10 Ways Baby Boomers Can Be Happier in 2018

How can you live your best life and be happier in 2018? Here are 10 surefire ways to help you hit the restart button for a better life.

Change Careers

Studies show that up to 80 percent of baby boomers plan to do some sort of paid work until age 70 to stay mentally sharp, keep engaged socially, and achieve financial security in retirement. That leaves a couple of decades after 50 to work.

Perhaps that’s why more and more boomers are contemplating an “encore career” to pursue their passions and create a fulfilling life they can enjoy.

The American Institute for Economic Research looked at people who changed or tried to change jobs after age 45 and found that 82% of people aged 47 and older who took up new careers in the last two years were successful, and 50% saw a salary increase.

“Don’t view your age or your experience as a liability. It’s a benefit to companies to have a multi-generational workforce,” says Oriana Vogel, vice president of global talent acquisition at American Express. “One of our goals… is to hire employees that can provide a variety of different perspectives and experiences.” Age doesn’t come into consideration when it comes down to hiring the best people, she says.

Enjoy Life’s Simple Pleasures

In 2017, International Happiness Day and the first day of spring coincided. How often does that happen? But do we really need a special day to find some bliss? I say that any ordinary day will do.

In 2018, let’s pause and enjoy all of life’s simple treasures and treats we look forward to throughout the day. Yes, we all have them! You know, the moment you open up your drapes and sunlight fills your home. The aroma of coffee in the morning. Those delightful blueberries on your cereal. The hot shower in the morning that awakens and refreshes you.

If you’re a baby boomer still working, instead of grumbling about it, enjoy your favorite song on the radio as you drive to your job. Don’t just sit there, sing along! If you’re lucky enough to be retired, enjoy some creative leisure time.

Experience happiness from the simple act of giving. Take a moment and write, text, or call a friend. Give someone a big smile to brighten their day and perk up yours as well. Make it a point to do something nice for a stranger or give someone a sincere compliment today. When you get home, give a loved one a big hug. Make your dog’s day with a walk around the neighborhood, a treat, and an extra pat on its head. Relish each bite of dinner. Watch the sunset. Enjoy your favorite comedy and laugh loudly. At the end of the day, remember each blessing and give thanks.

If a gloomy thought dares to enter your head this day, usher it right out and replace it with a happy, positive thought. No groans or gripes allowed. Mentally shout “next” in your head and move right along. Relish every day of simply being alive.

Break Through Barriers

Oh, the wonderful things that can happen when we break through our self-imposed barriers!

When I wanted to become a writer, I put a lot of barriers on myself. I was afraid that people would laugh at me because I didn’t have a college degree. That my submissions would sit in a huge pile and be ignored by literary agents and editors since I didn’t know anyone in the publishing business. That friends and family would roll their eyeballs if I dared to express my dreams of becoming a writer out loud. That I would become so discouraged by the countless rejections sure to come my way, I would give up and watch my precious dreams slowly fade away. Doesn’t everyone want to be a writer, but how many actually make it?

Instead of taking action, I was comfortable just dreaming about becoming an author one day. It was fun envisioning my novel on the shelves of Barnes and Noble and my first book signing. Until a woman at a writer’s conference asked me a simple but profound question. What are you waiting for?

With the woman’s words echoing in my head, I took the first step and began submitting my short story to magazines. Of course, I received the standard rejection letter which stung, but I continued on my journey, taking writing classes and submitting my work. The road wasn’t easy. Many of my fears came true during that time. I gathered enough rejection letters to wallpaper a room. Many times, I became discouraged and swore off writing. But I tenaciously pressed forward. Six long years passed before my first short story was published. Am I happy that I persevered and finally faced down all those nagging self-doubts and fears?

You bet! I’ve been writing professionally for over 25 years now. Over the years, I’ve been published in national magazines, authored three books (one of which was published by big time publisher McGraw Hill), landed an agent, won three journalism awards, and even had my dream come true with a book signing at Barnes and Noble.

This is the year to reflect on who you are and what matters most to you in life. Time to overcome your fears, persevere, and find the power to become the driver of your own life and personal journey!

Become Happy-Go-Lucky

The Urban Dictionary defines happy-go-lucky as a person who is cheerful about most things, has a positive view on life, and annoys the you-know-what out of their friends. Haha! Seriously, think of all the benefits of lightening up. You’ll be less stressed, have more fun, take more risks, step out of your comfort zone and because of your positive attitude have more friends and better relationships.

So adapt a devil-may-care attitude, be a little silly, laugh more, mellow out, and be playful! If you can become more of a happy-go-lucky person, I’d lay bets that you’ll find life more enjoyable and even more fulfilling.

Take a Trip

It’s no secret that I love to travel, so a new survey last year that listed baby boomers choices for top bucket list travel destinations caught my eye.

Of the 12,000 boomer participants, a whopping 99 percent said they planned to take one leisure trip last year. About half planned to travel domestically on multi-generational trips, weekend getaways, and holiday travel. Bucket lists inspired 43 percent of boomers to say they hoped to travel internationally as well.

Which places topped boomers’ bucket lists for travel? Hawaii topped the list for a dream domestic destination followed by Alaska, California, Arizona, and Nevada. The top international destinations were Australia, followed by Italy, the United Kingdom/Ireland, France, and the Caribbean. Are any of these places on your bucket list? No time like the present!

Interestingly, boomers enjoy dreaming about their trip almost as much as experiencing the trip itself. Part of the fun is planning!

Stay Positive Despite Adversities

is it possible to be happy when persistent, scary, and frustrating problems keep rising to the surface and smacking us in the face?

Adversity can make us feel stressed, upset, disappointed, powerless, angry, and depressed. Even when some or even most other aspects of our lives are going well, we tend to focus on things that are going wrong.

Instead of allowing damaging thoughts to build and grow in strength, find a quiet, peaceful place. Think of your problems and then forcefully push them aside. As Mark Twain wisely said, “Drag your thoughts away from your troubles… by the ears, by the heels, or any other way you can manage it.”

Research has shown there is a strong link between creativity and better mental health. Instead of stewing about your problems, do something creative and you’ll be forced to look inward and listen to yourself. It will help you shut out the world and its problems for a while.

Purposely direct your mind to focus on things that make you feel happy. You might recall something funny your grandchild did or said, reminisce about one of your favorite memories, or plan a trip for the future. Or write down five reasons you can feel grateful and force yourself to focus on those things. Put inspirational, happy quotes on post it notes and spread them around the house. Again, with a little practice you can train your mind to naturally gravitate toward more pleasant thoughts.

Of course, these tips won’t make your problems magically disappear, but they can help you better able to cope with challenges.

Get Rid of Clutter

Whether we’ve become empty nesters or are following the latest trend of decluttering, many of us baby boomers are downsizing.

Two years ago, we moved. As I was filling up trash bags and putting aside things to donate and sell, I felt incredibly FREE. Why hadn’t I done this sooner?

Conquering clutter can clear the way for a more productive life. Without physical obstructions like piles of unopened mail, old clothes, and Tupperware without lids in the way, you’ll be amazed how much you can accomplish in your life.

Aim for Long-Term Happiness instead of Instant Gratification

Instant self-gratification rules the world today. Think about ATM machines that provide instant cash, fast food supplying instant meals, the Internet with its access to instant information and entertainment – all of which has turned us into impatient beings that can’t tolerate waiting for anything.

