August 1, 2024 • 29 mins
Is it too expensive to have a child in 2024? Fertility rates have plummeted in Australia's capital cities i.e. where most people live. The leading theory is that things are simply too expensive to consider a child with rental payments and mortgage repayments reaching record highs and the significant cost of childcare services.
Elsewhere, the Crowdstrike outage bricked over 8.5 million computers worldwide affecting services like banks. Millions of people couldn't access their own money thanks to many banks' insistence on a digital only service. This outage has many questioning whether a digital only economy is the right decision.
Western Australian renters will be celebrating after new laws were passed allowing them more freedom to make small changes to their homes and keep pets all with the approval of their landlords.
All this and more on the latest Finance Show with Joe.
Follow us for more property news and mortgage advice!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Joe (00:00):
Is the world finally ending , or was it just a Microsoft
glitch?
Have rental prices affectedfertility, and is WA's rental
reform going to be followed bythe rest of the country?
Catch today's episode of theFinance Show with Joe.
Michael (00:15):
Welcome to the Finance Show with Joe.
He's Joe, I'm Jess, I'm Shcmo.
We're going to be talking aboutCrowdStrike, fertility rates
and rental reform, but first,obviously, crowdstrike.
Joe (00:25):
So I walked into Coles and I thought like it was Terminator
2.
Michael (00:30):
Judgment day.
Joe (00:31):
I uploaded a photo on my Instagram and I literally I
couldn't believe it.
I walked into Coles and I saw aposter drawn in crayon, like
they didn't even have, like nicecrayon.
It was crayon that said cashonly,
Michael (00:45):
and you weren't even buying a banh mi or anything.
Joe (00:47):
No no.
That's the only time I ever seecash only, I wasn't in
Cabramatta I wasn't at my barber, I was at Coles, and I never
have cash on me, neither my jobas a mortgage broker.
Okay, we get paid digitally bythe banks.
Money goes straight into ouraccount.
I digitally by the banks.
Money goes straight into ouraccount.
I don't see cash.
No, neither.
But just by chance I had a fewhundred dollars at home okay, in
(01:09):
cash from birthday presentsearlier in the year and they
were stashed away in cards, allright, and I was like, okay,
I'll open this, and I had todrive back home.
Michael (01:18):
I was surprised they weren't on stuff under your
mattress or something.
Joe (01:26):
I'm not that Lebanese, I'm not that Lebanese, but I
literally had to go home and Ihad to open up my cards and take
cash out.
To be able to go back to Colesand pay for my groceries in 2024
was not something I wouldimagine would ever happen?
Michael (01:35):
No, but it does sort of expose the weaknesses of
digital finance, doesn't?
Joe (01:40):
it.
It definitely does.
So the story is Microsoft washaving an update.
Michael (01:45):
No, okay, it actually had nothing to do with Microsoft
.
Okay, nothing to do withMicrosoft, it's all CrowdStrike.
So CrowdStrike, that'sbasically like cyber protection,
basically, okay, they releasedan update for their own software
that crashed 8.5 millioncomputers around the world.
It was a bad update.
Joe (02:01):
Yeah.
Michael (02:02):
They noticed it quickly , but then to fix it you need to
do it manually.
Obviously, it's going to be abit difficult when there's 8.5
million computers around theworld, so they had to, you know,
talk to everyone's IT person.
Joe (02:15):
The part to us that we really saw affected because we
work in banking NAB was down,cba was down, the big four yeah.
Macquarie Bank, okay, it wasoutside of the big four.
It was a lot of the majorlenders and then it was like the
second and third tier lendersthat people don't like.
That was still able to work.
Michael (02:32):
Weren't using CrowdStrike.
Joe (02:34):
Guys, maybe sometimes using the majors isn't a good idea
like we recommend I don't know,I'm just going to put that.
Michael (02:40):
It was funny as well.
A little Easter egg I waswatching Formula One Grand Prix
and the Mercedes team usedCrowdStrike, so their computers
were down as well.
You could see it on the pitwall.
They just had blue screens.
What?
During tests?
Yeah, I think it was duringpractice on the Friday, yeah,
and they couldn't.
Well, I mean, the car could run.
They just like the screens andstuff, like their data wasn't
working, but 90% of the-.
(03:00):
Well, yeah, their practicesessions I don't think were very
useful.
Oh my God, that's hilarious.
Joe (03:05):
Just to divert from that, I wish we could talk about
Formula One, for an hour.
Just to divert from that, thisdoes raise a massive question
about digital banking.
Michael (03:14):
Yeah, and just security and safety.
You can't access your own moneyif something like this happens.
This is unprecedented.
This has never happened beforeon this scale.
Joe (03:25):
Yeah, and we've seen a lot of news reports in the last 12
months ANZ moving to cashless,macquarie Bank moving to
cashless.
You know a lot of these majorbanks.
They want to move to cashlessso that they could track money
better.
The ATO can track money betterand they can essentially make
sure that people are payingtheir taxes on time.
Michael (03:44):
Also, they can essentially make sure that
people are paying their taxes ontime.
Also, they can put theirfingers in every single pie and
then also sell your data.
Joe (03:48):
Well, that too.
And then another big thing isthe merchant charges.
So when you go to an ATM or yougo to not so much an ATM, but
when you're buying from, I wantto say, the bakery down the road
and it's under 10 bucks, theyhave to pay a fee in order to be
able to have that transactiongo through.
It's like 12 cents, so it'slike 0.12%.
Michael (04:06):
Yeah, I think it's around about 10 cents.
Joe (04:07):
And then?
So what that essentially meansis, if we move to digital
banking, mainly whoever owns theterminal okay, whether it be
Stripe, whether it be CBA,whether it be NAB whoever owns
that actual FPOS terminal ismaking an extra 12 cents on
every single transaction, Everypurchase, which is the reason
why they want to move to digitalbanking.
(04:28):
But we saw the effect Oneupdate can crash an entire
system.
Michael (04:33):
And CrowdStrike's been around for a while.
It's not like they're not arespected software company.
Joe (04:38):
Yeah.
Michael (04:39):
Although their reputation has certainly taken a
massive hit now.
Joe (04:42):
Huge If I see CrowdStrike somewhere.
I never knew what CrowdStrikewas.
Michael (04:45):
That's the thing it was .
We didn't even realize how apart of the world CrowdStrike
was and just in their softwareand where it was, because it was
protecting against cyberattacks.
That's why airports and stuffuse it.
Joe (04:56):
And it became infamous very quickly.
Sydney airport was shut down.
Yeah, Melbourne as well, therewere delays in flights down,
yeah, melbourne as well.
There were delays in flights.
There were delays in trains,I'm certain as well.
But one other issue we foundwas settlements.
For a transfer of title tooccur, there needs to be a PEXA
workspace, so a title.
(05:16):
When you buy a property you buythe title deed that says I own
this, which means I own thatland.
What we saw occur was, at 3pm,settlements weren't going
through.
Thankfully I had twosettlements on Friday, one at
1230 and one at two After 3pm.
People weren't able to actuallyget their property and grab the
(05:37):
keys and you were havingconveyances on the seller's side
saying why are you delayingsettlement?
You're supposed to come in andthey're like we're not delaying
anything, we've got the funds,we can transfer it.
And then the blue screen ofdeath would pop up.
So we saw banking not only getaffected on the oh I can't pay,
fpos side, but we also saw themget affected on the mortgage
(05:58):
side.
I don't even know about theinstitutional banking or the
corporate level of finance, youknow, with the big transactions.
But for that to happen at thelow retail level, with the mom
and dads and, you know, peopletrying to buy their first home,
just normal people, yeah Justnormal people.
It's a massive effect and itdoes raise the question should
we move to a cashless society?
Well, clearly not, and I usedto be against it.
(06:19):
I like cash.
I'm Lebanese.
At the end of the day.
Okay, I don't use it that often, but I understand its purpose.
Michael (06:24):
I understand.
