Future Assist https://futureassist.com.au Award Winning Wealth & Property Experts Thu, 21 Jan 2021 07:28:06 +0000 en-US hourly 1 https://wordpress.org/?v=5.5.3 https://futureassist.com.au/wp-content/uploads/2019/05/favicon.png Future Assist https://futureassist.com.au 32 32 3 Interior Design Trends in 2021 https://futureassist.com.au/3-interior-design-trends-in-2021/ https://futureassist.com.au/3-interior-design-trends-in-2021/#respond Thu, 21 Jan 2021 07:10:36 +0000 https://futureassist.com.au/?p=21784 Written by Vee Prizzi Designer / Marketing Assistant We can separate all the rising 2021...

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Written by Vee Prizzi
Designer / Marketing Assistant

We can separate all the rising 2021 interior design trends into a few distinct categories: colour, sustainability, and texture. Let us jump right into it and peek at what is coming this year that will make our homes feel comforting and stylish at the same time. 

1. COLOUR

There are two ends of the spectrum when reviewing the rising interior design colour trends in 2021. On one end, Pantone, Dulux, and Sherwin Williams each named their colour of the year, and without exception, each consist of homely, warm, earthy tones. On the other end of the trend spectrum, there’s strongly saturated, rich colours that are able add life and personality to any room. But the former has been able to flow into our homes (seemingly right from the outdoors), pulling us back to nature. 2020 bound us to our living rooms for most of the year, and we began to see our homes on a more intimate level. We’ve become bored of the flawless, manufactured white-grey-black combination on untouchable, uncomfortable showfurniture that saturated our Pinterest timelines for so long. 

Pantone chose to pick two colours this year to share the spotlight, a soft and energetic yellow named ‘Illuminating’ and a fortifying, strong grey, named ‘Ultimate Gray’. Dulux’s warm and earthy tone ‘Brave Ground’ offers a solid foundation, and Sherwin Williams chose a comforting, rooted colour ‘Urbane Bronze’ that supplies a natural backdrop for light and warmth.

Representing the Pantone colours of the year, we can see the gentle, illuminating yellow adds a vivacity to the practicality and strength the grey palette has to offer. If your home has already adopted the clean, grey aesthetic, adding pops of colour like this can bring much-needed zest, while not breaking the budget trying to completely redecorate. 

This room’s warmth is evident in the range of brown tones. This is a great example of the use of multiple shades and tones deriving from one main base colour, similar to that of Dulux’s ‘Brave Ground’. Using multiple shades, and incorporating multiple textures gives the room depth and life.  

This dressing room was actually painted with Sherwin Williams’ colour of the year ‘Urbane Bronze’.  The dark contrast between the wall, and the light and warmth from the open windows opposite the mirror allow for an inviting, comforting feeling and tone. With a dark wall, light-coloured fixtures and furniture, and greenery, this room perfectly encapsulates a natural mood. Perhaps all you’ll need to update your home is to rid-yourself of your all-white wall, and embrace a darker backdrop. 

2. SUSTAINABILITY

The 21st century has us flying through design and manufacturing eras faster than ever, and after our age of producing as many goods as possible to please our consumeristic desires, we are now transitioning into a more sustainable, eco-friendly age. After creating so much waste, we must find a way to develop sustainable design solutions, and one of these solutions is repurposing plastic waste into furniture. The goal here is to create beautiful, stylish products from what we already have. 

Ikea makes giant steps in the eco-friendly department. Their creation of flatwoven rugs out of leftover fabric from their bed linen production, their ambition to make solar energy accessible to everyone, and their rugs made from recycled bottles are getting praise and notice from interior designers all over the world. 

The low-pile rug above is from the TYVELSE range. According to their websiteThis rug is made from about 780 recycled 0.5 l PET bottles. Using waste as a resource brings us one step closer to a more sustainable future. 

If you must add contemporary furniture and products to your home, choosing environmentally friendly, sustainable products is recommended, as not only does it lower your impact on the environment, but it also usually means the products in your home are different and unique compared to the particleboard and melamine products that were trendy last year. Although cheap, its mass production not only hurts the environment, but it will also end up hurting your budget down the track. Sustainable products are timeless and usually have a long lifespan, so you will not need to (or want to) throw them out and replace them in the next three years like you would have to with particleboard and melamine. 

Koala is another fitting example of beautiful, timeless design that doubles as ecologically friendly. Based in New South Wales, Koala is a housewares, home furnishings and accessories company that specialise in creating long-lasting products, while giving back to the environment. As a certified B Corporation, Koala ensure they meet the highest standards of social and environmental performance, while balancing purpose and profit. 

The above modern sofa is their modular, chaise lounge in the colour Hawky. From their website, “Our modular sofa is designed to look amazing in any room, no matter the combination. With classic silhouettes, warming tones and the versatility to mix and match, you can style it to your liking, and it’ll feel right at home, in yours. 

