The following is a transcript taken from episode 29 of the We Talk Cents podcast. The transcript is created by AI software so it might not be perfect - please forgive any imperfections or grammatical errors.
Blaize Pengilly 00:09
Personal Finance budgeting cash flow and investing don't have to be scary words. The We Talk Cents podcast is here to help you learn more about money and take control of your personal finances.
Blaize Pengilly 00:26
We Talk Cents podcast is not a financial advisor. This podcast is made for entertainment and educational purposes only.All information shared is of a general nature and does not take into account your personal situation. You should consider whether the information is appropriate for your needs and where appropriate seek professional advice from a financial advisor.
Dan Jovevski 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,
Blaize Pengilly 00:57
I'm Blaize a millennial learning about money.How are you going today?
Dan Jovevski 01:02
doing absolutely fabulous Blaize recently been on 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 probably be 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?
Blaize Pengilly 01:19
Very nice. You've been out there stimulating the economy. Good on you damn traveling grounds.
Dan Jovevski 01:23
I'm doing my part by $10 coffees at airports Blaize.
Blaize Pengilly 01:26
My gosh, I do not miss airport price products are ridiculous. That's really good news Dan. I am great. And I'm excited because today we are going back to what we did in our very second episode. If we 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 last year. But we're revisiting it again today. And as always, I've got plenty of questions 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. Seeing as the whole podcast today is essentially a big news bulletin. Have you got any personal money news you'd like to share down?
Dan Jovevski 02:13
Blaize the personal money years that I've gotten is for the avid followers of Doge coin, who have been following along since we bought it a few episodes ago. I think we'll be shocked to say that the price of Doge has gone down ever since. Ilan musk appeared on Saturday, live where 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 markets plays and especially for people that have got captivated by doze. It sounds like a puppet Ilan is turning and becoming a little bit more or less enthusiastic about crypto in general.
Blaize Pengilly 02:55
Speaking of Doge coin and crypto, I do you know what I did? I'm excited. I bought my first crypto. Oh, thank you. So after our discussions on the podcast a couple of weeks ago when we learn more about crypto, I had a friend who minds crypto come over and teach me how to use a website and I bought some my own crypto and I know that you're supposed to do a lot of research before you invest but part of me just wanted to get on the train. 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 them so the markets volatile and uh, you know, I only use money that I could spare but yeah, Mr. Masks stop being a couple of words for Mr. musket he can change the whole outlook of an entire cryptocurrency. It's crazy. So yeah, that's my news. And also I'm not sure if you can tell seeing as we are behind computer screens, looking at each other. We're not actually recording in the same room.But can you see anything different about me?
Dan Jovevski 04:00
I'm having to look plays or there is something there is something I don't know what it is. The skin is looking fantastic as always. So that hasn't changed.
Blaize Pengilly 04:10
You pretty close there. Because Do you know what I went and got? I used money with Maddie who we had on the show last week who 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
Dan Jovevski 04:29
got that's what it is. Are you there was a glowthere somewhere close. But that is that's fantastic.
Blaize Pengilly 04:36
It was awesome. So I was really excited by Maddies hacks last week on how to save money for beauty items, checked out my local 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 compared to a usual 40 To be fair, it's not something that I would usually regularly get but i thought you know what, why not try it. yourself. Amazing winter's coming.Let's pretend that it's not with the colour of my skin. So yeah, that was a really awesome hack by Maddie. And if you haven't listened to the last week's episode, and you want some beauty hacks I highly recommend because Maddie had some really, really good ones. As you can see, I've already jumped on board.She's convinced me so yeah. loving it.
Dan Jovevski 05:20
you look great.
Blaize Pengilly 05:21
Thanks, Dan. Now that's enough of my money news. Shall we talk the biggest money news of the week, potentially even of the year? Shall we talk federal budget?
Dan Jovevski 05:31
Blaize Pengilly 05:38
Australian Federal Budget. What exactly is it?I know what happens every year? And I know it's a really big deal for journalists. And you know, it's all over the news when it happens. But what actually is the federal budget and why should we care about it?
