Finance News

We are just as surprised as you!

Posted on Tuesday, May 21, 2019
We are just as surprised as you! Last week we were drafting franking credit emails, looking at alternative options for retirees, and contemplating negative gearing changes. Now all of that is in the bin - for the moment. The next issue for the Coalition is that given that they went into the election with a very modest set of policies, how they will govern from here? What are their big ideas for Australia? What kind of government will this be? The Coalition should not allow this unexpected triumph to be an excuse for complacency on their policy platform, or how they conduct debate within their parties. The Coalition’s surprise election win has given local stocks a healthy shot in the arm, sending the Australian share market surging to a fresh 11-year high on Monday. Bill Shorten and his proposed changes to negative gearing, capital gains tax and franking credits had been perceived by the market as detrimental. The challenge will now be for Scott Morrison to get his tax agenda through the pa ... Read the rest of entry »

Government first home buyer loan guarantees: BIG MISTAKE

Posted on Monday, May 13, 2019
Yesterday’s twist in the federal election campaign saw both sides of politics promise first homebuyers a home loan guarantee of 15%. This means that a buyer would only need to gather a 5% deposit in order to buy their first home, with the government guaranteeing the remaining 15% to the bank, totalling a 20% deposit overall. I believe this is a big mistake. It seems that our politicians on both sides have a very short memory. It was only about a decade ago that we saw the sub-prime mortgage crisis decimate the US housing market and flow on to feed the Global Financial Crisis.  In this circumstance, low-deposit loans led to home owners taking on more debt than they could afford to service, resulting in thousands of people across the US defaulting on their home loans, leaving the keys on the kitchen table and simply walking out. This is the risk we run, if we allow first homebuyers into the market with only a 5% deposit. But there are more reasons to ensure that the barrier to entry to the hou ... Read the rest of entry »

Is the ALP's small business tax cut discriminatory?

Posted on Monday, May 6, 2019
We’re two weeks out from the federal election and the Labor party have announced their package to woo the vote of business owners, as well as workers on the top and bottom of the age spectrum, by offering an incentive to employ younger and older workers. Under Labor’s plan, a small business will gain an extra 30% tax deduction on the wage of employees aged under 25 or over 55, if they have been unemployed for at least three months, or they are a carer returning to the workforce. This is the first sign the ALP has offered that they realise 5.7 million Australians either run a small business or are employed by one, and are looking to secure those votes. On face value, I’d take it as a win. I also note that this is the first election promise from either side that I’ve seen, that will actually put money back into the pockets of small businesses. The Coalition’s instant asset write off scheme offers a tax cut, but in order to take advantage of it, a small business must have the c ... Read the rest of entry »

Vote early, vote often!

Posted on Monday, April 29, 2019
I suspect you've heard the phrase, "vote early, vote often". Well, from today you get your chance on at least the first part of that statement, with early voting centres across the country throwing their doors open for the first day of voting in the Federal Election. It sounds great: most of us would rather vote on a day and at a time that suits us. After all, with election day being a Saturday it's often easier to slip away from work for half an hour during the week, than it is to find the time between brunch and kids' sport on election Saturday. And the numbers we've seen in two recent state elections suggest that early voting is quickly becoming our preference. In the recent NSW State election more than 1 million votes were cast prior to election day. In the Victorian State election last year around 1.4 million of us got it out of the way early. But there is also a significant issue here that requires reform, if the early voting trend is going to continue. The issue is that voter ... Read the rest of entry »

The impact of public holidays on small businesses

Posted on Tuesday, April 16, 2019
As a sporting tragic, it’s safe to say I’ve shed a few tears over the weekend, with Winx and Tiger woods cementing their places in history as the GOAT in each of their sports.  However, the next little while will see some tears spilled by small business owners across Australia for less happy reasons. In the seven days from Thursday this week, we will have four public holidays: Good Friday, Easter Sunday, Easter Monday and Anzac Day. This presents some serious challenges for small businesses, who are faced with the conundrum of whether they can afford to open or not. Here’s the equation: -       Option 1 – open, pay staff penalty rates, and potentially lose money -       Option 2 – open, work the days yourself to save the penalty rates outlay, but potentially have a negative impact on your physical and mental health -       Option 3 – don’t open at all and write it off ... Read the rest of entry »
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