3. TEXTURE & LAYERS

A subtle way to add sophisticated style to your home is by adding thoughtful texture and layers to each roomTextures and layers can come in the form of fabrics, home accessories, lightingfoliage, patterns, wall art, curtains, baskets – the list goes on! Below I have created two mood-boards to be an example of some basic textures and layers.


Find things that spark joy for you, do not just add things to your home just because you are trying to add dimension. For example, do not add ten plants to your living space if you think it will be too stressful looking after, watering and watching over ten plants 

 

To conclude, this year’s trends target our ability to reclaim our homes, invite the comfort and warmth of the outdoors, to create stylish statement pieces in our homes without the cost of hurting the environment and rid ourselves of the plain white walls we felt trapped in all year. 

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Declutter Christmas https://futureassist.com.au/declutter-christmas/ https://futureassist.com.au/declutter-christmas/#respond Mon, 30 Nov 2020 04:40:57 +0000 https://futureassist.com.au/?p=21552 Seven steps to decluttering your home before Christmas Peter Walsh – Author First published November 23,...

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Seven steps to decluttering your home before Christmas

Peter Walsh – Author
First published November 23, 2020 by Realestate.com

For many Australians 2020 has been a year to forget. As we get ready to embrace (a hopefully much better) 2021, now is the perfect time to clear the slate by decluttering and organising the home. 

Getting organised has a huge number of benefits. Not only does it make life a little easier, but studies show that looking at an organised, clean space brings a sense of calm and clarity.

And with the weather warming up ahead of Christmas, it’s the perfect time to open up the home and clear out unwanted items that have been building up.

Seven steps to decluttering

Step into 2021 with a fresh outlook. Here are seven steps to help make that happen.

1. Start small

Start by picking just one area of the home to concentrate on. Think about which areas are going to be used most often in the next few weeks. It might be the living room or the kitchen – but it also might be an outdoor area used for entertaining and relaxing with family and guests over the festive period.

2. Stay focused on one project at a time

Too many times, a good decluttering and organising job goes off the rails because people get started on too many projects all at the same time. To avoid this, limit the scope of the organising job. For instance, if the space being cleaned up is the kitchen, focus on one particular aspect of the space. What parts of the kitchen are most likely to be used during the holidays? It could be the serving platters, baking supplies, tableware or even cleaning out the pantry.

3. If it’s not used then discard

After choosing an area to focus on, gather every single item that belongs in that category and spread them out. Pick out anything that is ready to be thrown away such as damaged, soiled or broken items as well as anything that is no longer in style or is not loved anymore. Put those items in a box for the local op shop or gift or dispose of them in some other manner.

4. Store loved and used items

Locate items that are well-loved and used regularly. Be disciplined here and make sure these items are actually well loved and handy today. This limited group of treasures are the ones that will be stored within easy reach.

5. Set limits for things used infrequently

The last category is sometimes the hardest to deal with. It includes items that are perfectly fine but are not used regularly or particularly loved. Be a bit ruthless and decide exactly how much storage space is available for this entire category. If there is room for it then keep it – but there’s nothing wrong with leaving some extra room for future growth.

6. Clear, dust and clean before reloading spaces

Give the area a deep clean before putting anything back. Dirt, dust and even mould can collect in almost all storage areas. Take care of this now while the space is empty. Then start loading things back putting items used most regularly at the front so they can be accessed easily.

7. Dance your happy dance

Marvel at how beautifully organised the area is. Take pictures. Be proud. And then move on to the next project.

Focused and systematic gets the job done

If you limit decluttering to just one category within one space, the job is much more ‘doable’. Finish one job completely and then start on the next. Repeat this process to have Christmas decluttering done in plenty of time for the festivities.

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Property Valuations in SMSF https://futureassist.com.au/property-valuations-in-smsf/ https://futureassist.com.au/property-valuations-in-smsf/#respond Fri, 27 Nov 2020 03:39:53 +0000 https://futureassist.com.au/?p=21536 New ATO guidance on real property valuations in SMSFs The ATO has recently released new...

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New ATO guidance on real property valuations in SMSFs

The ATO has recently released new guidance regarding valuation of real property inside self-managed super funds (SMSFs).

Generally, all assets held within an SMSF must be reported at market value to be compliant with Regulation 8.02B of the Superannuation Industry (Supervision) Regulations 1994 (SISR).

In the past, unless the fund was paying a pension or held in-house assets, trustees could provide a valuation for fund assets every three years. This is no longer adequate, and assets must be reported at market value every year with evidence to support the valuation.

This evidence should also support the market value for the property as at 30 June of the year of audit or as close to this date as possible.