Dan Jovevski 05:52
The federal budget Blaze is the accountants ofAustralia all coming together and setting the scene about Australia's financial future and planning over the course of the next year and beyond. And every time that a budget comes, typically the month of May last year due to COVID. It was obviously postponed. And we had an intervention at a later period of time later the 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 hat off to Mr. Frydenberg. He is quickly developing as a competent treasurer. Certainly the eyes of the media because I haven't really heard one negative thing about him just yet. And I'm sure for Polly, I totally use router, what he's doing what PR agency he's using. But it seems like he's come off relatively unscathed. 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 really exciting, and some others. But there is nothing huge and big and super controversial about, you know, this budget, there's no tax increases, which often is the bane of a tax payer. And there's nothing in here that's actually taking individual balance sheets incredibly backwards. Yes, there's a few little bits and pieces of the economy that have missed out. But all in all, it's actually quite a fair and sensible budget.
Blaize Pengilly 07:28
So Josh Frydenberg is the treasurer, he does the announcement, when it comes to actually allocating money. Well, where's the money getting the government from to spend?
Dan Jovevski 07:40
What does the government recover is effectively the collective of every single person living in Australia contributing and paying tax, and that tax being funnelled to essential services like roads, school, public education, transport, basically, all these digital services that we take for granted almost every single day. And the budget is really aligned on making sure that we allocate our dollars to the things that every single citizen in Australia uses and gets the benefit from. So really, when we think about the government, all we really think about it is our elected representatives as contributing our tax dollars towards helping them allocate money across all the services that we use every single day.
Blaize Pengilly 08:25
So the way that I'm seeing this is that it's kind of like the treasurer, Josh Frydenberg is the head of the household. He has 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 the eldest kid is aged care, and he's going, Okay, you can have X this amount of money, and then the next kid is childcare. And it goes, he can have this much pocket money this week, but except it's at a bigger scale for a year. And it's really whole industries and like massive groups of people that are being affected by these decisions.
Dan Jovevski 09:03
Absolutely Blaize, a great way to put it.
Blaize Pengilly 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 nervous in such in front of such a large group of people, but also telling people how much money they're getting. There's a lot of scope for backlash there. But as you said, there's this is a pretty good budget. What what's the theme of this budget? And what overall What does this budget look like for Australians?
Dan Jovevski 09:29
Why is the government has done a really good job in separating these two forward reports. So really, the key themes are number one, creating jobs rebuilding our economy, number two, guaranteeing essential services. Thirdly, improving women's safety and economic security.And fourthly is building a building a more resilient and secure Australia. So they have really just put her into four key areas and there's different sub points in those four key areas which she can go into today. But it's A fairly good and robust budget that covers a lot of bases.
Blaize Pengilly 10:04
Yeah, nice one.
Dan Jovevski 10:06
And what Josh Frydenberg has said part of this budget, in quoting his exact words, the best way to repair the budget is to repair the economy and get more people to work. Because when that happens, your tax receipts go up, and your welfare payments go down. So he was fairly sort of clear that this is a job led budget, designed to get people back into the workforce, and productive, so the tax receipts go up. And then we have the ability to decrease the overall tax costs for individuals. So I think Josh has done a great job in really just summarising what the goals and ambitions are for this for this budget.
Blaize Pengilly 10:50
Awesome, then when it comes to where money is actually going. First, my first budget specific question is, what's in it for me? What am I getting out of this budget?
Dan Jovevski 11:02
Oh, Blaize I think most people will be glad to know that there's been $7.9 billion in tax cuts for low and middle income earners, worth about 1000 and IBV individuals in about 2160 for dual income couples. So there is quite a bit more money that will go into the economy by the mere virtue that more people will be taxed less and you know, $1,000 each and every single year for an individual. Now it's quite a bit of cash, that people could go off and do whatever they want with, which will of course go towards 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 if you're low and middle income, and how can I actually figure out how much I'll get back specifically, if you want to find out how much you can get back. Or you can simply head to the budget or golf to the website, and there is a calculator that tells you how much you'll get back individually for your situations, you just have to create a few key details about your income, and then you'll be able to find out how much you'll be saving in your tax bill each and every single year.
