Category Archives: Australia

How Budget 2017 may affect Small Businesses

The announcements in this update are proposals unless stated otherwise. These proposals need to successfully pass through Parliament before becoming law and may be subject to change during this process.

What’s in and what’s out!

• Small businesses with a turnover up to $10 million can write off expenditure up to $20,000 for a further year

• No changes to negative gearing or capital gains tax

• Depreciation deductions for plant and equipment on residential investment properties will be limited

• Accommodation and travel deductions for residential rental property will be disallowed

• An annual foreign worker levy of $1,200 or $1,800 will apply per worker per year on temporary work visas and a $3,000 or $5,000 one-off levy for those on a permanent skilled visa

• The Government will spend $75 billion in infrastructure funding and financing over the next 10 years

• A $472 million Regional Growth Fund will be established.

The main change for small businesses with aggregate annual turnover of less than $10 million was the extension of the ability to immediately deduct eligible assets costing less than $20,000 first used or installed ready for use by 30 June 2018. Certain assets are not eligible, for example horticultural plants and in-house software. Assets valued at $20,000 or more can continue to be placed in the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools). From 1 July 2018, the thresholds for the immediate deduction of assets and the value of the pool will revert to $1,000. A major new levy on the five biggest banks with liabilities above $100 billion will raise $6.2 billion over the Budget forward estimates. It will not apply to additional Tier 1 capital and deposits of individuals, businesses and other entities protected by the Financial Claims Scheme. The Australian Competition and Consumer Commission will undertake a residential mortgage pricing inquiry until 30 June 2018 in conjunction with the levy.

Legislation to support a reduction in the company tax rate over 10 years starting on 1 July 2016 passed Parliament on 9 May 2017. The first companies to benefit were those with turnover of less than $10 million, which moved to the 27.5% rate on 1 July 2016. The tax rate for companies with annual turnover below $25 million will be 27.5% from 1 July 2017 and those with turnover of less than $50 million will be taxed at 27% from 1 July 2018. Legislation to support an increase in the tax offset for unincorporated small businesses over 10 years to 16% from 5% passed Parliament on 9 May 2017. This offset applies to the tax payable on the business income and it benefits unincorporated small businesses that do not receive a reduced company tax rate.

Housing and superannuation

Individuals will be able to make voluntary contributions to their superannuation accounts to help buy their first home from 1 July 2017. Generally, pre–tax contributions (personal deductible or salary sacrifice) of up to $15,000 per year and $30,000 in total can be made. First-home super saver scheme contributions must be made within the concessional contributions cap ($25,000 in 2017-18) and will be taxed at 15%. Contributions and deemed earnings can be withdrawn from 1 July 2018 and will be taxed at the member’s marginal rate less a 30% tax offset. Non-concessional contributions can also be made but will not benefit from the tax concessions apart from earnings being taxed at the concessional super rate of 15% and these will be tax-free when withdrawn.

Housing supply target

The States will be required to deliver on housing supply targets and reform their planning systems and a $1 billion National Housing Infrastructure Facility will aim to remove infrastructure impediments to developing new homes. In Melbourne, Defence Department land at Maribyrnong will be released for a new suburb that could cater for 6,000 new homes. A new National Housing Finance and Investment Corporation will be established by 1 July 2018, to provide long-term, low-cost finance for more affordable rental housing. States and Territories will be encouraged to transfer stock to the community housing sector and managed Investment trusts will be allowed to develop and own affordable housing. The incentive for investors will include a capital gains tax discount of 60%, and direct deduction of welfare payments from tenants.

There are no changes to negative gearing, but tougher rules on foreign investment in residential real estate remove the main residence capital gains tax exemption and tighten compliance. An annual levy of at least $5,000 will also apply to all future foreign-owned properties that are vacant for at least six months each year. As well, developers also won’t be allowed to sell more than 50% of new developments to foreign investors.

