Winners of $1000 Charity Giveaway Announced

The Australian sharemarket followed global stocks higher but the Australian dollar fell after consumer inflation came in well below forecasts. Wall Street stocks rose 0.3 per cent, but the S&P/ASX 200 index climbed 50 points, or 0.87 per cent, to 5776.6 as rebounding commodity prices and the neutral interest rate outlook boosted sentiment. Consumer price inflation slowed to 0.2 per cent over the June-quarter, half expectations, and at 1.9 per cent on an annual basis, CPI was below the bottom of the Reserve Bank's target range of between 2 per cent and 3 per cent. The dollar fell US0.6¢ to US78.90¢, having hit a high of US79.70¢ last night as rate rise risks abated.

And the winners are ...

Last week, we asked our clients to nominate their favourite local charities to receive $1,000 towards their charitable work. There were many incredible nominations, but he had to narrow it down to the following two organisations. These organisations work tirelessly to improve the lives of the people they work with.

Hope Reins
The farm is owned and operated by Ms. Kylie Read and Ms. Ruth Polley and is run totally on donations and with the help of a large team of volunteers. This group works with mainly rescued and abused horses, and with children and adults who are having difficulties with life. Their motto is "Healing Horses Helping Hurting Humans". The program usually runs for two hours once a week for eight weeks. The farm also runs Corporate days, where staff can experience the program and be challenged to do the trust ride.


(*Image courtesy of The Gympie Times)

Angel Gowns
Angel Gowns Australia Inc. is an Australian organisation. The volunteers at Angel Gowns Australia deconstruct donated wedding gowns and turn them into numerous 'Angel Gowns' for stillborn babies. Sadly, the demand for these gowns is enormous. Grieving families are given a beautiful gown, made with love, to dress their baby in. It is wrapped in a beautiful white box along with an Angel pin and poem card as a keepsake. There is no cost to the grieving family for this service, it is a cost to the organisation.


We have been humbled to see the work done with such dedication by these tireless volunteers, and the comfort and support it brings to recipients. Congratulations to both of these organisations, and thank you for everything you do in our community.

How Hard is Your Super Working For You?

The sharemarket shot back above 5700 points on Wednesday, lifted by a rally in bank shares, which enjoyed their best day in eight months after the relief that new capital requirements weren't as tough as many had feared. ANZ soared 3.9 per cent, Westpac gained 3.8 per cent, NAB rose 3.1 per cent and Commonwealth Bank closed 3 per cent higher, for a cumulative gain of about $14 billion in value.
The S&P/ASX200 climbed 0.8 per cent to 5732.1, with gains in the big four banks alone adding more than 50 points to the benchmark index. The chunky gains in the banks disguised the fact that overall there were slightly more losers than winners on the ASX200 as numerous blue chips ended in the red.



What this means for you:

I read an interesting article this week titled "Why picking a superannuation fund isn't like shopping for groceries". Basically, it was about consumer choice, the more choices the better - right?

Well it seems in the case of superannuation funds the answer may be no. In comparison to shopping for something like a smart phone, superannuation is a complex product for consumers and too many options can just add even more confusion. With more superannuation products coming into the market and consumers generally not understanding the different fee structures in different superannuation funds or their different investment options, the choice and complexities may become overwhelming. It has been found that about two-thirds of all super fund members have their money in default accounts…. Which is the most important fact I took from this article, as this means that two-thirds of the population are leaving their future stability set to default!

Whilst it seems that many people have become complacent about how their super is invested and the fees that are being charged by super funds, having your super invested in the correct manner for where you are in your life and in-line with your tolerance for risk will stand in you good stead for the day you are able to access your super - retirement. Having this understanding can also mean the difference in retiring comfortably or having to be careful with each dollar you spend in your golden years. Whilst we don't have a crystal ball to predict what markets may or may not do, we can help guide you to make sure that your superannuation is invested wisely and that the fees being charged aren't unnecessarily eating into your retirement income.

If you would like to talk about your superannuation and how it is invested, give us a call. In an optimum situation, your super is working just as hard as you are!

As we settled into the New Financial Year we have taken some time to review our business goals, our vision, mission and values and where we are focusing on going in the next 12 months. For the team at Schuh Group, the community is very important - it is one of our top values and we want to support you to help make a bigger impact in our community so that we all prosper together. We value the idea of community and view it as an extension of the family. As a family-owned and operated firm with deep rural roots, we understand the importance of relationships and working together. So we are committed to investing our resources into the local community to support the growth and development of both the economy and the people. 