According to a CNN article, there are two types of well-being. One relies on self-involved instant pleasure and requires continuous action to constantly feed positive emotions. This type of satisfaction typically leaves as fast as it comes. For example, buying an expensive pair of shoes creates a temporary high but to keep that euphoric feeling we must keep shopping for the next quick fix. If something threatens our ability to seek out this kind of personal happiness – for example, all our credit cards are maxed out – our entire source of well-being is threatened.

The second type of well-being is a kind of happiness that comes, not from consuming products, but from working toward something larger than ourselves that gives true meaning to life.This type of well-being can bring long-term happiness.

That’s not to say that we should never reward ourselves with a bowl of ice cream or a great pair of shoes as a special treat every once in a while. We don’t have to wait to enjoy the present or our lives.

However, we’ll all be happier if we develop some self-control and avoid the habit of wanting everything right this second. Constantly giving into momentary desires can actually make us feel depressed in the long run. Advertisers have become experts at convincing us that instant gratification is the key to happiness. Don’t buy it. Shoot for long-term satisfaction and fulfillment instead.

Embrace Hygge like the Norwegians

Despite frigid arctic temperatures and months of darkness, the happiest people on the planet apparently live in Nordic countries, according to the 2017 World Happiness Report.

Norway jumped up three spots to claim the title of “world’s happiest country” for the first time. Denmark, the previous winner for three years in a row dropped to second. These countries were followed by Iceland, Switzerland, Finland, Netherlands, Canada, New Zealand, Australia and Sweden. In case you’re wondering, the U.S. came in 14th place, dropping down one spot from last year.

Could the reason Norwegians are so darn happy have to do with the Danish term hygge? Hygge is also difficult to define, but is translated loosely into the English word coziness and is associated with relaxation, indulgence, and gratitude. However, Norwegians would probably argue there’s much more to the word.

Hygge requires being present in a moment – whether it be simple, soothing, or special – that brings you comfort, contentment, or pleasure. The word refers to the ability to enjoy the good things in life with people you love. Hygge can describe soft candlelight, comfort foods like a pork roast or home-made cinnamon pastries, sitting by the fire on a cold night with fuzzy socks, or simply being kinder to yourself and others. It’s about transforming an afternoon cup of tea into an event with friends. Some people translate the word as coziness of the soul.

So, go ahead. Eat that pastry guilt-free, invite friends over for a glass of wine by the fire, or luxuriate in a candlelit bath. Savor the moment and let the warm, fuzzy feelings flow.

Retire in a Happy State

My childhood friend was visiting me last year when she asked, “Where do you want to retire?”

I’m from the Palm Springs, California area, which has long been one of the most famous retirement communities. Snowbirds love this place with over 300 days of sunshine a year. Golfing, casinos, hiking, and cycling are popular activities. Places to shop and dine abound. In addition, a fairly strong economy and low unemployment rate make the Palm Springs area a popular destination for baby boomers and retirees.

But do I want to retire here? Not especially. Some people love the heat, but I’m not a fan of the long, hot summers with temperatures that exceed 115 degrees. However, I have time to consider my options. Like many boomers, retirement is nowhere in sight for me at the time being. But of course, a girl can dream, right?

So, what are the best and worst states to retire? The results from a’s survey last year were interesting. Traditional retirement spots like Florida and California didn’t make the top 10 while other states, not usually considered as premier places to retire, like Wyoming and Colorado, made the top five. Honolulu is the 2nd most expensive place to live and Hawaii residents pay an individual income tax rate of 11% – the 2nd highest in the U.S. But if you can afford it, this state ranks high for happiness and personal well-being. New York and West Virginia rated the worst.

There you go! Applying just a few of these tips can have a drastic impact on your life and help you find your bliss in 2018. Go for it!


Accounting Development in Third World Countries

Most third world countries have nearly nonexistent accounting standards and lack the education to inaugurate a movement towards achieving their needs to at least sustain their positions towards global developments. Among these third world countries most of them have similar characteristics such as their low living standard for the vast majority of their populations, high levels of unemployment, and the governments tend to be more authoritarian opposed to a democratic approach. By the eighties it was well accepted that the Third World was no longer a single economic unit and at least four groups were distinguishable – OPEC member countries, Newly Industrialized Countries (NICs), Middle Developing Countries (MDCs) and Least Developing Countries (LDCs) . These are evident from the literature dealing with third world countries (Zakari, M. 2013). The third world countries were placed in these four categories depending on their population density, per capita income, natural resources, economic development, exports, and economic dependency versus economic diversification. Characteristics of LDCs have a negative effect on their economic integrity; therefore, they are forced to alter their financial policies related to accounting practice that may impose certain constraints and restrictions towards specific opportunities.

It was found that the high-income oil exporting third world countries are able to maintain a fairly modernized accounting system due to their ease of affordability for modern computers, foreign exports, and other elements needed for a quick conversion. All oil dependent third world countries are directly involved and jointly owned by various multinational enterprises and governments of foreign countries such as the USA, UK, France, and the Netherlands. These companies virtually control the entire oil industry as well as pioneering organizations and they ultimately introduce new modern accounting systems in these third world countries. Due to these large enterprises, international accounting firms dominate accounting in auditing practices in the high-income oil export countries.

Businesses and enterprises located within the private sector of these least developed countries need areas of financial accounting and reporting, cost accounting, management accounting, tax accounting, and auditing. These countries need people who show sophistication, and be able to show how much profit their interest in the business will be worth now and in the future. In most third world countries their major export is normally internationally distributed, which allows natives of the third world county to work with accountants from large sustainable countries. Third world countries have been successfully using oil to teach their natives foreign accounting standards. Since oil is an international need and an international enterprise, third world countries learn accounting techniques while interacting with economically stable countries. This, in turn, also has influenced other business enterprises (non-oil companies) as employees move in and out of the oil sector. (Zakari, M. 2013)

In recent years, many Middle Eastern countries are dramatically changing their economy. These countries are attempting to denationalize the public sector and encourage foreign investment and establish Arab Stock Markets. According to Al-Qahtani (2005) and Marashdeh and Shrestha (2010) these systematic challenges have been aimed at: Removing official barriers that have blocked the market due to monopolistic or oligopolistic power. Liberating economic activities and allowing the forces of the market to take control based on the laws of demand and supply in production, commerce, and service. Reducing the government role in the national economy by giving the private sector more influence. Creating the appropriate judicial and institutional settings as incentives for both local and foreign investments. Since the stock markets have been in place most companies have had to adopt the IAS's and ISA's for preparing and auditing their financial statements.

Hassan (2008) concludes that the economic development of accounting in emerging economies depends mainly on the cultural and political motives rather than on economic changes. In addition, Hassan argues that both types of motives are interchangeable as cultural and political ones are hidden under the promoted economic benefits. Some third world countries recognize religion as the dominant law. Islamic Law bans transactions that involve uncertainties such as margin trading and Islam also requires business activities to be conducted in compliance with principles enshrined in the Sharia. According to Kamla et al. (2006), the Quran and Sunnah are the material sources of Islamic Law. Together, they are referred to as the Islamic principles or Sharia. This tradition positions ethical or social activity ahead of individual profit maximization.