Education and health care

This Budget will invest $18.6 billion in extra schools funding over the next 10 years, in accordance with the Gonski needs-based standard. Funding for each student across all sectors will grow at an average of 4.1% a year. However, university fees will rise by $2,000 to $3,600 for a four-year course and students will have to start paying back their debt when they earn more than $42,000 from July next year, down from the current level of $55,000. A 2.5% efficiency dividend will be applied to universities for the next two years. In health care, the Medicare levy will increase on 1 July 2019 by 0.5% to 2.5% of taxable income to help fund the $22 billion National Disability Insurance Scheme (NDIS). The Treasurer says all Australians have a role to play in supporting the disability scheme, even if they aren’t directly affected. The Budget lifts the freeze on the indexation of the Medicare Benefits Schedule and reinstates bulk billing for diagnostic imaging and pathology services. Hospital funding will increase by an additional $2.8 billion over four years and an additional $115 million will be spent on mental health initiatives. Another $1.4 billion will be spent on health research over the next four years.

What’s next?

Most changes must be legislated and passed through Parliament before they apply. If you think you may be impacted by some of the Budget’s proposed changes, you should consider seeking professional advice. A financial adviser can give you a clear understanding of where you stand and how you can manage your cash flow, super and investments in light of proposed changes.

How Budget 2017 may affect families

The announcements in this update are proposals unless stated otherwise. These proposals need to successfully pass through Parliament before becoming law and may be subject to change during this process. 

  • The Medicare levy will increase by 0.5 per cent to 2.5 per cent from 1 July 2019
  • The Government will spend $37.3 billion on child care over four years
  • Additional education funding has been set at $18.6 billion over 10 years
  • University student fees will increase by 7.5 per cent by 2021
  • University graduates will start repaying their loans when they reach an income level of $42,000 a year, down from approximately $55,000
  • Family Tax Benefit Part A payments will not be indexed for two years
  • Doctors will be encouraged to prescribe generic drugs to save the Pharmaceutical Benefits Scheme $1.8 billion over five years
  • No changes to negative gearing

Overview

Medicare levy

In health care, the Medicare levy will increase on 1 July 2019 by 0.5 per cent to 2.5 per cent of taxable income to help fund the $22 billion National Disability Insurance Scheme. Treasurer Scott Morrison says all Australians need to support the disability scheme, even if they aren’t directly affected.

Child care

The Government will invest $37.3 billion in child care over four years to help about 1 million families, including those that need before and after school care for their children. A single, simplified, means-tested child care subsidy will provide more support for the families who need it the most from 2 July 2018.

The subsidy will introduce hourly rate caps and remove unnecessary regulation to allow providers to offer more flexible hours of care. The child care subsidy will be payable only to families with incomes below $350,000 per annum (in 2017-18 terms) from 2 July 2018. The upper income threshold of $350,000 per annum will be indexed annually by CPI from 1 July 2018.

A further $428 million will be provided to extend the National Partnership Agreement on Universal Access to early childhood education for the 2018 school year to allow access to a quality preschool education.

Schools funding

This Budget will invest $18.6 billion in extra schools funding over the next 10 years, in accordance with the Gonski needs-based standard. Funding for each student across all sectors will grow at an average of 4.1 per cent a year.

However, university fees will rise by $2,000 to $3,600 for a four-year course and students will have to start paying back their debt when they earn more than $42,000 from July next year, down from the current level of approximately $55,000. A 2.5 per cent efficiency dividend will be applied to universities for the next two years.

First-home buyers

First-home buyers will be able to use voluntary contributions to their existing superannuation funds to save for a house deposit. Contributions and earnings will be taxed at 15%, rather than marginal rates, and withdrawals will be taxed at their marginal rate, less 30% tax offset. Contributions will be limited to $30,000 per person in total and $15,000 per year. Both members of a couple can take advantage of the scheme. Non-concessional contributions can also be made but will not benefit from the tax concessions apart from earnings being taxed at 15%.

The States will be required to deliver on housing supply targets and reform their planning systems and a $1 billion National Housing Infrastructure Facility will aim to remove infrastructure impediments to developing new homes.

In Melbourne, Defence Department land at Maribyrnong will be released for a new suburb that could cater for 6,000 new homes. A new National Housing Finance and Investment Corporation will be established by July 1, 2018, to provide long-term, low-cost finance for more affordable rental housing.

States and Territories will be encouraged to transfer stock to the community housing sector and managed Investment trusts will be allowed to develop and own affordable housing. The incentive for investors will include a capital gains tax discount of 60 per cent, and direct deduction of rent from welfare payments from tenants.

Australians over the age of 65 will be able to make a non-concessional contribution of up to $300,000 each into their superannuation fund from the proceeds of the sale of their principal home from 1 July  2018.

