Everyone Ought to Be Rich: John J. Raskob

For anyone who watched the 1929 Great Depression Part 1 we posted earlier, you may remember mention of John J. Raskob’s August 1929 article in “Ladies Home Journal” several months before “Black Thursday”, we have provided the article here EverybodyOughtToBeRich (002) (Note the average wage in the US Wage was $15,000 in 1929.)

This is fascinating reading and touches on so many themes that I don’t want to spoil sit for you but to say perhaps Georg Hegel was right “We learn from history that we do not learn from history.”




You are never too smart to get advice.

“In life, you need many more things besides talent. Things like good advice and common sense.” Hack Wilson

In the financial world what constitutes good financial advice may not be seen straight away.
Recent news from the banking royal commissions and our increased access to information it is not hard to understand why people rely on family and friends or simply go it alone.
Usually, when we read about a financial guru we seem to isolate themselves as an oracle and the original source of that advice and therefore their success is purely self derived.
When we seek out answers, we look for definitive answers in which we don’t consider the moving parts of our lives. Where possible we try to abbreviate and spend as little time possible to achieve the best possible outcome with the least amount of money spent.
This may work in many other professions where there may be natural constraints or other concepts which can be relied upon, in the world of finance it is usually much more complicated.
In a recent mybusiness.com.au post in which Andrew Aravanis a Bankruptcy Trustee shared the top 10 professions that are more likely to go bankrupt according to his data. These are:
  1. Managers (sales, marketing, PR, business administration, ICT)
  2. Machine and stationary plant operators
  3. Road and rail drivers
  4. Business, human resource and marketing professionals
  5. Health professionals (nurses and midwives)
  6. Design, engineering, science and transport professionals
  7. Construction trade workers
  8. Other labourers
  9. ICT professionals
  10. Electrotechnology and telecommunications trade workers
Although, this may not be definitive it does reveal that regardless of your education, status or income you are not immune to poor financial outcomes. In fact, in many of the professions listed above their income would be well above the average Australian and the educational requires extensive.
What gets unsaid about financial advice, is the separation between the information gathered and the decision making process.
Information is king, and it shapes how we investment. More importantly, we trust that the information is correct and verifiable and for the most part it is …. from a certain point of view.
Many of those at the top of the financial game, have vast infrastructures in place to ensure they get accurate and verifiable information in a timely manner. Additionally, those that present opinions and ideas are vetted.
They wont just be analysts either, it would be a diverse group of individuals experts including law, tax, accounting and subject matter experts.
All of this enables them to be the best decision makers possible by exploring all of the alternatives on the table, and selecting the right decision for them. They extrapolating their own point of view. Yet, this does not immune them from loss, sometimes loss affects everyone and they lose less than the rest of us.
For now, we can ask ourselves the following questions:
  • If I just read the financial section of the news what is the difference between that and the racing form guide? What about advice from Uncle Bob or my friend Suzy?
  • If I don’t ask critical questions of those offering advice, how good is that advice?
  • Do I have an infrastructure in place to help me make decisions?
  • What could go wrong with my investments? What are the consequences?
  • If I have outsourced my financial decision making, have I really gained control of my life?

Its always easier to be proactive and take the time to ensure you are on the right path. Call our office on 03 9846 6542 or email: info@townshendassociates.com

General Advice Warning

The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on the author’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.








Taxable payments annual report (TPAR) – Cleaners and Couriers

From the ATO:

Cleaners and Couriers will need to lodge a Taxable payments annual report (TPAR) each year on contractors in their business. For this tax year (2019) the return will be due on the 29th of August 2019.

If this affects you please ensure you keep the following information as a minimum requirement, the contractor’s:

  • Australian business number if known
  • name
  • address
  • gross payment for the financial year (including GST).

To discuss further please call 0398466542 or email info@townshendassociates.com to make an appointment



Be aware of missed call scam, using overseas number

From the ABC, but further information go to scamwatch:

Call back at your own risk

Australian Competition and Consumer Commission (ACCC) deputy chair Delia Rickard said Scamwatch received reports of similar scams last year, but only three involved phone calls from Ascension Island.

She said it was likely the Carrington family were victims of a wangiri scam, a Japanese word loosely translated to “one cut”.

