I have a situation that demonstrates how this system can be overly restrictive.  If things start getting hairy here and the banks start looking a bit dodgy – which is remote I know, but not infeasible and I’d be happy to argue the point, but moving on – I could consider paying off some of my loans.  

Why would I do this? Because as it stands I have cash and loans.  The problem is that if my bank can’t pay back all my deposits and go bust it’s not simply a case of I owe the net, it’ll be a case of I still owe all of my loans to whomever bought them from the liquidator and hope for the best in terms of getting my cash back.  (As a side-bar this is a classic example of why the Australian Government is not debt free, much like me they are debt neutral, i.e. the balance of their creditors equals what they are owed. Problem is they are owed money by the likes of the Solomon Islands and Fiji).

One way of protecting myself is to pay off my mortgages with my cash deposits, leaving only a small debt to the bank. The problem is that I can’t reverse that transaction. If I take out my cash at a later stage I can’t claim a deduction on the interest on the amount I redrew. Perhaps I could if the money I took back out was used for investment purposes, but it would get messy as some of it is used as private funds and some of it is just in interest bearing cash accounts.
In fact this is the case even if you pay it off and then redraw it a day later (according to the ATO).
  
So, if things do go "Grapes of Wrath" I have to make the choice between reducing my risk totally, but paying the price of not being able to claim substantial deductions in the future, or taking a higher risk by keeping the cash.  On Steve’s web seminar he advises that cash be spread about in this situation, which is an option, but it has its flaws; on the up-side you lower your risk of losing the lot by placing it in multiple institutions, but you also increase the risk of losing some by the virtue of having the money in more than one bank.

Anyway, it’s a bit moot at the moment, but who knows, and it’s better to consider these things when you have time to rather than be forced to make rash decisions in a hurry.

I’d welcome any comments/advice about how I could redraw the money in the future and not disadvantage myself..

Perhaps those that take your advice might also end up wishing this was so!

But I was not!

Any negative statements about a specific agent or agency would only be libellous if they could be proven to be false.   Of course truth does not necessarily play any part in proviing libel and often those with the deepest pockets win, so even if your statement is true the question is; can you afford to defend yourself if required? 

That's the problem with the legal system, it's catch-22; you need to make it so that ambit claims are minimised (which has largely been accomplished by making the system prohibitively expensive), but by doing so you make justice unaffordable.  How many of us have copped a fine only because it's too costly to mount a challenge? But then the counter argument is that the system would grind to halt if it cost tuppence to do so.

We could play a game of dare here.  I’ll start with a statement and well see who is prepared to better it. The winner is the person who makes the the most outrageous claim (fact or fiction).  Or perhaps people can post a vote on each statement from 1 – 10 of riskiness.  Here's my opener:

Tom Cruse is a short little man (relative to me).

I'm not sure people are complaining so much about cost (I think most reasonable people are prepared to pay a fair price for a fair job), its more that the level of quality and consistency that disappoints.

I think one reason why people get so many quotes is that they do not trust tradies, so feel the need to "test" the market in order to get a realistic idea of the real cost.