With this in mind, we have decided to share $1000 in cash with some YOUR top local causes! This week we are looking for 2 worthy causes that would benefit from a cash donation. We know that there are an abundance of opportunities to help, so we need your help to find the most worthy cause right now - it is our way of supporting you in your community!

To nominate a cause all you have to do is:

1. Send an email to matthew.moon@schuhgroup.com.au
2. Type the word NOMINATION in the subject line
3. Tell us the name of the cause/charity and WHY you want to nominate them

On Thursday we will send out our top charity nominations and you can vote on the top 2 to receive $500 each! A worthy cause can be anything that is important to you that serves to benefit our local community in some way - it may be a charity or a giving program at a local business. We are open to all nominations and look forward to hearing from you!

Online Scams a Trap For The Unwary

Rising iron ore prices couldn't protect the Australian share market from the fallout from the latest political drama in the US, with all sectors shedding value as investor sentiment was hit by concerns about the future of the Trump administration's economic agenda. The benchmark S&P/ASX200 index fell one per cent to 5,673.8 points, as a handful of resources stocks providing the only bright spot. Global markets have been jittery following the release of emails connecting Donald Trump Jr, the US President's eldest son, to Russian support for his father's 2016 election campaign, again raising concerns over the durability of the US administration. But the Australian dollar is stronger against a US dollar weakened by the Trump Jr emails, trading at 76.51 US cents at 1630 AEST, from 76.18 US cents on Tuesday. 


What this means for you:

We would like to send a timely reminder to all of our clients to be vigilant against online scams in the wake of QLD police having charged a 75-year-old man with receiving more than a million dollars from ransomware victims as the representative of overseas scammers. Victims were contacted by cold-calling overseas criminals and told their computer needed repairs, Mackay police allege. If the victims agreed to provide remote access into the machine, the scammers would download and install ransomware on their computers and demand money to unlock the files. 

While such scams are an issue all year round we are now heading into a time of year where we see an increased number of scams from scammers purporting they are from the Australian Taxation Office. You should be wary of emails, faxes, SMS and phone calls claiming to be from the ATO. These could be scams designed to trick you into paying money or providing personal information. Once they have your information, scammers may use it to: 

1. Access your bank accounts
2. Take out loans in your name
3. Lodge false tax returns or BAS statements
4. Claim Centrelink or other benefits.
If you think you are a victim of a tax-related scam, phone the ATO on 1800 008 540 (8.00am–6.00pm, Monday–Friday). You should do this as soon as possible. If you receive a suspicious email claiming to be from the ATO, do not click on any links, open attachments or respond to the sender. Forward the entire email to ReportEmailFraud@ato.gov.au without changing or adding any additional information and delete from your inbox and sent folder.

Relief over the Reserve Bank's neutral policy stance faded and the Australian share market closed in the red as attention turned back to the weak domestic growth outlook. There was no lead from the US last night because of the Independence Day holiday, but the S&P/ASX 200 index dropped to a 0.5 per cent loss and closed down 20.5 points, or 0.35 per cent, at 5763.3 with most sectors closing lower. The Australian dollar was slightly firmer at US76.20¢ following its one per cent loss yesterday after the Reserve said a strong dollar would complicate the domestic growth recovery.



What this means for you:
The 1st of July is like a whole new year for us, which makes it a great time to get your superannuation, investments, savings and insurances in order for the year ahead. This is everyone's opportunity to set new goals and create new money habits for the next 12 months.
This may include reviewing your insurance premiums – do you have enough cover or maybe too much, can they be structured or funded differently? Could you contribute more into super this year? If you can, what will this look like in 5 or 10 years time or when you retire? If you have other investments, is there enough diversification within your portfolio? Are you paying too many fees?

It's also a good time to tidy up the last financial year by getting all your records together and booking in to have your 2017 tax done. If you can get off to a great start, there's no reason why this can't be your best financial year yet!

As the dust settles on another Financial Year and you begin to plan and set goals for the next 12 months of money-related business, why not take a step in the right direction with an obligation-free home loan health check?


