Jeff De Luca

Retired IT exec/author/speaker. Creator of FDD. Free speech. Critiquing politics, media bias. ❤️ Music, Collingwood, Newcastle, Juve. 🫁ROS1 carer.

[Jeff De Luca @jeffdl]

Just starting to play again after a long, long time away. The Wanton Song. #guitarist

[Gray Connolly @GrayConnolly]

Albanese discussing housing without discussing immigration is fundamentally dishonest and why his approval rating circles the drain

[Jeff De Luca @jeffdl]

@hbyte_01 No

[Jeff De Luca @jeffdl]

This is a “rush of blood” for the likes of Grattan and Australia Institute. You apple orchard analogy nails the absurdity. Unrealised gains aren’t “government money” sitting in your account that they’re kindly lending back; they’re not liquid, certain, or even guaranteed. And then there’s asymmetry of risk. If the asset rises, you eventually pay tax on the gain. If it falls (or stays flat), there’s no symmetric rebate or “government pays you interest” for the “loan” period. You bear the full downside; the government only shares upside via future tax.

[David McMahon @David_McMahon75]

Good point here. Why list on the ASX if domestic retail investors are constrained in buying your shares by our new punitive CGT design? Relatively small retail investors make up over half the float in junior resources listings/capital raisings in Australia, per AMEC.

[Rohanc @rohancct]

@TonyShaw22 And NZ banned this practise in 2018 under a Labor Govt.

https://t.co/LxsJOC76Yl

[Jeff De Luca @jeffdl]

@RoadknightThe https://t.co/n3G68FBYOG

[Davey @TheRealDavey2]

Australian's should be aware that Treasury thinks your unrealised gains are interest free loans from the ATO.

Labor is going to tax your unrealised gains.

They've already tried to do so in super.

[Hugo @lowlandsapien]

My cousin is up around Marree, SA currently.
Standard pic of Marree on left, his pic from yesterday on right

[Marko Matvikov @MarkoMatvikov]

And now here’s a chart - data centre builds are masking just how bad business investment otherwise is.

[Chris Brycki @chrisbrycki]

Good point.

I touched on that issue here, though you also make a great point about the incentive to cut losers quickly.

"Once investors realise losses cannot properly offset gains in real terms, higher-risk investing becomes far less attractive. Money will increasingly flow toward broad diversified ETFs and large established companies, while money exits small cap shares, mining exploration, biotechnology and other sectors dependent on high-risk investment.

Australia’s public markets have historically played a huge role funding mining exploration, biotechnology and emerging business growth. These sectors depend on investors accepting that most opportunities will fail while a handful succeed spectacularly.

Many of Australia’s greatest listed success stories looked speculative and risky in their early years. Companies such as Fortescue, Afterpay, Pro Medicus and many others relied on public market investors willing to tolerate volatility and the possibility of failure in pursuit of extraordinary long-term successes. That’s exactly the kind of long-term risk-taking these tax changes undermine.

These reforms risk reversing decades of growth in retail investing participation as more Australians conclude the rewards no longer justify the risk."

https://t.co/vYA3TcmpYf

[Andy Billing @AB_Beachside]

@chrisbrycki Good piece Chris. There's a 2nd order risk effect: Survivor bias. The loss treatment assymmetry will force investors to exit -ve returns quickly but run +ve returns. This will concentrate risk in +ve momentum assets & starve small, volatile or non-ETF members of capital.

[Chris Brycki @chrisbrycki]

A couple of weeks ago I wrote about a major flaw in the government's proposed capital gains tax reforms. 

Using a four share portfolio, I showed how replacing the current 50% CGT discount with inflation indexation could increase the amount of tax paid by investors by ~61%. The example was deliberately simple because it helped illustrate the mechanics of the problem... but some readers reasonably questioned whether a portfolio containing one extreme winner, two mediocre performers and one complete failure was representative of how Australians actually invest in shares.

So I decided to test the CGT changes using a portfolio based on actual investor behaviour rather than relying on a hypothetical portfolio. I analysed the 20 most popular ASX shares and ETFs purchased six years ago in April 2020.