Joe (06:25):
I have a friend.
He's a great guy.
His name is Dimi.
God bless him, love him withall my heart.
Dimi goes to the ATM everysingle week and he will withdraw
$250.
Okay, outside of his salary,that's $250.
He puts in his wallet and thatis his coffee money.
That is his spending money.
That is, I'm going to 7-Elevenand I'm buying lunch money.
That is his Really good way tobudget.
(06:46):
He's a tradie.
It's a fantastic way to budgetbecause he knows at the end of
the week if he has spent toomuch money.
He now knows okay, I've spenttoo much.
These are the locations I couldgo for lunch.
I could go to the local bakeryand I could grab myself a
sausage roll and a coffee andthat's going to cost me eight
bucks.
It's going to keep me full forthe whole day.
I can go to the Vietnamesebakery we mentioned it earlier
and I can grab myself a banh mifor like 10 bucks.
(07:07):
Yeah, okay, and you'll be full,and you'll be full, and they're
fantastic sandwiches.
I've said it time and timeagain Food tours, cabramatta Got
to go.
I'm now starting to think tomyself this cashless society
isn't it's like 99% not a goodidea anymore.
Michael (07:23):
I was against it before , mostly because you don't have
control over your own money.
Even like really rich people,money doesn't exist anymore,
Like they have these hugeamounts but they don't have
those amounts.
It's not like they have like aScrooge McDuck vault that they
dive into.
Joe (07:39):
That's exactly right.
I just kept thinking Terminator2, Die Hard 4, all the great
movies and I was like, oh mygosh, Skynet is here.
Michael (07:46):
I mean it's been around for a bit.
Like you know, all the littlepods and stuff that listen to, I
mean our phones, listen to us.
You know you always get that ad.
You're like how did they knowthat I was looking to buy this
when I was talking about this?
Because they listen.
Joe (08:05):
Let us know what you guys think.
Society, or should we actuallybe moving?
Michael (08:07):
to more of a cash society.
We see japan function quitewell and they're 99 cash uh, I
don't know about like that thathigh, but yeah, it's mostly cash
they're mainly a cash societyand they're considered one of
the most advanced societies inthe world yeah, look, it gives
you more control.
I think it's fine to like justhave it split down the middle
because there is a conveniencein having a digital.
Yeah, um, it just can't be onlything we have.
Joe (08:24):
But we need to move on to our next topic.
This is a serious topic, whichwas a pretty damning article
that came out this year.
Michael (08:31):
It's a damning report from the ABS and stuff like that
.
Joe (08:34):
So the fertility rate has dropped in major capital cities
as people have to decide betweenrent and having a kid.
Michael (08:45):
It's not even just rent , it's even just mortgages and
stuff, just everything cost ofliving and interest rates, like.
I've even had this conversationmyself.
Joe (08:53):
I'm having it with my wife.
Yeah, my wife is a doctor.
I'm a mortgage broker that ownsmy own business, and we are
having the conversation of canwe afford to have a child?
Michael (09:04):
Yeah, because not only that, like you both have to work
, because that's just how it isnowadays.
So then you got to pay forchildcare at some point, which
is someone's salary every year,and all you're doing is working
to pay for that childcare andthen plus all the additional
costs.
Joe (09:19):
Diapers aren't cheap.
Baby formula is extremelyexpensive.
Michael (09:22):
Clothes that they grow out of, and then you have to buy
more.
Joe (09:25):
There's a whole bunch of things, and one of the major
things that came out of this Ithink it was a KPMG report the
closer you were to a CBD, theless likely you were to have a
child.
They noticed in MelbourneMelbourne CBD itself.
I think it dropped by 0.3%.
There was something about 0.3in there.
But if you went to the regionalCBD which was Geelong, you're
(09:46):
more likely to have kids andthat is such a major impact.
The central business districtsare where people are expected to
go and make money.
It's where people are expectedto be able to produce.
Michael (09:57):
It's like the old timey market.
It's where you go.
You know I'm taking thepotatoes out to market today.
Joe (10:04):
Okay, I wasn't expecting to get that.
Michael (10:06):
I don't know why it was Irish either.
Jesus Christ, I don't knowwhere your brain went, but like
it's 100% true.
Joe (10:13):
I have clients from Wollongong yeah, okay, that will
have three kids.
I'll have clients in Sydneythat are like I have one child
and that's it, and that's it,and no, we're not considering
having a second.
We're seeing a lot of singleand we're seeing one or two
child households.
Michael (10:29):
We're not seeing the three, four kids anymore.
Who can afford that?
Joe (10:31):
It's just Lebanese people that get paid in cash, but
that's another story for anothertime.
But but we see, like it's sucha significant thing, and the
government.
This actually brings up a wholeother point to me, which we've
spoken about before.
But the government is lettingin a mass amount of migrants to
compensate for our low fertilityrate.
Michael (10:51):
So let's put this in numbers.
So the fertility rate, in orderto sustain a population and
continuously grow at areasonable rate, is at 2.1 2.1.
Every couple needs to have atleast 2.1 kids.
Okay.
Joe (11:03):
This decimal is named Frank Exactly.
Michael (11:07):
You've got two and a half kids and a dog.
Where it's currently at is 1.6nationally, but we're heading
towards a trend that it's goingto be 1.45, which means our
population will continuouslydecline.
We do not have enough babies toreplace.
It takes two people to make oneperson.
That's not going to replace you.
That's going to affect jobs inthe future.
(11:28):
It's going to affect theavailability of labor in general
.
Skilled or not skilled doesn'tmatter.
Joe (11:34):
Japan's facing this issue.
Japan's facing this issue.
China has faced this issue inthe past.
But I think they're prettysweet now.
Michael (11:40):
With over their one point they're going to have an
issue after their one-childthing because once they get into
the well, like once they'reworking and they're like the
main demographic, there's notgoing to be enough of them.
It doesn't matter now becausethey're replenishing those
numbers, but basically theone-child thing I think they've
admitted.
Yeah, it was a mistake.
Joe (11:58):
Yeah, 2.1 down to 1.45.
The huge issue with this isaging population, yeah, which we
all study at school.
A lot of retirees, currentretirees, depend on the pension,
which is government funded.
Michael (12:13):
Yeah.
Joe (12:13):
They didn't bring in superannuation until 22 years
ago.
Michael (12:18):
I was like four.
Forget how old I am sometimes.
Joe (12:22):
But I think superannuation was a compulsory thing around
2001.
Okay, where people, whereemployers, were forced to pay
for their employees' retirementor help them build their
retirement fund.
So somebody would get theirsalary and then 11% of that
would go to the retirement fundand then the retirement fund
would take that money and growit at 10 or 11%, depending on
(12:42):
what it is, and by the time youretire you'll have, you know,
300, $400,000.
But there's a massive gap.
I'm yet again.
I'm in the mortgage market.
I've said it time and timeagain.
We have these 40 to 50 yearolds that don't have that much
superannuation.
Michael (12:58):
And this is when the renting stuff comes into play.
Joe (13:00):
Exactly, and where does the pension come from?
The pension comes from taxes.
We just had a tax cut.
We just had a tax cut.
Now, whilst this is more moneyin our back pockets, which is
all well and good depending onwho you ask, because we all know
my opinion on this right nowokay, it's going to increase
inflation, interest rates aregoing to go up again, yada, yada
yada, but what is going to endup happening is either taxes are
(13:24):
going to increase or we'regoing to have another high level
of migration well, it's goingto be the migration thing
because it's more of apopulation thing, and this is
something that isn't um, it'snot exclusive to australia.
Michael (13:33):
This is happening in western western nations across
the board, or developed nations,I should say um, because it's
not limited to the West, yeah,develop nations in general.
Basically, at this point, bothparents are working.
Both parents are under greaterfinancial stress as things get
more and more expensive.
They have to work more and moreand this, that and the other,
that there's just no time tohave a kid.
