2019 has gotten off to a busy start with the Royal Commission report being released on 4th February 2019. The findings didn’t hold any surprises with the industry encouraged to move quickly to a comprehensive ‘fee for service’ model.
Markets have had a reasonable recovery from the low in December, as signs of a resolution to the trade war between the US and China become more likely.
The Australian Federal election will occur on 18th May 2019, while the Federal budget was released on 2nd April 2019. The budget included some great improvements to Super contributions for over-65’s.
On the other hand, Labor has proposed a number of policies that have caused a considerable amount of angst across the electorate. The two main ones are the reduction in the capital gains tax discount from 50% to 25%. Effectively if you make a $100,000 profit on the sale of a property you would pay tax on 75% rather than the current 50%. The second is the removal of the ability to claim unused imputation credits on shares, deemed as the ‘self-funded retiree tax’. This has been watered down somewhat. There is also a proposed change to the tax on trusts sometimes referred to as the “tradie tax” because many tradespeople set their business up through a trust to utilise the ability to split income. There are also a number of other smaller measures reducing the benefits on super that we will discuss after the election.
There has been a spate of moves from the banks to de-risk their business models. Westpac has announced it’s exiting personal financial advice. CBA has delayed it’s planned demerger from Colonial First State but has confirmed it’s committed to exiting the wealth management business. NAB has been looking for a buyer for it’s MLC business for some time.
The wealth management and banking sector are going through substantial change which will hopefully benefit borrowers and investors alike.
Wealthwise Team news
We would like to welcome Steven Apostolou to the team. Steven has a background in financial planning and stockbroking.
We also welcome Breeanne Lowe as our new receptionist.
Congratulations are also offered to Stephanie Luxton on the arrival of baby Flynn.
