Australian economy

[Smitte]

Hi,

I am interested in knowing what the Aussie economy is like at the moment. We hear of retrenchments, etc etc and the other question is, how far is your money going, because in ZAR all the prices are spiking upwards!!

I will appreciate it if we can get a honest view on this.

Thanks

Smitte

[Jordy]

Australia is the most expensive place in the world. We pay about 60% more for the same products in dollars than America pays. Every thing is expensive from food to clothes to houses. But!!!!!! We earn much more, and so have far more luxuries and savings than we ever had in RSA. Also my wife stays at home so we on one income and life is good. Honestly I cannot even begin to compare what we have in Aus versus what we had in RSA. It isn't even day and night difference, its huge. PS: My job is absolutely identical to the one I had in RSA. In RSA we had two incomes and were going backwards. Here we flourishing

The inflation rate here has been a constant 3-3.75% for the six years we have been in Aus. It hasnt been over 4%. But the funny thing is prices dont go seem to go up. My barber has been charging the same price for the past 6 years. Milk is still $2 / 2L as it has been for years.

Sorry didnt answer about retrenchments but my thoughts are that any company/job that has an international market (like cars, mines etc) are struggling. They are just not competitive and will never be with the huge labour cost. But I think jobs that dont rely on an international market but local are doing well.

[chzaau]

For the past decade and a bit Australia has been on a major investment boom to build mines and supporting infrastructure. That is now nearing completion and it will change over to operating those assets. That requires less people. The result is that yes there will be retrenchments and people should not be surprised. A number of people will depart and leave Australia to seek fortunes a new. The country however will continue and its economy wil carry on. What you need to consider is what line of work you in, if it invovles construction or mining I would suggest investigate further and ask yourself what if there is no job for me what else may I be able to do and is Australia able to support that.

To be honest I think if you in construction and like it there is most probably more money to make in Africa over the next decade then anywhere else in my view.

[Nev]

We went camping this holiday and camped next to an Auz family, really great bunch and we plan on going camping with them again, during conversation it came out that as a general construction tradie he earns a fair bit less than $40k per year, he has a stay at home wife and 3 kids, not only are they making it work but they were on the great ocean road camping for 2 weeks (On a not cheap site), they had all the camping gear, tarps, kids toys (And decent toys at that)

Quite simply it is possible to make it work with very little by way of salary here, the way tax and family help is structured is such that you can live a good life with very little (And by good i dont mean flashy, i mean camping with the kids kind of good)

Most people moving here will end up in a job that pays a fair bit more than that so will be considered well off by Auz standards

[AndreaL]

Nev has again hit the nail on the head

Things are expensive here, but also the minimum wage is good, so even if you are perhaps an unskilled worker, you are earning a living wage (not great) that gets "topped up" by your taxes.

Because in South Africa there is no cost of living or family support assistance, getting as much money as you can is vital, whereas here you can rather take a job you like, and still live decently.

A thing that South Africans forget is that Australians have lived here all their life, many of those people earning 50k have a house that is paid off or close too, cars are paid etc and they don't have the years of set up costs that new migrants have, so I think their money spreads further.

Nev, the tradie you met, is that after tax or before, obviously he likes what he does because you can earn more at the checkouts at Coles than that, but with 3 kids he will most likely get several hundred dollars a fortnight to top his wage up, it is very low though and might be indicative of the region he lives in.

Some Australians want to stay in the place they have always lived, the ones who are prepared to move can make great money.................but and I do respect this, the majority of Australians I have met, rate lifestyle and family, above other considerations.

I don't agree with Chzaau re mining jobs. I live in a huge mining community, we have around 50 mines within a 300km radius and there are still new mines going ahead, others are expanding, but because the price of coal is lower they are cutting costs and upping production...............again it much depends on where you live.

The heady days of everyone and their granny having some sort of mining associated job are over, but mining is still going on, oil and gas are ramping up....................................I am much more concerned with the mining job losses in places such as Rustenburg etc.

