Qld miners ‘live in concentration camps’

Queensland’s fly-in, fly-out (FIFO) miners are being forced to live in “concentration camps”, a state Labor MP says.

Opposition mines spokeswoman Jo-Ann Miller says the “harrowing stories” she has heard from FIFO workers in the mining communities of Moura, Dysart, Middlemount, Blackwater and Moranbah explain why the state’s mining towns are suffering.

“To say that mining companies are engaging in fly-in, fly-out postcode apartheid is no understatement,” she told state parliament on Tuesday night.

“Workers are being kept in what only can be described as mining concentration camps.”

Ms Miller said workers were being told not to mix with locals and had to have written permission before being able to leave the camps.

She said she and Mirani Labor candidate Jim Pearce had heard workers were being forced to drive away from the mining regions just to be able to fly back into the Bowen Basin from larger centres.

“This policy of denying workers and their families the opportunity of living near their work should be made unlawful,” she said.

“It is dangerous, it is discriminatory, it is un-Australian and it is a disgrace.”

Ms Miller said the practice was aimed at shutting down the state’s mining towns and breaking its coal mining unions.

Unoccupied hotels and struggling shops are being forced to close as a consequence, she said.

The Tax System Explained in Beer

This article is not strictly property related, but a gem nonetheless. Enjoy!

 

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this…

The first four men (the poorest) would pay nothing The fifth would pay $1 The sixth would pay $3 The seventh would pay $7 The eighth would pay $12 The ninth would pay $18 The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20?. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by a h higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!” “That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.  –   Professor of Economics.
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https://www.ijreview.com/2012/04/688-tax-system-explained-beer/

Federal government scraps First Home Saver Accounts scheme new accounts

The Federal government has scrapped the First Home Saver Accounts scheme, ruled off from tonight’s budget speech for new accounts.

The government expects to make $143 million in savings over five years from its ditching.

It was a Rudd government initiative where accounts attracted government co-contributions and tax breaks, which will no longer be on offer to new intending first home buyers.

Under the scheme, savers paid concessional tax rates of 15 percent on interest earned in the accounts and the government made a 17 percent co-contribution on the first $6000 contributed each year.

It was also reported government co-contributions to the existing accounts will end on 1 July and tax and social security concessions will be withdrawn from July 2015.

The government program, launched in 2008 by Kevin Rudd, was predicted to help hundreds of thousands of future home buyers.

However, statistics from the Australian Prudential Regulation Authority show that $521 million is held in 46,000 First Home Saver Accounts as of December 2013.

Period Mar 2013 Jun 2013 Sep 2013 Dec 2013
Number of FHSAs (‘000) 40.2 45.2 45.3 46.0
Balance of FHSAs ($m) 416.8 491.0 499.7 521.5

This figure is still just a fraction of the 220,000 first-home savers projected to open accounts by 2009 and the 2012 target of 700,000.

Only 18 institutions offered accounts. The average base interest rate being paid on these accounts being 2.54%.

A number of conditions are currently in place, including that a $1,000 minimum deposit must be reached yearly for four financial years before you can withdraw. The account’s balance is capped at $90,000.

There is an average of $11,300 in the accounts which, readers point out, can exceed $90,000 with interest but savers can’t deposit more after it reaches $90,000.

Late last year, with first home buyers’ low numbers, RateCity urged a review of the First Home Saver Account Scheme.

Ninemsn reported the first home saver accounts scheme was scrapped as Treasurer Joe Hockey said it had done little to improve housing affordability.

First home grants to buyers, handed out in conjunction with state governments, will continue unaffected

No future for NRAS as fifth round is scrapped in 2014 budget

News that the Abbott government will abandon the fifth tranche of the National Rental Affordability Scheme (NRAS) has brought mixed reactions from the housing industry.

The scheme provides tax free incentives to developers and investors providing approved housing to the rental market at 20% below market value. According to the government, there are no current funds allocated for any future rounds of NRAS, with all money that was allocated to the fifth round returned to the budget and redistributed elsewhere. The 2014 budget papers suggest scrapping the scheme will result in savings of $235 million over three years, and will reportedly could contribute $1 billion to revenue savings over the program’s life.

Developers who have already received NRAS approval for their projects will continue to receive payments for up to ten years so long as their eligibility requirements are met and their constructions proceed according to the pre-arranged timelines.

However, the Department of Social Services will be withdrawing financial support for projects where “insufficient progress” has been made in the dwellings’ construction. Investors are still able to invest in NRAS properties, as some 18,000 dwellings are still to be delivered. This yet to be completed apartment in Sydney’s Harris Park is currently advertised by Onyx (pictured below), a property investment advice company that markets NRAS approved dwellings.

Investors who own completed NRAS approved properties will this year receive $10,661 from the government. All applications for NRAS’s fifth round of approvals, which closed in August last year, have been abandoned and will not be approved.

