Some time ago, members of the Australian Parliament chose not to freeze their salaries. But perhaps they should have.
In a period of low inflation, low wage growth, and a ballooning national debt, which is apparently in the order of $500 billion now, politicians are working to find ways to save money and reduce the debt. So what message would it send to the Australian people if they did freeze their salaries?
What message did it send when they refused to?
Many people express frustration about the lack of control over spending by past and present politicians. And, I can understand how they feel, particularly when we learn that some politicians have done the wrong thing and flouted tax-payer funds. Next they want us to pay more for their mistakes.
So, as a gesture of their commitment to the cause, I believe they ought to vote for a freeze to politician’s salaries for a set period.
We may not have control over exactly what politicians do, but we can have control over what we do, which is why I enjoy hearing people say that they are choosing to worry less about what politicians do and instead are focused on what they as individuals can do to learn how to build wealth or generate an additional income stream. Therefore, any decisions made by politicians that effect your finances will seem less important.
What do we expect in the market?
The All Ordinaries Index (XAO) has finally retreated below 5800 points this week, a week or so later than the analysis indicated. The sell-off is likely to continue for a couple of weeks while the market comes back to rest close to 5550 points. Following this move, the market is likely to resume its rise.
US and UK markets are in blue sky, however, Asian markets are lagging; the Hang Seng (HSI) and Shanghai Composite Index (SSEC) are currently around 31% and 88% below their all-time highs, respectively. Australia is in the middle, still 19% below, and has been pushing hard to move higher.
My analyst team believe there is a reasonable probability of a new all-time high (above 6873 points) occurring in the next 12 to 18 months (at the latter part of this period). The previous medium term target, between 6200 and 6400 points, is still to be achieved this year; around 7% to 10% above the current level.
Dale Gillham is Chief Analyst at Wealth Within
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