B Invested



At the start of this month, the RBA publically announced it would be lowering interest rates even further to a new historic low of 1.75 per cent. Clearly this is a gesture which shows that the government feels the Australian economy needs a bit more steam and decided to stoke the fires by dropping the rates to encourage more growth.

This news came as a surprise to many people, just when they thought rates could not get any lower than 2 per cent, bam!…they get dropped again. Did it come as a surprise to me? No. I have foreseen interest rates dropping for some time now and here is the reason why. The government coffers are looking emptier by the year. With an aging population and less people contributing to the annual tax pool they are feeling nervous about the future. What they need is a bigger workforce to contribute to economic growth through their labour, consumption, and taxable income. Luckily for them Australia is a pretty attractive place for immigrants, we have fair laws, equal opportunity and we are a young modern country. However what we don’t have is the infrastructure to support them. At the moment, there is a net shortage of housing in Australia. The way I see it dipping the interest rates is a bid by the government to stimulate investment in infrastructure for the future. This is also the reason why I don’t think the government will be doing anything to change the current negative gearing laws.



The Australian retail finance sector has drawn a very firm line against foreign investors with the Westpac Bank, including all banks within the conglomerate such as St George Bank, Bank of Melbourne and Bank SA, having stopped lending to all foreign residential property buyers. This is a move which follows the earlier moves of the ANZ Banking Group and The Commonwealth Bank of Australia.

A Westpace spokesperson said, “In line with Westpac Group’s responsible lending practices, we have strengthened our policies regarding non-residents lending and foreign income, which represent a very small component of our loan book”. The moves means that the group will no longer accept mortgage applications from non-residents, home buyers with foreign self-employed income and anyone on a temporary visa. Any Australian residents who source a portion of their income from  overseas will be given a lower loan to value ratio of 70 per cent (down from 80 per cent). The changes took effect on April 26 and will apply to any pre-approved loans prior to this date which have not yet been issued or activated within 90 days or pre-approval.



Treasurer Scott Morrison handed down the 2016-17 federal budget earlier this month. Below is a summary of the winners and losers in this year’s budget. If you are any of the below then you can let out a sigh of relief, you have been smiled upon by the budget this time.

Middle-Income Earners: People earning over $80,000 in income will see the 37 per cent marginal tax bracket pushed higher to $87,000 to prevent ‘bracket creep’ as average incomes rise.

Small To Medium Companies: As for companies, the government plans to cut the tax rate on all companies to 25 per cent in order to bring it in line with the OECD average. The cuts will be staged with the first cut for small to medium enterprises (SME)’s proposed for 1 July 2016. This will drop the rate to 27.5 per cent from the current 28.5 per cent and will extend to companies with a turnover of less than $10 million.

People Saving For Retirement: The superannuation concessional caps will be able to be carried forward for up to five years for those who have super balances of $500,000 or less to let catch‐up on superannuation contributions. Restrictions will also be lifted for people aged 75 or under, allowing a tax deduction for personal contributions to eligible superannuation funds up to the new concessional cap of $500,000.

Infrastructure: $50 billion is going to be channelled into new road and rail infrastructure across the country from 2019-20 and onwards. Some projects identified for funding include the Inland Rail project between Brisbane and Melbourne and preparatory works for a Western Sydney Airport.

However, if you happen to fall into any of the following categories then you are not as lucky this time.

Multinational citizens: A new diverted profits tax will impose a 40 per cent penalty rate of tax on multinationals that attempt to shift their Australian profits offshore to avoid paying tax. This is in addition to the Multinational anti-avoidance Law put in place in 2015.

People saving for retirement: The taxation of earnings in Transition to Retirement Income Streams will reduce the incentive for them to be used to minimise tax (effective 1 July 2017). At the same time, the government will reduce the annual concessional contributions cap to $25,000 a year.

Retirees: Retirees with superannuation account balances in excess of $1.6 million will be required to reduce their retirement balance to $1.6 million by 1 July 2017. Excess balances for these people may be converted to superannuation accumulation phase accounts – thus losing their tax-free status.

High-income earners: The 30 per cent contributions tax rate will now be imposed on people earning A$250,000 a year (including concessional contributions), down from A$300,000.

If you want more information on the budget, www.budget.gov.au has an interactive tool to provide a personalized budget report for you.




It has been an unusually warm year so far however the nights are finally starting to get chillier, meaning the use of indoor heating is on the rise. Heading into winter it is extremely important to make sure that all your properties have working smoke alarms.