The Housing Industry Association (HIA) has described the abandonment the final round of the National Rental Affordability Scheme as disappointing.

“The scheme has resulted in thousands of affordable homes for low and moderate incomehouseholds, increased Australia’s housing stock and generated countless jobs the process,” said Graham Wolfe, the HIA chief executive.

Prior to the budget announcements, HIA’s chief economist Harley Dale told the Financial Review that the scheme had delivered affordable housing for thousands of Australians. “It’s been a good scheme that has helped boost low-cost rental accommodation, and we would like to see it continue,” he said.

The Urban Development Institute of Australia (UDIA) described the move as a “major disappointment.”

“Since its establishment in 2008, NRAS has delivered 14,575 new homes for low and moderate income households, and was on track to provide 23,884 more,” said UDIA’s national president Cameron Shephard.

However, the Real Estate Institute of Australia has welcomed the Abbott lead government’s decision, with president Peter Bushby calling the action “one REIA supports”.

In February, SQM Research managing director Louis Christopher told Property Observer while the scheme needed to be adjusted to keep out “dodgy developers” and improve transparency, “the NRAS is a good idea, and we’re supporters of it.”

The NRAS was launched by the Labor government in 2008 as a partnership between the Commonwealth and state and territory governments.

FIFO petition attracts 1300 signatures

A PETITION demanding an end to 100% fly-in, fly-out workers and forced camp accommodation has attracted more than 1300 signatures.

The petition, which was started by Moranbah resident Peter Finlay on March 12, closed yesterday afternoon.
Its goal was to end the discriminatory practice of mining companies employing a 100% compulsory FIFO workforces and forcing those workers to live in mining camps rather than letting them choose their place of residence.
The petition said the practice resulted in increased unemployment in affected mining communities since workers were selected from outside of the region rather than from locally-based, skilled miners.
It said the need for workers’ camps and FIFO was accepted, however, the forced accommodation of workers in camps and 100% compulsory FIFO was not.
It said well documented and disturbing difficulties that workers suffered due to being forced to live in camps included mental health issues, alcohol abuse and obesity. To read more, visit http://www.parliament.qld.gov.au.

Cyber thieves steal $50,000 from real estate agency

Real estate agencies have been urged to consider a zero tolerance policy to Facebook and internet-based email accounts after cyber criminals targeted an office in Western Australia.

WA Consumer Protection has confirmed the hackers stole $50,000 from a Broome real estate agency after they hacked into the company’s online banking system in February.

Mandy Reed, general manager at Hutchinson Real Estate, told Real Estate Business the cyber fraudsters most likely accessed the company bank account after a compromised email allowed malicious software (or malware) to be installed.

“We got done alright,” said Ms Reed. “We were doing a reconciliation of one of our bank accounts when we realised the money that was supposed to come into it never arrived. So we looked into it because it came from a trust account. We rang the bank and found out it had been directed to a bank account in western Sydney.”

It’s being alleged the bank account details of one of the agency’s clients were changed on a ‘pre-entered list’ of recipients who receive regular payments.

Three payments from the agency’s trust account, totalling $50,000, were redirected away from the intended bank account. It appears the account details were later changed back to the original, in the hope the fraud would not be detected. The agency has since been reimbursed by their bank.

“What the fraud squad reported to us was that it possibly came about by someone clicking on a dangerous email link, or it may have been from someone trying to view something on Facebook,” said Ms Reed, adding that the malware may have been lurking in their system for a while, since the business only recently ramped up its cyber security.

Ms Reed added the fraud experts advised the agency to take a zero tolerance policy to Facebook and web-based emails being used within the office.

“They told us to lock down anything web-based  to the point where we are really minimising the risk, even down to remote devices, charging phones, downloading photos from our phones that we may have taken from properties that we’ve gone out to, even iPads we use when conducting inspections,” she said.

This recent cyber theft follows shortly after one leading property manager and industry trainer had his identity stolen and his bank account compromised by a sophisticated scam artist.

Bob Walters, director of the Leading Property Managers of Australia (LPMA), battled a faceless fraudster for months, with no help from the police after his company was attacked by the scammer last month.

It also follows a similar case in March last year when a Perth settlement agency had $50,000 in two BPay transactions taken from their trust account.

WA commissioner for consumer protection, Ms Anne Driscoll, warned real estate to be alert to this type of fraud and to have strict security protocols in place to avoid falling victim to them.

“While the property industry has been targeted in these cases, fraud of this kind can affect any business, so it’s essential businesses have procedures and protocols in place to prevent unauthorised access to their computer system and systems to detect malware,” Ms Driscoll said.

“Staff should be trained to ensure that suspicious emails are deleted immediately, attachments are never opened and links never activated. Having up-to-date anti-virus and anti-malware software is essential for any business.

