Finance News

Albo vs Scomo: the real world impacts of pulling a political rabbit out of a hat

Posted on Wednesday, May 18, 2022
You now have just a few days to vote, and as expected both major parties have pulled a few rabbits out of their hats. But it’s quite staggering that even after all the restrictions and lockdowns, the pollies still haven’t worked out that we don’t like being told what to do.   In the COVID scenario, the iron fist was justified to a point in the interests of health and safety. But even with all the financial stimulus provided as compensation, many businesses went to the wall and others continue to do so.   Which is why this week has been a frustrating one for business owners, with Labor Leader Anthony Albanese publicly supporting a wage increase to match inflation. While Albo might be the hot favourite to win the election, telling a small business owner that their staff are all entitled to a 5.1% pay rise does not sit well with me, especially in the context of reduced hours and labour shortages in many industries. Of course, most business owners want to do the right thing by t ... Read the rest of entry »

The days of record-low interest rates are officially over

Posted on Friday, May 6, 2022
Unless you’ve been living under a rock this week, you will have heard that the RBA has lifted interest rates for the first time in a decade. Our official rate is now 0.35%.   Similarly, the US Fed lifted rates to 0.75%-1% and the Bank of England lifted their benchmark to 1%. Higher cash rates mean every person with debt is going to start paying more, since the ink hadn’t even dried on the RBA’s announcement before all the banks passed the increase on to customers.   Unsurprisingly, the increase didn’t flow on to cash accounts or term deposits, so not great news for those living off their savings.   And you can be pretty confident that the pain doesn’t end there. The war in Ukraine, COVID-19 lockdowns in China, and rising inflation are likely to push rates even higher – we could be looking at 3.5% to 4% variable by the end of the year.   For the average $700,000 mortgage holder, that translates to an interest-only increase of $145 per month, wh ... Read the rest of entry »

Feeling poorer? Inflation is costing us all at least $50 a week

Posted on Friday, April 29, 2022
We’ve all heard about it, and now we’re all feeling it. Inflation is real, it’s sending our cost of living through the roof, and there’s no relief in sight. After two years of governments throwing money at us throughout the pandemic, we’re now left with no choice but to stand on our own two feet and deal with soaring financial pressures, which range from the cost of a coffee hitting $5+, petrol prices hitting $2+ per litre, and $5+ for a humble lettuce. The average couple will feel about $50 poorer each week, which doesn’t even take into account the impending interest rate increase, which will put even more strain on household finances for both home owners and renters. So why the spike? A lot of it comes down to the Russia-Ukraine war.   Normally Russia supplies roughly a third of the world’s wheat, which makes up a sizable amount (up to 20%) of the average person’s diet. That wheat becoming scarcer is driving up grocery prices.   In ... Read the rest of entry »

Interest rate increases & COVID-related tax deductions

Posted on Wednesday, April 6, 2022
There’s been a lot of talk as we’ve emerged from the pandemic that official interest rates are set to head upwards for the first time in a very long time, and for me, yesterday’s RBA meeting solidified that further.   As I’ve said before, I expect there’ll be an increase to official interest rates in June, but some observers are tipping it might be August instead.   However, that’s only marginally relevant as the banks are clearly indicating they’re prepared to go it alone. The Commonwealth Bank in particular, has already lifted fixed rates on various products five times in the past three months.   In other news, as we approach the end of financial year in a couple of months, COVID-related tax deductions are becoming a talking point, so it’s time to start digging up all those old COVID receipts!   I’m talking masks, hand sanitiser, rapid antigen tests – anything COVID-related that you had to purchase for work.   ... Read the rest of entry »

"Dosh" Frydenberg's budget and the impact on the share market

Posted on Wednesday, March 30, 2022
By now you’ll be well aware that last night was federal budget night and Treasurer “Dosh” Frydenberg has done his best to butter us all up before the upcoming (but as yet unannounced) election.   I’m sure you’re across all the spending and you don’t need me to tell you about it again, but where I can shed some light is on where money has been invested in the stock market since the announcements, and how the market has reacted.   It makes sense that retailers and car-related stocks will benefit from a bounce in consumer spending after the budget promised voters $8.6 billion to address cost of living pressures, including the high price of petrol.   The big one is the cut to fuel excise, which is already flowing through to the bowser. Viva Energy, one of Australia’s largest petrol station operators, has immediately cut fuel prices by 10¢ a litre at its 700 Coles Express sites across the country.   The excise cut, along with other new ... Read the rest of entry »

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