Although the stride towards accounting advancement in third world countries varies from country to country, accounting and auditing professions are inconsistent in a market economy. In developing countries there seems to be a clear-cut difference between legislation and enforcement. When we sum up all of the information above, third world countries lack the wherewithal when it comes to accounting education, lack of computer hardware and software, inadequate facilities, and not to mention the culture and political boundaries. Despite from a few emerging countries the Middle East is not up to par with the required accounting standards and still have a long way to go before intertwining with other international accounting practices that meet the needs of the market economy.


Al-Qahtani, A. (2005): "The Development of Accounting Regulation in the GCC", Managerial Auditing Journal, Vol. 20, No. 3, pp 217-226

Hassan, M. (2008): "The Development of Accounting Regulations in Egypt", Managerial Auditing Journal, Vol. 23, No. 5, pp 467-484

Kamla, R., Gallhofer, S., and Haslam, J. (2006): "Islam, Nature and Accounting: Islamic Principles and the Notion of Accounting for the Environment", Accounting Forum, Vol. 30, pp 245-265

Marashdeh, H., and Shrestha, M. (2010): "Stock Market Integration in the GCC Countries", International Research Journal of Finance and Economics, No. 37

Wijewardena, H., and Yapa, S. (1995): "The Development of Accounting Systems and Accounting Education in high-income oil exporting countries: An Overview," Accounting & Finance Working Papers, School of Accounting & Finance, University of Wollongong .

Zakari, M. (2013): "Accounting and Auditing in Developing Countries-Arab Countries", Journal of Economics and Political Sciences, Vol. 16, No. 10, PP 1 27


The Top 10 Risks of Debt Recycling

What is debt recycling?

Quite often the first time you hear about debt recycling will be from a financial planner or a friend that has been to see one. The basic idea behind debt recycling is you should reduce your non tax deductible interest on a debt and replace it with tax deductible interest on a another debt. The purpose is to increase the tax efficiency of the borrowing which will contribute to the repaying of the non tax deductible interest debt sooner. In some countries the interest on a home loan mortgage is deductible. Some of the countries are The Netherlands, Sweden, Switzerland and the United States. You should not undertake this strategy without getting written financial advice, preferably, from a Certified Financial Planner who is also authorized to give tax advice. This article should not be viewed as advice, but from an accounting risk management approach warning of some of the dangers of debt recycling.

The process of debt recycling

Debt recycling is a strategy used to help a person pay off their home mortgage or other loan with non tax deductible interest earlier than the normal term while at the same time growing an investment portfolio.

Normally this means taking a separate investment loan against the equity in their homes initially and at the end of each year increasing the loan and investing that money in a portfolio of investments. The purpose of debt recycling then is to increase your wealth by enabling you to invest your money while still paying off your mortgage sooner. Therefore, debt recycling can be summed up in four steps:

1. You take out an investment loan against your home equity separate from your home mortgage or other loan for consumption purposes.

2. Borrow up to no more than 80 percent (preferably 50 percent) of your home equity each year and invest the borrowed monies into investments, such as shares and stocks. The income from the investments is used to prepay the non investment loan that bears the non tax deductible interest.

3. This means that the interest tax deduction in most jurisdictions is allowable as the related investments produce income that is used repay your outstanding mortgage loan or other consumption loans that do not have interest as a tax deductible expense.

4. You continue the process each year until you have your home loan or other non investment loan paid off in full. At that time, you should have surplus monies after you debts are repaid.

The Top 10 risks of debt recycling.

The strategy of debt recycling is an aggressive financial planning strategy and for most people it will not match their risk profile, especially if they are a family with children at home and are exposed to lifecycle risks associated with raising children.

1. That you do it without getting paid for advice from a Certified Financial Planner who is also authorized to give tax advice

2. The real risk involves the investments falling in value and you end up losing, which of course is one reason why your investment portfolio should always be constructed by a Certified Financial Planner.

3. That you undertake the project with a time horizon of less than five years and you may end up losing more than gaining during an economic cycle.

4. That the terms and conditions of your loans do not allow you to prepay and redraw at your discretion and you do not have an interest only repayment basis as a loan option.

5. That the valuation of your bank’s security property falls and that they require further security for the loans during a cyclical downturn. This risk can be reduced by lowering your initial loan security ratio.

6. That the interest rates on your loans increase dramatically over the periods of your loans and erode the profitability of the strategy.

7. That the taxation laws change during the period of the project.

8. The employment basis of you and your partner changes during the project and the tax strategy diminishes or evaporates. This risk also relates to the ownership of the loans and investments.

9. The assumptions that are made about the investments are poorly researched and not valid.

10. That your Certified Financial Planner does not arrange adequate insurance for income protection, trauma or death and disability.

This article is written from an accounting risk management perspective, but financial planning can help you not only with debt recycling but also with your budgeting so that you have a clearer understanding of your overall financial goals, not just debt recycling. Therefore, having a Certified Financial Planner as an ongoing professional paid advisor whenever you need to make major financial plans makes good sense.

Look at other alternatives

Make sure that you look at other alternatives to debt recycling to growing your wealth. For many people this is a less risky approach and from a Lifestyle Planning perspective a better approach especially if you are raising a family when you are exposed to lifecycle risks associated with your children.


Jan Tinbergen

Jan Tinbergen, (born April twelve, 1903, The Hague, Netherlands. – died June nine, 1994, Netherlands), Dutch economist observed for the development of his of econometric models. He was the co-winner (with Ragnar Frisch) of the very first Nobel Prize for Economics, in 1969.

Tinbergen was the brother of the zoologist Nikolaas Tinbergen and was knowledgeable at the Faculty of Leiden. He served as a business cycle statistician with the Dutch government’s Central Bureau of Statistics (1929-36, 1938-45) before turning the director of the Central Planning Bureau (1945-55). From 1933 to 1973 he had also been a professor of economics at the Netherlands School of Economics (now part of Erasmus Faculty), Rotterdam, and he subsequently taught for 2 years at the Faculty of Leiden before retiring in 1975.

While acting as an economic adviser to the League of Nations at Geneva (1936-38), Tinbergen analyzed economic development in the United States from 1919 to 1932. This pioneering econometric analysis offered a foundation for his business cycle principle as well as guidelines for economic stabilization. Also, he built an econometric model which helped shape both short term and broader political economic planning in the Netherlands.

Due to the political dynamics of his economic analyses, Tinbergen was one of the first persons to show that a government with a number of policy goals, such as total employment as well as price stability, should be in a position to bring on multiple economic policy equipment – say, fiscal policy and monetary policy – to get the desired success. Among the major works of his are actually Statistical Testing of Business Cycles (1938), Econometrics (1942), Economic Policy (1956), and Income Distribution (1975).

In 1969, Dutch economist Jan Tinbergen and Norwegian economist Ragnar Frisch discussed the initial Nobel Prize in economics “for having designed and applied dynamic types for the evaluation of economic processes.” Tinbergen, whom held a Ph.D. in physics, had become keen on economics while focusing on the dissertation of his, “Minimum Problems in Economics” and Physics (1929). He started applying mathematical resources to economics, and they at the moment was a non-mathematical and verbal discipline. In 1929 he joined the Dutch Central Bureau of Statistics to do research on business cycles. He stayed there until 1945, going for a leave of absence from 1936 to 1938 to work for the League of Nations in Geneva.

