Whoever Wins The Next Election - You Lose
Updated: Mar 29, 2020
It’s an election year and I’m afraid.
This is the time when politics resembles Bizarro world, and our Grinch-like politicians, dress up like Father Christmas.
Promises will be made. Guarantees will be given. You might even see an over sized cheque signed.
But I'm here to tell you whatever promises are made over the next few months, the next decade will usher in an era of fiscal siphoning, from your bank accounts, to the governments coffers - regardless of who wins!
Let me explain why
In 1950, Australia had 7 workers for every 1 retiree. By 2000, that ratio had reduced to 5 workers, and it is estimated by 2050 it will collapse to a staggering 2 workers for every retiree.
If these statistics don't scare you then you haven’t been paying attention and I suggest you read it again until the penny drops.
When you consider that almost half of all government revenue (that's 50%) comes from personal income tax, and more than half of all government expenses (again, that's 50%) goes to health, social security and welfare, you don't have to be a master mathematician to work out we have a problem.
With the baby boomers retiring in larger numbers than ever before, the government’s ability to fund the financial requirements of Australian retirees is coming under increasing pressure.
Simultaneously, better diets and improvements in healthcare mean that more of us are living longer than ever before. The next generation is thus likely to spend more time in retirement than previous generations spent working in their entire careers.
Unfortunately, the financial implication of the remorseless pressure of demographics alone will force future Australian governments (irrespective of ideology) to consider whether drastic cuts to an increasingly unaffordable health and social security system will be needed or, whether a significant restructuring of our tax system is warranted or, both.
Whatever any future government eventually decides, one thing is clear, you as an individual have no control over what those changes will be, when they will take place and how much it will cost you financially.
Therefore, its essential to be proactive and take personal responsibility for your own future finances and not allow your environment to dictate your financial fortunes or your lifestyle.
So, rather than wasting your precious energy arguing with friends and family about which political party to vote for, take a greater interest in your personal financial plans, and the sooner you start the better.
Information published on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this document is General Advice and does not take into account any person's particular investment objectives, financial situation and particular needs.
Before making an investment decision based on this advice you should consider, with or without the assistance of a qualified adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. Past performance of financial products is no assurance of future performance.