With home loan interest rates continuing to remain low (for now), it is the best time to take a step forward and look at all your options no matter if you are getting in the market, wanting to review your current lending structures, or maybe it is time to look at how you can offset your reduced capacity for super contributions with an investment property. So why not call us for a chat? We offer a complementary, home loan health check - that is designed to ensure that you are in the right structure for you and your needs and have the best loan option to suit you - and there's no time like the present!
 The aim of our home loan health check is to answer these questions:

1. Are you paying too much interest on your current mortgage?
2. Does your loan still meet your current needs?
3. Have your financial or personal circumstances changed? And if so, do you need different features and benefits from your loan?
4. When we update this information, we can look at your financial plans for the next 12 months and advise on how your loan could be set up to help you achieve your goals. For example, we could potentially help you unlock your equity to invest, renovate or make some lifestyle improvements.

Interest rates are staying low for now, and this alone is a great reason to ask us to give your home loan a full review right now. We have access to a wide variety of lenders, so we're in a great position to help you compare loan products and choose one that suits your current financial circumstances. A saving of just a little on your home loan now, could add up to a significant difference over the life of your loan. So why not give us a call today?

To register for your free "Home Loan Health Check" please call David Schuh directly on 0400 224 615.
The Australian sharemarket remained in reversal mode, this time to the upside as a mid-session spike in iron ore futures boosted miners. The S&P/ASX 200 index dropped 0.6 per cent in morning trade, but it bounced to close down 6 points, or 0.1 per cent, at 5714.2 as Singapore iron ore futures jumped 3 per cent. The Gold price plunged during the week to a 6 week low, presumably due to a "fat finger" erroneous trade, but prices have now re-stabilised. The Australian dollar also rallied along with miners, rising US0.3¢ to US76¢.

What this means for you:

The new concessional contribution cap of $25,000 kicks in July 1. If your current concessional contributions into superannuation are in line with the existing $35,000 and $30,000 caps (depending on your age) you need to make sure that you revisit your existing contributions come July 1 when the cap reduces to $25,000 for everyone. This means that any existing salary sacrificing arrangements will need to be re-visited. If you need assistance with looking at your salary sacrifice amounts for the new financial year and learning about the new carry-forward rules for concessional contributions that have been legislated give us a call to make an appointment. The Gold price movements during the week add further weight to the argument that investors shouldn't get caught up with daily price movements. Never fall into the trap of making a short-term decision on a long-term asset.

How is Your Retirement Planning Coming Along?

The Australian sharemarket fell to a four-month closing low as banks fell again and resource stocks were dragged down by sharp falls in oil prices. Wall Street reversed 0.7 per cent Tuesday night, but the S&P/ASX 200 index tumbled to close down 91.6 points, or 1.59 per cent, at 5665.7 as bullish global sentiment wilted along with commodity markets. The Australian dollar fell US0.4¢ to US75.60¢ as the US dollar rallied against major currencies on the US Federal Reserve's "hawkish" interest rate outlook. 

What this means for you: 

Are you on track for retirement? It's never too early or too late to start planning! With an ageing population and ever changing rules around superannuation and retirement, it's more important than ever to start planning ahead for your retirement. We are living longer than previous generations so we need to make sure now, that we are going to have adequate funds and assets in retirement to meet not only our lifestyle goals but to make sure that our retirement funds are going to last the distance. In a perfect world people should start looking at their retirement in their 20's or 30's (you can't beat 30 to 40 years of compound interest working on your savings) but in saying that don't panic if you think you may have left it a little too late. People of any age can start boosting their retirement savings and get on track to have the lifestyle they want once they retire. 

If you haven't started planning for your retirement, or need your retirement planning reviewed our services include: 

1. Calculating how much you'll need in retirement to enjoy the lifestyle you want
2. Preparing and implementing retirement planning strategies
3. Superannuation planning and SMSF's
4. Budgeting and cash flow management
5. Transition to retirement strategies
6. Centrelink eligibility ad calculating your potential entitlements
7. Help with estate planning 

We are all going to retire at some point so make sure you are in the best possible position when that day comes by making an appointment with Dominique to review you retirement strategy. If you would like to review your current structures, contact us today on 5482 2855.

Super Changes Push More to Family Trusts

With the legislated changes to superannuation just weeks away, trusts are becoming more popular as an "alternative" investment vehicle for those who have more to invest than the new super rules will allow. It is important to note that superannuation is still the most tax effective way to invest and that we see a trust as Plan B depending on your circumstances. Financial advisers have noted a marked increase in clients wanting to set one up, either dismayed by how little they'll be able to get into super after July 1 or fed up with government changes to retirement savings. 