Along with Frisch as well as others, Tinbergen created the area of econometrics, the usage of statistical resources to evaluate economic hypotheses. Tinbergen was one of the very first economists to produce multi-equation versions of economies. He created a twenty-seven-equation econometric type of the Dutch economic climate, and his 1939 publication, Business Cycles in the United States, (1919-1932), contains a forty-eight-equation type of the American economy which describes investment activity as well as models American business cycles.

Another of Tinbergen’s main contributions was showing that a government with a number of economic targets – for both the unemployment rate as well as the inflation rate, for instance – should have a minimum of as many policy instruments, like monetary policy and taxes.


When Should I Pay Dutch Payroll?

If you or your company has a registered office or workplace in the Netherlands with employed staff, then you have to deduct the correct payroll tax from employee’s salaries. The payroll tax is built from wage tax, employee’s insurance contributions, social security contributions and income-dependent Health Care contributions.

You are obliged to deduct Dutch payroll taxation when;

  • Your company has its office registered within the Netherlands
  • You have a permanent establishment in the Netherlands
  • You post, hire out or second personnel in/to the Netherlands.
  • Your employee works on the Dutch continental shelf.
  • Your employee falls under the national insurance schemes of the Netherlands.

In some situations you are obliged to deduct tax; even if your company has its main registered office within another country.

If you employ staff, then you must do the following;

  • Register as an employer with the tax and customs administration. This will result in receiving a payroll tax number alongside the required forms needed. Your payroll tax number is then used when submitting returns and with the regard to other types of contact with the tax and customs administration offices.
  • Ask your employee to provide you with a written statement including their surname and initials, address and postcode and their place of residence, country and region of residence alongside their date of birth and citizen service number (burgerservicenummer) or tax and social insurance number (also known as a sofinummer).
  • Verify and record each employees identity with the case of foreign workers including the check of whether of not they are allowed to work within the Netherlands.
  • Create a payroll record.
  • Determine the elements of the wage for the employee and then calculate the correct associated taxes and any contributions required by law.
  • File the tax return by the given deadline and pay the calculated taxes. The tax and customs administration office will inform you to the date and how to file the return properly.

Should the employer or the employee fail to comply with the obligations relating to payroll tax or the confirmation of employee identity, then they will have to apply the ‘anonymous person rate’.

Under specific conditions, individuals can set off a VAT payment against a payroll tax declaration. However, in order to do this the dutch form (verzoek loonheffingen verrekening met teruggaaf btw) has to be used.

Should an organisaiton hire temporary staff via an intermediary or subcontract out work to a contractor or subcontractor then the hired persons must pay the payroll tax for these staff members. If the company fails to follow these procedures then the Dutch authorities will hold the employer responsible and, therefore, liable.


Indonesian High Yield Bond Market Structure and Opportunities

Global investor demand for Indonesian corporate paper increased substantially in 2012 and 2013 after the rating upgrade of Indonesia to investment grade early last year and investors looking for exposure in the country’s strong growth story (Indonesia’s GDP growth averaged above 6.0% over the last five years). Majority of the global bonds issued are USD-denominated and are non-investment grade due to the sovereign rating cap (Baa3/BB+/BBB-).

High yield bonds in Indonesia are typically issued through an SPV located in tax efficient jurisdictions like Singapore, Netherlands, or Cayman Islands. The bonds generally benefit from parent guarantee as well as guarantee from major operating subsidiaries, but in some instances certain key operating subsidiaries are excluded from guarantee. Investors should, therefore, carefully analyse the structure of the bond to ensure a tightly structured cash trap mechanism, which minimises chances of cash leakage. Also, given the fact that majority of the bonds issued are unsecured in nature, structural subordination and recourse to operating assets might be a concern if the bonds are loosely structured.

Covenants in the high yield bonds issued by Indonesian corporates are largely financial in nature, which restricts/ regulates the issuer’s financial activities within pre-determined limits. Generally, covenants fall into one of the following three categories:

· Affirmative Covenants: These covenants outline company requirements while the bonds are outstanding, and would include requirements such as maintenance and submission of quarterly accounts, payment of taxes, maintenance of insurance, payment of bank interest and fees, etc.

· Negative Covenants: These covenants limit company activities. For example limits on mergers/ acquisitions, asset sales, dividend payment, negative pledge, etc.

· Financial Covenants: These covenants require that the issuer maintain a minimum financial condition, usually in the form of ratios. Standard financial covenants include restrictions on debt incurrence (the most commonly used being Fixed Charged Coverage ratio), restricted payments, restriction on asset sales, Interest Reserve Accounts, etc.

High yield bond covenants in Indonesia are broadly in line with those in China, Hong Kong, Singapore, and India. They do act as an early indicator of any potential default. For example, certain high yield bond indentures require that the issuer to maintain an Interest Reserve Account with a Trustee Bank, where at least one interest payment amount on the bonds is deposited at all times. If the issuer of the bond fails to timely top-up this account, it acts as an early indication of liquidity issues within the issuer company.

As a result of global tightening bias and flight safer assets, the USD-denominated bonds issued by Indonesian corporates have consistently declined in price over the last two months. The long dated papers, in particular, have declined considerably reflecting increased inflation expectations amidst ongoing fuel reforms in the country. This trend is in line with other emerging market bond performance, as global investors moved funds out of emerging markets to safer assets. While it is difficult to say if the bond prices have bottomed at current levels, the running prices adequately price-in the expected Fed tapering and tightening interest rate environment in Indonesia. Therefore, the current low prices offer select good investment opportunities for global fixed income investors and wealth management firms.


Your Legal Rights in a Living-Together Relationship – The Rights of Unmarried Cohabitants

If you’ve read Part I of this article, you know that it’s extremely difficult to establish a common law marriage under New York law. And, if this led you to wonder why the system has seemingly abdicated responsibility for issues related to the break-up of long-term living-together relationships, you’re not alone. Why the courts and legislature have taken this approach is puzzling, particularly considering that in contemporary society such relationships are more prevalent than ever.

You may find the answer to be disappointing. It’s what lawyers and judges call, “judicial economy”. This is the idea that certain litigants, as a matter of public policy, should be kept out of the courts. The primary rationale cited is the proverbial opening of the floodgates, though some cite a state interest in promoting marriage. It’s no secret that divorce cases comprise a troublingly high percentage of the courts’ dockets, most studies say it’s as high as 50% in New York State. This means the system is already on overload. So, inviting more litigants into the system to address their divorce-like rights isn’t exactly enticing.

Yet, societal and legal trends expanding the legal definition of terms such as “marriage” and “family” have been accelerating fast. As these terms become more elastic, perhaps lawmakers will reconsider, and begin writing legislation that addresses the dilemmas faced in the dissolution of living-together relationships. Until that time, those of you in non-marital relationships looking to the courts for guidance will likely have to look elsewhere.

One such place is alternate dispute resolution, e.g., mediation or arbitration. Or, you can plan in advance for the possible break-up of your non-marital relationship, by entering into a cohabitation agreement (an especially sensible alternative for those beginning to acquire property or build wealth together). Absent these alternatives, it’s more than possible that there may be no legal solutions to the problems you’ll encounter in the process of dissolving your living-together relationship.

However, before throwing up your hands to denounce the legal system as hopelessly antiquated, read on. There are certain circumstances for which the law does provide answers. In the balance of this article, I will attempt to summarize these circumstances and the applicable legal concepts, most of which derive from tort or contract law, and explain how such might apply to your living-together relationship.

