HEADLINES FROM THE FEDERAL BUDGET
What does it mean for you?
The long-awaited 2020-2021 Federal Budget has landed, and after an exceptionally challenging 2020, it is unsurprising that economic recovery, job creation and increasing business confidence are the Government’s priorities. To help you get up to speed, We've summarised some of the headlines below. If you would like to talk through any of the implications of the budget on your specific situation, please don't hesitate to get in touch. JOB CREATION Creating jobs is at the heart of economic recovery, and it was the biggest theme of this year’s Budget. Treasurer Josh Frydenberg announced a new ‘JobMaker’ hiring credit to encourage employers to hire young Australians (aged between 16-35) in a move estimated to support 450,000 new jobs for young people. Emphasis was also placed on education through the support of apprenticeships and short courses, with a 50% wage subsidy available for businesses who employ these learners. $240 million was pledged to support female workforce participation. TAX RELIEF In a bid to stimulate economic activity, more than 11 million taxpayers will receive a tax cut this year, backdated to July 2020. The low and middle income tax offset worth $1080 will also be extended by a year. Significant investment incentives for private industry were announced in a bid to unlock investment, expand Australian productivity and create jobs. Primarily, instant asset write-offs worth $26.7bn will mean that 99% of businesses can immediately write off the full value of any eligible asset purchased for their business. Businesses will also be able to offset losses incurred to June 2022 against profits made in or after the 2018-2019 financial year, immediately accessing tax benefits. AUSTRALIAN MANUFACTURING AND INFRASTRUCTURE Huge shifts in the global supply chain have highlighted the need to strengthen Australian manufacturing. Special focus will be placed on the food and beverage, resource technology, medical, defence and space industries. $14bn has also been set aside for new regional infrastructure projects, improving connectivity and generating an estimated 40,000 jobs. FIRST HOME BUYER DEPOSIT SCHEME An additional 10,000 first time buyers will be able to purchase a home under the First Home Loan Deposit Scheme. $1bn of low-cost finance will be made available to support construction of affordable housing. $150m has also been pledged to the Indigenous Home Ownership Program in regional Australia. SUPERANNUATION FEES The Treasurer estimated that $450 million is being paid each year in unnecessary super fees due to multiple accounts. As such, new super accounts will no longer be created every time an employee changes job. Online super comparison tool ‘Your Super’ is also being established by the government to help Australians make informed choices about their superannuation. To discuss in detail what the Budget could mean for you personally, get in touch.
WHY IT'S CRUCIAL TO REVIEW YOUR FINANCES
For some, checking in with finances is part of a weekly – or even daily – routine. For others, it’s more a case of ‘set and forget’. Whatever your usual habits, We would recommend that the current pace of change merits a more regular review of your finances.
MARKETS ARE MOVING FAST Whether your investment portfolio is based in Australia or includes a mix of overseas assets, it will certainly have been affected by the turbulence of COVID-19. As markets move, it’s important to keep up-to-date with what this means for your investments. Depending on the impact on your specific portfolio, you might need to reconsider your investment horizon or risk appetite to ensure you get the most from your money. It’s not about changing your investment strategy on a monthly basis, but about making sure the impacts of turbulent markets are reflected in your long-term investment horizon and financial plans. PERSONAL CIRCUMSTANCES ARE CHANGING Let alone the impact on the global markets, families across Australia are feeling the effects of COVID on a personal, individual basis. Unemployment, changes to property markets, and different levels of lockdown have impacted financial goals, objectives, and priorities. It’s important to review your finances in line with your current circumstances, and redesign your short- and long-term goals. Regular review will keep you accountable, and make sure you’re communicating about your circumstances to loved ones. SCENARIO PLANNING A regular review of your finances means you can be ready to face ongoing uncertainty or unusual circumstances with confidence. As you review, try to look ahead to the next few months and consider what you would do in certain situations. It’s prudent to have an emergency fund just in case the worst should happen. You might also take the opportunity to review your insurance to make sure you’re covered for unforeseen eventualities. KEEPING YOUR FINGER ON THE PULSE Staying up-to-date with the world at the moment can feel totally overwhelming, but having a good awareness of what’s going on both in Australia and overseas will help as you decide on your next financial move. Try to absorb the information in the easiest way for you, whether that’s by reading the newspaper, listening to podcasts, or consulting with experts. If you would like to review your finances more regularly, and want tips on how to do that, or further support and advice, we're always happy to discuss your needs and find a solution that works for you.
MAKING THE MOST OF FINANCIAL ADVICE
It probably won’t come as a surprise that we think having a financial adviser on hand can be useful at every stage of life. There are a number of areas were having us as your adviser can prove beneficial.
1. BUDGETING, SETTING OBJECTIVES AND SAVING EFFECTIVELY It’s important to review your financial situation, goals and strategies regularly. Building a strong, trusted relationship with us will help us to better guide you through significant financial decisions, as we will have all the context we need to provide you with the appropriate advice. If your circumstances change, be sure to keep us updated so that we can amend our advice accordingly. 2. PROPERTY MORTGAGES Whatever rung of the property ladder you’re on, We are happy to act as a sounding board. This might mean giving you guidance on investment property, rental options, or reducing the tax implications of current or future purchases. We can also help you review your mortgage so it’s best suited to help you achieve your longer-term goals. 3. INVESTMENTS We can support you as you build and refine your investment portfolio either onshore or overseas. Given the economic turbulence the world is facing, regular contact with an objective expert can provide you with the reassurance and real-time advice you need to make the best decisions for your portfolio. We can also help to manage your level of risk on an ongoing basis. 4. RETIREMENT AND ESTATE PLANNING It’s never too soon to start thinking about retirement, so let’s chat to make sure you and your loved ones are preparing the most tax-effective way by considering options like super contributions and investment bonds. Keeping us updated with your personal circumstances as well as financial ones can also help us advise you on the best way to plan and structure your estate. 5. REDUCING YOUR TAX While looking over your portfolio, be sure to regularly ask us about how you can streamline your tax more effectively. We’ll always be on the lookout for strategies to reduce your tax obligations in a responsible way. If you would like to discuss any of the above, get in touch at any time and we would be glad to talk things through.