 "Cost of living concerns will be addressed in budget")
Andrew Brown
(Australian Associated Press)
Measures to address cost of living concerns will be a key component of the upcoming federal budget, according to the prime minister.
With less than a week until the 2022/23 budget is handed down, Scott Morrison said work was being finalised on ways to address the soaring cost of essentials such as petrol and groceries.
“Addressing those cost of living pressures will be a key priority of that budget,” he told the Nine Network on Wednesday.
“We’ve been carefully designing our response because what we don’t do is have knee-jerk reactions on things like the economy.”
The government will be hoping to use the budget as a springboard ahead of the federal election due in May.
Meanwhile, Opposition Leader Anthony Albanese has thrown his support behind budget measures that tackle the rising cost of living.
However, he remained tight-lipped on whether Labor supported calls to temporarily cut the 44.2 cents per litre fuel excise, in the wake of rising petrol prices.
“We’ll assess all of it, we’ll wait and see,” he told ABC TV.
“There’s a range of measures that are putting pressure on family budgets, the biggest of which is that we just simply aren’t keeping up with the cost of living.”
The Labor leader hit out at the prime minister, saying the government did not have plans to actively address rising living costs.
“Housing costs are going up, the cost of food and groceries are going up, these are all having an impact on people’s capacity to pay their bills and to get by,” he said.
“The only thing that isn’t going up is wages, and wages are projected to fall in real terms again further over the next four years.”
It comes as the government announced on Wednesday $5.4 billion of funding would be in the budget to build the Hells Gates Dam in north Queensland.
The government will guarantee funding to build the dam, which is expected to create 7000 jobs, subject to completion of the final stage of the business case, expected in June this year.
Up to 60,000 hectares of irrigation would be opened up through a 2100 gigalitre dam bolstered by three downstream irrigation weirs.
Mr Morrison said more dams were needed in Australia to support agricultural industries
“We’ve done the homework on Hells Gates Dam and it’s now time to get on and build it,” he said.
“This dam will help turn the Burdekin region into an agricultural powerhouse, helping our farmers to stock supermarkets and feed Australia while also securing north Queensland’s water supply and security.”
With transport a key issue for regional areas, a further $29 million in the budget will go towards upgrading regional airports.
Applications will open for grants of between $20,000 and $5 million to help cover up to half of eligible project costs.
Also on Wednesday, the government announced $700 million has been set aside to support specialist medical training in regional areas.
The government’s specialist training program will be continued for four years from 2022, with $708.6 million being spent on its expansion.
The program, which has been running since 2010, allows for local doctors to be trained across medical specialty areas.
| Posted in:News |
 "Budget takes smart approach to red tape")
Maeve Bannister and Colin Brinsden
(Australian Associated Press)
Business groups believe the Morrison government is taking a “smart approach” to deregulation with a budget proposal to reduce red tape, while improving the cash flow for small businesses.
In the latest measure to emerge from his pre-budget blitz, Treasurer Josh Frydenberg announced a reduction in the pay-as-you-go tax instalment rate to two per cent for the 2022/23 income year from the standard 10 per cent.
A reduced uplift rate is expected to lower instalments and deliver $1.85 billion in cashflow support.
Treasury estimates more than two million businesses and sole traders currently using the pay-as-you-go instalment method will benefit from the changes.
Mr Frydenberg says the returns from the package will allow small and medium-sized businesses and sole traders to invest, innovate and grow job opportunities.
The government will also support companies to manage their cash flows by allowing them to calculate PAYG instalments based on their annual financial performance.
Other measures involve automating tax instalment calculations, sharing data collected by the tax office to allow tax returns to be pre-filled, and digitising income reporting for trusts.
They are expected to result in annual compliance savings of more than $800 million a year.
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said this is a smart approach to deregulation.
“Practical measures to reduce the handbrakes on business will save time on compliance, reduce costs, and boost efficiency, benefiting all Australians,” Mr McKellar said.
“The strength of our economic recovery is contingent on removing the regulatory burden on business, particularly for small and medium enterprises.”
The Tax Institute said being smarter with technology is also a welcome measure.
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 "Know where you stand: Myths about life insurance")
There’s a common perception that life insurance companies will do everything they can to avoid paying claims.
In fact, 92% of all life insurance claims are paid in the first instance¹. And OnePath Life has paid 93% of claims for policies taken out with a financial adviser during 2018.
As long as you fulfil your duty to take reasonable care not to make a misrepresentation when you apply for cover, and you’re covered for the medical condition you’re claiming for, you should be confident your claim will be paid.
1. www.asic.gov.au/about-asic/news-centre/find-a-media-release/2019-releases/19-070mr-apra-and-asic-publish-world-leading-life-insurance-data/
Life insurance isn’t all about providing for debts and dependents. It’s also about looking after yourself.
Think what would happen if you became ill or disabled and couldn’t work. Would you ask your parents to bear the financial burden? Or would you rather have income protection to help you manage on your own?