My hubby is an electrician, we started off on a low wage, much like Nev's camping friend, but moved to other jobs and now have a very comfortable life on one salary...............a life we would never have had in RSA.

In Australia food shopping is different, prices are marked down as the food gets closer to the best by date, so you can pick up bargains daily, Australians tend to reuse items so you can pick up great buys at garage sales, mowing house sales etc...............I don't know how, but your money does seem to go further, you don't pay much for state schools, have no security costs and don't have to have private medical health insurance ( but I think you should have at least a hospital plan) so you seem to have more disposeable income.

Rentals can be expensive as are house prices, but the mortgage rate is low at the moment.

This isn't a scientific or researched idea, but if you are willing to have a go, think outside the box and perhaps even change careers, there are opportunities. Those that come and demand to be in the smae position it took them 20 years to get to in South Africa are sometimes in for a lesson or too.

Just as an aside, I spoke to an engineering manager the other day and with maintanance for his ex wife and being taxed in the top bracket, he actually brings home less than my electrician hubby.................so throw out all preconceived South African hierarchy perceptions..................things really do work differently here.

Yes there have been job losses and yes, I expect the unemployment rate to go up and yes I expect more sober times with a consevative type government, but there are still more opportunities here I believe.

[Enrica]

I think , I would rather take my chances in Australia with unemployment at say 4.5 % than in RSA with unemployment at 40-50% thanks

[Bams]

Thank you for this post and the honest responses. You have just once again confirmed that we are doing the right thing and that we don't have to fight daily just to survive...

[GideonVD]

If you are in the IT industry you might have a problem finding work as there is now a flood of developers on the market with the big drive to outsource development to India and such by the big companies... especially telco's and banks. I'm finding it difficult to move from my current employment...

[chzaau]

What about non IT development roles any view on those ?

[Nev]

I love this recruiter comment i found on facebook:

It sums up things quite nicely,

"We are not a coffee shop and do not have the time to individually meet with the many many applicants that just want to drop off resumes. If you are applying for a job we have advertised we can answer questions in that regard. If you are in a skills shortage specialist field..we bring the coffee to you"

Quite simply it depends on what you do, if your role is not very short of skilled resources you will unfortunately find it hard to get a job

Hey Gideon, now that you are in Melbourne we should hook up, will PM you my cell number & personal email add

And as a separate issue relating to the economy, this gives a good idea on how Auz is in comparison to other countries

http://www.abc.net.au/unleashed/3726692.html

Edited January 10, 2014 by Nev

[4viljoens]

Thanks guys! Allot of good info. Does anyone know what the job market is like for Accountants and Sales Managers (Industrial and Steel industry)?

[Nev]

Your best bet is to go to www.seek.com.au then punch in "Accountant" for example, select the city and see how many adverts come back

So Accountant in Melbourne brings back 1255 Jobs

Accountant in Brisbane 889

Perth 731

Adelade 180

You get the idea

It doesn't mean you will beat all the locals to the jobs but at least you get an idea of how many positions are being offered and where.

[Smitte]

Thanks for all the info, we appreciate it, it really helps.

[HarryVR]

Thanks guys! Allot of good info. Does anyone know what the job market is like for Accountants and Sales Managers (Industrial and Steel industry)?

If you are referring to Chartered Accountants, then the news is bad. It was just in the media in the past 2 days that CA's will be taken off the SOL as from 01.07.2014 as there is an oversupply here in Australia. With regards to Other Accountants, people who have diplomas from Technikons and Other Colleges in South Africa, you will find it very hard to compete with the CA's, as they are almost the minimum that most companies employ these days, once again due to the over supply. Sorry I can't comment regarding Sales Managers in the industries you mentioned, but once again, if it's on the SOL with appropriate qualifications, then you can apply for PR. Hope it helps.

[Donovan83]

Wow that's interesting news. The term "CA" was never on the SOL, but you could get assessed as an "Accountant (general)", which included all accountants... there were also other similar ones like auditor and management/taxation accountant. I think it's a wise move to remove accountant from the list as I think there's an oversupply. Very sad for people planning to come over using that as their nominated occupation, though!