Contractual Rights

The most fundamental legal concept available to unmarried cohabitants interested in establishing their legal rights or obligations is contract law. However, its applicability is severely limited under New York law. Under most circumstances, for any contract to be enforceable it needs to have been reduced to writing and supported by “consideration” (meaning one party gives something up and the other receives something of benefit in return, e.g., payment for services rendered).

The courts have additionally held that the terms of any such contract must be clear and definite. For example, where the promise was to provide domestic services and contributions as a business partner in exchange for an equal share in the other’s business, the court held that the exchange of promises was an enforceable contract. However, a more general promise, such as one to take care of a significant other in the style to which she had become accustomed, in exchange for a promise to introduce and promote the other socially, was held to be inadequate. You should also be aware that any illicit form of consideration is void as against public policy.

The benefits of contract law are generally only available to those who have bargained for and entered into a written contract in advance of their break-up. So, if you’re presently involved in or contemplating a committed living-together relationship, you should strongly consider reducing your respective rights and obligations to contract. This document is akin to a prenuptial agreement and can be referred to as a cohabitation agreement, living together agreement, or the like.

Granted, it may be difficult, unpleasant, or even unadvisable to broach this topic with your significant other. Moreover, you don’t have the ability to induce your significant other to sign a cohabitation agreement by threatening not to go through with the wedding if they won’t sign. Yet, other circumstances, e.g., purchasing or renting a common residence, or even moving in together, can perhaps serve as motivation.

If you surmount these obstacles, you’ll have the benefit of a clear blueprint to follow in the event of separation. Another great benefit of contract law is that most if not all of the legal benefits of a contractual agreement are equally available to same-sex cohabitants. This should also be the case with the balance of legal concepts discussed below.

Property Rights

Assuming that you don’t have a valid written contract, you will have to turn to a far less precise set of legal principles for guidance. Most of these legal principles have existed since long before living-together arrangements became societally or legally sanctioned (in fact, many are common law innovations, meaning that they date back to case law that originated in England and was later adopted by most states, including New York). Some of these concepts have been applied to living-together relationships.

Legal Presumptions

There are certain established presumptions that may provide guidance in the process of disentangling your financial affairs. Certainly, any bank account jointly titled in your respective names, absent agreement to the contrary, is presumptively a fifty-fifty shared asset under applicable banking law. The same should apply to other investment accounts like securities, mutual funds, bond or money market accounts.

Jointly titled or jointly acquired assets that can=t readily be divided in half, such as artwork, an automobile or real estate (see discussion below), are more problematic. Although you might be able to agree to sell and equally divide the proceeds, that course may be impractical or undesirable for economic reasons.

Partition of Real Property

If you own real estate jointly, it will probably be even more difficult to determine your respective rights in the event of a dissolution of your non-marital relationship. Under a legal principle known as “partition”, the rights of joint property holders are determined not just by how title is held, but also by virtue of the relative financial contributions (towards both acquisition and maintenance of the property) made by the title holders. There are lawyers who specialize in this area of practice.

Non-Contractual Rights

An even more troublesome class of property, is assets that were acquired together or through joint efforts and which one of you now holds in sole name or otherwise has within his/her exclusive control. To legally address assets of this type, you’ll need to resort to theories of legal recovery that derive from tort and contract law. Most of these legal concepts were developed with the idea of redressing wrongs perpetrated by one member of a fiduciary relationship against the other (a fiduciary relationship is one that by its very nature gives rise to a presumption of mutual reliance or dependency, e.g., a broker-customer relationship, a relationship between business partners or one between close relatives of unequal bargaining power). These legal concepts include causes of action under partnership law, contract law and tort law, such as economic partnership, express contract, unjust enrichment, fraudulent misrepresentation, constructive trust and quantum meruit restitution, all of which are discussed below.

Economic Partnership

One legal concept that may apply to your living-together relationship is the law related to business partnerships. The courts routinely refer to the financial relationship between the parties to a marriage as an “economic partnership”. In divorce litigation, in order to refute this presumption, you must present evidence showing that the parties actually functioned as separate economic units. So, why shouldn’t the concept of economic partnership be applicable to the dissolution of non-marital relationships, assuming that a party can show that their relationship functioned as an economic unit?

There are reported cases that have accepted this logic. One such example is the case of McCall v. Frampton, which was a suit brought by Ms. McCall, an established business manager of rock and roll acts before she became romantically involved with Peter Frampton, a classic rock guitar icon known for such hits as, “Do You Feel Like I Do?”. Ms. McCall was able to convince the court that management services that she provided to Mr. Frampton free of charge, services of a kind that she had previously been paid for in the marketplace, constituted a thing of value that should entitle her to compensation (namely, a share of the profits of their partnership).

The decision in McCall notwithstanding, establishing an economic partnership under New York law will require a high standard of legal proof. You will need to show that you and your significant other deliberately entered into a business relationship, and that you then proceeded to function as business partners over the course of your relationship. If this was your situation, I strongly recommend that you speak to a lawyer well versed in partnership law.

Quantum Meruit Restitution

In a cause of action for quantum meruit restitution, the question to be resolved is: “Did the moving party confer a financial benefit upon the non-moving party?” This typically could involve housekeeping or homemaking efforts, and, in a more unique case, could include financial, managerial or other marketable services.

As suggested above, it can not include sexual favors, which judges have disapprovingly termed “meretricious” services. Another criterion is whether the alleged contribution was “quantifiable”, or would be more appropriately characterized as “pillow-talk”. Unless the advice-giving cohabitant is a career counselor by day, his or her advice from the sidelines (or more likely, the bedroom) is not likely to be compelling. Again, the case of McCall is illustrative, where Ms. McCall’s prior experience as a rock and roll manager was crucial to the success of her claim.

Under reported New York cases, you must prove the following to make out a case for quantum meruit recovery: (a) good faith performance of the service(s); (b) acceptance thereof by the other party; (c) that you had an expectation of compensation; and (d) that you can demonstrate the reasonable value of the service(s).

Constructive Trust

In a constructive trust cause of action, the movant must prove a confidential or fiduciary relationship with the other party, that a promise was made to him or her, and that as a result the other party was unjustly enriched. The courts speak of a constructive trust cause of action as an “equitable device”, meaning one designed to redress inequality. An example of when the courts might apply this concept, is where one party in a position of trust convinces another to transfer money or property to him or her, based on a declaration or promise that is subsequently broken.

Unjust Enrichment/Fraudulent Misrepresentation

The cause of action known as “unjust enrichment” emphasizes the economic unfairness to the aggrieved party in a particular transaction. The related concept of “fraudulent misrepresentation” involves the same unfairness, but with an added element of fraud. This means that the misrepresentation at issue must have induced the defrauded party to take or omit to take an act that resulted in some substantial detriment.


Lastly, under New York law, there is no such thing as “palimony”. Again, the concept of judicial economy was a driving force here. The concept of palimony first came to public attention in Marvin v. Marvin, 18 Cal. 3d 660, a California case, decided in 1976, which involved a non-marital relationship between the legendary film actor/action hero, Lee Marvin and Michelle Trola Marvin. In that case, the court afforded Ms. Trola Marvin the right to attempt to prove that an implicit or express contract involving Mr. Marvin=s earnings and assets was entered into between the parties. This case paved the way for recognition of palimony as a recognizable cause of action in California.