There are benefits to applying for life insurance when you’re young and healthy. It’s generally cheaper and it means you don’t have to worry about getting cover later if your health changes (see myth #3).
Once you start your cover, what you are covered under your life insurance for won’t change – even if your health deteriorates.
In fact, you don’t even need to tell your insurer about a change in your health unless you intend to make a claim.
It’s worth noting that for a OneCare Business TPD policy, a change of occupation can alter terms of cover*. Should you change occupation,you will need to notify your insurer and refer to the Product Disclosure Statement and Policy Terms for details.
* OneCare is issued by OnePath Life Limited (OnePath Life) ABN 33 009 657 176, AFSL 238341. OneCare Super is issued by OnePath Custodians Pty Limited ABN 12 048 508 496, AFSL 238246. OnePath Life is not a related body corporate of OnePath Custodians.
We recommend that you read the relevant Product Disclosure Statement available at www.onepath.com.au or by calling 133 667 before deciding whether to acquire, or to continue to hold the product.
Most life insurance products sold through financial advisers required some medical tests before you get covered, but it may be as simple as one blood test and a GP examination.
‘Level premiums’ are designed to save you money over the long term by eliminating the impact of age-based premium increases.
Level premiums are calculated based on your age when the cover started, not at each anniversary, which means premiums are generally averaged out over a number of years. This means your cover is more expensive than‘stepped premiums’ at the beginning of your policy, but generally gets cheaper(relative to stepped premiums) as your policy continues.
It’s important to note that at policy anniversary the premium may still increase (even with level premiums), because age is just one factor that determines your premium. Other factors that impact premium (such as claims trends in Australian population) can result in a repricing of your insurance cover.
When insurers reprice stepped or level premiums, they don’t do it for an individual policy within a specific group unless they do it for every policy in that group.
Many life insurers in Australia have repriced level premiums in the past, so it’s important to talk to your financial adviser or your life insurer to understand your policy as well as any repricing activity that’s recently occurred, so you can make an informed decision. To understand the factors that influence your premium. Learn more here.
Regardless of whether stepped or level premium is selected, premium rates and premium factors are not guaranteed or fixed and insurers have increased premium rates in the past and may increase in the future.
The graph is for illustrative purposes only. This graph illustrates age-based premium increases for stepped against level for all covers. This premium comparison has been calculated, assuming all other factors affecting the premiums are excluded.Both stepped and level premiums can increase due to factors other than age.Premium rates and premium factors are not guaranteed or fixed, and insurers have increased premium rates in the past and may increase in the future. We recommend that you refer to the relevant product disclosure statement and policy documentation, and speak to your financial adviser, to understand other factors affecting your premiums.
Life insurance is designed to change as your life changes, as your cover needs can vary significantly over your lifetime.
Say you take out life insurance when you get married. You may want to increase your cover if you have children or increase your mortgage (learn about increasing your cover via future insurability).
But similarly you may want to reduce your cover if your children have grown up or you’ve paid down your debts.
Your financial adviser can help you work out how much cover you need at any given time, to make sure you’re not paying for any cover you don’t need.
Over 70% of Australian life insurance policies – more than 13.5 million separate policies – are held through superannuation funds*.
While this cover is great to have, many of these policies only provide the minimum level of cover employers have to offer, which isn’t enough for most people.
In fact, Rice Warner estimates that the median level of cover in superannuation meets is only 60% of needs for life cover (or just 38% for families with children), 13% for TPD cover and 17% for income protection.
Basic needs met by life insurance cover in super
*Insurance through superannuation, 2016, www.ricewarner.com/insurance-through-superannuation/
Workers’ compensation provides some protection for work-related accidents or injuries.
But it doesn’t cover any illnesses, nor does it cover anything that happens to you when you’re not at work.
Even if you are covered by workers compensation, the benefits are typically capped in terms of the amount and duration of payments, which means the cover could fall well short of what you really need.
There’s no doubt insuring the breadwinner is vital for any family’s financial security.
But if a non-working or lower income-earning partner became seriously ill or injured, their family would need a lot of assistance.
Imagine a breadwinner had to reduce their working hours to look after their partner or young children, or employ outside help.
Either option could prove very expensive, which is why both members of a couple should consider life insurance – regardless of how much they earn.
| Posted in:News |
 "Govt to scrap earlier tax relief: report")
Andrew Brown
(Australian Associated Press)
Plans to bring forward tax cuts for middle and high income earners to this year’s 2022/23 federal budget could reportedly be shelved.
Treasurer Josh Frydenberg is now unlikely to accelerate the relief by two years and flatten the tax rate for those earning between $45,000 to $200,000 to 30 per cent, The Australian reported on Wednesday.
Citing an unnamed senior government source, the news outlet said Mr Frydenberg plans instead to focus on cost of living pressures, such as rising petrol prices.