Not sure how up to date this is - http://www.awpa.gov.au/our-work/labour-market-information/skilled-occupation-list/pages/flagged-occupations.aspx - but it certainly looks like most types have been flagged for removal from 1 July.

I've been looking at Seek and have found the same thing, all the jobs need CA/CPA qualifications as a minimum and many state that they want people to have had big 4 experience.

If you're coming over as a CA though, it's not all doom and gloom. It depends where you go and what you want to do. The Perth market seems to have cooled a bit (and also, almost all the jobs are resources/mining), and I haven't heard good things in general about Brisbane's economy but it's especially oversupplied with accountants, but I've applied for two jobs in Melbourne just to test the waters and had positive responses from both. The one is even happy to employ me on a contract basis for a few months to see if I am happy with the work before committing to a relocation, which to me would show that they couldn't find someone with my experience there.

[4viljoens]

Thanks for the info! I will be writing the SAIPA PE in May 2014, and will be CPA qualified before we go over to Australia... Our application should be in before July 2014 - before any changes. I am really not too concerned, as I am not bothered if I have to start as a clerk and work my way up again. I will even do temp jobs to gain enough Australian experience. To be honest, my aim is to have more time with my children and my husband will work full time - if we can afford it.... But we know we can leave it in God's hands.

I will discuss this with my agent anyway

[Bob]

There is a "personal" wage, or salary, and also a "social" wage.

The social wage in Australia, especially for those with kids, is really good.

Everyone (including those on a Permanent Residence visa) in Australia has free public medicine and hospital treatment, among a bunch of other grants and hand-outs that the Australian government offers to help its people out.

This week my daughter-in-law gave birth to my grandson, in the Women's & Children's Hospital in North Adelaide, here in South Australia. She comes home tomorrow with no bill to pay, first class care given (as she has Type 1 Diabetes) and first world treatment and facilities offered.

Beth, my daughter-in-law also has the Baby Bonus now to claim, a tax-free Australian government grant of A$5 000, being paid in 13 fortnightly instalments over the next 6 months to help out with the care of have a kiddie. Unfortunately, it's being phased out on 1st March, so she got in with a month to spare.

My son, who has his own mechanical workshop in the Adelaide hills, immediately to east of the city of Adelaide, can't keep up with demand. He and his apprentice are busy for the five days a week they are at the workshop. There is the nominal income he takes home, but there are so many other ways of making a quid on the side.

A mate blew his Holden up, offered it to my son Bob for the sum of A$300. Bob stuck a new motor in it, did up all the problems such as braking, suspension, radiator and so on. He sold the car this week in good condition for A$3 500, a profit of A$3 200 after expenses of around A$1 500.

The South Africans I've come to know over the past 10 years are resourceful and quite capable in their own field, of making the same sort of quick income on the side that doesn't reflect in the weekly income figures. It's all money in the pocket, after expenses. The icing on the cake.

I have every confidence in the future for my son, his wife Beth and their little newborn boy.

They plan to have around three of four kids. Australia's social wage to an Australian family like that would be in the region of A$20 000 to A$30 000 a year with the lower taxes and handouts of all kinds that are available at the moment to young families. The lower the family income, the more the social wage kicks in to support the average Aussie family and keep them going.

This how it's possible to earn a nominal wage of A$35 000 to A$40 000 a year, have four kids and still afford a great lifestyle.

I hear of Americans battling to pay their medical and hospital insurance premiums, but Aussies take all that for granted and don't worry about taking home a low wage.

The other side of the coin is also there. If you are a high income earner, then you'll find Australian taxes are fairly hefty.

My youngest daughter in Brisbane is a practising dentist, fresh out of university, working in two of the public hospitals. She works for Queensland Health which delivers all the health needs for that state.

She is single, no family as yet, has an income of A$95 500 a year and pays out income tax and 5% (A$4 800) into her superannuation, leaving only A$58 000 in the bank a year. That is a hefty A$37 500 in outgoings!

