I won't be blogging for the next 2 to 3 weeks (hopefully). Due to a health emergency in the family, I'll be away and will not have convenient access to a computer.
Thursday, March 8, 2012
Monday, March 5, 2012
Understanding the economic background of migrants
Many Asian migrants have a fair amount of personal savings when they come to Australia. Hence they are able to buy cars without getting a bank loan, or buy properties soon after they arrive. Some people view this as being unfair to the locals who have been here for a long time, while others think that as long as you can afford it, the market is fair game.
Here is what I think. The fact that I myself am an Asian migrant does not stop me from feeling that Asian migrants are indeed at an advantage economically when we come to Australia.
The reason is in the different tax rates between the different countries. In Malaysia, for example, the tax rate is much lower than in Australia. During the good old yesteryears, a person in this country would be able to build up his savings for old age and health care. To him, savings is a necessity because he cannot count on the government to provide age care. The lower tax rate gives people the chance to save.
In Australia, people are taxed heavily from the day they started working. A lot of money is collected and used by the government to provide age care for older people. The high tax rate makes it difficult for young people to save, but they don't need to, as they can count on the government to provide age care. (And yes, we all know that this may change in time to come)
So when a migrant comes into the country, he gets to enjoy the benefits, along with the savings he had built up in his previous home country, without having to first contribute towards it.
(Of course, what is written above is a lot of generalizations. Please take it as food for thought, and not fodder for consternation)
Here is what I think. The fact that I myself am an Asian migrant does not stop me from feeling that Asian migrants are indeed at an advantage economically when we come to Australia.
The reason is in the different tax rates between the different countries. In Malaysia, for example, the tax rate is much lower than in Australia. During the good old yesteryears, a person in this country would be able to build up his savings for old age and health care. To him, savings is a necessity because he cannot count on the government to provide age care. The lower tax rate gives people the chance to save.
In Australia, people are taxed heavily from the day they started working. A lot of money is collected and used by the government to provide age care for older people. The high tax rate makes it difficult for young people to save, but they don't need to, as they can count on the government to provide age care. (And yes, we all know that this may change in time to come)
So when a migrant comes into the country, he gets to enjoy the benefits, along with the savings he had built up in his previous home country, without having to first contribute towards it.
(Of course, what is written above is a lot of generalizations. Please take it as food for thought, and not fodder for consternation)
Monday, February 27, 2012
Watch your electricity consumption
I used this to check the power consumption of several appliances in my house. The result is quite interesting. I'll show you how much power my computers consume, as well as the cost per month at 22c per kWh, which is what I am paying to AGL now.
Our gaming computer (moderately hi-end): On standby, it consumes 90W (=$14.25 pm). With monitor on, it consumes 170W. When playing an intensive game, it is 355W. Assuming it is used for gaming for 4 hours per day, the extra wattage is 355W-90W=265W (= $7.00 pm, using 4hrs/day). In total, the running cost is $21.25pm.
My own computer (rather low end, dual core CPU, 2.66GHz): On standby it consumes 134W (=$21.22pm), even more than the gaming computer! This doesn't include the monitor, which is typically switched off when not in use.
The above may not look much, but together they represent 28% of my electricity bill. This beats spending thousands on solar panels. The 28% is slightly less than what my 15KW solar panel generates and it costs me AUD$3k, after government rebate of AUD$6k.
Saturday, February 25, 2012
Melbourne house auction results not accurate
Yesterday, I visited few house auctions with a friend. In Australia, for those reading this from overseas, houses are typically sold in an auction where people bid for it openly. Auctions are held on a Saturday and the results are reported on Sunday.
Out of the 5 places we visited, 4 were not sold on the spot. Three had a bid from one person in each case, and were quickly "passed in" (i.e. vendor rejects the offer, but is open to further negotiations with the bidder). In the fifth place, we missed the auction but the signboard outside indicated the auction was unsuccessful.