Joe (13:55):
So what do we think is going to be fair and a solution,
Cause right now communism looksgreat to me.
Smidgen of communism here andthere.
Socialism just a smidge, I'mnot talking full socialist party
.
Michael (14:07):
I don't want to be.
Joe (14:08):
Argentina or Venezuela.
Michael (14:09):
Well, Argentina's gone full libertarian with it.
That's what they'reexperimenting with, because they
had a socialist government forthe last.
I'm not big into Argentina so Idon't really know, but I did
know they had like asocialist-leaning government
before this so they went fulllibertarian, which is basically
complete deregulation ofeverything.
The government's not doinganything for you except like run
(14:30):
basic economy and structure ofthings.
We'll see how it plays out.
I have no idea.
There's never been alibertarian government before.
Joe (14:37):
Which is another insane thing, but you know I don't want
to get into Argentina.
This is a finance show with Joe, based in Illawarra.
Michael (14:44):
But I definitely think and I think we're already seeing
this happen sort of across theboard again People are angry in
general over the quality oftheir lives is decreasing and
everyone's starting to notice,and it's not just poor people,
it is now the middle class whichis continually shrinking.
Joe (15:01):
I think we now need to seriously look at the way
Australia is built, now morethan ever.
We've been talking on this showfor the last three to four
months.
There's been a lot of doom andgloom.
This is a serious doom, okay,like fertility rates dropping by
0.7%.
That means 70, our country isbasically being replenished by
70% less than what it waspreviously.
Yeah, essentially this.
That means our country isbasically being replenished by
(15:21):
70% less than what it waspreviously.
Michael (15:22):
Yeah, essentially this isn't the first time it's
happened.
This happened in the 70s aswell, but the 70s also weren't a
good time for the economy.
It was also a recession fordeveloped nations as well Oil
crisis and stuff like that.
So maybe we're being a littletoo reactionary right now
because things are a bit rough.
In the post-COVID sort of stuff, it's sort of figuring things
out as economies trying to keepgrowing, but the way they're
(15:44):
growing is by, like, bleedingtheir people.
Joe (15:49):
And I just I think we need yet again government reform, I
think there needs to be lessregulation and I think there
needs to be crosses and checksaround what the government is
spending money on.
Michael (16:00):
Well, yeah, that's part of that corruption watchdog
that they talked about earlier.
Joe (16:03):
Yeah, I'm all in on the corruption watchdog.
I mean.
Michael (16:07):
I think the only people that aren't in on it are the
ones in parliament.
That's it.
I'm pretty sure it's abipartisan.
I don't know anyone that's like, yeah, no, the government
should be able to do whateverthe hell they want.
No one should tell them what todo Should.
Joe (16:19):
I run for office.
Michael (16:22):
I don't know, man Give it a go.
Joe (16:24):
Give it a red hot go.
Michael (16:25):
I would hate to work in politics personally, Like
that's no, not for me.
Joe (16:30):
I just think to myself, if I was in, and the way that I
would say is the first thing Iwould be doing.
I think the Romans said it best, and the only reason why I know
this is because of the moviethe Dark Knight.
Okay, where, when you'rebringing in politicians, you
should be bringing them inkicking and screaming, not
because they want to bepoliticians, but because they
are the smartest people to do so.
Michael (16:51):
Yeah, it really depends on the person too, because
there is the idea of, like thereluctant king, yeah, whereas
the person who doesn't want torule is the one who should be
ruling, but there's a reverse tothat.
Whereas the guy who doesn't wantto rule really doesn't want to
rule and doesn't, and thenthings just sort of fall apart.
So it's not perfect, but theidea.
(17:11):
Anyone who goes into politicshas already got a good opinion
of themselves, so to speak, andthey have a fascination with the
idea of power Because you'vegot to put up with a lot of
stuff and you've got to have alot of drive to do this.
You don't just sort of I mean,if you've got to know a lot of
money, yeah, you can just fallinto it.
But generally speaking, why dopeople want to be politicians?
That's the question I ask.
(17:32):
Is it because they want to helppeople?
Joe (17:35):
I'm sure some of them do, but no, I don't think it's the
majority.
Not a single one of them wantsto help anyone.
Michael (17:40):
No, I'm sure there's some idealists that exist, that
are out there.
I just don't think it's themajority.
I think most people are aftermoney and power.
Joe (17:46):
They start as the idealist.
By the time they're in a goodposition.
It's money and power.
Michael (17:50):
Yeah, we see examples of that constantly.
But anyway, this is a financeshow.
Joe (17:53):
I want to hammer them, no but I just genuinely think we
and I've said it time and timeagain we're going to see so much
more bankruptcy in the next sixmonths.
Michael (18:05):
Yeah, I mean, people are just going to keep doing it
harder and harder.
Joe (18:07):
People are going to do harder, we're going to have a
lower fertility rate, we'regoing to have more migration and
you're going to have a lot moresenior people NIMBYs being like
not in my backyard, but it'sgoing to be too late by then.
Michael (18:16):
I think, yeah, honestly , the local councils kind of
just need to get some balls andpiss off their electorate.
I know that's not what you'resupposed to do as a politician,
because you're supposed torepresent them.
Joe (18:28):
Yeah, we've got one more story that we need to cover and
we do hope that we actually seethis across all Australian
states, but Western Australiahas brought in their rental
reform, yeah, which is.
Michael (18:40):
Okay.
So basically you get a little.
You get a bit more like basichuman rights as a former renter.
So basically, with those rentrises that happened all across
nationwide, you can now in WAyou can only raise your rent
once every 12 months which ispretty reasonable, I feel.
Because, yeah, the market doeschange.
(19:00):
Rents do need to go up.
Joe (19:02):
There is a symbiotic relationship between landlord
and renter so landlords can onlyincrease rent by every 12
months.
Yeah, pets are mostly allowedpets are mostly allowed.
Michael (19:11):
Obviously there's like they keep saying like we have
reasonable conditions and withinreason.
So basically it seems like it'sthey can't stop you from having
pets unless they have a goodreason to not let you have a pet
, which for a lot of people is abig deal.
I know when I was looking forrental properties, we had to
cross off a few things becausethey were like yes, you can have
pets, but it's going to costyou an extra $30 a week or
(19:32):
something, or straight up, no,you can't have a pet which is
fair.
Look, at the end of the day,it's the landlord's place.
You could, you could.
I reckon it's reasonable tocome up with like some sort of
deal, like some sort ofnegotiation, because, yeah, your
dog, you know, might be greatand really well trained, but
you're not going to live thereforever.
The next person's dog mightchew up the walls much, tear up
(19:53):
the carpet or destroy doors andstuff like that because it's
poorly trained.
You don't know that, yeah,hence you talk, you negotiate
funny.
Joe (20:00):
You mentioned that we bought a second golden retriever
on the basis that our first onewas so good and, like the
second one, is so bad.
She's more disciplined whenwe're around, but when we're not
around she's so much morenaughty, cheeky.
No, it's not cheeky.
She's eaten my couch.
Her poo was full of leather.
She's destroyed all thelandscaping.
(20:23):
She has literally destroyed myhouse.
She has decreased the value byGod knows how much.
There's hair everywhere becausenow she's finally getting rid
of her summer coat oh sorry, herpuppy coat and the adult coat
is coming in.
I completely forgot how hardgolden retrievers could be, and
now that I've got two of them,she revs him up.
He's old.
(20:44):
He's like I want to sleep, butshe revs him up and she gets the
puppy energy right out of himagain.
Michael (20:48):
Now imagine that, and it's not even your dog.
Joe (20:51):
No, not even my dog, not even my house.
Michael (20:54):
Well, like, exactly.
But like from a landlord'sperspective.
Like you put up with that stuffbecause your dog, you love that
dog.
Now it's a landlord with youdon't really know your tenants,
you don't know this dog.
All you know is the dog'sruined a lot of shit.
Joe (21:07):
Yeah, that's exactly right.