She qualifies for very little in government handouts, other than what all Australians get (such as Medicare).

If she chooses in a year or two to buy a house, then she will qualify for the First Home Owner's Grant of A$7 000 tax free.

So, in summary, the Australian economy is robust enough to support a decent income for just about all Australians.

[Kanniewagnie]

Would she pay the same income tax if she had dependents? Maybe a stupid question, but I wonder how the tax are calculated, did not read up about it yet - someone has a link for this info? Then I can work out some sort of a budget so long.

Is there a scale were one can see on X amount of dollars a month / year, you may or may not qualify for this or that grant on this or that condition, for instance being a single mom, or earning below X and having a child or 6... You get my drift? Is the grant for a primary school child on a lower income bracket the same as for a high school kid, etc.

[Nev]

Hi

You can see quite a good tax breakdown here: (ATO is the Auz tax office and this is from their website)

http://www.ato.gov.au/Individuals/Income-and-deductions/Income-tests--an-overview/

I'm not an expert but here is my understanding:

The simple answer is that there is no tax benefit to having a dependent partner, however there is negatives if they are earning a salary and that makes your joint income greater than a set amount (you start loosing other possible tax rebates)

The same goes for kids, there are benefits but only if your income is low enough,

If you are earning around the 100k mark no matter kids or wife you wont be getting much back for a dependent partner or kids, that is what they were saying above, if you have a low income there is a ton of help from the government, but if you earn a great salary they expect you to pay your own way

[AndreaL]

Kanniewagnie

The cut-off point for any form of assistance is $150 000

Family Tax Benefit Part B is for families (single parent or couple) in which the primary earner has an adjusted taxable income of $150,000 or less per year

The lowest wage earners will qualify for Family Tax benefit part A and those higher perhaps part B, but it all goes on your earnings and for every dollar received above a base point the amount decreases http://www.humanservices.gov.au/customer/services/centrelink/family-tax-benefit-part-a-part-b

[Bronwyn&Co]

There is a "personal" wage, or salary, and also a "social" wage.

The social wage in Australia, especially for those with kids, is really good.

Everyone (including those on a Permanent Residence visa) in Australia has free public medicine and hospital treatment, among a bunch of other grants and hand-outs that the Australian government offers to help its people out.

This week my daughter-in-law gave birth to my grandson, in the Women's & Children's Hospital in North Adelaide, here in South Australia. She comes home tomorrow with no bill to pay, first class care given (as she has Type 1 Diabetes) and first world treatment and facilities offered.

Beth, my daughter-in-law also has the Baby Bonus now to claim, a tax-free Australian government grant of A$5 000, being paid in 13 fortnightly instalments over the next 6 months to help out with the care of have a kiddie. Unfortunately, it's being phased out on 1st March, so she got in with a month to spare.

My son, who has his own mechanical workshop in the Adelaide hills, immediately to east of the city of Adelaide, can't keep up with demand. He and his apprentice are busy for the five days a week they are at the workshop. There is the nominal income he takes home, but there are so many other ways of making a quid on the side.

A mate blew his Holden up, offered it to my son Bob for the sum of A$300. Bob stuck a new motor in it, did up all the problems such as braking, suspension, radiator and so on. He sold the car this week in good condition for A$3 500, a profit of A$3 200 after expenses of around A$1 500.

The South Africans I've come to know over the past 10 years are resourceful and quite capable in their own field, of making the same sort of quick income on the side that doesn't reflect in the weekly income figures. It's all money in the pocket, after expenses. The icing on the cake.

I have every confidence in the future for my son, his wife Beth and their little newborn boy.

They plan to have around three of four kids. Australia's social wage to an Australian family like that would be in the region of A$20 000 to A$30 000 a year with the lower taxes and handouts of all kinds that are available at the moment to young families. The lower the family income, the more the social wage kicks in to support the average Aussie family and keep them going.

This how it's possible to earn a nominal wage of A$35 000 to A$40 000 a year, have four kids and still afford a great lifestyle.

