Robert Gravina

@ca91450 @chrisbrycki The @AustSharesAssoc is trying.

@chrisbrycki I think we need to educate people and so pleased to see these posts. I am surprised the major aussie asx firms are not lobbying to stop this nightmare, maybe they are, but surely they cant do nothing.

This Betashares article by does a very good job explaining why the proposed return to CGT indexation could quietly kill off direct share investing in Australia. Their “triangle of sadness” analogy shows the core problem... under the proposed rules, capital gains are measured against an indexed cost base, but capital losses are still measured against the original nominal purchase price. That means if some shares underperform inflation, investors can suffer a real economic loss without receiving a corresponding tax loss. Meanwhile the winners remain fully taxable. The result is that diversified direct share portfolios can end up paying tax on gains that don’t actually exist in real terms. Ironically, ETFs may reduce much of this distortion because the portfolio is treated as a single pooled CGT asset, although the same issue can still emerge if an ETF itself underperforms inflation over long periods. The longer you invest, and the more diversified your share portfolio becomes, the worse this asymmetry potentially gets for direct shareholders. That’s very bad news for all direct shareholders and particularly the smaller end of the Australian share market, which doesn’t benefit from being inside ETFs or from large passive index flows. betashares.com.au/insights/capit…

My co-founder & co-PM Arms went on the @EquityMates podcast. Good fun chat on how we use AI. Worth a listen. :) youtube.com/watch?v=bQnZb_…

@thomasrice_au @EquityMates It was an excellent episode! @ArmsRosenberg thanks for great level of detail about how you and @thomasrice_au use co-operating AI agents for different parts of the idea generation and research process. Also, my JPX banks and trading companies look very boring next to CoverCorp!

@DirtMccGirt @ArrowInvestor Super is for retirement, not a house deposit. A 5% LVR puts you in extreme mortgage stress if rates rise. If someone is able, they should invest for their future, their families etc. outside super too. These changes discourage that.

@robertgravina @ArrowInvestor They will buy ETFs or what asset class they prefer in their super and receive an income tax deducution for doing so, withdraw it when needed for buying a home. $50k each, $100k for a couple combined with 5% deposit rules they will be ok, especially with less investor competition

This is such a Dogs breakfast & it doesn't work. The irony is if they had just said we are reducing CGT discount from 50% to 25% those it impacted would have probably said that sucks & moved on. Instead they have have exposed & highlighted their Greed & incompotence.

@DirtMccGirt @ArrowInvestor It does harm young people saving for a home. A savings account alone will take you years longer to get to a house deposit than growth stocks or ETFs will. Many young people do this. 30% min CGT hurts low-income people the most. Most people have a job and assets. Not either or.

@robertgravina @ArrowInvestor It harms those income shifting and encourages people to work instead of invest. It doesn't harm young people saving for a home, so it should be workable for most.

@cjoye Totally agree. I just wish that the point that it impacts everyday investors in growth stocks almost as much (which is skewed towards younger investors) got a bit more attention. It seems to get drowned out by small business.

Charlton looking smart with these remarks today, which are the first sensible comments I have seen thus far: "Assistant Science Minister Andrew Charlton has conceded the new capital gains tax regime “doesn’t interact well” with small businesses that have a low capital base, validating the sector’s concerns about the reform. Mr Charlton, the Labor cabinet secretary, told ABC Radio National on Friday morning the decision to scrap the 50 per cent CGT discount for an inflation indexed model would not work for startups and small businesses that have “nothing to inflate off”. The decision to impose the inflation model and minimum 30 per cent tax rate across all asset classes has sparked fierce backlash from the business sector. Asked if the outcry was “unwarranted,” Mr Charlton replied: “No, I think there are real concerns”. “Start-ups and some small businesses are a real concern because what I just explained is that we’ve got this new type of capital gains discount which is based on inflation, and the point that many start-up founders, the point that many small businesses have been making is valid. “It’s a valid point because that new regime doesn’t interact well if you have a really low capital base because you’ve got nothing to inflate off. So, there are real concerns out there. “The government recognised those concerns, the Treasurer recognised them. Before the budget, there was a statement in the budget recognising them and we are consulting on them. So, we definitely hear those concerns.”" @ALeighMP @Charlton_AB theaustralian.com.au/nation/politic…

The reason this is a big problem is this. The current system (much like other countries) - buy say Coles and NAB and sell if one makes $100 and the other loses $100, you have not made a gain and pay no tax. Under the new system, you have both made no gain AND have to pay tax!