Despite analysing a completely different portfolio based on actual investor behaviour, I arrived at a similar conclusion. The proposed indexation model increased taxable gains by ~82%.

The government's stated aim is to improve fairness and encourage investment into housing. But if the practical effect is to penalise diversified investors and significantly increase tax on ordinary Australians who invest patiently over decades, the reforms risk creating distortions far greater than those they seek to address.

Policymakers should carefully consider whether a tax system that increases tax for a typical long term investor by more than 80% is really achieving its intended objective.

A related question is why any rational investor would choose to invest in direct shares at all under this regime? If successful portfolios are taxed much more heavily and unsuccessful ones receive less recognition for their losses, the after tax risk adjusted return from direct share investing becomes highly unattractive.

Full analysis is here: https://t.co/hc5vRfz4un

[Noel Whittaker @NoelWhittaker]

🚨 Tax specialists have uncovered a sleeper clause in the federal budget bill designed to quietly inflate investor tax bills — and it's a rort. The bill which passed the lower house yesterday, introduces a mandatory "loss-ordering" mechanism for the first time in Australian tax history. Instead of cherry-picking how losses offset gains, investors will now be forced to burn through their oldest gains first — stripping away the 50% CGT discount and leaving newer gains fully exposed to the punishing new cost-base indexation regime from July 1, 2027.
Say you bought shares in 2018 and again in 2024. You sell both at a gain, but you also have losses to offset. Previously, you'd apply those losses to your 2018 gains first — which already qualify for the 50% CGT discount, meaning less of them are taxable anyway. Under the new rules, you're forced to do exactly that — exhausting the discounted gains first and leaving your 2024 gains fully exposed to the new, harsher indexation rules.
You end up paying more. This isn't an oversight. It's a deliberate revenue grab buried in fine print

[Rock Chartrand @RockChartrand]

Because the government isn't trying to "help" bring TV prices down.

Nobody is subsidizing TV purchases, guaranteeing TV loans, restricting TV construction, protecting inefficient producers, or burying manufacturers under layers of bureaucracy.

Companies are largely free to compete, innovate, automate, and drive costs down while improving quality.

The industries with the worst affordability crises tend to be the ones where government intervention is the heaviest. Not a coincidence.

[Pulp Librarian @PulpLibrarian]

Capricorn One is still one of the most entertaining conspiracy thrillers of the 1970s, with a great set up and a really strong hook: the faking of a crewed mission to Mars.

It's sometimes a bit overlooked, maybe because it's a slow build up, but the payoff is worth it with some brilliant action sequences: Telly Savalas and Elliott Gould in a crop sprayer dodging helicopters, Gould driving at breakneck speed without breaks through traffic. It tapped into a lot of existing conspiracy theories and a general post-Watergate mood of distrust in institutions, and writer and director Peter Hyams delivers a strong thriller as a result. The two novelisations, by Ron Goulart and Ken Follett (writing as Bernard L. Ross) are really good reads.

Hyams later sci-fi work also doesn't get all the credit it deserves. Outland (1981) is a solid 'space Western' that feels claustrophobic and tense throughout. 2010: The Year We Make Contact is also really good ("Piece of pie!"). Watching all three movies together makes for a fun (but long) evening!

Capricorn One had its US release delayed until mid-1978 to avoid clashing with Superman. Audiences really liked it and the Jerry Goldsmith score, realistic NASA props and some great set pieces make it really work quite well.

[Jeff De Luca @jeffdl]

@BigMal84 @7AFL He went through the process at Melbourne

[Jeff De Luca @jeffdl]

@Bowiesinspace4 John Greening

[Ross Cameron @RossCameron4]

Another day, another Jim Chalmers blunder revealed...

An exemption for pensioners for the new minimum 30% CGT rate will prompt seniors to seek just $1 of age pension, because that may save them tens of thousands in tax. “The policy creates a sharp divide with self-funded retirees facing a minimum 30% tax on capital gains regardless of their marginal rate, while age pension recipients are exempted from the minimum tax”

https://t.co/GWjcdp4RX8

[Christian C @CunningInsights]

@RossCameron4 @freedomrules21 2016