I hear of Americans battling to pay their medical and hospital insurance premiums, but Aussies take all that for granted and don't worry about taking home a low wage.

The other side of the coin is also there. If you are a high income earner, then you'll find Australian taxes are fairly hefty.

My youngest daughter in Brisbane is a practising dentist, fresh out of university, working in two of the public hospitals. She works for Queensland Health which delivers all the health needs for that state.

She is single, no family as yet, has an income of A$95 500 a year and pays out income tax and 5% (A$4 800) into her superannuation, leaving only A$58 000 in the bank a year. That is a hefty A$37 500 in outgoings!

She qualifies for very little in government handouts, other than what all Australians get (such as Medicare).

If she chooses in a year or two to buy a house, then she will qualify for the First Home Owner's Grant of A$7 000 tax free.

So, in summary, the Australian economy is robust enough to support a decent income for just about all Australians.

Congratulations on your new grandson Bob, that is excellent news.

I have to just point out a few things though. First of all the First Home Owner's grant is no longer available. Well, not in Brisbane anyway.

Secondly, I don't get free medicine with PR or as a citizen. Also, if you do not take out private hospital cover within 12 months of getting PR, you are severely penalised with higher rates for the next 10 years. If you do not take out private hospital cover you will have to pay close to that amount in penalty taxes. The area is quite complicated and specialist advice is recommended. If you have hospital cover you will possibly only have to pay your excess of $250 or $500 per hospitalization.

I also do not recommend making any cash 'on the side' and not declaring it. The ATO is very serious about catching people who do that and you will be caught and fined. Even kids of 14 who are working at Macdonalds have to get a tax file number and pay Super and tax. Do not take chances with the ATO.

If you earn $35k a year with 4 kids you are going to be in deep, deep trouble.

We got a new government a few months ago and slowly but surely they are closing the freebie loopholes.

Please assume you will have to earn a livable salary of around $70 or $80k pa if you have children, or else research that Centrelink website until you understand it very well.

[AndreaL]

Bronwyn

As far as I'm aware the first homeowners grants is available for new builds anyway in QLD, it has been renamed the great start grant.

he changes:

• $15,000 for first home buyers of new and off-the-plan properties applies from September 12
• $7000 grant for first home buyers of existing properties to be scrapped from October 12
• New $15,000 grant applies to newly constructed homes, or properties bought off the plan

To be eligible, first home buyers must:

• Make the property the principal place of residence within one year of taking ownership and live there for at least six months
• Not sell the property within a year of moving in
• Buy or build at a property worth less than $750,000.

Read more: http://www.brisbanetimes.com.au/queensland/newman-to-scrap-7000-first-home-owner-grant-20120910-25mvu.html#ixzz2s9z4tIT3

[Bronwyn&Co]

Hi Andrea, thanks, you're right it is still in place for newbuilds. To be honest I think it's just built into the prices of the new houses in our area. Also the nearest newbuilds to the city are at least 15-20kms away.

You are 100% correct though ;-)

I see it differs quite a lot between states. They couldn't make it any more complicated if they tried, but here goes:-

http://m.propertyobserver.com.au/first-home-buyers/first-home-owner-grants-a-state-by-state-guide-fhog-fhb

Edited February 2, 2014 by Bronwyn&Co

[AndreaL]

I also think that too......they get their pound of flesh one way or the other.......lol. In theory it is a good idea to stimulate the housing construction industry with new houses, but we all pay for it somewhere along the line.

[WallyBok]

I think , I would rather take my chances in Australia with unemployment at say 4.5 % than in RSA with unemployment at 40-50% thanks

The unemployment figure reached 6% in Australia today and with the collapse of the motor manufacturing industry, where a reported 50,000 jobs could be in jeopardy, it pays to come well prepared and not with rose tinted glasses that this is the land of milk and honey.

While many of the comments are justified Australia debt is growing daily and is at record high levels (will reportedly be in excess of AU$400 billion), so keep all these facts in perspective.

I wish you all the best.