However, on this side of the continent, the courts have viewed the issue quite differently. In 1980, New York’s highest court, in Morone v. Morone, 50 N.Y.2d 592, decided that it would not recognize palimony as a valid cause of action on the grounds of public policy. As a result, palimony has been a disfavored cause of action in New York ever since.


A word of caution, each of the legal concepts described above is applicable only under special circumstances. Again, reference to the interesting case of A vs. A, may help to bring this home. Although Mr. and Mrs. A’s relationship lacked the formal sanction of marriage, they were virtually universally assumed to be a traditional married couple. After Mrs. A’s common law marriage cause of action was dismissed (as described in Part I of this article), she proceeded under some of the contract and tort law principles discussed above (including constructive trust, quantum meruit, economic partnership, unjust enrichment and fraudulent misrepresentation).

I believe that what enabled Mrs. A to prevail, in the face of Mr. A’s motion to dismiss, were the compelling and special circumstances that she was able to demonstrate. Specifically, when the parties embarked on their living together-relationship, they were in their late-20’s to early 30’s, and had yet to achieve the significant financial success that they would later in life; Mr. A was still plying his trade as an oil burner furnace serviceman, and Mrs. A hers as a dental technician. Yet, over the course of their relationship, they built a successful business together. Mrs. A was integrally involved in both the development of the product, and in fulfilling many of the demanding functions involved in building a business from the ground up (including physically challenging and dangerous jobs like making late-night cash deposits in sometimes marginal neighborhoods).

By the time of their separation, they had a number of investments in joint name, filed joint income tax returns for most years of the relationship, adopted common estate plans, and jointly owned residential apartments, including the penthouse apartment they lived in up to their separation. During the years in which they built their substantial wealth, Mrs. A served as corporate officer and secretary of their primary business, and, as they expanded into property holding and development, she was issued shares in one or more corporate holding companies.

And lastly, but perhaps as importantly, Mrs. A was able to prove these facts. As is often the case after litigation commences, when Mrs. A attempted to obtain certain documents in order to prove her claims, Mr. A contended that the documentation no longer existed, was no longer under his possession or control, or never existed in the first place.

Consequently, it was crucial that Mrs. A had the foresight to retain and copy hundreds of documents before litigation was initiated. As a result, she was armed with an arsenal of paper that would help prove her claims.

So, my last word of advice is to do more than just keep yourself informed and knowledgeable about your financial affairs. Also, be wary enough to collect your documentary proof, and to do so before it’s too late. Otherwise, you may find that you’re barred from locations where documents are kept, and that documents have been thrown out, hidden, shredded, or otherwise placed beyond the reach of legal process.

And lastly, the case of Jennings v. Hurt (discussed in Part I of this article) illustrates that you can’t tailor the facts of your case to fit your claims. In dismissing Ms. Jennings’ common law marriage cause of action, the court also refused her request for permission to amend her complaint to add three non-marital causes of action (constructive trust, breach of contract and breach of a promise to support), leaving her with effectively no legal remedy, except for the right to receive child support for their common child.

Critically, the courts require a proponent of any one of the legal theories described above to specifically plead and prove the specific elements of the given cause of action. This was the case with respect to Ms. Jennings’ proposed constructive trust and breach of contract causes of action, which were held insufficient, as a matter of law, due to failure to plead specific elements of the cause of action. It should come as no surprise (in light of Morone) that the Court dismissed the third proposed cause of action, which it considered to be a mere promise to support in return for “wifely” duties, in essence a palimony claim, finding it to be void as against public policy.

The lawyer for Ms. Jennings contended, rather unconvincingly, after losing on the trial level, that the trial judge had been blinded by Mr. Hurt’s celebrity (even claiming that the judge had fallen in “love” with Mr. Hurt). Yet, issues of relative credibility aside, it seems clear to me from the face of their respective allegations that the degree of financial interdependence involved in the relationship between Ms. Jennings and Mr. Hurt, didn’t compare to the interdependence that existed between either Ms. McCall and Mr. Frampton, or between Mrs. A and Mr. A for that matter.


The Sociologic Of Political Silence: Explaining A Discourse In Jamaica’s Society

The hegemonic categorization of the Jamaican landscape is primarily the justifiable reason for the sophisticated demonstrations and social hemorrhaging. Many of those happenings are caused from the lack of monologue of the business constituents. This group of elitists has exponentially benefited from playing the proletariat class. They have not offered their clientele the respect of voice on matters of social concerns or political mismanagement. The present government’s socio-economic policies are chiefly responsible for the erosion of much of the social fibre and economic livelihood of the Jamaican people. The poor are not only suffering but they are also hemorrhaging while the business class offers the society stillness as a tool of needed social change. PIOJ (2004) report, Economic and Social Survey Jamaica, report confirms that the national poverty stood at 16 per cent. Of the 2, 650,900 inhabitants, there are 424,144 poor people, which absolute valuation seems not to perturb the hegemony of this society. In order to attain that social society that we all desire, justice through actions and deems must be a hallmark of the leadership.

The categorization of Jamaicans as poor has been declining (Henry-Lee, 2001) but the economic indicators of growth are not impressive as our Caricom counterparts. Looking at the absolute figures, the social realities of the peoples are not marginally measured or understood. Despite the fluctuations in economic growth valuations, rural poverty continues to be higher than the national figures and of those for other towns and cities. Coupled with the economic hardship of poverty, rural Jamaica over the last six months is seeing a dwindling of economic activities. As a social scientist, I believe that the current tidal waves of price increases are eroding the economic livelihood of many of the poor. This situation means that the economic hardship of the people within the context of the hegemony – silence, is destroying the moral and other social fibre of the poor. “What are poor to do?”

‘Once economic growth was taking place, it was that poverty would be reduced’ (Henry-Lee, 2001, p.202) but this orthodox phenomenology may be changing in Jamaican as Gross Domestic Product (GDP) at constant prices have been increasing (PIOJ, 2004, p.3.1) with a simultaneous change in economic hardship of the poor while the hegemonic class expand their physical surroundings and amass European amenities. To date, the constant salary, the MTTP (Ministers Tricking the Poor), the minimal bus fare increases (only 67 % – what!), the huge increases in prices of basic foods and increase in political leadership are making the ‘poor’ poorer. Those hurdles are not the challenges of the poor as they wrestle with ‘prince’ and ‘guards’ for sanity. The electricity increases, instructional materials increases, the last blatant disdain by the Prime Minister, ‘Rt’ honourable Percival James Patterson, for the intellectual mindset of the ‘black’ academic is frightening and speaks volume of the private sector’s silence.

The private sector, despite ‘recognizing’ the challenges of governance and policies formulation of the government, continue to hemorrhage in silence, which, I construe, indicates the tenants of the PNP over the economy. I realize that there is no longer a unified Jamaica but a PNP, a JLP group and a business class. This situation was unfolded to me over time as there is not core concern that may create unison in order that Jamaicans can forge around with the interest of all. Instead, we are ‘Ps’ and a ‘B’. The socio-political arena has changed globally and nationally for the JLP but the reality is, the average citizenry of this society are still clamouring for hegemony and social transformation though development.