Blaize Pengilly 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 of the financial year I'll be paying less or is it that it accumulates throughout the year and I'm getting a small amount I'm getting taxed a smaller amount each week, or is it sort of an end of financial year thing? How does that big part of it work
Dan Jovevski 12:29
From what we understand this is an end of year event. 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 the first July so you can expect your tax to be reflected in the new financial year.
Blaize Pengilly 12:49
Yeah, awesome. I heard something about there being changes to superannuation as well for low income earners. what's for that
Dan Jovevski 12:59
There's also some good news for low income employees earning less than $450 per month at the moment, your employer currently does have to pay you the superannuation guarantee, because change at any that low income earners will be able to get the same super as everyone else. And this impact will probably have for about 300,000 people aroundAustralia, and nearly two thirds of whom are women.
Blaize Pengilly 13:20
That's awesome. I didn't know that that you had to meet a certain threshold to be paid super. I assumed everyone got the is that 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's actually in it?
Dan Jovevski 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 shrine workplaces are free from sexual harassment. And he proven the ability to quality women's health services, as is really good. I think there is a massive focus from the government into every single initiative that's focused on the betterment of women and female outcomes, which is absolutely amazing. And so this puts up somewhere around sort of $345 million dollars is a health package for women and girls and includes a $47 million towards things like depression services for expecting mothers and new mothers as well as $100 billion to improve cervical and breast cancer screening programs. In addition to all of this, there's almost a billion dollars towards the reduction of the domestic and family violence and supporting survivors for the next four years. And in terms of some other areas around 42 million dollars has been committed to offer230 scholarship placement for STEM that science, technology, engineering and mathematics industries. So it's a great way to include protect and empower more women inside this budget, which is a fabulous outcome. And it's good the government's paid attention to this area.
Blaize Pengilly 15:21
This is awesome. If I the the money towards helping women escaped domestic and family violence is incredible, because, you know, cast your mind back to when we had Amanda Cassar on the show. And she really, really pulled back the curtain and opened my eyes to see that, to discuss what financial abuse is, and how common and prevalent it is in all around Australia. And I didn't even know if an actual abuse was a thing. So to see. I think it's really good to see the government dedicating a huge amount of money towards assisting women getting out of these situations that can be just so dire as we heard of some of those stories. In our in our episode with Amanda Cassar
Dan Jovevski 16:07
Absolutely Blaize, it's really lifting up the vial and uncovering the parts of their financial lives that we often don't talk about such really amazing. That's great. Kevin's put this front and centre inside the federal budget and dedicated quite a bit of money, but also quite a bit of focus, which is really awesome to say,
Blaize Pengilly 16:25
Yeah, now Dan, if I cast my mind back to last year, the big standout from the budget for me, and it's still ingrained in my memory is that there was a million initiatives all starting with that three letter word J O B, there was job maker, job keeper job training job seeker. Is there any other mentions of that this year? Is there any other job initiatives to look out for?
Dan Jovevski 16:48
Yes, there is there is an extension to the job trainer program with $506 million with the funding. And the program is expected to deliver about 163,000 low fee, or free training courses to areas that have skilled shoulders at the moment. And in particular, this is gonna have a focus on two areas in aged care and also in the digital skills courses arena.
Blaize Pengilly 17:12
So there's not another million initiatives, and they 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 must be working well for them to continue it.
Dan Jovevski 17:25
Blaize Pengilly 17:26
What about if you're a first home buyer, or you're someone looking to enter the property market? Will they will the government be providing any further assistance to people in that boat,
Dan Jovevski 17:36
There will be given the meteoric rise in property prices all around the country, this could not come sooner. So there is an extension of the first home loan deposit scheme, which is been extended by another 10,000 places. And what this does is helps first home buyers enter the housing market with less than 20% deposit. So under the scheme, the government acts as a guarantor for the first home buyers, enabling them to purchase or build 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 a mortgage insurance premium. So this is the cost that you have to pay to the bank, 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 to pay just for the benefit of borrowing money without a 20% deposit. So I think this is absolutely excellent 10,000 places are also healthy amounts, and which will not only stimulate more people getting on the property ladder, but also if there is more construction going on, create new homes, which has a role and benefit to more construction workers and people in the building industry for them to also keep employed, which is fabulous.