And then the last thing issegue away from the older
retrievers that segue away fromthe older retrievers, uh, that
we can now make minormodifications in rental
properties, yeah, which you'vegot.
Had a past experience with you,discussed it on last episode
yeah, it's just like so.
Michael (21:22):
Basically, you can now, again with your landlord's
permission because it is theirproperty at the end of the day
put up pictures on your wall.
You can put up fly screens, youcan put in that, um, well water
saving shower heads, and stufflike that, which I don't know
why a renter would do it,considering they don't pay the
water bill.
Joe (21:38):
What I'm seeing is WA do, and I can't believe it, because
their housing market has beenbooming.
We talked about it last episode.
They're still thehighest-growing state right now,
at 1.8%.
But what they're doing isthey're actually forcing
investors out of the market.
They're pushing investors outbecause they're like nope, you
can't increase rent every sixmonths, it has to be every 12.
(22:00):
You want to have a rentalproperty?
Fantastic Pets have to beallowed Within reason Within
reason.
You have to allow somebody tohave their pet dog if it's a
well-behaved dog.
Michael (22:10):
Look at the end of the day, these are normal.
These are people who want tolive there.
Like it's an investment to theinvestor, but it's a home for
the people who live there.
Joe (22:18):
Yeah, I think Manny mentioned it on our last episode
with him and he was talkingabout WA really wants the
owner-occupied people to come in.
Yeah, and good on them.
We've seen it, I've said ittime and time again WA is
investing in their city, they'reinvesting in sport, they're
investing in local entertainment, they're investing in property.
They want to see it grow and itis growing.
Michael (22:41):
Yeah, and it's working, yeah, in a good way.
It seems like they've got somelong-term thinking going on.
It doesn't seem like short-termprofits are the topmost of mind
.
Joe (22:51):
Yeah, they've got their eye on the target of.
We want to be Australia's Idon't want to say most prominent
city.
It's always going to be Sydneyand Melbourne.
Michael (22:58):
Yeah, there's too much history.
Joe (22:59):
There's too much history there, but they've got such a
massive advantage, being on thesame time zone as Perth not
Perth as China, because it'ssuch a lower end of the market
we are seeing the migrationhappen.
Yeah, probably call offinvestors and allow more people
to migrate there.
It'll allow more people topurchase and occupy.
Michael (23:16):
Which is what they want .
You don't want like those emptyapartment buildings for
investors.
No one lives in them.
Joe (23:22):
Yeah, exactly.
Michael (23:23):
Like, if no one wants to live there, what's the point?
Yeah, you've invested all thismoney and now you've just got
empty buildings.
That accumulate wealth, I guess?
Yeah, but if no one is buyingthem or no one's interested in
even being in and around thearea, then then no, you're not
going to accumulate wealth.
Joe (23:37):
So here's some question I want to ask you, and you can
drop a comment below Do we thinkthat other states will follow?
Michael (23:43):
Depends on how much public pressure there is,
because recently there's been alot of public pressure from
renters after those post COVID.
Basically, just how everythingsucks Like they pay ridiculous
amounts of money but they getnothing from their landlords
Again, not every landlord.
There are many decent peoplewho are landlords, but there are
also many who are not.
Joe (24:06):
I've got a client recently who purchased an investment in
Queensland in 22.
And I will never forget thisphone call because she was the
first person that has said it tome in six months and I've got a
lot of clients.
I've got a lot of clients.
I've got a lot of people I workwith day to day.
I'll say oh, how much rent.
We have to do a fact finder.
So I go how much rental incomeare you collecting on this
property?
And she goes well, it should be600, but I've got it at 480
(24:26):
because I don't want to be aC-U-N-T to my tenant yeah, cause
there's, there's, there's theeconomic reasons for doing
things.
Then there's a social reason,and that was the first time in
six months I had heard thatcomment and God bless her.
I can't, oh, damn it.
I said her I'm not going tomention names, but God bless her
because she is probably theonly landlord I can think of.
(24:49):
That thought that everyone elseis thinking I've got to make
mortgage repayments, I've gotmake electricity and I should
have more money in my backpocket, which isn't a bad way to
think.
At the end of the day, you'vegot one life to live.
You want to make sure that youlive it in a comfortable way,
but when you have landlords likethat, they're very far and few
in between.
Seeing WA go to this reform isforcing people to be those kinds
(25:10):
of landlords.
Michael (25:11):
Well, it's just forcing people not to be exploitative,
because right now there's justnot that many protections for
renters in New South Wales.
Joe (25:18):
When you have BlackRock, one of the largest investment
firms in the world, going tolocal auctions to buy houses
okay, and they're biddingagainst mom and dads with
families.
These sorts of laws need tocome into play.
Michael (25:31):
This is what I mean.
Yeah, there's a limit, like youknow, everyone's all about,
we're all about making money,all that sort of stuff.
It's a finance show, after all,but there is a way to do these
things, shall we say, ethically.
Joe (25:45):
That's such a big thing to say.
You can make money ethically ifthe government puts in the
right rules and regulations foryou to do so.
Michael (25:56):
Yeah, and you know we made this argument that maybe
they have done that and that'spart of the regulation which is
stopping dwellings from going up.
I don't think that's true.
I think that's buildingregulations, not like rental
regulations.
Yeah, not 100% on the buildingstuff, but at least with the
rent stuff.
Like anytime you want to takeanything up or something's gone
wrong, you have to go to theombudsman.
(26:17):
There's no just like simple law.
I know a lot of people thatwere getting those rent rises
and they were like, yeah, butwe've been asking for these
repairs for two years.
At this point you still haven'trepaired these rentals, whereas
, like, why should I pay youmore when you can't?
You won't even fix this.
I live here, this is my home,but I'm not allowed to fix it.
Joe (26:35):
Yeah.
Michael (26:36):
So, yeah, just things, that there are things that make
sense economically and there arethings that make sense in
practice.
Yeah, sometimes what works onpaper doesn't work in practice,
which is, you know, communism,like on paper, like it makes a
complete logical sense but itdoesn't.
Joe (26:52):
It clearly doesn't work out because the human condition you
come up with many things- andthis is the philosophy show with
Michael, but I agree witheverything that you're saying.
I like the rental reform assomeone that's an advocate for
people to buy their first homes,for people to be able to
accumulate wealth, for people tobe able to build themselves up.
(27:12):
I would rather that happen in asound, economic, ethical way
that is fair, where if you areworking harder to make more
money, you deserve it.
I don't like the black rockcoming in and buying properties
and hiking up the rent.
It was like that medicine thathappened in the states where?
Michael (27:33):
oh that martin scli guy ?
Joe (27:35):
Yeah, he went and he bought this medicine and he hiked up
the price by 2,000% or something.
Michael (27:39):
Yeah, I think it was like HIV medicine or something.
Joe (27:41):
It was no, it was diabetes, diabetes.
Michael (27:42):
Fuck, so that's even worse.
Joe (27:43):
More people so many people have diabetes.
They hiked up-.
Michael (27:46):
Especially in America.
Joe (27:50):
Yeah, and then they finally came in and said no, nobody's
allowed to do this.
Yada, yada, yada.
I like WA, I like the fact thatthey're doing this.
They're building anowner-occupied society where
people take care of theirproperties, and I hope that we
could see the same in New SouthWales, victoria, adelaide.
The reason why I hope so muchis because you won't have people
outbidding each other by$250,000, $300,000, hundred
(28:10):
thousand dollars, creating theseinflationary prices.
At the same time and I'm goingto finish on this note I want to
see the government allowingmore builders to enter the
market with less regulation, tobe able to build more dwellings
so people can afford to live inNew South Wales again.
Michael (28:24):
Yeah, just building on that to close off, victoria, I
think, is on that track Ahundred percent.
All their prices are going down, the growth is going down and
the rent is going down andinvestors are becoming less
interested, which is great forthe people that actually live
there.
Joe (28:37):
That is exactly right.