The ATO has stated that no single piece of evidence will be sufficient for this purpose, unless the property has been recently sold, but would require evidence from multiple sources in agreement. Examples of potential sources given by the ATO include:

  • independent appraisals from a real estate agent (kerbside)
  • contract of sale if the purchase is recent and no events have occurred to the property that could materially impact its value since the purchase
  • recent comparable sales results
  • rates notice (if consistent with other evidence on valuation)
  • net income yield of commercial properties (not sufficient evidence on their own and only appropriate where tenants are unrelated).

Future Assist Accountants (FAA) will follow the above guidelines regarding property valuations inside SMSFs going forward and may seek your assistance or assistance of third-party property agents/valuers on your behalf.

What happens if we don’t follow this guidance?

The ATO indicates that it is the responsibility of the trustee(s) of the fund to provide objective and supportable evidence, in accordance with these guidelines, to the auditor of their SMSF to satisfy the requirements of Regulation 8.02B. The auditor’s role is then to form an opinion on whether the provided evidence is sufficient and appropriate. If the auditor cannot form an opinion or finds the evidence otherwise lacking, this will prevent the audit of your SMSF from being finalised with further information being requested.

Regulation 8.02B and evidence required to support real property valuations | Australian Taxation Office (ato.gov.au)

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NSW Ends Stamp Duty https://futureassist.com.au/nsw-ends-stamp-duty/ https://futureassist.com.au/nsw-ends-stamp-duty/#respond Wed, 25 Nov 2020 06:16:21 +0000 https://futureassist.com.au/?p=21514 NSW Takes The Lead By Ending Stamp Duty

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NSW Takes The Lead By Ending Stamp Duty

Finbar O’Mallon – Reporter
First published at November 17, 2020 by Financial Review

NSW will lead the way on tax reform with its plan to make the transition from stamp duty on property purchases to a land tax, as part of a suite of measures designed to stimulate the economy as it recovers from the coronavirus recession.

Businesses and economists have praised Tuesday’s 2020-21 state budget, which is splashing nearly $30 billion on infrastructure projects, stimulus measures and payroll tax relief.

Debt will soar to nearly $105 billion by 2023-24, and NSW Treasurer Dominic Perrottet has seized on record low cash rates from the central bank as he promises not to drive the state into “structural deficit”.

Acting on recommendations from the Thodey review into federal-state financial relations, Mr Perrottet has proposed an optional move away from stamp duty to an annual property tax based on land value, with all future owners locked into the levy.

“When it comes to our economy and the biggest impediment on economic growth, the number one area for states are taxes,” Mr Perrottet said.

“The worst which we’ve been speaking about for some time is stamp duty; it is an impediment to home ownership.”

Buyers will get the choice of paying the transfer duty or the property tax, and the rates will differ for owner-occupiers, investors and commercial tenants.

The Thodey report noted that numerous inquiries, including the Henry review and the 2015 Commonwealth Treasury tax review, had found stamp duty was one of the most inefficient and damaging taxes, with costs ranging from 34¢ to $1.07 for every extra dollar of revenue raised.

Mr Perrottet has dubbed it a “response and reform” budget to drive the state’s post-pandemic recovery and plug its $16 billion deficit, predicting a return to surplus by 2024-25.

“There are a lot of numbers but ultimately this budget is about people,” he said. “It is not just about dealing with the pandemic today.”

Like the federal government, Mr Perrottet is hedging his bets on a coronavirus vaccine being available by mid-2021 and international borders reopening by December next year.

Measures in Tuesday’s budget include vouchers for people to spend on hospitality and entertainment, higher payroll tax thresholds for businesses and big spending on shovel-ready projects.

NSW’s economy is projected to shrink by 0.75 per cent before growing by 2.5 per cent in 2021-22, with $25 billion in revenue to be wiped out over four years.

Population growth will effectively hit zero over the next two years, shrinking the state’s revenue pool.

First home buyers could receive grants of up to $25,000 to help cover stamp duty, and the change is expected to bring in the same amount of revenue as the transfer charge.

Despite the proposed switch to land tax, budget documents show stamp duty revenue will grow 11 per cent over the next four years and land tax will grow at a sluggish 0.9 per cent over the same period.

Economist Saul Eslake praised Mr Perrottet for pursuing the politically challenging issue of stamp duty reform.

“I give him kudos for pressing on with this because no other state Treasurer has had the cojones to do it,” Mr Eslake said.

But he warned that the Treasurer risked undermining his own reform by giving people an option to choose between the annual levy or the transfer charge.

“In theory that should make the property tax system fairer. The reality is people who are unlikely to move very often will opt to stay with the present system,” Mr Eslake said.

Steve Mann, NSW chief executive of the Urban Development Institute of Australia, said new builds could be delayed if the move to the annual tax took too long.

