Labor proposed a number of policies that would have helped the poor, the sick, and the environment e.g. subsidised dental care, subsidised treatment for cancer patients, subsidised childcare, and funding for climate change action. That many people would vote for money to be given to investors to leverage or gear into the property and stock markets and live off dividends rather than fund these other worthwhile causes is, in my opinion, quite disappointing because it reveals something quite negative about human nature. It is yet further evidence that human nature is darker than I imagine. I am not naive, but I do wrestle between wanting to belive that humans are inherent good vs inherently bad, and it seems that every day there is a stream of evidence that points towards the the idea that humans are innately bad.
Thoughts about the 2019 Australian Federal Election
In my previous post (How to Adapt to the Labor Party’s Reforms to Franking Credits) I spoke about how to adjust your portfolio if Labor won the 2019 Australian federal election. The polls and the betting odds were showing a Labor win, but remarkably the Coalition won, so everything is business as usual. I will admit the result came as a huge surprise for me and although I did not vote for the Coalition, I accept the will of the people as this is a democracy.
I have mixed feelings because personally I imagine I will benefit from the Coalition’s policies e.g. cash refunds from franking credits as well as capital gains discounts and reductions in the top tax rates down to 30%. A large portion of my wealth (maybe 70%) is in Australian shares. The focus of the election was on the property market and in particularly on negative gearing, but negative gearing does not impact me because I positively gear into stocks. Leveraging into high dividend shares to get franking credits usually results in a positive gearing position because the dividend income typically exceeds the interest expense.
Something that bothers me and makes me feel some sense of guilt is that I understand that more money in my hands to live off dividends means there is less money for others. Some may flippantly say that if I want to fund these programs, I should do so with my own money, but welfare is not sustainable without taxation. Medicare, for example, would never work if it relied on private donations.
Many people think I am lame for thinking this way. My father tells me I should forget about others and think about myself. He constantly tells me I need to “man up” and get married, have children, etc. However, when I think about human nature, it makes me think about whether I should have children or whether I should start a family. With childcare costs rising and with climate change presenting an existential risk for the next generation, does it make sense to have children? If people are truly bad, what sort of world would my child inherit? What sort of social ills would my child be faced with?
I am still childfree and single but haven’t ruled out a relationship, marriage or children, but I am not the sort of person who would just jump into something big without careful consideration.
The way I see it, there are two options. One is believing in the goodness of humanity and instilling these positive values in my child so they grow up and contribute to a positive society and world. Financial independence becomes a means of funding procreation, and procreation is pursued for the sake of perpetuating the human species because the human species is good.
The other option is to believe that humans are inherent bad, and in this case financial independence plays a defensive role with passive income used to retire early and to shield myself from society.
I Live Off Dividends 
My thinking in this respect is very similar to yours. I spent quite a bit of time leading up tot he election weighing up whether to vote for the greater good (Labor’s policies IMO) or my good (Liberal policies). I ended up choosing the former so feel ok about myself because of that. I don’t always take the unselfish option so I think when you do you have to give yourself a bit of credit.
From what I can see about human nature, generally as individuals on the whole we are good, but as a group can tend towards the selfish, maybe this is because as individuals we can be called to account for our actions, but in a group we can hide. So perhaps this is telling us that humans are inherently a selfish and short sighted group.
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Well said, Calvin my thoughts exactly.
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Calvin,
here is a way you can have your cake and eat it too.
Donate a portion your income to the causes that you deem important. You give examples,
> > subsidised dental care, subsidised treatment for cancer patients, subsidised childcare, and funding for climate change action
In this way you can do what will presumably lift your dark view of others and the society they collectively create.
And of course others can do with their wages what they wish to do, without these choices being imposed upon them by “The Man” more than is currently the case.
Some very worthy recipients of our dollars in your list.
Perhaps with one exception?
I do struggle with paying for other peoples children to be institutionalised (subsidised child care) so that both parents can work themselves into what often turns into a chaotic frenzied life.
Just a thought
-Pete
>
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Well said – although my reading of the seat-by-seat outcome of the election is a little less negative than yours. I think many people who are reasonably comfortable financially did understand the need to rebalance the tax system to give younger and less well-off people a fairer go. It was those in outer suburban and regional areas who are struggling for work and with cost-of-living who took the bait of a very negative campaign. I am retired and financially secure (and do take advantage of some of the tax breaks Labor was targeting) but don’t know anyone in my circle of friends in similar circumstances who think the current system is fair or sustainable. Love you work.
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