Family Tax Benefits

The current Family Tax Benefit Part A payments will not be indexed for two years from 1 July 2017. Indexation will resume on 1 July 2019. A 30¢ in the dollar income test taper will apply under Method 1 for Family Tax Benefit Part A families with household incomes above the Higher Income Free Area (currently $94,316) from 1 July 2018. Entitlements under Family Tax Benefit Part A may be worked out using two income tests, with the one giving the highest rate applying. Method 1 sometimes produces a higher result for larger families.

 

What’s next?

Most changes must be legislated and passed through Parliament before they apply. If you think you may be impacted by some of the Budget’s proposed changes, you should consider seeking professional advice. A financial adviser can give you a clear understanding of where you stand and how you can manage your cash flow, super and investments in light of proposed changes.

 

If any of these proposals raise questions, concerns or potential opportunities for you, please speak with your financial adviser today. These opportunities apply to Australian consumers.

How Budget 2017 may affect Wealth Accumulators

The announcements in this update are proposals unless stated otherwise. These proposals need to successfully pass through Parliament before becoming law and may be subject to change during this process.

  • First-home buyers have the opportunity to save a deposit through voluntary contributions to superannuation
  • No changes to negative gearing or capital gains tax
  • Accommodation and travel deductions will be disallowed for residential rental property
  • Small businesses with a turnover up to $10 million can write off expenditure up to $20,000 for a further year
  • Depreciation deductions for plant and equipment on residential investment properties will be limited
  • The Medicare Levy will increase by 0.5% to 2.5% of taxable income on 1 July 2019
  • Budget projected to return to balance in 2020–21 and remain in surplus over the medium term
  • Capital gains tax rules for foreign investors will be tightened
  • Foreign investment rules will be changed to discourage investors from leaving properties vacant.

 

Overview

To address the desire for many first home buyers to enter the market, the Budget proposes they will be able to use voluntary contributions to their existing superannuation funds to save for a house deposit. Contributions and earnings will be taxed at 15%, rather than marginal rates, and withdrawals will be taxed at their marginal rate, less a 30% tax offset. Contributions will be limited to $30,000 per person in total and $15,000 per year. Both members of a couple can take advantage of the scheme. Non-concessional contributions can also be made but will not benefit from the tax concessions apart from earnings being taxed at 15%.

The States will be required to deliver on housing supply targets and reform their planning systems and a $1 billion National Housing Infrastructure Facility will aim to remove infrastructure impediments to developing new homes.

States and Territories will be encouraged to transfer stock to the community housing sector and managed Investment trusts will be allowed to develop and own affordable housing. The incentive for investors will include a capital gains tax discount of 60%, and direct deduction of welfare payments from tenants.

There are no changes to negative gearing, but tougher rules on foreign investment in residential real estate remove the main residence capital gains tax exemption and tighten compliance. An annual Levy of at least $5,000 will also apply to all future foreign-owned properties that are vacant for at least 6 months each year. In addition, it is proposed that developers also won’t be allowed to sell more than 50% of new developments to foreign investors, which may make it easier for Australian residents to enter the market.

What’s next?

Most changes must be legislated and passed through Parliament before they apply. If you think you may be impacted by some of the Budget’s proposed changes, you should consider seeking professional advice. A financial adviser can give you a clear understanding of where you stand and how you can manage your cash flow, super and investments in light of proposed changes.

 

If any of these proposals raise questions, concerns or potential opportunities for you, please speak with your financial adviser today. This article is relevant for Australian consumers.

The Truth About Cats and Dogs

Did you know that 3 in 5 households in Australia own a pet?  38% of us are dog owners, 29% have a cat, 12% fish, 12% birds and 9% some other animal like reptiles, bunnies (not for Queenslanders!) or guinea pigs.

Mostly, we love our furry friends for the companionship they give us – that undying love and having someone who actually wants to see us waiting at home every night!  Others buy to teach the kids responsibility and some to keep them fit and active.

But there’s plenty of good reasons why we don’t own pets as well!  Some don’t want the responsibility, others don’t have a home that’s suitable or aren’t allowed by their body corp.  But a very large reason comes down to cost!

Have you every had to weigh up the average cost of pet ownership to see if it’s for you, or don’t know where to start?

According to one source, the average cost of owing a dog annually is around $1,475 and a cat around $1,029.  Fish would be lucky to set us back $50, depending on how luxurious our tank is, and a bird around $115 per year.