But who do they suit and what are the potential benefits? Just like a super fund, a trust is an investment structure into which you put money that's invested for you. A trust is tax-neutral in that it pays no tax on earnings and taxable income flows through to beneficiaries - a spouse, children and wider family members - and they pay tax on what they've been paid (their distribution). By comparison, super funds pay tax on earnings, albeit at a low rate (a maximum of 15 percent). 

This sort of income splitting has long been a key attraction of family trusts. What's pushing them higher on investors' agendas is that after July 1 it's going to be harder to get large amounts into super. 10 years ago someone over 50 could get contribute $105,000 in a year to super. Under the new rules, there will be a flat $25,000 for all ages making pre-tax ("concessional") contributions. Ten years ago you could make an after-tax ("non-concessional") contribution of $1 million but after July 1 it will be $100,000 a year (as long as your super balance is under $1.6 million at the end of the previous financial year). Flexibility is another reason more clients are considering trusts. There are no investment rules, no contribution rules and no preservation requirements (rules on when you can withdraw funds), and unlike super, the trust can buy personal use assets like a holiday house. Family trusts can also be beneficial in the following circumstances -
1. Income splitting
2. Estate planning
3. Business merger
4. Capital gains
5. Asset protection
6. Second marriages
If you would like to discover if a family or discretionary trust can be part of an investment, tax or estate planning strategy please give us a call on 5482 2855.

 


Some Financial Housekeeping For June 30

The ASX dodged the US mini-tech-wreck on Tuesday, surging to its best daily performance in seven months, as investors flooded back into beaten-up bank stocks. The benchmark S&P/ASX 200 shrugged off a downbeat Wall Street lead to gain steadily throughout the day. It closed up 95 points, or 1.7 per cent, to 5772.8, while the broader All Ordinaries index added 1.5 per cent to 5801.4. The Australian dollar was flat at US75.50¢ and government 10-year yields marginally firmer at 2.403 per cent as global investors awaited the US Federal Reserve interest rate decision . Overnight the US Federal Reserve has raised its key interest rate for the the third time in six months, providing its latest vote of confidence in a slow-growing but durable economy. 

What this means for you: 

This week we wanted to bring you some of the take outs from the Queensland budget that was released on Tuesday. There is a budget surplus of $2.8 billion in 2016/17, falling to $146 million in 2017/18. The state government sees unemployment to remain steady at 6.25% for the next 12 months and there will be $10 billion spent on infrastructure programs across the state in 2017/18. It has been proposed that pensioners and seniors may be eligible for a $329 electricity rebate, $69 reticulated natural gas rebate, up to $120 off the cost of water access and usage charges and up to $720 once every two years for one-off emergency assistance to pay home energy bills. We will see a 3.5% rise in vehicle registration costs which is the third rise in three years almost doubling inflation. Drought assistance has been extended with up to $34.6 million in assistance in 2017/18 and the First Home Owners grant has been extended by 6 months to December this year.

Regardless of your financial position, the approach of June 30 brings some "housekeeping financial issues". This annual deadline is fast approaching, so please take some time to consider the following so that the end of financial year is as good for you as it can be: 

1. Review your Depreciation Schedule to delete any obsolete items and add any times not on the Schedule.
2. Check your insurance schedule to ensure you have equipment adequately insured and that you are not covering valueless equipment.
3. Visit your utility suppliers to negotiate fresh contracts e.g. electricity / insurance providers.
4. Visit your banking arrangements to ensure you are getting the best loan or interest rate deal. Remember, with banks "if you do not ask, you will not receive".
5. Ensure employees are being paid correctly and that superannuation and wage records are up-to-date so employee pay records can be finalised promptly after June 30.
6. How long has it been since you reviewed your Will – does it adequately reflect your intentions when considering your current assets or debt levels and family situation?
7. Visit your bookkeeping processes – are they accurate, timely and cost or time efficient.
8. Review you first nine months trading to consider profitability. Are you comfortable with your profit level or return on investment?
9. Consider superannuation or savings plans. Statistics tell us we will live longer so we need to provide better and more stable retirement income streams. 