It is the business class that is the engine of growth in all societies and not the public sectors. This group dictates the terms of economic activities and stipulates the atmosphere of governance but the Jamaican group is hemorrhaging from fear and political conformity. Hence, the present proletariat class, the underclass, is left to view the heavens for a haven. When the business class fails to provide that leadership for the society, the ‘labourer’ class will gradually venture in deviant acts as a medium of grappling with political mismanagement. ‘Too many people are comfortable with the present affairs (Bourne, 2005) and silence of the ‘underclass’ is becoming increasingly deafening. If the business class continues with this dialectic silence, the poor may resort to revolution in an effort to understand and come to a rationale of their social space.

The old philosophical construct of poverty is primarily food consumption of the poorest quintile but this definition fails to recognize that poor people are social beings with children. One researcher (Henry-Lee) forwarded a slant that; the poor spend the largest proportion of their earnings on food, which means that the business class must begin to offer a position against any erosion of their economic base. If there are presently 424, 100 absolutely poor people any increase in food prices will see them living how?

According to Rapley (1996, p.7), “state interventions to relieve poverty would inhibit initiative, and would stifle investment because they would rely on increased taxes.” Dr. Rapley’s cited perspective is a clear indication of the stance taken by all traditional economists. This stance sees development as solely an economic growth phenomenon that is driven by the free market but many post World War II economists differ on a theorizing for this construct. Lewis concurred with classicalists like Smith and Keynes that development is primarily economic. Rapley (1996, p.16) stated that, “Lewis argued that in a Third World economy, the wage rate was set at a constant level as determined by minimum levels of existence in traditional family farming.” This ensured a virtually unlimited supply of cheap labour, which has an advantageous factor in industrial development (Rapley, 1996 p.16). As a social scientist who is concerned with development and its determinants, the researcher is cognizant of the different discourse on the issue but will analyze both schools of thought before coming to a consensus.

The Organization of Eastern Caribbean States (OECS, 2002) wrote, “while material poverty affect a large number of households, the Report points to the impending dangers of more widespread and subtle forms of poverty that include poor health, inadequate levels of educational attainment; lack of economic assets or access to markets or jobs that could create the unsafe physical environment; and various forms of social exclusion.” This report forwards the core of the post-1950 scholars’ viewpoints on development that is broader than the Classicalists theorizing that was once the epistemological framework on development thoughts. The article points to other non-economic growth theorizing such as health care, education and other psychosocial conditions. Hence, the author will not seek to continue in the pre-1950s epistemological mindset as it is a one sided theorizing but will seek to quantify any validity of the contemporary developmentalists’ perspective on the issue as this include social, political and economic factors. This paper surrounds the social aspect to development in the form of expenditure on health care and expenditure on education with the intention of using those two (2) determinants of contemporary development in order to ascertain any causal and/or associational relationship between expenditure on social programmes and their influence on levels of development.

Spikes (2002) posits: “poverty can be regarded as the inability to obtain the essentials of life; for others it is a matter of low income; for others a problem of social inequality”. He goes on to say that “poverty can be explained in terms of material conditions, that is basic needs, food, clothing, and shelter; however limited resource interfere with the ability to acquire the essentials. Poverty can be seen as exclusion; the European Union defines the poor as persons whose resources (material culture and social) are so limited as to exclude them from the minimum acceptable way of life in the member state in which they live depending on benefits as equivalents as claiming social assistance”.

It is frightening to say the least that despite efforts within the technological age people are living in abject poverty that retards the process in which many of these issues should have been addressed. Haralambus (1995)”poverty implies an undesirable social problem that a solution should be found. Basic amenities, for examples, shelter health and nutrition: the latter according to Drewnowski and Scott in Haralambus “is measured by factors in relation to the amount of calories and protein consumed by the individual. Shelter is measured by the quality of living arrangements (dwelling etc.) and health is measured by factors such as infant mortality and the quality of medical treatments available.

When individuals are malnourished, the health of these individuals would affect them in terms of their physical and mental states. A medical practitioner, Dalzell-Ward (1974: 23), commented that “The deprivation of energy foods’ will result in excessive fatigue which will in turn diminish social and work performances and interfere with well-being.” There is however, the indication of a level of development, where as if an individual is not in the best of health, this will contribute to fewer hours worked and reduced production. The economist Adam Smith states that this would be an indication of reduced economic growth. Professor Todaro (Todaro, 2000) from his perspective, that development envelope social, political and economic changes in peoples lives. Another medical practitioner concurred with Dalzell–Ward (1974) when she said:

In fact many of today’s problems with students are actually health related. Kids are not able to learn sufficiently if they are hungry, tired, hung-over from alcohol, or worried about violence. We need to eliminate barriers that affect students’ readiness to learn. A variety of physical and mental conditions impact students’ attendance and their ability to pay attention in class anger, and restrain from self-destructive impulses.

Eurocentric beliefs have so conquered the epistemology of world ideology that it becomes difficult even for the ‘honest’ advocate to be effective. Individualism-profiteerism drives the engine of social existence that humans only protect themselves, even if it appears that another is being helped in the process. Christianity is a by-product of the Eurocentric system and so helps to explain its true tenet. Europe in an effort to corner all epistemologies of the ontology of man’s existence and creation offered spiritualism. Christianity operates as though it has the sole authority to the ontology of creation. Despite its stance, the ideological phenomenology of Christianity subsumes individualism. Unlike the other traditional epistemological construct of man, humanitarianism is a tenet of their doctrine but they are not the iconic thought because they were fashioned prior to Europe’s delineation of world ideology. The social reality is such that we cannot afford to mute a position, the people are being ‘Saddomized’ by the political structure, and it is in the hegemony’s best interest to ensure that the poor and less fortunate are protected as they have nothing to lose in the event of a revolution.


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Dumbing Down Our Children – This Is Education "Equity?"

One of their favorite arguments: “Why, we can’t trust the free market to educate our children — the very idea! The free market excels at many things, they say, but it does not guarantee education “equity” for our kids.

What is this “equity” public-school apologists talk about? It means a guarantee that all children get a “quality” education and “equal opportunity” to learn. “In the cruel free-market,” the public-school bureaucrat says, “the rich get the best schools, the middle class the mediocre, and poor kids get left in the dust.” That, they say, is not fair, not “equity.”

But why not apply their “equity” theory to food, clothing, and housing? Shouldn’t all homes, food stores, and clothing factories also be owned and operated by government to ensure “equity?” After all, the rich eat better, have warmer clothes, and live in finer homes than the poor or middle-class. That’s not fair, right?

No, it is fair.

In a free-market, those people who make more money than others usually earn it. They risk more, work harder, work smarter, persevere more, make better life decisions, or choose a profession that has greater opportunity to gain wealth. Why shouldn’t they enjoy the just fruits of their labor, of their character, of their life-decisions?

Also, what financially successful people earn is not taken from those who earn less. Is it the successful person’s fault the less successful do not work as hard, persevere as long, or make better decisions? If you seek blame for differences in people’s income, don’t place it on those who succeed. Blame it on life, on human nature.

Nature makes all men and women different — different talents, abilities, strengths, and weaknesses. It has always been this way since human beings came out of the trees and started walking upright. To stamp your foot at disparities of income is to stamp your foot at human nature, which is to stamp your foot at reality.