“With reforms slated for late 2021, homebuyers could hold off on purchasing until they have more certainty, which could effectively stall the industry completely,” he said.

Business Council of Australia chief executive Jennifer Westacott said NSW was “building a strong business-led recovery”, pointing to the budget’s stamp duty and payroll tax changes.

“While some jurisdictions are talking about reform, NSW is acting,” she said.

“Critically, the NSW budget puts business at the centre of the recovery by unleashing the job-creating power of the private sector.”

Payroll taxes for companies creating 30 new jobs in NSW will be axed for four years, the payroll tax threshold will rise from $1 million to $1.2 million, and small businesses will be given $1500 vouchers to help cover government fees and charges.

The government will trial its $500 million “Out and About” initiative in Sydney’s central business district next month before rolling it out statewide next year, with households receiving $100 in vouchers to spend on hospitality and entertainment.

People will get only one shot to spend the $25 vouchers, and any leftover cash will be forfeited. They will not be able to be used for alcohol, cigarettes or gambling.

Moody’s warned that NSW’s high debt levels, which will more than double over the next four years, would put it at risk of future shocks.

“This will test institutional capacity as it targets fiscal repair,” Moody’s vice-president John Manning said.

Mr Perrottet said NSW had an “obligation to future generations” to use the opportunity of low borrowing rates.

Coal mining royalties will be diverted to the NSW Generations Fund, while the government floats a securitisation of the state’s lotteries tax revenue.

Public servant pay increases have been frozen at 1.5 per cent over the next four years, and Mr Perrottet told departments to cut back spending on travel, events and contractors.

He used his budget speech to describe a horror year for NSW, as Tuesday’s budget marked a year since the first known case of the coronavirus.

“We look to the far horizon, because we have a long road to tread,” he said.

NSW Labor has dismissed the budget, saying it failed to account for the looming economic crisis when JobKeeper ends next year. It also criticised a lack of start dates for proposed new schools and hospitals.

“It’s a tired, flat budget from a tired, 10-year-old government,” Opposition Leader Jodi McKay said.

 

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Federal budget 2020-21: Analysis from a tax perspective https://futureassist.com.au/federal-budget-2020-21-analysis-from-a-tax-perspective/ https://futureassist.com.au/federal-budget-2020-21-analysis-from-a-tax-perspective/#respond Mon, 12 Oct 2020 00:35:16 +0000 https://futureassist.com.au/?p=21108 Tax and business investment took centre stage in the Federal Budget this year, as the...

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Tax and business investment took centre stage in the Federal Budget this year, as the Morrison Government seeks to reboot growth and repair the damage wrought by COVID-19 on Australia’s economy and employment.

Treasurer Josh Frydenberg emphasised the Coalition’s focus on tax by bringing forward the start date for the next round of tax changes. Backdated to 1 July 2020, the measures will provide immediate tax relief for individuals and small businesses. They also represent a significant step in reshaping Australia’s current progressive tax system.

In addition, the reintroduction of measures allowing the carry-back of tax losses and a significant expansion of existing asset write-offs should help support medium and small businesses who have been facing some of the toughest trading conditions in living memory.

 

Early start to personal tax cuts

At the centre of the tax changes announced by the Treasurer is a new 1 July 2020 start date for the next stage of the government’s tax plan.

 

Under the Stage 2 changes:

  • The existing low-income tax offset increases from $445 to $700,
  • The upper limit of the 19 per cent tax bracket increases from $37,000 to $45,000, and
  • The upper limit of the 32.5 per cent bracket increases from $90,000 to $120,000.
  • There is also a one-year extension of the low and middle-income tax offset (LMITO) during 2020-21 worth up to $1,080 for individuals and $2,160 for dual income couples.

 

Companies gain full asset write-off

For businesses, a major announcement was the introduction of a temporary tax incentive allowing the full cost of eligible depreciable assets to be written off in the year they are first used or installed ready for use. This will also apply to the cost of improvements.

From Budget night, companies with a turnover of up to $5 billion – over 99 per cent of businesses – can fully claim eligible depreciable assets as an expense until 30 June 2022. This will significantly reduce the cost of eligible assets by providing a cash flow benefit.

 

Temporary carry-back of tax losses

Companies with turnovers of up to $5 billion will also be able to generate a tax refund by offsetting tax losses against previous profits on which tax has been paid. Losses incurred in 2019-20, 2020-21 and 2021-22 can be carried back against profits made in or after 2018-19.

Under the new measure, eligible companies can elect to receive a tax refund when they lodge their 2020-21 and 2021-22 returns. This will help previously profitable companies who are making losses due to COVID-19 access a cash refund to keep their business running, or to take advantage of the new full write-off provision.

 

JobMaker hiring credit for young employees

Businesses will now be able to access a new JobMaker Hiring Credit if they hire additional employees working at least 20 hours a week.