So let us know what you thinkabout WA's rental reforms, and
let's finish off on that.
My name is Joe.
That is definitely some schmo.
Michael (28:46):
Don't listen to a word I say
Joe (28:48):
and if you need any help with your finance, visit us at
www.
itssimple.
com.
au Almost forgot my own websitethere.
You can also reach out to us onInstagram and LinkedIn, and we
hope you've enjoyed this episode.
Is the world finally ending , or was it just a Microsoft
glitch?
Have rental prices affectedfertility, and is WA's rental
reform going to be followed bythe rest of the country?
Catch today's episode of theFinance Show with Joe.
Michael (00:15):
Welcome to the Finance Show with Joe.
He's Joe, I'm Jess, I'm Shcmo.
We're going to be talking aboutCrowdStrike, fertility rates
and rental reform, but first,obviously, crowdstrike.
Joe (00:25):
So I walked into Coles and I thought like it was Terminator
2.
Michael (00:30):
Judgment day.
Joe (00:31):
I uploaded a photo on my Instagram and I literally I
couldn't believe it.
I walked into Coles and I saw aposter drawn in crayon, like
they didn't even have, like nicecrayon.
It was crayon that said cashonly,
Michael (00:45):
and you weren't even buying a banh mi or anything.
Joe (00:47):
No no.
That's the only time I ever seecash only, I wasn't in
Cabramatta I wasn't at my barber, I was at Coles, and I never
have cash on me, neither my jobas a mortgage broker.
Okay, we get paid digitally bythe banks.
Money goes straight into ouraccount.
I digitally by the banks.
Money goes straight into ouraccount.
I don't see cash.
No, neither.
But just by chance I had a fewhundred dollars at home okay, in
(01:09):
cash from birthday presentsearlier in the year and they
were stashed away in cards, allright, and I was like, okay,
I'll open this, and I had todrive back home.
Michael (01:18):
I was surprised they weren't on stuff under your
mattress or something.
Joe (01:26):
I'm not that Lebanese, I'm not that Lebanese, but I
literally had to go home and Ihad to open up my cards and take
cash out.
To be able to go back to Colesand pay for my groceries in 2024
was not something I wouldimagine would ever happen?
Michael (01:35):
No, but it does sort of expose the weaknesses of
digital finance, doesn't?
Joe (01:40):
it.
It definitely does.
So the story is Microsoft washaving an update.
Michael (01:45):
No, okay, it actually had nothing to do with Microsoft
.
Okay, nothing to do withMicrosoft, it's all CrowdStrike.
So CrowdStrike, that'sbasically like cyber protection,
basically, okay, they releasedan update for their own software
that crashed 8.5 millioncomputers around the world.
It was a bad update.
Joe (02:01):
Yeah.
Michael (02:02):
They noticed it quickly , but then to fix it you need to
do it manually.
Obviously, it's going to be abit difficult when there's 8.5
million computers around theworld, so they had to, you know,
talk to everyone's IT person.
Joe (02:15):
The part to us that we really saw affected because we
work in banking NAB was down,cba was down, the big four yeah.
Macquarie Bank, okay, it wasoutside of the big four.
It was a lot of the majorlenders and then it was like the
second and third tier lendersthat people don't like.
That was still able to work.
Michael (02:32):
Weren't using CrowdStrike.
Joe (02:34):
Guys, maybe sometimes using the majors isn't a good idea
like we recommend I don't know,I'm just going to put that.
Michael (02:40):
It was funny as well.
A little Easter egg I waswatching Formula One Grand Prix
and the Mercedes team usedCrowdStrike, so their computers
were down as well.
You could see it on the pitwall.
They just had blue screens.
What?
During tests?
Yeah, I think it was duringpractice on the Friday, yeah,
and they couldn't.
Well, I mean, the car could run.
They just like the screens andstuff, like their data wasn't
working, but 90% of the-.
(03:00):
Well, yeah, their practicesessions I don't think were very
useful.
Oh my God, that's hilarious.
Joe (03:05):
Just to divert from that, I wish we could talk about
Formula One, for an hour.
Just to divert from that, thisdoes raise a massive question
about digital banking.
Michael (03:14):
Yeah, and just security and safety.
You can't access your own moneyif something like this happens.
This is unprecedented.
This has never happened beforeon this scale.
Joe (03:25):
Yeah, and we've seen a lot of news reports in the last 12
months ANZ moving to cashless,macquarie Bank moving to
cashless.
You know a lot of these majorbanks.
They want to move to cashlessso that they could track money
better.
The ATO can track money betterand they can essentially make
sure that people are payingtheir taxes on time.
Michael (03:44):
Also, they can essentially make sure that
people are paying their taxes ontime.
Also, they can put theirfingers in every single pie and
then also sell your data.
Joe (03:48):
Well, that too.
And then another big thing isthe merchant charges.
So when you go to an ATM or yougo to not so much an ATM, but
when you're buying from, I wantto say, the bakery down the road
and it's under 10 bucks, theyhave to pay a fee in order to be
able to have that transactiongo through.
It's like 12 cents, so it'slike 0.12%.
Michael (04:06):
Yeah, I think it's around about 10 cents.
Joe (04:07):
And then?
So what that essentially meansis, if we move to digital
banking, mainly whoever owns theterminal okay, whether it be
Stripe, whether it be CBA,whether it be NAB whoever owns
that actual FPOS terminal ismaking an extra 12 cents on
every single transaction, Everypurchase, which is the reason
why they want to move to digitalbanking.
(04:28):
But we saw the effect Oneupdate can crash an entire
system.
Michael (04:33):
And CrowdStrike's been around for a while.
It's not like they're not arespected software company.
Joe (04:38):
Yeah.
Michael (04:39):
Although their reputation has certainly taken a
massive hit now.
Joe (04:42):
Huge If I see CrowdStrike somewhere.
I never knew what CrowdStrikewas.
Michael (04:45):
That's the thing it was .
We didn't even realize how apart of the world CrowdStrike
was and just in their softwareand where it was, because it was
protecting against cyberattacks.
That's why airports and stuffuse it.
Joe (04:56):
And it became infamous very quickly.
Sydney airport was shut down.
Yeah, Melbourne as well, therewere delays in flights down,
yeah, melbourne as well.
There were delays in flights.
There were delays in trains,I'm certain as well.
But one other issue we foundwas settlements.
For a transfer of title tooccur, there needs to be a PEXA
workspace, so a title.
(05:16):
When you buy a property you buythe title deed that says I own
this, which means I own thatland.
What we saw occur was, at 3pm,settlements weren't going
through.
Thankfully I had twosettlements on Friday, one at
1230 and one at two After 3pm.
People weren't able to actuallyget their property and grab the
(05:37):
keys and you were havingconveyances on the seller's side
saying why are you delayingsettlement?
You're supposed to come in andthey're like we're not delaying
anything, we've got the funds,we can transfer it.
And then the blue screen ofdeath would pop up.
So we saw banking not only getaffected on the oh I can't pay,
fpos side, but we also saw themget affected on the mortgage
(05:58):
side.
I don't even know about theinstitutional banking or the
corporate level of finance, youknow, with the big transactions.
But for that to happen at thelow retail level, with the mom
and dads and, you know, peopletrying to buy their first home,
just normal people, yeah Justnormal people.
It's a massive effect and itdoes raise the question should
we move to a cashless society?
Well, clearly not, and I usedto be against it.
(06:19):
I like cash.
I'm Lebanese.
At the end of the day.
Okay, I don't use it that often, but I understand its purpose.
Michael (06:24):
I understand.
Joe (06:25):
I have a friend.
He's a great guy.
His name is Dimi.
God bless him, love him withall my heart.
Dimi goes to the ATM everysingle week and he will withdraw
$250.
Okay, outside of his salary,that's $250.
He puts in his wallet and thatis his coffee money.
That is his spending money.
That is, I'm going to 7-Elevenand I'm buying lunch money.
That is his Really good way tobudget.