Blaize Pengilly 18:53
Okay, that's that's really good news, because the first time land deposit scheme, if I recall correctly, they they've been doing it quite a bit. We talked about it in I believe it was Episode 17 the ins and 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 extends this program, they extend it by 10,000 places. And if I recall correctly from the episode that we discussed it, we're at 30,000 places. So they've now extended it by another 10,000 which means they're assisting 40,000 people around the country and during the property market. What about Dan? We've also discussed the first home Super Saver scheme before, which is where you can make voluntary contributions to your super account and then withdraw them and it sort of gives you a tax benefit. You're getting tax list if you do that, too in order to buy your first home for a home deposit. Has there been any news on that front as well?
Dan Jovevski 19:55
Yes, there has a the government has now increased The voluntary contribution from 30,000 to 50,000. So if you make additional contributions to superannuation, you want to withdraw them at the time that you buy home, you can now do that up to a rate of $50,000, which is quite a bit of money that you can take out of your super for a deposit when you get 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 your superannuation.
Blaize Pengilly 20:33
Dan Jovevski 20:34
And also, lastly, about property, there is anew family home guarantee scheme, which has also been introduced. And this is designed 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. buying a 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 key start. That is for couples, of course, but it does allow you to buy property with as low as two to 3% in some cases. So it's good that this is being near nationalised, and also a focus on single parents, which is a very challenging space to buy property if you've only got one income.
Blaize Pengilly 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, my calculator 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 deposit to be able to buy a house. I think it's really awesome that the government is assisting people to get into the into the home buying market. But yeah, I don't know what it's going to do. But given that property prices have increased so dramatically over the last year. Guessing prices will continue to rise because so much resistance has been provided that more people can enter the market.
Dan Jovevski 21:57
Absolutely. Just a very quick interruption as we go through the budget if you want to take care of your own financial future and understand your own budget, and why not keep the WeMoney app a go.
Blaize Pengilly 22:10
WeMoney helps you to manage your money, categorise your spending, track your net worth your credit score, and even set your 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 the show notes so you can download straight from wherever you're listening.
Blaize Pengilly 22:32
Alright, let's get back to budget chat. Dan, let's talk mental health. If I recall correctly, last year, the government extended the amount of sessions by subsidising the mental health care plan from10 sessions to 20 sessions. what's been done in the way of mental health this year?
Dan Jovevski 22:49
Well, Mental health this year has become a massive focus with $2.3 billion mental health and suicide prevention measures.Heck, yes, the government initiative headspace, we get an extra $278 million over 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 using headspace 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 everyone who's being discharged from hospital after a suicide champion gets access to mental health support. And finally, nearly 30 million has been set aside for the National Suicide Prevention office as well. Why is this important? Well, plays I think, like we had it in the last COVID relief package budget, there was a particular focus on mental health issues. Now. The fact that the government's gone in and again and double down the space is absolutely fantastic. And mental health is an area where each and every single day that passes further destigmatisation occurring on this topic. And the fact that the government's put some pretty big dollars aside that is so wonderful for people who are going through a difficult period or wanting to get help and support from other people to help them get back on track. So really awesome initiatives from from the government on this front.
Blaize Pengilly 24:19
Heck yes, I'll say I said it before. I'll say it again. Heck, yes, this is awesome. I'm so stoked to see that such a huge amount. What do you say 2.3 billion has been put towards mental health. I think it's so important mental health is something that affects everybody. And just while we have the opportunity. Lifeline is a number you can call if you're struggling with anything and just like to share it now. It's 13 11 14. So I think it's awesome that the government's putting money towards it. And yet don't forget there's free services you can access if you do need to talk to someone and it's all confidential. So that's 13 11 14 for lifeline. That's COVID-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?
Dan Jovevski 25:09
Well, COVID-19 vaccines huge are focused $1.6billion will be spent on a vaccine strategy over the next five years. And additional $1.5 billion will be put towards the COVID-19 related health services, including contract tracing and testing. As a person who's recently traveled, what I can say is, my goodness, I think the government's actually got something right. The airports are also down health workers everywhere. Every single nook and cranny of an airport is filled with a sanitising Bay, everyone's going about their business quite safely, which is awesome.Obviously, not all that risk, but certainly the government is not pulling any stops, in terms of making sure that we're all safe, which is awesome. And recently, I've heard blows is that the goal is to get a majority of Australians vaccinated by November, and I think the goal the targeting is, you know, somewhere over 75%, of Aussies getting vaccinated by, you know, before the end of 2019, which is absolutely fabulous.
