backinterest. Australia's credit rating is AAA. And if you can consider that thoserating in terms of what it means it is the best Australia is one of the bestcredit rating nations around the world. So we can borrow money, and fundparticular programs by not having to balance our own budget for a particularyear. And what this allows the government to do is plan and invest for thefuture going to be balancing your budget each every single year. You can't dothings like massive infrastructure spending, or other big initiatives where youcan basically borrow from the future and invest today, you know, roads,highways, train systems, trams, all this stuff takes multi multi years worth ofinvestment to get up and running. that pays off for many, many years in thefuture. So yes, the Mr. Mr. frydenberg, has embraced deficit spending. And he'snot scared to go into debt in order to fund some of these initiatives, which isthe flavor of a majority of governments around the world who want to improvetheir domestic services for citizens. So yeah, here's to being in the red, buthopefully it will pay off in the future.
BlaizePengilly 34:16
You gotta spend money to make money then.
DanJovevski 34:18
That's right.
BlaizePengilly 34:19
I have a real thoughts. How do you feel aboutthe budget as a whole to
DanJovevski 34:23
To be frank Blaize, There is plenty criticismthe government gets and in terms of the budget, I think they have done an okayjob. I don't know what charm factor that Mr. frydenberg has cast dispersed overAustralian journalist. But I was trying to find a really critical journalistabout this budget, and even the opposition to the government at the moment asalso, I think struggled to come up with a lot of criticism. We've listened totalkback radio. So look, all in all, I think most people are happy. Is it superexciting. We all jumping out of a chair? No, we're not. But I think they'vedone an over Good job in presenting a very clear and concise budget for thefuture and only time will tell on Australia's economic fortunes. But look sofar so good. Certainly areas they could have improved on. But all in all,Blaize I think it was a terrific budget. How about you?
BlaizePengilly 35:15
Yeah. Well, thank thanks so much for running methrough it down. I tend to agree with you Like, it seems. It seems like there'sa lot more winners this year. I remember when we're going through the budgetlast year, it was pretty balanced with people that are industries or groupsthat won and ones that lost in the budget. But it really seems like there'sreally few losers in this one, except for the environment, which I'm a bitdisappointed about. But it is so good to see. I mean, having more money, themental health, I think is just so important. So I'm really, really happy withthat. creating more jobs and supporting women. And the tax, the tax rate rebateor the tax. What's the terminology for it? Is it an offset is a rebate? Is it acut? When you're getting taxed back? What's the terminology?
DanJovevski 36:01
The government loves tax cut? Because it feelslike you're getting a discount? Are you getting more money? You're paying lessstuff?
BlaizePengilly 36:07
Yes. I love the low and middle income and histax cut. I think that's fantastic. So yeah, overall, I'm feeling prettypositive about it. And yeah, good job, Papa frydenberg, for dishing out all thepocket money and making all your children and the little industries in groupsand whatnot. I think I'm pretty happy with the outcome altogether. Yeah,
DanJovevski 36:29
Absolutely. Thanks for tuning in to anotherepisode of We Talk Cents. We're back here next week.
BlaizePengilly 36:39
Don't forget, if you want to make your ownbudget, there's a really easy way to do it. Download the free WeMoney app anduse the code word podcast to make a budget of your very own chuckling in theshownotes for that one.
DanJovevski 36:51
Excellent. I will use the referral code podcastyou'll also get $5 on team winning money. So get involved. Download it today onthe Google Play Store or the Apple App Store. And if you want to get in touchwith us on our socials, then reach out to Instagram get weed money, send us aDM we'd love to hear your thoughts and feedback about the show and the thingsthat you want to learn more about.
BlaizePengilly 37:11
Thanks for tuning in. Catch you next time. Seeya. See you later.
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The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.