“In light of these attempted frauds, it is our advice that real estate and settlement agents manually input bank account details of clients when making electronic bank payments, rather than relying on the accuracy of details in pre-entered lists.”

Australian Tax Office Targeting Property Investors 2014

If you own a rental property you could be one of the 110,000 investors who will be getting a letter from the Australian Tax Office (ATO) about your tax liabilities.

The ATO has announced that it will be writing to a sample of rental property owners about their tax obligations and entitlements, after new data mining technology identified that property investors may have submitted incorrect tax claims in prior tax years.

The ATO are targeting aggressive expense deductions and particularly the estimated two thirds of property investors who are negatively gearing their investments and claiming losses on their investment properties to offset their tax bills.

If you fall into this category, the following tips might be worth considering when you are completing your tax return.

What’s the status of the property?

Firstly, it’s vital that, if you’re claiming deductions, your rental property needs to be rented or available for rent. If a property is not available for rent, then expenses incurred by a taxpayer are not deductible.

This would seem an obvious point, but it’s worth remembering particularly if your property – as a holiday home or other part-time accommodation – is not rented out across the entire year. If that’s the case, remember that you can only claim deductions for the period that the property is rented or available for rent.

Who’s the owner?

It’s also worth remembering that the legal ownership of the rental property determines the proportion of ownership and entitlement to deductions on your individual tax return. This means that if a husband and wife purchase a rental property in joint names, then their levels of ownership will be 50/50 unless stated otherwise in the purchase contract.

Categories of deduction

Generally, the ATO specifies three types of rental property expenses:

  • Those which you cannot claim a deduction.
  • Those which can be claimed as an immediate deduction in the financial year in which they were incurred.
  • Those that can be deducted over a number of years.

Capital or personal expenses aren’t deductible, although you may be able to claim decline in value deductions (depreciation) or capital works deductions, or include certain capital costs in the cost base of the property for capital gains tax purposes. Other examples across each of the three categories are outlined in the sidebar alongside this article.

The picture also gets a bit more complicated when other considerations are factored in. For example, if you take out a loan to purchase a rental property, you can claim the interest charged on that loan as a deduction. However, if the loan is taken out for more than one purpose, you can only claim the interest relevant to the amount borrowed for the rental property. Depending on your circumstances, there may also be potential to claim prepaid interest to maximise your deductions.

Another factor which often confuses owners is the area of repairs and improvements to the property. Spending on repairs and maintenance is tax deductible, but you can’t immediately deduct costs on improvements and total replacements of items, as these are considered capital in nature. However, you might be able to claim depreciation and capital allowances on some improvements.

And, if you’re looking to fix something straight after buying the property, remember that you cannot claim initial repair costs for deterioration and damage already there when you bought the property until at least 12 months after purchase

You should consider getting a quantity surveyor’s depreciation report to ensure you can claim the maximum depreciation and capital allowances deductions. A specialist quantity surveyor can visit your property and prepare a depreciation report that will cover the actual building and the items within it (such as air-conditioner, stove, hot water service, etc).

It’s also worth consulting your accountant before you leap into the property investment space. Given the issues outlined above, tax time can be complex for property investors. When it comes to completing your tax return, working with your accountant to get it right can save a great deal of paperwork – and cost – down the track.

Daniel Deutsch is a partner at Marin Accountants, a firm specialising in advice for individuals, investors and family businesses. 

http://www.propertyobserver.com.au/forward-planning/investment-strategy/30823-rental-properties-keeping-deductions-working-for-you.html

Mackay investors win rates battle against council

MAYOR Margaret Strelow and the council’s CEO, Evan Pardon, will review yesterday’s Supreme Court judgment that has Mackay landlords celebrating and which could have ramifications for Rockhampton investors.

In what could be a landmark decision, Central Judge of the Supreme Court of Queensland Duncan McMeekin handed down his ruling in favour of a group of investment property owners that challenged the Mackay Regional Council over increased rates.

The group of investors took the council to court after it last year increased rates on properties that weren’t an owner’s principal place of residence.

It has been argued that the judgment is likely to set precedence for other councils, such as Rockhampton.

However, Mr Pardon said that wasn’t necessarily the case.

He said he was aware of the matter before the court but could not provide detailed comment until he had read Justice McMeekin’s judgment.

“The rates system in Rockhampton is different to Mackay … the council provides a concession to those residents who occupy their homes,” he said.

“This case doesn’t necessarily set a precedent for us because of these differences in our rating systems.

“We will await the wording of the judgment and seek further advice.”

Cr Strelow declined to comment.

In his judgment, Justice McMeekin said the Mackay council’s rating system “was an improper exercise of the power conferred on the respondent under the LGA (Local Government Act)”.

He said the council “impermissibly” took into account characteristics personal to the property owners rather than the value of the land itself.

Justice McMeekin said the council’s resolution in July last year to introduce this rating system should be set aside.