From 7 October 2020, eligible employers will be able to claim $200 a week for each new employee they hire aged between 16 and 29, and $100 a week for additional hires aged 30 to 35 years old. New employees must have been unemployed or in education prior to hiring.

New jobs created until 6 October 2021 will attract the hiring credit for up to 12 months, with the credit claimed quarterly in arrears from the ATO.

 

More small business tax concessions

The Treasurer also made several announcements prior to the Budget providing valuable tax concessions for small businesses. From 1 July 2020, the annual turnover test for a range of business tax concessions will increase from $10 million to $50 million. This includes immediate deductions for eligible start-up expenses and prepaid expenditure.

In addition, from 1 April 2021, eligible businesses will be exempt from the 47% FBT on car parking and work-related portable devices such as phones and laptops provided to employees.

From 1 July 2021, eligible business will be able to access simplified trading stock rules, remit their PAYG instalments based on GDP adjusted notional tax, settle excise duty monthly and enjoy a two-year (instead of four-year) amendment period for income tax assessments.

 

If you would like to discuss how to make the most of these and other Budget announcements, please get in touch.

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Time to break up with your old habits? https://futureassist.com.au/time-to-break-up-with-your-old-habits/ https://futureassist.com.au/time-to-break-up-with-your-old-habits/#respond Mon, 28 Sep 2020 00:24:32 +0000 https://futureassist.com.au/?p=20910 We all have bad habits, and they can be many and varied. They can be...

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We all have bad habits, and they can be many and varied. They can be as big as poor time management which can impact your productivity, or as small as nail biting which drives your loved ones crazy! You might self-sabotage, such as tucking into that tub of ice-cream even if you’ve vowed to eat better or checking your phone during face-to-face conversations which can cause hurt feelings.

It’s of course unrealistic to be perfect, but you can part company with the habits which are not having a positive impact on your life.

 

How habits are formed

It’s estimated that 40% of our activities are performed daily in the same situations. It can be hard to trace back how habits (good and bad) were formed but they served a purpose at some stage in our lives. Perhaps you took up smoking to fit in or deal with stress, or learned to self-soothe with sugary treats.

A bad habit for one person isn’t necessarily a bad habit for someone else. Having a glass or two during wine o’clock might be problematic for someone, but a welcome treat for another.

 

Why habits are hard to break

Habits become deeply wired over time and often reward us in some way thanks to our brain chemistry. However, we don’t have to remain at the mercy of them.

As the common failure of our New Year’s resolutions show, it’s hard to break habits and/or form new ones. Fortunately, there has been significant research into how habits are formed, which can help when it comes to breaking our less desired habits.

 

Leveraging the habit loop

All habits can be broken down into three main components; first comes the cue or trigger which could be in your internal or external environment; then the action (good or bad); and lastly the reward, where your brain receives the positive feedback for your action.

Appreciating how habits are formed and maintained will enable you to consciously adjust your behaviour, intercepting the habit loop and making your desired behaviours finally stick.

Firstly, create an environment that reminds and encourages you to take action. This could be having your clothes set out for your early morning workout, or scheduling time and moving to a separate space to allow for deep thinking work.

Next identify your current external and your internal cues that trigger your behaviour and set up a process for more productive response, removing any barriers to your success. Are you prone to the 3pm afternoon slump? Take a walk or have some healthy snacks at hand to save you from that sugary snack.

 

Creating a positive feedback loop for success

Ever wondered why your most addictive habits are often the easiest to adopt and the hardest to kick? These habits, while they may not have a positive impact on your health and wellbeing, have inbuilt reward systems which release a cocktail of positive chemicals in your brain including dopamine, encouraging you to continue your new found habit.

While not all habits have a natural inbuilt reward system, you can create a positive feedback loop to stimulate your brain and embed a new habit, particularly when you are just getting started. For example, studies have shown that a small amount of dark chocolate after a workout can stimulate the same chemicals that will eventually be released by the workout itself. Creating an immediate reward to spur you on.

 

…and pace yourself

It takes time to break habits and form new ones – on average, over two months. Be patient with yourself and realistic with what you can achieve. If you do fall back into your old ways, don’t be too hard on yourself, most people fail multiple times before they make it work. Treat yourself with compassion and persevere. It will be worth the effort to dump those habits that just aren’t working for you anymore.

 


References 

https://www.sciencedaily.com/releases/2014/08/140808111931.htm

https://www.forbes.com/sites/quora/2018/02/13/the-science-behind-adopting-new-habits-and-making-them-stick/#671e27a143c7

https://www.sciencedaily.com/releases/2016/09/160913101129.htm

https://onlinelibrary.wiley.com/doi/abs/10.1002/ejsp.674

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Inflation, deflation – What’s in the name? https://futureassist.com.au/inflation-deflation-whats-in-the-name/ https://futureassist.com.au/inflation-deflation-whats-in-the-name/#respond Mon, 28 Sep 2020 00:22:50 +0000 https://futureassist.com.au/?p=20916 When the inflation rate fell into negative territory in the June quarter, it was so...