(06:46):
He's a tradie.
It's a fantastic way to budgetbecause he knows at the end of
the week if he has spent toomuch money.
He now knows okay, I've spenttoo much.
These are the locations I couldgo for lunch.
I could go to the local bakeryand I could grab myself a
sausage roll and a coffee andthat's going to cost me eight
bucks.
It's going to keep me full forthe whole day.
I can go to the Vietnamesebakery we mentioned it earlier
and I can grab myself a banh mifor like 10 bucks.
(07:07):
Yeah, okay, and you'll be full,and you'll be full, and they're
fantastic sandwiches.
I've said it time and timeagain Food tours, cabramatta Got
to go.
I'm now starting to think tomyself this cashless society
isn't it's like 99% not a goodidea anymore.
Michael (07:23):
I was against it before , mostly because you don't have
control over your own money.
Even like really rich people,money doesn't exist anymore,
Like they have these hugeamounts but they don't have
those amounts.
It's not like they have like aScrooge McDuck vault that they
dive into.
Joe (07:39):
That's exactly right.
I just kept thinking Terminator2, Die Hard 4, all the great
movies and I was like, oh mygosh, Skynet is here.
Michael (07:46):
I mean it's been around for a bit.
Like you know, all the littlepods and stuff that listen to, I
mean our phones, listen to us.
You know you always get that ad.
You're like how did they knowthat I was looking to buy this
when I was talking about this?
Because they listen.
Joe (08:05):
Let us know what you guys think.
Society, or should we actuallybe moving?
Michael (08:07):
to more of a cash society.
We see japan function quitewell and they're 99 cash uh, I
don't know about like that thathigh, but yeah, it's mostly cash
they're mainly a cash societyand they're considered one of
the most advanced societies inthe world yeah, look, it gives
you more control.
I think it's fine to like justhave it split down the middle
because there is a conveniencein having a digital.
Yeah, um, it just can't be onlything we have.
Joe (08:24):
But we need to move on to our next topic.
This is a serious topic, whichwas a pretty damning article
that came out this year.
Michael (08:31):
It's a damning report from the ABS and stuff like that
.
Joe (08:34):
So the fertility rate has dropped in major capital cities
as people have to decide betweenrent and having a kid.
Michael (08:45):
It's not even just rent , it's even just mortgages and
stuff, just everything cost ofliving and interest rates, like.
I've even had this conversationmyself.
Joe (08:53):
I'm having it with my wife.
Yeah, my wife is a doctor.
I'm a mortgage broker that ownsmy own business, and we are
having the conversation of canwe afford to have a child?
Michael (09:04):
Yeah, because not only that, like you both have to work
, because that's just how it isnowadays.
So then you got to pay forchildcare at some point, which
is someone's salary every year,and all you're doing is working
to pay for that childcare andthen plus all the additional
costs.
Joe (09:19):
Diapers aren't cheap.
Baby formula is extremelyexpensive.
Michael (09:22):
Clothes that they grow out of, and then you have to buy
more.
Joe (09:25):
There's a whole bunch of things, and one of the major
things that came out of this Ithink it was a KPMG report the
closer you were to a CBD, theless likely you were to have a
child.
They noticed in MelbourneMelbourne CBD itself.
I think it dropped by 0.3%.
There was something about 0.3in there.
But if you went to the regionalCBD which was Geelong, you're
(09:46):
more likely to have kids andthat is such a major impact.
The central business districtsare where people are expected to
go and make money.
It's where people are expectedto be able to produce.
Michael (09:57):
It's like the old timey market.
It's where you go.
You know I'm taking thepotatoes out to market today.
Joe (10:04):
Okay, I wasn't expecting to get that.
Michael (10:06):
I don't know why it was Irish either.
Jesus Christ, I don't knowwhere your brain went, but like
it's 100% true.
Joe (10:13):
I have clients from Wollongong yeah, okay, that will
have three kids.
I'll have clients in Sydneythat are like I have one child
and that's it, and that's it,and no, we're not considering
having a second.
We're seeing a lot of singleand we're seeing one or two
child households.
Michael (10:29):
We're not seeing the three, four kids anymore.
Who can afford that?
Joe (10:31):
It's just Lebanese people that get paid in cash, but
that's another story for anothertime.
But but we see, like it's sucha significant thing, and the
government.
This actually brings up a wholeother point to me, which we've
spoken about before.
But the government is lettingin a mass amount of migrants to
compensate for our low fertilityrate.
Michael (10:51):
So let's put this in numbers.
So the fertility rate, in orderto sustain a population and
continuously grow at areasonable rate, is at 2.1 2.1.
Every couple needs to have atleast 2.1 kids.
Okay.
Joe (11:03):
This decimal is named Frank Exactly.
Michael (11:07):
You've got two and a half kids and a dog.
Where it's currently at is 1.6nationally, but we're heading
towards a trend that it's goingto be 1.45, which means our
population will continuouslydecline.
We do not have enough babies toreplace.
It takes two people to make oneperson.
That's not going to replace you.
That's going to affect jobs inthe future.
(11:28):
It's going to affect theavailability of labor in general
.
Skilled or not skilled doesn'tmatter.
Joe (11:34):
Japan's facing this issue.
Japan's facing this issue.
China has faced this issue inthe past.
But I think they're prettysweet now.
Michael (11:40):
With over their one point they're going to have an
issue after their one-childthing because once they get into
the well, like once they'reworking and they're like the
main demographic, there's notgoing to be enough of them.
It doesn't matter now becausethey're replenishing those
numbers, but basically theone-child thing I think they've
admitted.
Yeah, it was a mistake.
Joe (11:58):
Yeah, 2.1 down to 1.45.
The huge issue with this isaging population, yeah, which we
all study at school.
A lot of retirees, currentretirees, depend on the pension,
which is government funded.
Michael (12:13):
Yeah.
Joe (12:13):
They didn't bring in superannuation until 22 years
ago.
Michael (12:18):
I was like four.
Forget how old I am sometimes.
Joe (12:22):
But I think superannuation was a compulsory thing around
2001.
Okay, where people, whereemployers, were forced to pay
for their employees' retirementor help them build their
retirement fund.
So somebody would get theirsalary and then 11% of that
would go to the retirement fundand then the retirement fund
would take that money and growit at 10 or 11%, depending on
(12:42):
what it is, and by the time youretire you'll have, you know,
300, $400,000.
But there's a massive gap.
I'm yet again.
I'm in the mortgage market.
I've said it time and timeagain.
We have these 40 to 50 yearolds that don't have that much
superannuation.
Michael (12:58):
And this is when the renting stuff comes into play.
Joe (13:00):
Exactly, and where does the pension come from?
The pension comes from taxes.
We just had a tax cut.
We just had a tax cut.
Now, whilst this is more moneyin our back pockets, which is
all well and good depending onwho you ask, because we all know
my opinion on this right nowokay, it's going to increase
inflation, interest rates aregoing to go up again, yada, yada
yada, but what is going to endup happening is either taxes are
(13:24):
going to increase or we'regoing to have another high level
of migration well, it's goingto be the migration thing
because it's more of apopulation thing, and this is
something that isn't um, it'snot exclusive to australia.
Michael (13:33):
This is happening in western western nations across
the board, or developed nations,I should say um, because it's
not limited to the West, yeah,develop nations in general.
Basically, at this point, bothparents are working.
Both parents are under greaterfinancial stress as things get
more and more expensive.
They have to work more and moreand this, that and the other,
that there's just no time tohave a kid.
Joe (13:55):
So what do we think is going to be fair and a solution,
Cause right now communism looksgreat to me.
Smidgen of communism here andthere.
Socialism just a smidge, I'mnot talking full socialist party
.
Michael (14:07):
I don't want to be.
Joe (14:08):
Argentina or Venezuela.
Michael (14:09):
Well, Argentina's gone full libertarian with it.
That's what they'reexperimenting with, because they
had a socialist government forthe last.