At Schuh Group we have a team of experienced, committed people to help guide and plan your financial future. We are a second generation business with firsthand experience in wealth creation. So, if you feel you need assistance in any of these areas, please don't hesitate to contact us on 07 5482 2855.

Shares were buoyed by slightly better-than-expected economic growth numbers, but a slide in Wesfarmers kept the market in the red, while sentiment remained fragile ahead of a number of global risk events this week. The benchmark S&P/ASX 200 index slipped by the slimmest of margin, 0.005 per cent, to 5667.2, its third close in the red this week.
The Australian dollar hit a one-month high on Wednesday as economists breathed a sigh of relief after the release of weak but as expected first-quarter GDP growth figures. The local currency gained a third of a cent to US75.3¢ immediately after the Australian Bureau of Statistics revealed the economy grew by 0.3 per cent over the first three months of the year, in line with consensus expectations. The Aussie then continued to push higher through the session to fetch US75.4¢ in late trade. Globally, worries about the outcome of the UK elections, a potentially dovish stance by the European Central Bank at its policy meeting and former FBI director James Comey's Senate testimony kept investors on their toes.


What this means for you:
I am currently attending an insurance conference in the USA which has prompted me to write about a recent survey that has found that over eight in 10 Australians were swayed by the cost of life insurance premiums, with price competitiveness being more significant to consumers than product features, claims reputation and service levels, according to research from life insurer NobleOak.

This research also found that there has been a move towards an increasing preference for consumers to purchase insurance online. Whilst this may be convenient, the shortened application process and limited scope of some direct offerings in the market means consumers can be at greater risk of not being in the right cover which is concerning as these shortened application process can result in problems at the time of claiming when customers may need to answer more detailed health questions and supply a report from their doctor. Not only does this slow the process down at a time when a customer is emotionally distressed, but it could reveal a pre-existing condition with the claim being denied.

Direct insurance purchased through the television or other streams will almost certainly not be structured to allow you to maximise the tax concessions available, which means you could be paying more for this insurance than you should be. If you don't have personal insurance or would like to review your existing personal insurance to make sure that you and your family are adequately protected, please give us a call. We have recently had the experience of a client having to make a claim against their trauma cover due to a shock diagnosis of a life threatening disease. Obviously these types of situations are incredibly stressful regardless of your financial situation, but our client has told me that they would be in a far more terrible situation if they also had to worry about paying the bills as well. 

If you would like to review your current structures, contact us today here or call us: 5482 2855

Reduce Your Tax Bill Today!

Has your small business made a profit this year? Are you worried about a looming tax bill? When you work hard for your money, you want to take advantage of all the tax deductions available to you. As we fast approach the end of financial year with continued low-interest rates and same day approvals, it is time to take advantage of the opportunity to purchase a new vehicle or piece of equipment to help set your business up for the next financial year. 

Did you know that small businesses can claim back purchases of up to $20,000 as full tax deduction?  We are happy to work with your accountant to achieve the best outcome possible for your business. These offers come with quick turnarounds and fast settlements, so there is no worry that you won't make the June 30 deadline. Take advantage of the opportunities available now and contact our vehicle and equipment finance specialist Jo Bennett on 07 5480 4859 or contact David directly on 0400 224 615.

THE Queensland Government has introduced a Regional Employment Package to boost employment throughout our region. Long-term unemployed jobseekers are the main beneficiaries of the $100 million Back to Work job program. The Australian Bureau of Statistics defines "long-term unemployed jobseeker" as someone out of work for 52 weeks or more. All eligible employees attract a government payment of $10,000.00 paid to the employer for businesses who take on an unemployed worker. This value increases to $15,000.00 for employees who are classified as "long term unemployed".


Further, a $20,000.00 "Youth Boost" is available for eligible employers who hire unemployed youth aged between 15 and 24 (between 1 December 2016 and 28 February 2017). You can apply for an Employer Support Payment just four weeks after an eligible employee starts working with you. An eligible employee is a person who meets the following criteria

1. Is a resident of Queensland;
2. Was unemployed for at least four weeks directly prior to commencing employment;
3. Was not previously employed by same company in the previous 12 months;
4. Commenced work after 1 July 2016 and has worked for at least four weeks
5. Work an average of at least 20 hours per week (eight hours for a person with a disability);
6. Be paid to work full time or part time (casual employees excluded);

All employers who hire an eligible employee in a regional Queensland job are qualified for the incentive except for government entities including local, state and federal government, government owned corporations and statutory bodies. Visit Back To Work Initiatives for more information on how to apply.