Blaize Pengilly 26:08
2019 we're a little bit behind. We're in the future.
Dan Jovevski 26:12
Well, that's pretty much all you did say. By the 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 what what I've heard recently is in the United States, they're trying to increase the degree vaccinations, what they're doing is offering like a weekly lottery of a million dollars in the state of Ohio to get more people vaccinated. I don't know if the government's government giving a really funky to pick up that last a lot of, you know, couple of 100,000 people. But it's, it's super interesting that they've gone through a very methodical approach on getting as many people vaccinated 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 when the borders to end up opening up.
Blaize Pengilly 27:05
I wonder if Mr. Frydenberg, we'll take that approach of you know, offering the drop chance to go in a lottery to people that get vaccinated. Because if that's the case, I'll be holding it until the stakes 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 win a 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 put selfies 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 drive through, vaccinating, puts it on the topic of America, international borders. I know, I heard that there's no real answer as to when they're going to open and that it probably won't be this year. Who is affected by that over here? And has there been consideration about those industries in our budget
Dan Jovevski 28:03
Was quite a few industries that are impacted ablaze but there's no additional support in a large way to travel related industries like tourism, or travel operators. Surprisingly, I think most of those operators have diversified their businesses or adjusted business operations to basically tied themselves over until tourism packs up. But I can tell you, just like the property boom, that's force everybody to come into auctions. in a safe environment. Of course, property prices go up to 20%. I expect that we'll probably see people queuing up at airports to get away once we're in a safe harbour to travel. And the destinations that Australians can travel to increases with time and especially after vaccination. So all our thoughts go to all those travel operators that I'm sure will be looking forward to booking the 2 million flights to Bali. Once once that gets up and running.
Blaize Pengilly 28:56
Do you know what I'm imagining that classic ad the IKEA ad where the lady's running out. And she's got the like, she's got all the 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, fortunate enough 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 people myself running towards the airport. I
Dan Jovevski 29:27
Think I'm gonna join you Blaize.
Blaize Pengilly 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
Dan Jovevski 29:36
This is a really good point. So if you can't go to nationally, and the difficulty of quarantining and whatnot, has focused an inward look to where else can we go inside of Australia, as it has been $1.2billion dollars to subsidise the cost of domestic airfares to tourism regions.And this is designed to support domestic airports that receive regular public transport flights. And this is absolutely fantastic because it means thatAustralians Can't get their plane fix, but they could do it within the borders of Australia and you know, trap person, excellent locations that they probably wouldn't have thought about before with all the other potential international options 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 even know existed.
Blaize Pengilly 30:19
Yeah, I think that's a really, really good point. It's sort of Yes, it's Yes, it's a bit disappointing. And it must be really difficult for people that are missing family and loved ones and friend sand 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, that borders are closed to the outside world. So now we're having to get creative and travel around locally, which is exciting. And, you know, I've seen all the half 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 this budget funding. I would I wouldn't mind recording from somewhere like the, I don't know, Adelaide Hills or even down in Tassie.
Dan Jovevski 31:00
Oh, lovely places, I always picture the theWeMoney combi that will pull up and open the back out as with a recording studio I'm liking it, it sounds like a sensitive, great idea.
Blaize Pengilly 31:11
Hopefully there's a budget for that. Now, what about what about Mother Nature? Are we doing anything for the environment? Or is this all just jobs and economy based,
Dan Jovevski 31:22
There's nothing directly in this budget, what we've really got is an extension of pre budgeting periods where there is some initiatives that the government has put in place that is still being fired for pride budgets, but there's nothing really in particular, that's focused on Mother Nature in this particular budget, that is a standout. So potentially an area of improvement, certainly for the government. That was obviously not ignore that there's pre funding periods that are supporting some good initiatives in that space.