Federal Labor has previously committed to backing the so-called stage three tax cuts, which would cost about $17 billion a year, originally due in 2024/25.
Mr Frydenberg is also reportedly considering extending the low and middle income tax offset, which gives an eligible taxpayer an offset of up to $1,080, for another 12 months.
Meanwhile, Australia’s critical mineral sector will be bolstered in the upcoming federal budget with more than $200 million for manufacturing projects.
The government has announced $243 million will be spent across four projects in the sector.
Critical minerals, such as nickel, magnesium and other rare-earth elements, are heavily used in the manufacture of technology such as mobile phones, electric cars and solar panels.
Nearly half of the funding, $119.6 million, will go towards an integrated nickel manganese cobalt battery material refinery hub in Kalgoorlie.
Meanwhile, $49 million will be spent on processing high-grade vanadium from a Western Australian mine and transporting it to a plant powered by clean hydrogen.
There will be $30 million set aside for a rare-earth separation plant in the Northern Territory, the second of its type outside China and the first in Australia.
The fourth package will be $45 million to help construct a high-purity alumina production facility near Gladstone in Queensland to help meet rising demand for lithium-ion batteries and LED lights.
It is expected the four projects will help create more than 3400 jobs.
Prime Minister Scott Morrison said the new initiatives were critical to expanding the critical minerals sector in Australia.
“These projects are about manufacturing the products and materials Australians need, and the world needs, by making them right here at home,” Mr Morrison said.
“We’re helping grow the local critical minerals processing and clean energy industries and locking in the future of those industries by backing manufacturing projects in Australia.”
The critical minerals projects will form part of the federal government’s $1.3 billion modern manufacturing initiative.
Industry Minister Angus Taylor said the projects would mean Australia would capture more of the global supply chain.
He said the initiatives would help address the dominance of China in the area, which is currently responsible for between 70 and 80 per cent of critical mineral production.
“Australia is lucky to have some of the largest reserves of the critical minerals and metals which drive the modern global economy … this initiative is designed to address (China’s) dominance,” he said.
“These projects are not only game changers for the local region with the creation of new jobs – they will also open up incredible export opportunities.”
| Posted in:News |
 "How your investment income is taxed")
Lower tax on your investments can help you reach your financial goals sooner. But don’t choose an investment based on tax benefits alone.
You need to include investment income in your tax return. This includes what you earn in:
You pay tax on investment income at your marginal tax rate.
Use our income tax calculator to find out your marginal tax rate.
You’re allowed tax deductions for the cost of buying, managing and selling an investment. But there are rules around what you can and can’t claim as a tax deduction. See the Australian Taxation Office (ATO)’s investment income deductions.
Investing and tax can be complex. See your accountant for help.
If you sell an investment for more than the cost to acquire it, you make a capital gain. You need to include all capital gains in your tax return in the year you sell the investment. Capital gains are taxed at your marginal rate.
If you’ve held the investment for more than 12 months, you’re only taxed on half of the capital gain. This is known as the capital gains tax (CGT) discount.
The ATO has information to help you work out your capital gains tax on different investments.
If you sell an investment for less than the cost to acquire it, you make a capital loss.
You can use a capital loss to:
Positive gearing is where you borrow money to invest and the income from the investment (for example, rent or dividends) is more than the cost of the investment (interest and other expenses).
If you’re positively geared, you’ll have extra money coming in. But you’ll also have to pay tax on this income at tax time.
Negative gearing is where you borrow to invest and the investment income is less than the cost of the investment.
Investors negatively gear as they can generally claim a tax deduction for the investment loss. The aim is for the capital growth to offset the loss in earlier years.
If you’re making an investment loss, it is still costing you money. You’ll need to have cash from other sources, like your salary, to cover interest and expenses.
A tax-effective investment is one where the tax on your investment income is less than your marginal tax rate.
Choose investments based on your financial goals, risks you’re comfortable with and expected returns. Tax benefits should be a secondary consideration.
Super is a tax-effective investment and one of the best ways to save for retirement. This is because the government provides tax incentives to save through super. These include:
See Tax and super for more information.
Insurance bonds are investments offered by insurance companies. They can be tax effective if you’re planning to invest for 10 years and follow certain rules.
All earnings in an investment bond are taxed at the corporate tax rate of 30%. If no withdrawals are made in the first 10 years, no further tax is payable. They can be tax effective for investors with a marginal tax rate higher than 30%.
Tax-driven schemes offer tax deductions now for investing in assets that may provide income in the future. These schemes can be high risk and some are scams. Check the ATO page investigate before you invest for how to spot a dodgy tax scheme. Or get professional advice from an accountant.
Keeping good records will help you at tax time to:
It will also help you calculate any capital gains or losses when you sell an investment.
For all investments such as shares, property and cryptocurrencies you need to keep records to show:
You’ll need to keep records for five years after you included the income and capital gain or loss in your tax return.
MoneySmart
(ASIC)
| Posted in:News |
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