Pet insurance is still in its infancy with only one in four dog owners having cover (costing approx. $293 p/a) and one in five cat owners taking out cover (approx. $246 p/a.)

Pet insurance isn’t always available if your furry friend is getting on in  years and some breeds are dearer than others to insure.  You’ll also need to check what’s covered as some  routine check-ups, desexing and dental may not be insured events.

Having three pets, I’d decided against pet insurance, but when my English Staffy did her patella in last year, needed medication and X-rays and then emergency desexing, the average costs went out the window!  Having said that, it certainly paid to shop around with one vet offering a service for $4,000 that another did for $1,200 – and very well thankfully!

The kids were not prepared to let their beloved dog suffer or be put down and were happy to pitch in to cover the costs.

So, if you’re counting the pennies, it’s definitely worth weighing up the costs before taking the plunge into being the resident human for your new fur love.  But if you adore your fur babies more than anything, cost is hardly likely to be a factor in your pet ownership adventures.

Sources: Pet Ownership in Australia 2016 (Animal Medicines Australia) and Pet Insurance Australia, 2015.

Are you an Amazing Unleashed Woman?

I’m so excited!  I’ve just found out that I’ve been approved for a grant from the Million Dollar Round Table in the United States for UDS$1,000 to support my work with The Hunger Project.  Woohoo!

After my visits to Uganda and Malawi, I’ve become even more passionate about the empowerment of women in global communities and the drive to end hunger.  It frustrates me that so many of us have so much, while so many struggle with so little.

Did you Know?  A donation of even $50 can help give 3 women a micro-finance loan to start or grow a small business to create further income for their families.  We drop that no problem on a meal out or a few drinks with friends.

And here’s an example of what a couple of weeks groceries,  just $500 is able to achieve:

  • Train 400 mothers on feeding their children locally available nutritious food, so their children grow up healthy; or
  • Give 30 women a start-up micro-finance loan to start or grow a small business, to create income for her family; or
  • Empower 15 women to become local volunteer leaders and train their fellow villagers on issues such as education and sanitation.

But, if you’d rather spend your hard-earned dosh on a table at a fabulous restaurant spoiling your loved one on Valentine’s Day, I completely get that too.  So why not bid on A Table to End Hunger and empower others to put food on theirs.   Get in quick!

I’ve been so amazed by the incredible people who’ve supported my journey to date and those who’ve jumped on board and joined the movement.

I’d love to welcome you to become Unleashed with me again for the coming year!

And it’s still not too late to donate – if you’d like to help others to help themselves, please donate here: Unleashed Amanda’s Fundraising Page

2015 Women in Focus Conference

I was incredibly excited and honoured recently to be invited to the sixth annual CBA Women in Focus conference held in the beautiful Sheraton Resort in Hastings Street, Noosa.  To whomever was unable to make the event, and prompt the lovely Katie Mihell to include me in the guest list – I am eternally grateful to!

Due to prior commitments, I was unable to make the opening dinner, and so I hit the road at 4.30 am on the Thursday, arriving in time to quickly check-in and kick off with the first sessions at 8.15 am – and we didn’t stop for two full days.  I’d also lost my voice by this stage, thanks to the kindness of my daughter sharing her winter lurgies with me and this isn’t a good place to be with 180 amazing women cranking the decibel level at every opportunity.

The opening session kicked us off with Dr Fiona Kerr followed by Doc Jordy Nguyen and my brain was fried from inception.  Hearing about artificial intelligence, mind controlled wheelchairs and the hope of robotics for the future for those with disabilities hit close to home for me with an intellectually impaired and autistic nephew.  Cracking into his little brain and being able to communicate with this non-verbal little man now sounds like something that may just be possible in this lifetime rather than a pipe dream.

The breaks were a brilliant opportunity to meet up with some old friends, one of whom I hadn’t seen since our trip to Uganda with The Hunger Project in May and connect with some new and amazing ladies.

Panel discussions allowed various agricultural businesses to showcase their stories and their wares and I’m now a passionate convert to the Myrtleford Butter Factory.  I’ve devoured books by Cathy Burke, CEO of the Hunger Project and the fabulous Anita Heiss, a prolific indigenous author and all round great gal.