Contact our office today if you have any questions about your personal and unique situation on 07 5482 2855.
Regardless of your financial position, the approach of June 30 brings some "housekeeping financial issues". This annual deadline is fast approaching, so please take some time to consider the following so that the end of financial year is as good for you as it can be:


1. Review your Depreciation Schedule to delete any obsolete items and add any items,
not on the Schedule.
2. Check your insurance schedule to ensure you have equipment adequately insured and that you are not covering valueless equipment.
3. Visit your utility suppliers to negotiate fresh contracts e.g. electricity/insurance providers.
4. Visit your banking arrangements to ensure you are getting the best loan or interest rate deal. Remember, with banks "if you do not ask, you will not receive"
5. Ensure employees are being paid correctly and that superannuation and wage records are up-to-date so employee pay records can be finalised promptly after June 30.
6. How long has it been since you reviewed your Will – does it adequately reflect your intentions when considering your current assets or debt levels and family situation?
7. Review your bookkeeping processes – are they accurate, timely and cost or time efficient
8. Review your trading to consider profitability. Are you comfortable with your profit level or return on investment?
9. Consider superannuation or savings plans. Statistics tell us we will live longer so we need to provide better and more stable retirement income streams. Make sure that you are up to date with the new changes and any contribution opportunities that may support you.

At Schuh Group we have a team of experienced, committed people to help guide and plan your financial future. We are a second generation business with firsthand experience in wealth creation. So, if you feel you need assistance in any of these areas, please don't hesitate to contact us on 07 5482 2855.

Are You Drowning in Credit Card Debt?

It has been reported that while the nation's overall credit card debt that attracts interest charges has dropped 11% in the past four years, our overall credit card debt has reached a record high of $52.2 billion in 2016 and is climbing! While interest rates across home loans remain relatively stable at reduced rates and remain for the most part well below 5% and lower, the standard credit cards charge interest rates near 20% per annum. Personal loans currently charge around 10%, and as noted in recent weeks mortgages are at 5% or less.


Working on these interest rates the cost comparison of $10,000 owing on a credit card (at 20% interest rate) equates to $2000 in interest a year compared with the same $10,000 on your home loan (at 5%) costing only $500. The exact same amount owed on a credit card is four times as much as if it was owed on a home loan. Many credit card holders are beginning to be savvy with their outstanding balances and getting smarter about managing their credit card debt by making the most of the balance transfer cards offering 0% interest, typically for 12 months.

However, it might make more sense to absorb your credit card debt into your home loan while shopping around for a better mortgage option. With falling interest rates, right now is the best time to reduce your overall debt and simplify your finances into one easy and lower repayment. Rolling all your debt into one structure such as a home loan may allow you to focus on paying more off that one loan and reducing it faster if you choose. You will also reap the benefits from the variety of flexible structures now available improving cash flow that puts more money in your wallet!

How can your reduce all your debt right now?

It is our job to work for you to find you the best financing option for your situation and to support you in creating a better overall position. Right now we have access to a variety of lenders and lending options that can better serve you. We can give you the best advice and access to the best opportunities every day. If you are ready to access a better loan and rate for you contact us today on: 5482 2855. Or call our friendly residential team, Dannii and Jo on 07 5480 4859 or David direct on 0400224615 to book an appointment today and find out how we can save you more. 

The Australian sharemarket fell on Wednesday at the open as the new bank liability-levy hit the lenders, but it soon spiked higher on optimism policy certainty would be good for the domestic economy. The S&P/ASX 200 index dropped 0.4 per cent at the open as bank dividends looked threatened, but push-back against the levy encouraged bargain hunting in the Big Four and it ramped to a 0.8 per cent gain. The index slipped and closed up 35.5 points, or 0.61 per cent, at 5875.4 with miners rallying on firmer iron ore prices and $75 billion in fiscal infrastructure spending plans over 10-years supporting industrials. The Australian dollar bounced US0.3¢ off its overnight low to US73.60¢ amid optimism the Budget would help retain Australia's AAA credit rating. Government 10-year yields dropped 2.4 points to 2.658 per cent.


What this means for you:
With the Federal Budget released on Tuesday night we were surprised and perhaps a little happy that there were no changes to superannuation announced. This is good news, as we are still working with clients on the changes that are already legislated to take effect on July 1.

