So, who are you voting for?

Written on the 13 May 2019 by Nathan Drew, Fox Finance Group

So, who are you voting for?

 

As we all head to the polls on May 18, this is a hot topic around everyone's BBQ. Do you have a clear understanding of which party has the policies that will benefit you and your family? With policy back-flips, leadership spills, impending tax breaks and tax increases, it's almost impossible to get a clear idea of who is doing what, for who and when.

You could be forgiven for thinking there is some uncertainty surrounding the housing and lending industry at present.

Between the findings and recommendations of the Banking Royal Commission and subsequent tightening of lending requirements, speculation around the possible timings on the Reserve Bank's movement on interest rates along with the ongoing doom and gloom being reported around the decline of Aussie property prices, it feels like the same news cycle has been on repeat for months.

The reason for this is in no small part due to the upcoming Federal Election, and the uncertainty surrounding which Government (and their respective policies) will we be governed by later this month.

When I speak with business owners it's fair to say the majority of them have been holding their breath for the outcome of the election before they make any big decisions in their business. From our perspecitive as a family owned business, it's understandable that we all need to understand what rules of the game will be in play for businesses after the "winner" is announced.

Trying to navigate the political waters is tough when you are trying to decide who to vote for and which policies will impact you the most. There are policy divides between the two main parties, pros and cons for each, that will certainly affect how you secure money in the future, property investment and small to medium businesses. These are all fundamental areas that will impact our everyday lives.

So, I've answered some of the burning questions my customers are asking me, plus added a pros and cons breakdown for the major parties.

Read on to make sense of what the election could mean for you!

Will a change in government affect small business?

Small to medium sized businesses are the backbone of our country, so an important question for every business owner (and Australian) when leading up to an election is how changes in Government could affect us and our business! The outcomes of how these businesses react to the news from the election affects the lives of not just them but also all of their employees. The good news is that both sides of politics seem to understand how important SME businesses are to the Australian ecconomy with their sights set on creating more jobs.

Fox Finance Group's Founding Director, Dan Fox had this to say about how government can effect family businesses; "As the owner of a 100% family owned business for over a decade, I understand the effect that a federal election can have on a growing family business. It's understandable with all that has been played out in the media that right now people might be feeling a bit uncertain about the future, but we are a resiliant bunch and I'm confident that there are some very exciting and fruitful times ahead for the businesses that are motivated to keep challenging themselves to inovate and grow."

The Coalition looks set to introduce two funds to support small to medium Australian businesses:

  • $2 billion Australian Business Securitisation Fund
  • $100 million Austrailan Business Growth Fund

Labor's appeal for small business' is the introduction of a permanent 'Australian' investment Guarantee, which will allow the immediate deduction of new investment assets above $20k. This gives business owners more room to invest, increase their business spending and grow.

Will I still be able to get a loan or is it going to get harder for me?

As a professional Financial Service business, we know that our ability to provide our clients with great customer service will not change with a change in Government. There is a lot of support out there right now for Finance Brokers which has generated a better understanding of what it is the we do. This is evident in the huge upswing of loans that are being originated through the Broker network with lenders. The fact is that no bank wants to be under the spotlight from the regulators, so they have and will continue to impose stricter lending standards on all types of loan applications. This is already making it harder for Aussies to get access to car loans, personal loans and home loans

We see daily examples of clients that have tried to 'go it alone' and arrange their finance just as they would have years ago. Technology has made it easier to apply online, but the negative outcomes that we are seeing from customers jumping online and applying to multiple lenders at once to see who will give them the best deal is devastating. 

Now, more than ever, it is critical that you have someone in your corner with your best interests at heart when applying for a loan. Someone that knows and understands what each lender is thinking today. Our role as professional Finance Brokers has for some time now been about education for us and our clients. We know what is making the lenders tick, we know how to protect your credit score and to ensure that you are being offered the very best loan for your scenario. You can have an obligation free chat with our friendly professional and experienced team anytime!

With the housing market declining - is now the time to invest?

It has been well publisised that housing prices have been dropping across Australia which has already been having an impact on homeowners, renters and investors. In the Coalition's federal budget, there are no changes to negative gearing or the capital gains tax - two key incentives for property buyers.

But this alone doesn't fix the housing market slump. To have a revival in property prices, it's our view that we need to develop more confidence in investors. The Coalition's lack of incentive for Australian's to invest into the property market could further hurt the housing market and drive house prices down even further and keep the housing market stagnent for longer.

Now to Labor's position on housing. Labor's proposed changes are likely to limit negative gearing to new investments only and will halve the capital gains tax discount. This is one of the hottest topics leading up to the election with Citibank Australia claiming that Labor's policy could "accelerate the cyclical weaknesses in housing prices", similar to what we saw when negative gearing was abolished in 1985. So, why the change?

Labor claims that the current arrangement benefits high-income earners and prevents first home buyers from entering the property market. Labor's' plan for housing affordability' will limit the tax breaks for investors, and drive investors away from established urban areas and into new housing developments. Some predict this will increase housing supply, and create more jobs in growing communities, while others predict an oversupply and crash.

Check out our simple guide.

As you can see by our simple guide below, there are pros and cons for each policy from both major political parties. Before heading to the polls on May 18, take extra time to weigh up your options and decide which policies will work best for you. It's a big decision, but rest assured, we are all in the same boat! We have prepared the simple guide below so you take a moment to consider your options further.

 

 


Author: Nathan Drew, Fox Finance Group
About: Managing Director - Fox Finance Group
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