I'm not big into Argentina so Idon't really know, but I did
know they had like asocialist-leaning government
before this so they went fulllibertarian, which is basically
complete deregulation ofeverything.
The government's not doinganything for you except like run
(14:30):
basic economy and structure ofthings.
We'll see how it plays out.
I have no idea.
There's never been alibertarian government before.
Joe (14:37):
Which is another insane thing, but you know I don't want
to get into Argentina.
This is a finance show with Joe, based in Illawarra.
Michael (14:44):
But I definitely think and I think we're already seeing
this happen sort of across theboard again People are angry in
general over the quality oftheir lives is decreasing and
everyone's starting to notice,and it's not just poor people,
it is now the middle class whichis continually shrinking.
Joe (15:01):
I think we now need to seriously look at the way
Australia is built, now morethan ever.
We've been talking on this showfor the last three to four
months.
There's been a lot of doom andgloom.
This is a serious doom, okay,like fertility rates dropping by
0.7%.
That means 70, our country isbasically being replenished by
70% less than what it waspreviously.
Yeah, essentially this.
That means our country isbasically being replenished by
(15:21):
70% less than what it waspreviously.
Michael (15:22):
Yeah, essentially this isn't the first time it's
happened.
This happened in the 70s aswell, but the 70s also weren't a
good time for the economy.
It was also a recession fordeveloped nations as well Oil
crisis and stuff like that.
So maybe we're being a littletoo reactionary right now
because things are a bit rough.
In the post-COVID sort of stuff, it's sort of figuring things
out as economies trying to keepgrowing, but the way they're
(15:44):
growing is by, like, bleedingtheir people.
Joe (15:49):
And I just I think we need yet again government reform, I
think there needs to be lessregulation and I think there
needs to be crosses and checksaround what the government is
spending money on.
Michael (16:00):
Well, yeah, that's part of that corruption watchdog
that they talked about earlier.
Joe (16:03):
Yeah, I'm all in on the corruption watchdog.
I mean.
Michael (16:07):
I think the only people that aren't in on it are the
ones in parliament.
That's it.
I'm pretty sure it's abipartisan.
I don't know anyone that's like, yeah, no, the government
should be able to do whateverthe hell they want.
No one should tell them what todo Should.
Joe (16:19):
I run for office.
Michael (16:22):
I don't know, man Give it a go.
Joe (16:24):
Give it a red hot go.
Michael (16:25):
I would hate to work in politics personally, Like
that's no, not for me.
Joe (16:30):
I just think to myself, if I was in, and the way that I
would say is the first thing Iwould be doing.
I think the Romans said it best, and the only reason why I know
this is because of the moviethe Dark Knight.
Okay, where, when you'rebringing in politicians, you
should be bringing them inkicking and screaming, not
because they want to bepoliticians, but because they
are the smartest people to do so.
Michael (16:51):
Yeah, it really depends on the person too, because
there is the idea of, like thereluctant king, yeah, whereas
the person who doesn't want torule is the one who should be
ruling, but there's a reverse tothat.
Whereas the guy who doesn't wantto rule really doesn't want to
rule and doesn't, and thenthings just sort of fall apart.
So it's not perfect, but theidea.
(17:11):
Anyone who goes into politicshas already got a good opinion
of themselves, so to speak, andthey have a fascination with the
idea of power Because you'vegot to put up with a lot of
stuff and you've got to have alot of drive to do this.
You don't just sort of I mean,if you've got to know a lot of
money, yeah, you can just fallinto it.
But generally speaking, why dopeople want to be politicians?
That's the question I ask.
(17:32):
Is it because they want to helppeople?
Joe (17:35):
I'm sure some of them do, but no, I don't think it's the
majority.
Not a single one of them wantsto help anyone.
Michael (17:40):
No, I'm sure there's some idealists that exist, that
are out there.
I just don't think it's themajority.
I think most people are aftermoney and power.
Joe (17:46):
They start as the idealist.
By the time they're in a goodposition.
It's money and power.
Michael (17:50):
Yeah, we see examples of that constantly.
But anyway, this is a financeshow.
Joe (17:53):
I want to hammer them, no but I just genuinely think we
and I've said it time and timeagain we're going to see so much
more bankruptcy in the next sixmonths.
Michael (18:05):
Yeah, I mean, people are just going to keep doing it
harder and harder.
Joe (18:07):
People are going to do harder, we're going to have a
lower fertility rate, we'regoing to have more migration and
you're going to have a lot moresenior people NIMBYs being like
not in my backyard, but it'sgoing to be too late by then.
Michael (18:16):
I think, yeah, honestly , the local councils kind of
just need to get some balls andpiss off their electorate.
I know that's not what you'resupposed to do as a politician,
because you're supposed torepresent them.
Joe (18:28):
Yeah, we've got one more story that we need to cover and
we do hope that we actually seethis across all Australian
states, but Western Australiahas brought in their rental
reform, yeah, which is.
Michael (18:40):
Okay.
So basically you get a little.
You get a bit more like basichuman rights as a former renter.
So basically, with those rentrises that happened all across
nationwide, you can now in WAyou can only raise your rent
once every 12 months which ispretty reasonable, I feel.
Because, yeah, the market doeschange.
(19:00):
Rents do need to go up.
Joe (19:02):
There is a symbiotic relationship between landlord
and renter so landlords can onlyincrease rent by every 12
months.
Yeah, pets are mostly allowedpets are mostly allowed.
Michael (19:11):
Obviously there's like they keep saying like we have
reasonable conditions and withinreason.
So basically it seems like it'sthey can't stop you from having
pets unless they have a goodreason to not let you have a pet
, which for a lot of people is abig deal.
I know when I was looking forrental properties, we had to
cross off a few things becausethey were like yes, you can have
pets, but it's going to costyou an extra $30 a week or
(19:32):
something, or straight up, no,you can't have a pet which is
fair.
Look, at the end of the day,it's the landlord's place.
You could, you could.
I reckon it's reasonable tocome up with like some sort of
deal, like some sort ofnegotiation, because, yeah, your
dog, you know, might be greatand really well trained, but
you're not going to live thereforever.
The next person's dog mightchew up the walls much, tear up
(19:53):
the carpet or destroy doors andstuff like that because it's
poorly trained.
You don't know that, yeah,hence you talk, you negotiate
funny.
Joe (20:00):
You mentioned that we bought a second golden retriever
on the basis that our first onewas so good and, like the
second one, is so bad.
She's more disciplined whenwe're around, but when we're not
around she's so much morenaughty, cheeky.
No, it's not cheeky.
She's eaten my couch.
Her poo was full of leather.
She's destroyed all thelandscaping.
(20:23):
She has literally destroyed myhouse.
She has decreased the value byGod knows how much.
There's hair everywhere becausenow she's finally getting rid
of her summer coat oh sorry, herpuppy coat and the adult coat
is coming in.
I completely forgot how hardgolden retrievers could be, and
now that I've got two of them,she revs him up.
He's old.
(20:44):
He's like I want to sleep, butshe revs him up and she gets the
puppy energy right out of himagain.
Michael (20:48):
Now imagine that, and it's not even your dog.
Joe (20:51):
No, not even my dog, not even my house.
Michael (20:54):
Well, like, exactly.
But like from a landlord'sperspective.
Like you put up with that stuffbecause your dog, you love that
dog.
Now it's a landlord with youdon't really know your tenants,
you don't know this dog.
All you know is the dog'sruined a lot of shit.
Joe (21:07):
Yeah, that's exactly right.
And then the last thing issegue away from the older
retrievers that segue away fromthe older retrievers, uh, that
we can now make minormodifications in rental
properties, yeah, which you'vegot.
Had a past experience with you,discussed it on last episode
yeah, it's just like so.
Michael (21:22):
Basically, you can now, again with your landlord's
permission because it is theirproperty at the end of the day
put up pictures on your wall.