The main changes in the budget that may be of benefit to clients are the first home super saver scheme and the changes to downsizing for older Australians. Here, we will talk about the first home super saver scheme.

First Home Super Saver Scheme
With house prices high in many parts of the country, young Australians are entering the housing market later in life than in previous generations. A key difficulty is saving a deposit. From 1 July 2017, individuals can make voluntary contributions of up to $15,000 per year and $30,000 in total, to their superannuation account to purchase a first home. These contributions, which are taxed at 15 per cent, along with deemed earnings, can be withdrawn for a deposit. Withdrawals will be taxed at marginal tax rates less a 30 per cent offset and allowed from 1 July 2018.

For most people, the First Home Super Saver Scheme could boost the savings they can put towards a deposit by at least 30 per cent compared with saving through a standard deposit account. This is due to the concessional tax treatment and the higher rate of earnings often realised within superannuation. Many employees will be able to take advantage of salary sacrifice arrangements to make pre-tax contributions. Individuals who are self-employed or whose employers do not offer salary sacrifice can claim a tax deduction on personal contributions, meaning savings effectively come out of pre-tax income.

Voluntary contributions under this scheme must be made within existing superannuation caps. The total concessional contributions an individual can make, from both compulsory employer contributions and voluntary contributions, including those made under the scheme cannot exceed $25,000 in 2017-18. The amount of earnings that can be released will be calculated using a deemed rate of return based on the 90 day Bank Bill rate plus three percentage points (as per the Shortfall Interest Charge). The First Home Super Saver Scheme will be administered by the ATO, which will determine the amount of contributions that can be released and instruct superannuation funds to make these payments accordingly. This measure will assist first home buyers to save a deposit for their home faster.

First Home Super Saver Scheme Case Study:
Michelle earns $60,000 a year and wants to buy her first home. Using salary sacrifice, she annually directs $10,000 of pre-tax income into her superannuation account, increasing her balance by $8,500 after the contributions tax has been paid by her fund. After three years, she is able to withdraw $27,380 of contributions and deemed earnings on those contributions. Her withdrawal is taxed at her marginal rate (including Medicare levy) less a 30 per cent offset. After paying $1,620 of withdrawal tax she has $25,760 that she can use for her deposit. Michelle has saved around $6,240 more for a deposit than if she had saved in a standard deposit account. Michelle's partner Nick has the same income and also salary sacrifices $10,000 annually to superannuation over the same period. Together they have $51,520 that they can put towards a deposit, $12,480 more than if they had saved in a standard deposit account.
If you would like to discuss how you can take advantage of this scheme, contact Dominique Schuh today on 5482 2855.

Heavy profit-taking in the major banks and miners hit the Australian sharemarket as market pundits warned the lenders were overbought and house prices faced downside risks. Wall Street edged higher last night, but after slipping 0.3 per cent in early trade, selling accelerated mid-session and the S&P/ASX 200 index crashed through technical support at 5900 points. 

The Australian dollar lost US0.4¢ to US74.90¢ and government 10-year yields were marginally lower despite a 4 point drop in US 10-years to 2.28 per cent.


What this means for you:
Our attention over the next week will be turning towards the Federal Budget which will be released on Tuesday. In the lead up to the budget Australian Treasurer Scott Morrison has been making reference to "good vs bad debt". You may ask what is "good" debt and what is "bad" debt. Basically good debt is an investment in your future like a mortgage for an investment property. Bad debt is debt incurred to purchase things that quickly lose their value and/or do not generate long-term income and generally carries a high interest rate, like credit card debt or the mortgage for your home.
If your bad debt is getting out of control it may be time to go back to basics and do a budget. Take a good look at what you are spending money on and follow this general rule to avoid bad debt - If you can't afford it and you don't need it, don't buy it.

Can Global Events Impact on Your Super Strategy?

The Australian sharemarket belatedly caught up to the global relief rally on the outcome from France's presidential election. Having lagged on Monday with a 0.3 per cent gain, the S&P/ASX 200 index climbed 40.2 points, or 0.68 per cent, to 5912 after the US S&P 500 index gained 1.6 per cent over two sessions on relief France was set to elect centrist, pro-euro Emmanuel Macron as president on May 7.