If “equity” for all people is our goal, then for every “inequality” between poor, middle-class, and rich people, whether in food, shelter, health care, or education, government must loot financially more successful people with taxes to remedy what they did not cause, and which is not their fault. This notion of “equity,” extended to all aspects of our life, will turn America into a socialist or Communist economic police state. In such a police state, the successful are punished and “leveled” by progressive income taxes, so that all of us end up miserably equal and equally miserable.

But this is an old story, the story called envy. The unhappy who hate the happy, the unsuccessful who hate the successful, all seeking to salvage their self-esteem by bringing down the ones they envy. The communist Soviets tried it for eighty years. The result — a shambles of poverty, slavery, and failure.

“But,” the equity lovers say, “why punish the children? Is it their fault their parents are poor?” No, it is not, but neither is it the fault of those who are not poor.

Even presuming we wanted this “equity” for our kids, have our government schools actually given children equal opportunity and “quality” education during their 150 years of control? Jeanne Chall, in her book, “The Academic Achievement Challenge,” sites grim statistics that 70 percent of inner-city 4th-graders read below grade level, that an exploding prison population is made up mostly of men whose reading and math skills are at or below the eighth-grade level. These are just the tip of the iceberg of statistics that prove the utter failure of government schools.

Public-school employees can have the best intentions in the world. So what? What matters is results. For all practical purposes, public schools therefore create only inequity for our children by giving them a third-rate education, especially inner-city kids. Our government-controlled public schools condemn millions of children to a lifetime of failure, while school officials mouth pious goals about creating education “opportunity” for all kids. Could our children be any worse off if public schools were scrapped, and low-cost, competent, free-market schools or tutors taught our kids?

In order to guarantee “equal education” for all children, you have to create a massive, public-school system to enforce this guarantee. Once a government monopoly takes control of your children’s education, quality education for your kids goes out the door. Demand education “equity” and we condemn millions of children to a miserable future.

In contrast, if we allow children’s natural love of learning to flourish and an education free-market to blossom, even poor kids, as generations of American immigrants have proven, become middle-class or even rich. Scrap the public schools and let school choice and open competition prevail, and most poor kids will finally get a quality education and rise to their highest potential.


How Does the 2018 Federal Budget Affect You and Your Family?

If you sat down at 7:30 last night to watch the 2018 Federal Budget Announcement, you may have found yourself a little overwhelmed. With so many figures and areas of taxation to get your head around, we have sat down, dissected and summarised the answers to the question you may be asking – “What’s in it for me (and my family)?”

Personal income tax

The Treasurer announced plans for a three-step, seven-year plan:

  • Step One: Effective immediate, low and middle income earners are to benefit from tax savings of up to $530 per person (or $1,060 per couple).
  • Step Two: From 1 July this year, the threshold of the 32.5% tax bracket will increase from $87,000 to $90,000, then will again increase in July 2022 from $90,000 to $120,000.
  • Step Three: From 2024-25, there will be just two income tax brackets for people earning over $41,000 per year: 32.5% for incomes between $41,001 and $200,000, and 45% for incomes exceeding $200,000.
  • The Medicare levy will remain at 2%.

Your superannuation

Have you ever considered changing your super fund, but found it cost-prohibitive because of high exit fees? Great news in this years budget– super funds will soon be banned from charging exit fees. But you’ll need to wait until 1 July 2019 to make your move.

Other changes to superannuation include:

The balance-eroding practice of automatically adding life insurance to a superannuation policy, no matter what the age of the person, will end. (To date, super members under the age of 25 pay nearly $200 million a year in life insurance fees through superannuation). Those under 25 are now required to ‘opt in’ to buying life insurance.

Companies can no longer automatically deduct life insurance cover for all funds where no contributions have been made for 13 months.

According to the Association of Superannuation Funds of Australia, more than 60% of Australians have multiple super funds. So, the ATO will turn their eye to inactive super accounts and merge them with their owners’ active funds.

  • Self-managed super funds (SMSFs) can now have 6 members, up from 4.
  • SMSFs with a history of good record keeping will be rewarded by reducing annual audits to 3 yearly audits.
  • People over 65 can put up to $300,000 into super from the proceeds of selling their home.
  • First home buyers who have made super contributions under the First Home Super Saver Scheme can access their money for eligible property purchases.


Young people living in rural and remote communities will find it easier to get access to Youth Allowance payments while they are studying away from home (eligibility for these payments is based on parental income).


The Federal Government will match funding with the states and territories to provide traineeships and apprenticeships for “high-demand” areas over four years. However, there is one caveat: each of the states and territories needed to sign up for this to go ahead.

Ageing Australia

There are a number of changes in this years budget to benefit older Australians. They include:

  • $1.6 billion over four years has been set aside so 14,000 seniors can stay in their homes rather than go into a nursing home.
  • $20 million for mental health nurses to support older people still living at home (the Government notes that men over 85 have the highest risk of suicide of all age groups).
  • $40 million has been budgeted for urgent building and maintenance work for aged care facilities in regional and remote areas.
  • $33 million has been set aside to address a chronic shortage of palliative care in nursing homes.
  • A one-year exemption from the ‘work test’ will apply to recent retirees who have less than $300,000 in total super savings.
  • The Pension Loans Scheme will be available to all Australians over Age Pension age and the maximum payments will increase to 150% of the full Age Pension.
  • Pension Work Bonus increases to $7,800 p.a. from $6,000.
  • Finally, the Government has pledged to make the aged-care system easier for families to navigate, simplifying forms and providing relevant online educational facilities.

Access to more affordable medicine: Granted, you will need to wait years for this, but it’s good to know the government will spend $302 million over four years to improve your access to generic and less expensive medicine.

Your health

There are plans to allocate $130 billion for public hospitals over five years. The government also proposed a crack down on unnecessary diagnostic tests.

Access to your own data. The government announced the establishment of a “consumer data right”. This will allow you to take control of your online personal data and safely share it with credible service providers, starting with the banking, energy and telecommunications sectors.

Small business

No budget would be complete without something for small businesses. If you run your own business, the current deduction on spending on eligible assets of up to $20,000 has been extended to July 2019. Another win: streamlining of GST reporting which, in turn, will save money – a welcome change for around 2.7 million small businesses.

Craft Beer Brewers. There are around 350 craft brewers in Australia, so chances are you aren’t one of them. However, most consider the tax changes that put small craft beer brewers at a disadvantage to be a victory for common sense. Beer sold in kegs larger than 48 litres have been taxed at a lower rate than smaller kegs, which in effect has favoured large producers. The change brings the lower tax level down to beer sold in kegs larger than the 8-litre size.


While not all of these changes are likely to affect you personally, you might give them your ‘tick’ of approval:

  • Multinational companies now to be policed and stopped from shifting profits to lower-taxing countries (they do this by loading up local operations with debt).
  • Online hotel booking websites based outside of Australia will now be taxed at the same rate as Australian businesses, ending the inequality that currently occurs between international and local booking providers.
  • Companies that are currently ‘pushing the boundaries’ and taking advantage of the research and development tax incentive scheme will be stopped. This will ensure funding goes to genuinely innovative spending.
  • A $1.3 billion plan to support Australia as a ‘global leader’ in medical technology, biotechnology and pharmaceuticals.
  • The ATO will turn an eye to the ‘Black Market Economy”, with more audits, ‘mobile strike teams’ and a ‘Black Economy Hotline’ for the public to report suspicious activity of businesses attempting to avoid paying tax.

Budget Questions?

If you have any questions, your mortgage broker is always ready to help.