Where to live for various phases of your life

School Age until University

Australia. Education is free (except for private schools). Public healthcare is free (or inexpensive for private health insurance). Large amounts of land/space at relatively low cost.

Working Age

Asia. Tax rate is low. Salary is higher for the same job compared to Australia. Vibrant nightlife and shopping until late. Cheap travel to other countries.

Roughly speaking:

Australia -> 4 - 21 years old

Asia -> 22 - 35 years old

Australia (when your children are primary school age) -> 36 - 52 years old

While working in Asia, remember to buy investment property in Australia to accrue negative gearing tax credits.

Before returning to Australia, sell your investment properties to reduce the amount of tax payable under capital gains tax. i.e. sell 1 property each financial year. Sell enough such that there would be no loan balance outstanding on your primary residence. Only 50% of the capital gain is taxable if the asset has been owned over 1 year, and there would be no other Australian income to push you into the higher Australian tax brackets while you are currently working in Asia. Keep the cash in AUD$ if you are worried about currency fluctuation and reduce the loan principal (or put into an offset account) of your primary residence.

Upon return to Australia, use the accrued tax credits to offset Australian salary income. Use the capital gains from the sale of your investment properties to eliminate any loan on your primary residence (because interest on a home loan for your primary residence is not tax deductible). Any surplus cash can be used to purchase a new investment property (for more negative gearing), or shares using a margin loan (for negative gearing). Only borrow money if the interest is tax deductible. Alternatively, any surplus cash can be left overseas for foreign investments that are unknown/untraceable by the Australian Tax Office.

Salary sacrifice into superannuation after all the accrued tax credits have been depleted to reduce your taxable income. Use a self-managed superannuation fund to purchase investment property or shares for your retirement. Do not pay fees/commissions to a fund manager.

Differences in schooling between Australia and Asia

University

Assuming the goal is to have your children study at a University, then the FEE-HELP system offered in Australia is the most cost-effective. FEE-HELP defers the upfront costs of attending university and is paid back later by the child when they start to earn income and is not means-tested to be eligible. If their salary is > $43,151 they starting paying back their FEE-HELP loan to the government at 4% per year. The maximum repayment is 8% when they start earning > $80,137.

The lifetime loan limit for FEE-HELP is $85,062 for 2010 (higher limit for medicine, dentistry). For example, a 4 year Bachelor of Laws undergraduate degree at the University of Technology Sydney will roughly cost $35,424 in university fees. (192 credit points X $184.50) You must be an Australian citizen or permanent resident of Australia AND be a New Zealand citizen to be eligible.

Such a scheme is not offered in Asia. Attendance at a university in Asia requires upfront payment of fees. For example, at the University of Hong Kong, a 4 year Bachelor of Laws undergraduate degree incurs tuition fees for HK$42,100 X 4 = HK$168,400 = AU$24,680

Therefore attending an Australian university if you are an Australian citizen is not a difficult choice to make. Even though it may cost less to obtain a similar university degree in Asia, you must determine whether it is of the same quality and whether there are enough places to gain a place or if the entry mark is too high.

High School

Countries have both public high schools and private high schools. Public high schools are generally free while private high schools are not.

Private High School in Hong Kong versus Private High School in Australia

Australian International School in Hong Kong

Year 7 - HK$106,600 + HK$12,000 (capital levy) = HK$118,600

Year 8 - HK$118,600

Year 9 - HK$118,600

Year 10 - HK$118,600

Year 11 - HK$112,000 + HK$12,000 (capital levy) = HK$124,000

Year 12 - HK$124,000

Total: HK$722,400

English Schools Foundation (ESF) - Shatin College, New Territories

Year 7 - HK$89,250

Year 8 - HK$89,250

Year 9 - HK$89,250

Year 10 - HK$89,250

Year 11 - HK$89,250

Year 12- HK$89,250

Total: HK$535,500 (25.8% cheaper than the Australian International School)

Many schools in Hong Kong are Direct Subsidy Scheme (DSS) schools. They can set their own schools fees (usually HK$3,000 - $110,000 per year) and receive some government funding. A list of DSS schools in Hong Kong is found here:

http://www.edb.gov.hk/FileManager/EN/Content_175/schlist(fees)_e_c.pdf

Sydney Grammar in Australia

Year 7 - AU$24,318

Year 8 - AU$24,318

Year 9 - AU$24,318

Year 10 - AU$24,318

Year 11 - AU$24,318

Year 12 - AU$24,318

Total: AU$145,908 = HK$996,665

Public High Schools - Hong Kong

In Hong Kong, there are comprehensive public schools. Only 112 of 400 government-funded high schools are allowed to conduct classes in English. These are referred to as English Medium Secondary Schools. Funnily enough these English Medium Secondary Schools are also the best performing government-funded high schools. However, even in English Medium Secondary Schools, many instructions to students are given in Cantonese.

Therefore comprehensive public schools are not an option for someone seeking future study in an Australian university (which is taught in English).

Public High Schools - Australia

In NSW, there are public high schools which are Selective High Schools. The students who attend these type of public high schools must pass a Selective High School Placement Test when they are in Year 6 and therefore must be of high academic ability if they are offered a place. There are 3,533 vacancies for Year 7 in Selective High Schools and each year there are approximately 13,336 applicants. This represents a 26.4% chance.

In 2009, the top 5 Selective High Schools that accept boys based on their minimum entry score were:

1) James Ruse Agricultural High School (241/300 - 80.3%)

2) North Sydney Boys High School (223/300 - 74.3%)

3) Sydney Boys High School (219/300 - 73%)

4) Baulkham Hills High School (216/300 - 72%)

5) Fort Street High School or Normanhurst Boys High School (213/300 - 71%)

Why choose a Selective High School? For example, 50% of Year 12 students at James Ruse Agricultural High School accept university places for studying medicine and law.

Therefore attending a Selective High School is not a difficult choice to make. It is far cheaper than attending a private high school and your child has a far higher chance of being admitted to an Australian university course with a high cut-off entry mark than if they attended a comprehensive public school.