Australian Budget Screwed Young Aussies | Channel 7 LIVE (The Morning Show)

Thank you, guys.Well, Jim Chalmers has handed down what he's calling the most ambitious federal budget in decades, with housing, tax and wealth reform all dominating headlines today.The biggest bombshell?Well, the Treasurer has broken a key election promise not to tamper with negative gearing or capital gains tax.

Landlords purchasing existing homes will no longer be able to use negative gearing to reduce their income tax amount unless they invest in a new build.capital gains discount has also been gutted.The government says it's about improving affordability and easing pressure on younger Australians trying to enter the market.But critics warn it could hit investors, housing supply and confidence.So, who are the winners?Who are the losers?

And what does it mean for your money?

To tell us more we welcome back personal finance expert, buyers agent and author Ravi Sharma.Hi Ravi, nice to see you.What's your overall reaction to the budget?Big vision for Australia or political gamble and loss of trust and what are your YouTube subscribers saying?

Massive gamble and wow, what a loss in trust that we have now in the government.We obviously already saw people come out, promise the world and they've gone back on it and not in a small way either.The very budget that's supposed to help young people I think is going to scroll them over.

How do you think that will happen?

One of the biggest things was negative gearing.Albo came out and said no we're not making changes to negative gearing.Negative gearing should be viewed as a subsidy for renters because effectively you're taking a loss as a landlord to say I'm going to provide housing as an investment property and the government's going to help me out with some tax offsets.Now if you remove that What ends up happening is you have rents push higher or the investors leave the market.And if investors leave the market, there's going to be a small portion of people that can now buy their own home.Great.

But for the rest of the people that can't buy a home, now the investor pool has just shrunk.And so now you've got less investment properties, which means less rental properties.and the last time they tried this in 1985 rents went up by a lot.

A lot and also the the landlords are looking to recoup their losses so they've got no option but to put the rents up right?

That's it.

And what about the like young people who sometimes buy maybe a lesser apartment just as a way of getting a foothold still in with mum and dad but try and get their foot in the market so therefore there are no incentives for them.

Yeah, correct.I mean, why would they go ahead and do something where they're going to lose all this money and still not get further ahead?Now, obviously, with the negative gearing changes, yes, you get an upfront benefit, which is how it was under the new system.It's just you're carrying forward the loss.So it's not all doom and gloom for young investors to go out there and build a portfolio.But it became so much harder overnight.

Wow.

The government says more money will now flow towards new builds.The question is, will this help bring prices down?Can you see that at all?It's kind of confusing.

There's like left hand, right hand going.Well if you think about new builds, usually you'll have approvals and then completion.So 12 to 18 months after it's approved, it gets completed.Now the issue is that if you're now going and saying that all of these incentives are going to be for new builds, it'd be similar to buying a new car.The moment you buy that new car, it depreciates because now all these people are going to go, I get all these benefits by buying a new property.But guess what?

If I now sell that new property to you, it's an established property means you don't get the negative gearing benefits.So suddenly you're losing value.You're paying so much more for an inferior location and some would say an inferior product as well.

Yeah.And very hard in the big cities to build something new unless you are, you know, like maybe two hours behind.commute from the city centre because there's no land.

Yeah, correct.But none of this demographic is talking about buying land and building a new house.That's not the discussion, right?

No, exactly.And if you go ahead and do, say, an off -the -plan apartment or house and land package, it's usually in areas, as you mentioned, that are very far from anywhere that people actually want to live.90 bucks in tolls to get back into town for you.

At least.Yeah, like maybe $200 in an Uber fare too if you want to.OK, defence spending has surged again.Canberra signalling Australia is entering a more dangerous era, maybe or not?

Of course.I mean, geopolitical issues across the board.This one's probably the only one that makes sense, to be honest.But I don't think any young Australians sat there looking at the budget going, oh, my God, great, I'm getting screwed by the government when it comes to rents.But, hey, you know what?We're investing in defence.

Yeah.Hey, fuel security has become a major focus in this budget, and so it should.How vulnerable is Australia right now in this department?

Massive.Because, you know, there's all these talks about how we had all these fuel reserves and we had all access to these things.We're a resource -rich country.How are we in this position?That's the part that people are sort of frustrated with.

160 ,000 people removed from the NDIS National Disability Insurance Scheme.Are vulnerable Australians feeling the impact today?

Yeah, definitely.I think whenever there's a new program or policy that comes in, some people do the right thing and a lot of people don't do the right thing.With the NDIS system, there's a lot of dodginess and scams going on.Unfortunately, with a change like this, it could affect some people that actually need the help, and that's unfortunate.

Yeah, innocent people get caught up in it.But there's so much fraud going on in the NDA system.

I think everybody wants better fuel reserves.Everybody wants Australia to be better defended.But how is this affecting everyday Australians?And what are we taking away from it today?

Well, massive frustrations across the board because you've got the government coming out and saying, this is about housing supply.We're going to increase housing supply.We haven't been able to do that so far and build enough homes.Now you're saying, well, under this tax system, we're probably going to go and build fewer homes as well, which means it's going to put further pressure.And then It makes no sense.Why would you go after changing capital gains tax rules, not only on property, but also on shares?

Say, business owners and entrepreneurs suddenly going, see ya, see ya.

Yeah.Ultimately, the biggest winners and the biggest losers.

Ultimately, the biggest winners.It's really hard to find anyone at the moment.

$250 saving on your tax.from next year.Which sounds great.Not a week, not a month, not every six months, once a year.

And honestly, I could see rents go up by about 200 bucks a week.And so that's going to slap you across the face when it comes to that.

Ravi, we are right out of time.You've got 100 ,000 plus subscribers on YouTube.You went live with this last night.In general terms and quickly, response?

Massive frustrations.No one came in positive.And mind you, my channel is not a hate negative Nancy channel.Anyway, a lot of people frustrated, especially young Australians.Australians, especially people building businesses, they've gone straight to, I need to find another country that's going to be the safe haven.

Interesting.Ravi, lovely to see you.Thank you.

Thanks for your take on that, Ravi.