According to propertysafe.com.au home fires accounted for 94% of all fire related deaths and up to 50% of these fatalities could be prevented if homes had working smoke alarms. It is recommended that inhabitants of a dwelling test their smoke alarm monthly to make sure the battery is still charged. From a landlords perspective, this is difficult to enforce which is why property managers should be testing smoke alarms during property inspections or within 30 days of a new lease being signed.

Landlords can face serious legal ramifications should tenant death or injury occur and the property owner is found to have neglected smoke alarm safeguards and maintenance. Smoke alarm regulations vary from state to state, however, there are some general rules to follow to make sure your smoke alarms are working effectively.

  • Change batteries once a year, although batteries can last for many years, changing them annually reduces the risk of a battery running flat at a critical time.
  • Position smoke alarms in central areas such a thoroughfares, stairwells, and landings so that they are equidistant to as many rooms a possible.
  • Place at least one smoke alarm on each level of the building.
  •  Place extra smoke alarms in high-risk areas such as kitchens.
  • Never paint over smoke alarms, be sure to remove them first and replace them after the paint has dried.
  • Follow the links to find more information about smoke alarm requirements for NSW and QLD.




Prince, the legendary music icon passed at 57 years old last month. It’s rumored that Prince recorded enough music to release an album every year for the rest of the century however he did not leave a Will to instruct how his estate and musical legacy should be handled. Would Prince wish for his music to be released after this death or did the meticulous artist omit these pieces from his carefully curated works for a reason? Although this example may seem a little far removed from the lay man’s everyday reality, the fact remains that many people have not prepared their estate in the unfortunate event of an unexpected passing.

So what is a Will and why do I need one?
A Will is a legal document that sets out who you want to receive your assets when you die. Making a Will is the only way you can ensure your assets will be distributed according to your wishes when you die. According to the NSW government, at least 45 per cent of Australians do not have a valid Will.

What happens if I die without a Will?
If you die without a Will, you die intestate. This means as you didn’t have a Will, no-one knows who you wanted as your beneficiaries and who you wanted as your executor. Your assets will then be distributed according to a pre-determined formula to divide your assets despite what you may have wished.
Dying intestate can result in your surviving spouse, family and friends suffering unnecessary financial hardship and emotional stress. If you are in a de-facto or same-sex relationship, it is necessary to supply sworn evidence that the relationship existed. If you die intestate and have no surviving relatives closer than cousins, the State Government will receive your estate.

Does a Will guarantee that my wishes get carried out?
While you are entitled to leave your assets to anyone you wish, in some circumstances, friends or relatives who believe they have not been sufficiently provided for are entitled to contest your Will.
People who can contest your Will under Succession Act 2006 are not restricted to your spouse and children. Claimants can include a de-facto partner, any other dependents or a former spouse. The person needs to convince the Court that you failed to make adequate provisions for their maintenance, education or advancement in life.
An increasing number of people now have complicated family structures such as blended families and second marriages. This may increase the likelihood of your Will being contested. A Solicitor is able to advise people making Wills on how to address possible challenges.




It’s been a volatile year for Australian shares. So what are the themes that will matter for the share market in the coming months and which stocks are likely to outperform? According to BT investment management there are three key structural developments in the share market that will have the greatest implications for investors:

The era of abundant corporate liquidity has come to an end
Following a prolonged period of policymakers supplying cheap debt to fuel corporate growth, companies are now finding it harder to access cheap funding both domestically and globally. We are seeing emerging markets and major oil exporting economies withdraw money from global equities, exacerbating volatility in markets worldwide. The focus of investors has moved from absolute yield to the sustainability and future growth potential of this yield.

The economic cycle has become more muted
The returns outlook for Australian shares is lower and few companies are benefiting from strong cyclical tail winds. Companies continue to focus on maximising capital return to shareholders, reflecting both a relative absence of growth opportunities in the Australian economy and the understanding that investors crave yield in an environment of low rates and compressed bond yields.

Disruptive forces are changing the outlook for returns across a range of industries
Understanding industry structures and potential changes is key, and in such an environment, management actions are more critical than ever in determining returns. A great example of this is the supermarket industry, where the success of low-cost retailer Aldi has lured market share away from Woolworths and Coles. Woolworths and Coles have been forced to spend more money on store expansion and differentiation to maintain their growth – while at the same time reducing their profit margins – degrading profitability and growth potential.

Where should an investor look next?
According to BT investment management, investors should focus on factors that can change earnings outcomes, whether it be a change to industry structure, cyclical trends or business innovation. Investors should look out for companies demonstrating disciplined capital allocation or embarking on a ‘self-help’ journey.

This communication has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and you should seek advice from your financial adviser before making any investment decisions.



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