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When the inflation rate fell into negative territory in the June quarter, it was so unusual it begged the question of what this means for the economy. Are we facing deflation or even stagflation and what is the difference?

In the June quarter the annual inflation rate fell to minus 0.3 per cent, only the third time in 72 years of record keeping that the rate has been in the negative.

Much of the fall was attributed to free childcare (part of the special COVID-19 measures) and low petroleum prices during the quarter. The general view is that the September quarter will return to positive territory when childcare fees resume.

So what is inflation and why does it matter?

 

What is inflation?

In Australia, the main measure of inflation is the consumer price index (CPI). This measures the rate of change in the average price of a basket of selected goods and services over time.

While the index can move up and down, a negative inflation rate – no, that’s not an oxymoron – is referred to as deflation.

Generally, the Reserve Bank of Australia (RBA) aims to keep the inflation rate between 2 and 3 per cent. But in the current environment, the RBA is now expecting the CPI to remain below 2 per cent until at least December 2022.

A falling consumer price index – particularly one that is in negative territory – sounds like it should be a good thing as it will give you greater purchasing power with the lower prices. After all, who doesn’t like a bargain? But in reality, it can play havoc with retail businesses who are faced with lower profits but not necessarily lower costs. This can put a squeeze on their business, which can often lead to retrenchments and a spike in unemployment.

The other two occasions when Australia experienced deflation were in 1962 and in 1997-98.

The 1962 negative rate was after then Prime Minister Menzies implemented two credit squeezes to end the inflation caused by the Korean War Boom. The 1997 episode was in the wake of the Asian Financial crisis.

 

A slowing economy

Clearly, we are living in extraordinary times with COVID-19 and until the pandemic is more under control we can expect further slowing in the economy.

But at least this curtailment of economic activity is not coinciding with higher prices for goods. If that were the case, the country would be faced with stagflation which poses a far greater squeeze on households than deflation. Stagflation is a situation with rising inflation (prices) and slowing economic growth, often accompanied with high unemployment.

Of course, if your job is not in jeopardy, you will benefit from cheaper goods. But if lower prices become the norm, people may hold off major purchases on the expectation that they can buy even more cheaply in the future. This is not good news as consumer spending makes up 60 per cent of total economic activity, so a contraction in spending generally results in a contraction in the economy.

However, if your employment is insecure and the overall unemployment rate rises, this will depress household spending. It will also have an impact on the property market.

 

Unemployment takes its toll

According to the latest figures, more than one million Australians are currently unemployed and many more could face uncertainty going forward. Whether you rent or are buying your property, finding the funds can present problems.

In some areas, as demand dried up in the June quarter, rents dropped by as much as 25 per cent. This may be good for renters, but it is not for those with investment property as part of their retirement strategy. If rents fall – or indeed if your property is vacant for some time – it may jeopardise retirement income.

Property prices are also under attack with distressed sales coming to the fore as the unemployment rate grows. When property values fall, mortgages become more expensive in real terms as your equity may be reduced – and in some cases you could find yourself with negative equity in your property.

Hopefully, the measures introduced in Australia to counter COVID-19 will prove successful and the economy will begin to recover.

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Our ongoing relationship status… with our devices https://futureassist.com.au/our-ongoing-relationship-status-with-our-devices/ https://futureassist.com.au/our-ongoing-relationship-status-with-our-devices/#respond Mon, 28 Sep 2020 00:21:00 +0000 https://futureassist.com.au/?p=20918  If your New Year’s resolution was to spend less time glued to your phone, you’ve...

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 If your New Year’s resolution was to spend less time glued to your phone, you’ve probably found that unexpectedly challenging this year. While the impact of COVID-19 differs from state to state, many of us have experienced social isolation and the call to stay and work from home where possible, resulting in an increase in the amount of time we are spending online.

In fact, data demand over the NBN increased by more than 70 to 80 per cent during daytime hours in March compared to figures calculated at the end of February. Due to greater usage, internet speeds across Australia slowed to cope with the uptake.

It’s not just the time we are spending online that’s being impacted, our relationship with technology is evolving as we adapt to the changing world around us.

 

The benefits of technology

While technology usage often gets a bad rap when it comes to mental health, it has also brought positives into many of our lives, especially during 2020: greater work flexibility, connection to loved ones, and access to online resources and support groups.

During social isolation, many of us relied on technology to keep our lives as normal as possible. For some that meant working from home, keeping up a regular exercise regime with online classes, or having a regular video chat scheduled with family and friends.