It was a blessing to watch new friendships and business relationships being forged and hear from inspirational women such as the passionate Rosie Batty, Australian of The Year and tired (not tireless) campaigner against Domestic Violence.  The story of the Allanah and Madeline Foundation was told and bra-burning passionate women such as Wendy McCarthy who has been paving the way for women everywhere since the 70’s were featured.

It was hard not to be overwhelmed with every presenter as brilliant and passionate as the last and all with a fabulous story to tell.  It didn’t just feel like I was among greatness, I actually was!

Andy Lark shared his fantastic adventures with Xero, another shared her ups and downs in building a billion dollar business Christina Re dazzled us with her spectacularly beautiful home-ware lines.  Mandy Gunsberger of Babyology told us all about her journey and her future adventures as she heads off to join the next Business Chicks Leadership and Immersion Program in Mexico.  I managed to score Beauty From the Inside Out by Doctor Libby Weaver and didn’t cease absorbing my entire two days.

An evening of country glamour had us up dancing at Yandina Station, and we boogied the night away to finish the conference in a fabulous marquee in the Noosa National Park.

The hashtag #disruption15 trended Australia wide as we cheered on our speakers and supported each other in the virtual and physical world.

It was an honour and privilege to be a part of this event.  I hope I take a long time to come down from Cloud 9 after this and will enjoy reviewing my notes for some time to come.

A Magical Trip to Uluru

Like most Aussies, I had the amazing Uluru (once known as Ayres Rock) as a place on my bucket list.  But realise too, that few have had the opportunity to visit.  And it is in the middle of our really big country, that’s sometimes a bit tricky, expensive and time consuming to navigate.

When the opportunity arose for me to attend a conference in the amazing spiritual heart of Australia (and hosted by the amazing Business Chicks) I jumped at the chance to go.  For I knew both the content and the location could only be brilliant.

Our first glimpse of both Kata Tjuta (The Olgas) and Uluru was granted on the plane ride in to Uluru airport, and it’s pretty special.  I’m not sure the size was ever really quite abundantly clear to me, until I saw it rising up from vast flat lands dotted with mulga.  And it’s actually the Olgas site that holds a deeper spiritual significance for the traditional owners, the Anangu people.

For some idea of scale, it’s twice the height of the Eiffel Tower and three times that of the Statue of Liberty – that’s 348 metres high!.  It’s 9.6 kilometres around to walk the base.  Yes, it is a really big rock!

My stay was at the Accor run, Sails in the Desert resort and it’s not far to any of the viewing areas available for sunrise and sunset picture opportunities.  The resort is great for singles, couples or families and has a pool onsite, along with a restaurant, bar and conference facilities.

Some said they felt Uluru to be a truly spiritual area and being there affected them deeply.  I was awed by these majestic mounds of sandstone that make up both landmarks, oxidising before our eyes.  Incredibly, both extend for kilometres further underground.

It’s hard to tear your eyes away, and long after we swapped our cameras for champagne glasses, we were dragging them out again as the light and colours constantly changed before our eyes.

A few of us treated ourselves to a sunrise tour with Ayres Rock Helicopters, and it was worth every cent.  Our wonderful Venetian pilot Julio was a fabulous tour guide and took us on a 36 minute extended tour for fabulous photo opportunities and filled us in on fun facts throughout the flight.

Funnily enough, Aboriginal art also made a whole lot more sense from above.  I can’t say I’ve been a huge fan of the traditional dots and stripes style of art, but from above, it’s clear that this is exactly what you see.  The dunes of a former inland sea snaked across the landscape and shrubs and bushes literally dotted the remaining space.

On our return from our flight, we headed to the watering hole area at the base of the rock that is a holding pond for water that pours down the sides of the rock during the rains and gathers at its base.  Depending on the heat and the seasons, it can quickly dry out.  Further up exists another collection hole that we couldn’t see, but is said to be up to 10 metres deep.

There’s a painting cave to visit, and a few signs along the clearly marked paths around the base of this amazing landmark.  Getting up close and personal was a fabulous experience that will leave a lasting memory.  It was only when standing at its base and staring up that it’s sheer amazing height and presence was truly felt.

If you ever get the chance to head out please do, or if not, make the opportunity happen.  It shouldn’t be left to just the hordes of European and Asian tourists to make the effort to visit this amazing natural treasure and take home the pics.  You owe it to yourself to see first hand just how spectacular this place really is.