Here's the result. In the widely published Domain circulation for yesterday's auction, only one of the four "passed in" properties was reportedly sold in the after-auction negotiation. The other four were not even included in the report. Quite likely they were not sold. If this is the case, the auction success rate has been inflated, intentionally or not intentionally. It gives a impression that the market is more vibrant than it actually is. I am only talking aboout 4 out of the 224 reported auction results I saw. Goodness knows how many unsold auctions go unreported. Caveat emptor!
Generally, I do not trust statistics on face value. Unless I know the intention of the organization creating the statistics, many statistics are just distorted truths. Figures are juggled, and graphs are prepared in a way that gives the reader an intended impression at first glance. While statistics are meant to inform, many should be banned from publication because they are actually mis-information.
Out of the 5 places we visited, 4 were not sold on the spot. Three had a bid from one person in each case, and were quickly "passed in" (i.e. vendor rejects the offer, but is open to further negotiations with the bidder). In the fifth place, we missed the auction but the signboard outside indicated the auction was unsuccessful.
Here's the result. In the widely published Domain circulation for yesterday's auction, only one of the four "passed in" properties was reportedly sold in the after-auction negotiation. The other four were not even included in the report. Quite likely they were not sold. If this is the case, the auction success rate has been inflated, intentionally or not intentionally. It gives a impression that the market is more vibrant than it actually is. I am only talking aboout 4 out of the 224 reported auction results I saw. Goodness knows how many unsold auctions go unreported. Caveat emptor!
Generally, I do not trust statistics on face value. Unless I know the intention of the organization creating the statistics, many statistics are just distorted truths. Figures are juggled, and graphs are prepared in a way that gives the reader an intended impression at first glance. While statistics are meant to inform, many should be banned from publication because they are actually mis-information.
Friday, February 17, 2012
Money is a depreciating asset
Money no longer holds a constant value in this day and age. The sooner one realizes it, the better able he is to prepare for his impoverishment.
Money actually depreciates at the rate goods, services, and taxation go up in price. Let's say you have a certain amount of savings in the bank, earning an interest of 6% per year. Assuming you do not touch the interest at all, letting the principal grow cumulatively. At the same time, cost of living goes up by 10% (for utilities, transport, house, food, council rate, etc). Your net wealth is actually poised to drop by 4% at the end of the year.
In an ideal capitalist society, the system is supposed to be self-correcting such that the price of goods and services will always remain in check. Well, the system has cracked. Price stability is no longer the norm. Constant price increases is the new norm as corporations set ever-higher prices with no restraint. Politicians join in the game to increase taxes everywhere under whatever guises they can think of (e.g. carbon tax).
Unless the government acts to curtail price increases that do not reflect actual costs (such as banking industry practices in Australia), the government is actually letting the economy run wild. Unchecked, the average taxpayer will soon see his take home pay disappear before he can take it home.
Money actually depreciates at the rate goods, services, and taxation go up in price. Let's say you have a certain amount of savings in the bank, earning an interest of 6% per year. Assuming you do not touch the interest at all, letting the principal grow cumulatively. At the same time, cost of living goes up by 10% (for utilities, transport, house, food, council rate, etc). Your net wealth is actually poised to drop by 4% at the end of the year.
In an ideal capitalist society, the system is supposed to be self-correcting such that the price of goods and services will always remain in check. Well, the system has cracked. Price stability is no longer the norm. Constant price increases is the new norm as corporations set ever-higher prices with no restraint. Politicians join in the game to increase taxes everywhere under whatever guises they can think of (e.g. carbon tax).
Unless the government acts to curtail price increases that do not reflect actual costs (such as banking industry practices in Australia), the government is actually letting the economy run wild. Unchecked, the average taxpayer will soon see his take home pay disappear before he can take it home.
Monday, February 13, 2012
Protecting the rural way of life
Our prosperity is relative to the place where we live and work. For example, a person surviving on a government pension in Australia will be able to live like a rich man in most places in a third world country (but probably not in a major city).Therefore it is only fair that a person not allowed to buy real estate in foreign country because of this disparity. Otherwise it will upset the socio-economic balance, and hence the way of life, to the benefit of those in the rich country.