 

Changing nature of how we use our devices

Technology has stepped up and is filling the gap in areas we previously hadn’t relied on it for. With gyms and boot camps off limits across many parts of Australia during stages of lockdown, online workouts started popping up on platforms such as Zoom and Facebook.

Online shopping is understandably booming as the trend away from ‘bricks and mortar’ retail quickens pace and people embrace the convenience and safety of shopping online during pandemic conditions. Based on Australia Post deliveries, there was an 80% increase in online shopping during the months of April and May.

When concerts were cancelled and movie theatres and galleries closed, we also turned to our devices increasingly for entertainment. Netflix saw a boom in their subscribers, up a whopping 15.8 million users in April, while Instagram Live was up 70% in the US in March.

 

Transforming how we work

Many workplaces have had to put in place processes to support working remotely. Prior to the pandemic, besides face-to-face meetings, most workplace correspondence was done via email or phone. Due to social isolation and increased feelings of loneliness as a result, video meetings and catch-ups have become more of the norm. The cameras on our phones and computers have been able to make us feel more ‘in person’ as a result.

Collaboration has also been on the rise, with collaborative platforms and online communities such as Slack, Asana and Trello making it easier to work together while we’re apart.

 

Looking out for others

Much of our online activity has tended to be a reflection of our self-absorption. The ‘it’s all about me’ approach of many influencers and content creators was tempered during the crisis by a more giving approach. We saw an outpouring of generosity, from entrepreneurs offering time to listen to pitches, master yoga instructors teaching free classes and musicians performing regular concerts. People have banded together to keep us feeling connected.

Local communities used technology to engender a sense of support and inclusion, with groups springing up to assist others in a myriad of ways such as offering to shop for those who were in isolation, providing free produce from gardens, or toilet paper for those who missed out in the panic buying frenzy early in the pandemic, to just making sure that everyone in the community had a ‘voice’.

Our relationship with our devices and the way we conduct our digital lives is ever-evolving. If we take the positives that have come from the way the crisis has influenced our lives in the digital realm, we’ll continue moving in a direction that not only makes our lives easier but also supports genuine human interaction.

 


References

https://www.abc.net.au/news/2020-04-01/coronavirus-internet-speeds-covid19-affects-data-downloads/12107334

https://auspost.com.au/business/marketing-and-communications/access-data-and-insights/ecommerce-trends

https://www.abc.net.au/news/2020-04-22/netflix-warns-record-users-will-not-last/12171800

https://www.businessinsider.com.au/instagram-live-70-percent-increase-social-distancing-psychologist-explains-2020-4?r=US&IR=T

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Getting your retirement plans back on track https://futureassist.com.au/getting-your-retirement-plans-back-on-track/ https://futureassist.com.au/getting-your-retirement-plans-back-on-track/#respond Mon, 28 Sep 2020 00:20:03 +0000 https://futureassist.com.au/?p=20924 After a year when even the best laid plans have been put on hold due...

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After a year when even the best laid plans have been put on hold due to COVID-19, people who were planning to retire soon may be having second thoughts. You may be concerned about a drop in your super balance, insecure work, or an uncertain investment outlook.

Whatever your circumstances, a financial tune-up may be required to get your retirement plans back on track. You may even find you’re in better financial shape than you feared, but you won’t know until you do your sums.

The best place to start is to think about your future income needs.

 

What will retirement cost?

Your retirement spending will depend on your lifestyle, if you are married or single, whether you own your home and where you want to live.

Maybe you want to holiday overseas every year while you are still physically active or buy a van and tour Australia. Do you want to eat out regularly, play golf, and lead an active social life; or are you a homebody who enjoys gardening, craftwork or pottering in the shed?

Also think about the cost of creature comforts, such as the ability to upgrade cars, computers and mobiles, buy nice clothes, enjoy good wine and pay for private health insurance.

It’s often suggested you will need around 70 per cent of your pre-retirement income to continue living in the manner to which you have become accustomed. That’s because it’s generally cheaper to live in retirement, with little or no tax to pay and (hopefully) no mortgage or rent.

 

Draw up a budget

To get you started, the ASFA Retirement Standard may be helpful. It provides sample budgets for different households and living standards.

ASFA suggests singles aged 65 would need around $44,183 a year to live comfortably, while couples would need around $62,435. Of course, comfort is different for everyone so you may wish to aim higher.

To put these figures in perspective, the full age pension is currently around $24,550 a year for singles and $37,013 for couples. As you can see, this doesn’t stretch to ASFA’s modest budget, let alone a comfortable lifestyle, especially for retirees who are paying rent or still paying off a mortgage.

Then there is the ‘known unknown’ of how long you will live. Today’s 65-year-olds can expect to live to an average age of around 85 years for men and 87 for women. The challenge is to ensure your money lasts the distance.