Blaize Pengilly 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 and the environment. But that it, like you said before, it seems like Josh Frydenberg 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 get money for this, so that that part is exciting. Now I have I have heard the word deficit thrown around. And like, I understand that this is a really expensive budget, and we are spending a lot of money. But how is it that was spending money that we don't have? How does the government do that? And how do we get I just can't get my head around? Yes, we're doing all this spending. But where is the money coming from? If we are putting ourselves into deficit? Is that the same as going into debt? Is it the same as taking out a loan? How does it actually work on a federal level Christian blows, and just
Dan Jovevski 32:43
Like our own personal balance sheets, when we run into a deficit, it means that the Australian government needs to find that money elsewhere. And in a deficit situation, what the government does is it goes out and raises money from international markets by issuing bonds. So these bonds are effectively like getting a mortgage. And we pay those bonds back interest. Australia's credit rating is AAA. And if you can consider that those rating in terms of what it means it is the best Australia is one of the best credit rating nations around the world. So we can borrow money, and fund particular programs by not having to balance our own budget for a particular year. And what this allows the government to do is plan and invest for the future going to be balancing your budget each every single year. You can't do things like massive infrastructure spending, or other big initiatives where you can basically borrow from the future and invest today, you know, roads, highways, train systems, trams, all this stuff takes multi multi years worth of investment to get up and running. that pays off for many, many years in the future. So yes, the Mr. Mr. Frydenberg, has embraced deficit spending. And he's not scared to go into debt in order to fund some of these initiatives, which is the flavour of a majority of governments around the world who want to improve their domestic services for citizens. So yeah, here's to being in the red, but hopefully it will pay off in the future.
Blaize Pengilly 34:16
You gotta spend money to make money then.
Dan Jovevski 34:18
Blaize Pengilly 34:19
I have a real thoughts. How do you feel about the budget as a whole to
Dan Jovevski 34:23
To be frank Blaize, There is plenty criticism the government gets and in terms of the budget, I think they have done an okay job. I don't know what charm factor that Mr. Frydenberg has cast dispersed overAustralian journalist. But I was trying to find a really critical journalist about this budget, and even the opposition to the government at the moment as also, I think struggled to come up with a lot of criticism. We've listened to talkback radio. So look, all in all, I think most people are happy. Is it super exciting. We all jumping out of a chair? No, we're not. But I think they've done an over Good job in presenting a very clear and concise budget for the future and only time will tell on Australia's economic fortunes. But look so far so good. Certainly areas they could have improved on. But all in all, Blaize I think it was a terrific budget. How about you?
Blaize Pengilly 35:15
Yeah. Well, thank thanks so much for running me through it Dan. I tend to agree with you like, it seems. It seems like there's a lot more winners this year. I remember when we're going through the budget last year, it was pretty balanced with people that are industries or groups that won and ones that lost in the budget. But it really seems like there's really few losers in this one, except for the environment, which I'm a bit disappointed about. But it is so good to see. I mean, having more money, the mental health, I think is just so important. So I'm really, really happy with that. creating more jobs and supporting women. And the tax, the tax rate rebate or the tax. What's the terminology for it? Is it an offset is a rebate? Is it a cut? When you're getting taxed back? What's the terminology?
Dan Jovevski 36:01
The government loves tax cut? Because it feels like you're getting a discount? Are you getting more money? You're paying less stuff?
Blaize Pengilly 36:07
Yes. I love the low and middle income and his tax cut. I think that's fantastic. So yeah, overall, I'm feeling pretty positive about it. And yeah, good job, Papa Frydenberg, for dishing out all the pocket money and making all your children and the little industries in groups and whatnot. I think I'm pretty happy with the outcome altogether. Yeah,
Dan Jovevski 36:29
Absolutely. Thanks for tuning in to another episode of We Talk Cents. We're back here next week.
Blaize Pengilly 36:39
Don't forget, if you want to make your own budget, there's a really easy way to do it. Download the free WeMoney app and use the code word podcast to make a budget of your very own chuckling in the show notes for that one.
Dan Jovevski 36:51
Excellent. I will use the referral code podcast you'll also get $5 on team winning money. So get involved. Download it today on the Google Play Store or the Apple App Store. And if you want to get in touch with 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 things that you want to learn more about.
Blaize Pengilly 37:11
Thanks for tuning in. Catch you next time. See ya. See you later.
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