@purplepingers The CGT changes also make it much harder for renters to grow their savings into enough for a deposit. Many renters do this through shares and ETFs. And for startups it makes the risk if the aim is to sell equally almost not worth it. So they have a right to complain.

Hue and cry over maybe having to pay a little tax as a treat

In case it's not clear from all the CGT-related tweets I've been replying to or re-posting, I am in favour of fair taxation and support programmes. But the caveat is that the CGT changes (if any) should also encourage investment, economic growth and wealth building for all.

@AaronDodd @SebasTheSaint Taxpayers aren't subsidising anything. Every developed nation in the world, even those in the EU, do more with less tax. Spending is the problem. This change would make Australia the highest global CGT with high income tax but significantly worse public services than the Nordics.

@robertgravina @SebasTheSaint Sure, but the greater the risk the greater the return (or loss). That still doesn't justify taxpayers subsidising risk takers. If we take that to its logical end, gambling losses should be tax deductible.

FYI... capital gains are not "hard earned returns". You literally make an investment, then simply sit back and watch that investment (hopefully) appreciate over time. #auspol

@AaronDodd @SebasTheSaint That's very easy to answer. Interest is virtually guaranteed so there is no risk. Hence, it's income. Equities can (and sometimes do) go to zero. The CGT discount rewards the risk taking investment into a business. The rest of the world understands this, hence most < 25%.

@SebasTheSaint If you put that same money in the bank, the interest you earned would be at the same rate that you will ultimately pay for any capital gain. Why should one investment get treated differently to another?

@DavidBassanese I've tried asking Wolfers to be Treasurer but he seems busy so I'm all for Bassanese for Treasurer. The proposed CGT changes for equities makes no sense and hope the budget gets modified to be something like this. Also, big fan of Betashares.

Here’s what the Govt could/should have done 1) no change to CGT 2) ban neg gearing new purchases of existing properties from budget night 3) 5 year window to end neg gearing on already purchased existing properties except one per investor

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@TheRealDavey2 Wolfers for Treasurer! If you don't know him, he's a great Aussie economist that works for the Uni of Michigan and comments on US economics. There must be a thousand great economists in industry or academia in Aus, why do we have a pol sci major?

How is this guy the Treasurer of Australia

@AvidCommentator This is the bit of the budget I think most want to see happen. The whole idea of a residential property portfolio needs to be discouraged, made less profitable. What makes no sense is applying the CGT changes to shares/other investments. We should encourage money to flow there

I just watched a property investor spend about 10 minutes complaining how the changes to negative gearing will stop her from growing her portfolio to her heavily disinterested friend....

@mumbletwits It's the highest in the world. An outlier. I'm not saying it should not be considered but it ahould be very carefully considered, not rushed out like this. It has lasting effects.

@robertgravina When you say "47%" you're assuming everyone is already in the top tax bracket.

I don’t really get the argument that CGT means double taxing because the money invested has already (usually) been taxed. That money invested isn’t taxed by CGT, only the increase from that is.

@mumbletwits I'm thinking of the house deposit case. You save for years and sell to put down a deposit. A typical depoait after tax on top of an average wage puts you well into this bracket

@mumbletwits Inflation adjustment only really makes any real difference in assets that rise much closer to the rate of inflation. Which are assets like bonds, dividend paying stocks and real estate. And guess who holds those? Mostly those closer to retirement. So the whole idea make no sense.

@mumbletwits It's frustrating because financial advisors pretty much all agree that when you are young saving for a deposit (lets say ten years out) and your retirement and are say 20, you should be building up growth assets. High CGT on shares hurts the young most.