 

Can I afford to retire?

Once you have a rough idea what your ideal retirement will cost, you can work out if you have enough super and other savings to fund it.

Using the ASFA benchmark for a comfortable lifestyle, say you hope to retire at age 65 on annual income of $62,000 a year until age 85. Couples would need a lump sum of $640,000 and singles would need $545,000. This assumes you earn 6 per cent a year on your investments, draw down all your capital and receive a part age pension.

Add up your savings and investments inside and outside super. Subtract your debts, including outstanding loans and credit card bills, to arrive at your current net savings. Then work out how much you are likely to have by the time you hope to retire if you continue your current savings strategy.

There are many online calculators to help you estimate your retirement balance, such as the MoneySmart super calculator.

 

Closing the gap

If there’s a gap between your retirement dream and your financial reality, you still have choices.

If you have the means, you could make additional super contributions up to your concessional cap of $25,000 a year. You may also be able to make after-tax contributions of up to $100,000 a year or, subject to eligibility, $300,000 in any three-year period.

You might also consider delaying retirement which has the double advantage of allowing you to accumulate more savings and reduce the number of years you need to draw on them.

These are challenging times to be embarking on your retirement journey, but a little planning now could put you back in the driver’s seat.

 


References

https://www.superannuation.asn.au/resources/retirement-standard

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September Tax Alert https://futureassist.com.au/september-tax-alert/ https://futureassist.com.au/september-tax-alert/#respond Tue, 15 Sep 2020 01:54:13 +0000 https://futureassist.com.au/?p=20752 Many small business owners and sole traders will be breathing a sigh of relief following...

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Many small business owners and sole traders will be breathing a sigh of relief following the extension of the JobKeeper scheme until March next year. At the same time, however, the ATO is stepping up its compliance activities.

Here’s a roundup of some of the key developments in the world of tax.

 

JobKeeper extended to March 2021

The government has announced its JobKeeper scheme, which was originally due to wind up on 27 September 2020, will now continue until 28 March 2021.

The $1,500 per fortnight payment to eligible businesses, not-for-profits and the self-employed will, however, drop to $1,200 per fortnight from 28 September 2020 and to $1,000 per fortnight from 4 January 2021.

From 28 September 2020, if your business claims JobKeeper, you will also be required to demonstrate it has suffered a decline in turnover using your actual GST turnover rather than the prior method, which was based on projected GST turnover.

 

ATO data matching support payments

The tax man is also starting to put JobKeeper support payments under the microscope using information from a new data matching arrangement with Services Australia (formerly Centrelink).

Information about JobKeeper payments reported to Services Australia for social security payment purposes will also be provided to the ATO. This will help the ATO identify people who are receiving both JobKeeper and social support payments.

 

JobKeeper still open to businesses

Although most businesses suffered an immediate decline in turnover when the COVID-19 crisis started, some businesses are finding things are tougher now the new financial year has commenced. The renewed lockdown in Victoria has also dealt a new blow to many businesses, so it’s worth remembering it’s still possible to apply for the JobKeeper subsidy.

If your small business has experienced a drop in turnover of more than 30 per cent and you meet the eligibility requirements, you are still able to apply for financial support through JobKeeper.

 

Expenses shortcut extended

For employees who have been using the shortcut method to calculate their working from home expenses, the good news is the end date for this scheme has been extended from 30 June to 30 September 2020.

The ATO announced the new three-month extension and said a further extension may be considered.

Employees and businessowners who work from home between 1 March 2020 and 30 September 2020 on income producing activities can use the shortcut method to claim 80 cents per work hour for their home office running expenses. This all inclusive rate means you don’t need to calculate and record your actual running costs.

The shortcut is not a free pass, however, as the ATO recently noted this was one of the top three issues it was seeing in returns lodged for 2019-20. To avoid problems in this area, ensure you don’t double up on your shortcut claim by adding, for example, a depreciation claim for laptops and desktops.

 

Warning on TPAR requirement

The ATO is warning some small businesses may find they need to lodge a taxable payments annual report (TPAR) this financial year if they have started using contracted service providers due to the pandemic.

TPARs keep the ATO informed about payments made to contractors, with the requirement initially rolled out for the building, cleaning and courier industries.

The tax man is now cautioning restaurants, cafes, grocery stores, pharmacies and retailers who have started paying contractors to deliver goods to customers that they may be required to report.

If total payments received for delivery or courier services are ten per cent or more of your business’s total annual business income, you may need to lodge a TPAR for 2020-21.

 

No tax on ‘robodebt’ refunds

And some good news for taxpayers who receive a refund amount from Services Australia for a debt raised using averaged ATO income information – also known as a robodebt. You don’t need to include the money in your income tax return.

The ATO is advising no action needs to be taken regarding these refunds and tax returns for prior years should not be amended.

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