When I was in Bali, I was told that you can buy an acre of padi field for less than AUD$15k. The villa we stayed in in Ubud (in the middle of a padi field) was built and run by an Australian. I think this is an injustice to the local Balinese. A local who works hard and is saving up to buy his own padi field will inevitably be priced out.
In parts of Australia, farmlands have been quietly purchased by foreigners, with the intention of mining for coal. There should be a law against this, as the transaction price does not reflect the true value of the land. Farmland is a contributor to the GDP. It is a renewable source of income, unlike mineral resources which get exhausted eventually.
Governments should enact laws to ensure that farmlands are not sold to people who are not interested in adopting the rural way of life, be it to foreigners or to city-dwellers. These people are only interested in buying a laidback lifestyle but not the life that comes with it.
When I was in Bali, I was told that you can buy an acre of padi field for less than AUD$15k. The villa we stayed in in Ubud (in the middle of a padi field) was built and run by an Australian. I think this is an injustice to the local Balinese. A local who works hard and is saving up to buy his own padi field will inevitably be priced out.
In parts of Australia, farmlands have been quietly purchased by foreigners, with the intention of mining for coal. There should be a law against this, as the transaction price does not reflect the true value of the land. Farmland is a contributor to the GDP. It is a renewable source of income, unlike mineral resources which get exhausted eventually.
Governments should enact laws to ensure that farmlands are not sold to people who are not interested in adopting the rural way of life, be it to foreigners or to city-dwellers. These people are only interested in buying a laidback lifestyle but not the life that comes with it.
Saturday, February 11, 2012
Protect, not destroy, the rural way of life
Many people think that to bring progress to the rural community is to introduce the lifestyle and modern amenities of city living to the country folks. "Progress" means new shopping malls, planned housing estates, recreation centers - all of which only succeed in replacing a rural lifestyle with a city lifestyle, without a clear long term benefit to the former. In the process, it destroys a good way of life.
I grew up in a small town. People made their living from tapping rubber, growing vegetables, or tending to the orchards. Everyone seemed to have enough to live on while the government provided adequate and free health care and education. Those who had more did not indulge in anything extravagant; one had no need of such things in rural living.
Unfortunately, "progress" crept in. Instead of beautiful traditional village houses, brick and mortar link housed sprouted. They are cramped into little estates. Undisposed construction material in time are covered by weeds. The houses are small and their fenced compounds are barely sufficient for hanging the laundry. I cannot understand why anyone thinks this is progress.
In other places, I have seen farms being sold and converted into housing estates. This provides a windfall to the farmer but diminishes the country's food production. I see young people emigrating to the cities to look for work. Some make it big but most are just eking out a living. In my opinion, they would have done better if the authorities have protected the conventional rural way of life. Instead, rural lifestyle as a way of life is never consciously preserved as a complementary system to city living. A country must always have a good balance of rural and urban dwellers, without one overwhelming the other's lifestyle.
I grew up in a small town. People made their living from tapping rubber, growing vegetables, or tending to the orchards. Everyone seemed to have enough to live on while the government provided adequate and free health care and education. Those who had more did not indulge in anything extravagant; one had no need of such things in rural living.
Unfortunately, "progress" crept in. Instead of beautiful traditional village houses, brick and mortar link housed sprouted. They are cramped into little estates. Undisposed construction material in time are covered by weeds. The houses are small and their fenced compounds are barely sufficient for hanging the laundry. I cannot understand why anyone thinks this is progress.
In other places, I have seen farms being sold and converted into housing estates. This provides a windfall to the farmer but diminishes the country's food production. I see young people emigrating to the cities to look for work. Some make it big but most are just eking out a living. In my opinion, they would have done better if the authorities have protected the conventional rural way of life. Instead, rural lifestyle as a way of life is never consciously preserved as a complementary system to city living. A country must always have a good balance of rural and urban dwellers, without one overwhelming the other's lifestyle.
Subscribe to:
Posts (Atom)