The bounce in global stocks also raised hopes the global reflation rally would gain fresh impetus, prompting some rotation from bonds into stocks. US 10-years to 3 points to 2.30 per cent, while Government 10-year yields rose 3.5 points to 2.63 per cent as consumer inflation came in at 2.3 per cent, below the consensus forecast but in the Reserve Bank's target range for the first time in almost three years. The Australia dollar lost US0.5¢ to US75.10¢ as higher US yields strengthened the US dollar against most currencies except the euro.

What this means for you:
For most people events like the French election have little impact on their lives but global events like this can have an impact on our superannuation and other investment funds particularly if there's exposure to global markets. When we meet with clients to discuss their superannuation and investments we always look at their risk profile so we have a strong understanding of how they feel, and how they would react to movements in global markets.

This risk profiling along with understanding our clients goals ensures that we recommend the most appropriate superannuation or investment accounts for our clients. If you would like to find out more about reviewing your superannuation or investment goals then give us a call.
If you would like to review your current structures, contact us today on 5482 2855.

The Low Down on Coming Changes to Super

As you may already be aware, there are some superannuation rule changes coming into play from 1 July 2017. Therefore, it may be in your interest to take advantage of the current opportunities before the financial year ends.


* At any time during this financial year Please note, if you're 65 or over at the time of making a contribution, a work test must first be satisfied.

Total pension amounts will be limited From 1 July 2017, if you're converting your super into a pension to derive an income in retirement you'll be restricted to transferring a maximum of $1.6 million into a tax-free pension account, not including subsequent earnings. If you already have a pension balance above that, the excess must be placed back into the super accumulation phase (where earnings will be taxed at the concessional rate of 15%) or taken out of super completely before 1 July 2017 to avoid potential penalties.

Also note, if you do transfer $1.6 million into your pension, even if your balance reduces over time, you won't
be able to top up your pension a second time. Transition to retirement pensions will lose their tax exemption Investment earnings on super fund assets that support a pension are currently tax-free. However, this will no longer apply to transition to retirement (TTR) income streams. Earnings on fund assets supporting a TTR income stream will be subject to the same maximum 15% tax rate that applies to super accumulation funds from 1 July 2017.

Opportunities before 30 June 2016
Take advantage of the higher concessional contribution caps before these drop to $25,000 for everyone.
Consider making a larger non-concessional contribution this year in order to maximise what's in super.
Revisit whether you need to continue your transition to retirement if you're not yet 65. It may be worth your while to place the funds back in accumulation mode if you don't need the pension income for your cash flow.

As always, please contact us on 5482 2855 if you'd like personalised advice in this area.

Tumbling commodity prices on rapidly fading global reflation hopes dragged the Australian share market lower again this week but bargain hunting in the major miners and telcos helped trim losses. Following a 0.3 per cent loss on the US S&P 500 index, the S&P/ASX 200 index opened almost one per cent down, before bouncing to 0.2 per cent loss as a rally in iron ore futures boosted miners. Selling returned and it held above the psychological 5800 point level to close down 32.7 points, or 0.56 per cent, at 5804 on volume 17 per cent above average. The Australian dollar dropped US0.6¢ to US75.20¢ despite broad US dollar weakness as the deteriorating commodity outlook weighed on the Aussie. Currency market volatility spiked and the British pound leapt 2.2 per cent against the greenback and 3.2 per cent against the Aussie after the surprise announcement by British Prime Theresa May of a snap June 8 poll to secure a strong mandate for Brexit negotiations.


What this means for you:
The thing still dominating our immediate world at the moment are the superannuation changes coming into effect on July 1. From 1 July 2017, the general concessional contributions cap will be lowered to $25,000 (2017/2018 year) from $30,000 (2016/2017 year), and the over-50s cap of $35,000 (2016/2017 year) will be dead from 1 July 2017. So if you are making general concessional contributions you only have a little over two months to take advantage of the higher caps.

The one upside to the cut in the annual concessional (before-tax) contributions cap, is that the government has introduced catch-up concessional contributions. The catch-up contributions opportunity was initially planned from 1 July 2017, but the measure has now been delayed. Instead, the start date for the catch-up provisions is 1 July 2018. What this new measure means is that unused portions of the concessional cap each year can be carried forward on a rolling basis for up to 5 years, for the annual caps applicable from July 2018, but only if you have an account balance of less than $500,000. If you would like to find out more about concessional contributions and the changes to superannuation, give us a call.

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