You can put up fly screens, youcan put in that, um, well water
saving shower heads, and stufflike that, which I don't know
why a renter would do it,considering they don't pay the
water bill.
Joe (21:38):
What I'm seeing is WA do, and I can't believe it, because
their housing market has beenbooming.
We talked about it last episode.
They're still thehighest-growing state right now,
at 1.8%.
But what they're doing isthey're actually forcing
investors out of the market.
They're pushing investors outbecause they're like nope, you
can't increase rent every sixmonths, it has to be every 12.
(22:00):
You want to have a rentalproperty?
Fantastic Pets have to beallowed Within reason Within
reason.
You have to allow somebody tohave their pet dog if it's a
well-behaved dog.
Michael (22:10):
Look at the end of the day, these are normal.
These are people who want tolive there.
Like it's an investment to theinvestor, but it's a home for
the people who live there.
Joe (22:18):
Yeah, I think Manny mentioned it on our last episode
with him and he was talkingabout WA really wants the
owner-occupied people to come in.
Yeah, and good on them.
We've seen it, I've said ittime and time again WA is
investing in their city, they'reinvesting in sport, they're
investing in local entertainment, they're investing in property.
They want to see it grow and itis growing.
Michael (22:41):
Yeah, and it's working, yeah, in a good way.
It seems like they've got somelong-term thinking going on.
It doesn't seem like short-termprofits are the topmost of mind
.
Joe (22:51):
Yeah, they've got their eye on the target of.
We want to be Australia's Idon't want to say most prominent
city.
It's always going to be Sydneyand Melbourne.
Michael (22:58):
Yeah, there's too much history.
Joe (22:59):
There's too much history there, but they've got such a
massive advantage, being on thesame time zone as Perth not
Perth as China, because it'ssuch a lower end of the market
we are seeing the migrationhappen.
Yeah, probably call offinvestors and allow more people
to migrate there.
It'll allow more people topurchase and occupy.
Michael (23:16):
Which is what they want .
You don't want like those emptyapartment buildings for
investors.
No one lives in them.
Joe (23:22):
Yeah, exactly.
Michael (23:23):
Like, if no one wants to live there, what's the point?
Yeah, you've invested all thismoney and now you've just got
empty buildings.
That accumulate wealth, I guess?
Yeah, but if no one is buyingthem or no one's interested in
even being in and around thearea, then then no, you're not
going to accumulate wealth.
Joe (23:37):
So here's some question I want to ask you, and you can
drop a comment below Do we thinkthat other states will follow?
Michael (23:43):
Depends on how much public pressure there is,
because recently there's been alot of public pressure from
renters after those post COVID.
Basically, just how everythingsucks Like they pay ridiculous
amounts of money but they getnothing from their landlords
Again, not every landlord.
There are many decent peoplewho are landlords, but there are
also many who are not.
Joe (24:06):
I've got a client recently who purchased an investment in
Queensland in 22.
And I will never forget thisphone call because she was the
first person that has said it tome in six months and I've got a
lot of clients.
I've got a lot of clients.
I've got a lot of people I workwith day to day.
I'll say oh, how much rent.
We have to do a fact finder.
So I go how much rental incomeare you collecting on this
property?
And she goes well, it should be600, but I've got it at 480
(24:26):
because I don't want to be aC-U-N-T to my tenant yeah, cause
there's, there's, there's theeconomic reasons for doing
things.
Then there's a social reason,and that was the first time in
six months I had heard thatcomment and God bless her.
I can't, oh, damn it.
I said her I'm not going tomention names, but God bless her
because she is probably theonly landlord I can think of.
(24:49):
That thought that everyone elseis thinking I've got to make
mortgage repayments, I've gotmake electricity and I should
have more money in my backpocket, which isn't a bad way to
think.
At the end of the day, you'vegot one life to live.
You want to make sure that youlive it in a comfortable way,
but when you have landlords likethat, they're very far and few
in between.
Seeing WA go to this reform isforcing people to be those kinds
(25:10):
of landlords.
Michael (25:11):
Well, it's just forcing people not to be exploitative,
because right now there's justnot that many protections for
renters in New South Wales.
Joe (25:18):
When you have BlackRock, one of the largest investment
firms in the world, going tolocal auctions to buy houses
okay, and they're biddingagainst mom and dads with
families.
These sorts of laws need tocome into play.
Michael (25:31):
This is what I mean.
Yeah, there's a limit, like youknow, everyone's all about,
we're all about making money,all that sort of stuff.
It's a finance show, after all,but there is a way to do these
things, shall we say, ethically.
Joe (25:45):
That's such a big thing to say.
You can make money ethically ifthe government puts in the
right rules and regulations foryou to do so.
Michael (25:56):
Yeah, and you know we made this argument that maybe
they have done that and that'spart of the regulation which is
stopping dwellings from going up.
I don't think that's true.
I think that's buildingregulations, not like rental
regulations.
Yeah, not 100% on the buildingstuff, but at least with the
rent stuff.
Like anytime you want to takeanything up or something's gone
wrong, you have to go to theombudsman.
(26:17):
There's no just like simple law.
I know a lot of people thatwere getting those rent rises
and they were like, yeah, butwe've been asking for these
repairs for two years.
At this point you still haven'trepaired these rentals, whereas
, like, why should I pay youmore when you can't?
You won't even fix this.
I live here, this is my home,but I'm not allowed to fix it.
Joe (26:35):
Yeah.
Michael (26:36):
So, yeah, just things, that there are things that make
sense economically and there arethings that make sense in
practice.
Yeah, sometimes what works onpaper doesn't work in practice,
which is, you know, communism,like on paper, like it makes a
complete logical sense but itdoesn't.
Joe (26:52):
It clearly doesn't work out because the human condition you
come up with many things- andthis is the philosophy show with
Michael, but I agree witheverything that you're saying.
I like the rental reform assomeone that's an advocate for
people to buy their first homes,for people to be able to
accumulate wealth, for people tobe able to build themselves up.
(27:12):
I would rather that happen in asound, economic, ethical way
that is fair, where if you areworking harder to make more
money, you deserve it.
I don't like the black rockcoming in and buying properties
and hiking up the rent.
It was like that medicine thathappened in the states where?
Michael (27:33):
oh that martin scli guy ?
Joe (27:35):
Yeah, he went and he bought this medicine and he hiked up
the price by 2,000% or something.
Michael (27:39):
Yeah, I think it was like HIV medicine or something.
Joe (27:41):
It was no, it was diabetes, diabetes.
Michael (27:42):
Fuck, so that's even worse.
Joe (27:43):
More people so many people have diabetes.
They hiked up-.
Michael (27:46):
Especially in America.
Joe (27:50):
Yeah, and then they finally came in and said no, nobody's
allowed to do this.
Yada, yada, yada.
I like WA, I like the fact thatthey're doing this.
They're building anowner-occupied society where
people take care of theirproperties, and I hope that we
could see the same in New SouthWales, victoria, adelaide.
The reason why I hope so muchis because you won't have people
outbidding each other by$250,000, $300,000, hundred
(28:10):
thousand dollars, creating theseinflationary prices.
At the same time and I'm goingto finish on this note I want to
see the government allowingmore builders to enter the
market with less regulation, tobe able to build more dwellings
so people can afford to live inNew South Wales again.
Michael (28:24):
Yeah, just building on that to close off, victoria, I
think, is on that track Ahundred percent.
All their prices are going down, the growth is going down and
the rent is going down andinvestors are becoming less
interested, which is great forthe people that actually live
there.
Joe (28:37):
That is exactly right.
So let us know what you thinkabout WA's rental reforms, and
let's finish off on that.
My name is Joe.
That is definitely some schmo.
Michael (28:46):
Don't listen to a word I say
Joe (28:48):
and if you need any help with your finance, visit us at
www.
itssimple.
com.
au Almost forgot my own websitethere.
You can also reach out to us onInstagram and LinkedIn, and we
hope you've enjoyed this episode.
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