Interest Rates

Thursday, January 07, 2016

As it had been widely expected the RBA left interest rates on hold at its February meeting.  This marks the ninth month in a row with the cash rate remaining at 2%.
While the RBA is less upbeat on the global economic outlook, particularly for emerging countries, and has acknowledged a further slide in commodity prices and reduced appetite for risk it seems more upbeat on the Australian economy at least in terms of information released over the last few months.
Inflation continues to be seen by the RBA as remaining low and it has also acknowledged slowing property price gains in Sydney and Melbourne.
While the RBA retained an easing bias on the back of the low inflation outlook, the balancing of more positive domestic developments against recent negative global developments clearly enabled it to remain on hold for now. However, the RBA is clearly concerned about recent global and financial market developments and is waiting for more information in order to be able to judge its impact on global growth and the Australian economy.
Our view remains the RBA will cut interest rates again this year reflecting the risks around the global economy, weaker than expected commodity prices, still subdued growth in Australia at a time when the contribution from housing construction is slowing, a more dovish Fed threatening a higher Australian dollar and continued low inflation. However, this may not come till April or May.
However, whether there is another rate cut or not from the RBA, it’s hard to see rate hikes any time soon.

So the period of low interest rates – with the cash rate at a record low and bank deposit rates at their lowest since the 1950s – is set to continue.


A Boost to Small Business - how to benefit from tax cuts!

Friday, July 17, 2015



One of the most talked about changes in this year’s budget was Treasurer Joe Hockey’s announcement of an immediate deduction for small businesses for acquired assets up to the value of $20,000, a generous increase from the current $1,000 threshold. From July 1, small businesses tax will also be cut to 28.5%.

So why is the government so keen to give small business a boost? And if you’re one of the two million small business owners in Australia, what can you do to make the most of the changes in the lead up to the end of financial year?

Urging small businesses to 'have a go'

The $5.5billion small business package designed to stimulate the economy by encouraging small business owners to spend now – anything from “cars and vans to kitchens and machinery,” according to Mr Hockey in his budget speech.

Given 96 per cent of Australia’s businesses are small, they employ over 4.5million people and they are typically able to make purchase and hiring decisions quickly, boosting small business confidence and investment can have a significant and almost immediate impact.

read more


Preparing for End Of Financial Year - EOFY

Friday, June 05, 2015


With the end of the financial year on our doorsteps, its a good time to reflect on your financial situation.

Here is a list of common changes to consider...

Has your income changed?

The income you received during the year may not be the same as when your advice was put in place. Maybe you received a pay increase, earned some overtime or received other payments such as extra commission or a bonus. How might this affect you?

If you are making salary sacrifice contributions to super

There is a limit, known as the concessional contributions cap, on the amount you can contribute to superannuation each year from your pre-tax income. Contributions your employer makes on your behalf, such as Superannuation Guarantee and salary sacrifice contributions, count towards this limit.
If you have arranged with your employer to contribute part of your salary to superannuation via a salary sacrifice arrangement, it is important to review your contributions to ensure they are still within the concessional contribution cap.

If, for example, you’ve earned more than expected then the amount you have salary sacrificed, together with the compulsory contributions made by your employer, may be in excess of the contributions cap. This could result in additional tax penalties and administration issues. Detecting this before the end of the year can allow time to minimise any impacts.

Making tax deductible personal super contributions

You must meet certain criteria to be eligible to claim a tax deduction for a personal superannuation contribution you make. If you haven’t earned as much as you thought:

You may not to be able to claim a deduction for the full amount of the contribution. You can only claim a tax deduction for your contribution if you have assessable income to offset.

Will your spouse earn less than $13,800 this year?

If your spouse has a low income, you may be eligible to claim a tax offset of up to $500 after making a contribution to their superannuation fund. Tax offsets have a greater impact on your underlying tax liability than deductions because they directly reduce your tax bill dollar by dollar – rather than deductions which simply reduce the income you include in your tax return.

Is your insurance still appropriate for you?

Have any of these happened to you through the year?

  • A change in your salary
  • The purchase of a new home
  • Changes to your home loan repayments – such as an increase in your rate of repayment or lump sum repayments
  • Purchase of an asset funded by borrowings
  • Marriage or divorce
  • New children.

If so, you may need to review your insurance cover.

Do you have a self managed super fund (SMSF)?

You’ll be aware that having an SMSF means you have extra responsibilities as trustee of the fund. As 30 June approaches, two important considerations include:

  • If you are in pension phase, have the minimum pension payments requirements been met?
  • If your SMSF is receiving contributions from an unrelated employer, it must be able to receive contribution information through the new SuperStream data standards. If you have recently changed employers or intend to change employers, it’s important to make sure your fund can receive contributions using the data standards so you are not in breach of your duties.