“What typically happens is the scammer calls for just one ring then cuts the line leaving a missed call on the victim’s phone,” she said.

“Then the victim calls the number back and they could be put on hold, have music playing or they could try and chat.

“The objective is to keep them on the phone for as long as possible.”

Ms Rickard said scammers made their money by enticing people to call back a premium number similar to those used by psychic hotlines and sex lines.

“There’s a complicated billing structure but people are charged more when they’re communicating over these numbers and the money makes its way back to the scammer,” she said.

Australians lost $48,830 to premium service scam calls and texts in the past 12 months.

To avoid extra charges on your phone bill, Ms Rickard recommended ignoring calls from country codes you don’t recognise and from 19 or 1900 numbers in Australia.

“That’s an indication that it’s a premium number and it’s going to cost you extra to be calling that number.”

Blocking problematic phone numbers and not returning missed calls from unknown numbers can help you avoid becoming a victim.

“The other thing that we know in the past about premium services is sometimes if you call your mobile provider and tell them what’s happened, you won’t end up having to pay the charge,” Ms Rickard said.

“Some mobile providers are prepared to do that, so it’s worth a try if you want your money back.”


First home super saver scheme to assist with saving for a deposit

If you wish to explore the following exert further please contact the office on 039846 6542 or email info@townshendassociates.com

From the ATO

You can start saving by entering into a salary sacrifice arrangement with your employer to make voluntary contributions or by making voluntary personal super contributions. You can contribute into any super fund, although contributions made to a defined benefit interest or a constitutionally protected fund will not be eligible to be released under the FHSS scheme. It is also possible to contribute into more than one fund.

Note: Some employers may not offer salary sacrifice arrangements to their employees.

Before you start saving you should:

  • check that your nominated super fund/s will release the money
  • ask your fund about any fees, charges and insurance implications that may apply
  • be aware that if you receive FHSS amounts, it will affect your tax for the year in which you make the request to release. You will receive a payment summary, and you will need to include both the assessable and tax-withheld amounts in your tax return.

If you want to be considered under the financial hardship provision then you should ask us to determine if these provisions apply to you before you start saving.


New HELP Repayment schedules

From 1st of July 2019 a new payment minimum of 1% at income of $45,881 and a maximum threshold of 10% at $134,573

For comparison here are this years HELP rates:

2018–19 repayment income thresholds and rates for HELP, SSL, ABSTUDY SSL and TSL
Repayment income (RI*) Repayment rate

Below $51,957


$51,957 – $57,729


$57,730 – $64,306


$64,307 – $70,881


$70,882 – $74,607


$74,608 – $80,197


$80,198 – $86,855


$86,856 – $91,425


$91,426 – $100,613


$100,614 – $107,213


$107,214 and above





The Age: More on Tax & Bitcoin Scam

From today’s age: Don’t be afraid to hang up.

Victorians have been warned against a cryptocurrency scam after fraudsters posing as debt collectors convinced victims to deposit more than $50,000 into a bitcoin ATM.

The victims, who are all from the eastern suburbs and believed to be migrants, were told they would be arrested if the amount was not paid.

Police said the four victims were told to take money from their bank accounts and go to Braybrook where a bitcoin ATM, one of a few in Melbourne, is located.

The victims were then given a code and instructed to deposit their money into a certain bitcoin account.

There are a few variations of the scam, where the fraudsters tell the victim they have spoken to their accountant or to federal police who have confirmed the victim’s debt, police said.

Maribyrnong crime investigation unit acting Detective Sergeant Katherine Lehpamer said she feared there may be many more victims and urged anyone affected to contact police.

“We believe that there are a number of victims out there who have not reported the matter for one reason or another, they may be here on visas or they are not aware that authorities would never tell them to deposit money into an ATM,” she said.

“It does appear that the scammers are targeting a certain group of people who they can convince that their immigration status is in jeopardy.

“Anyone getting a call along these lines should make inquiries with the relevant authority before paying any money or giving any banking or personal details over the phone.”

There are more than 20 bitcoin ATMS scattered across Melbourne, including in St Kilda, Richmond, Prahan, CBD and Maribyrnong.

Anyone who has information about this matter can contact Crime Stoppers on 1800 333 000 or file a confidential report at crimestoppersvic.com.au

For information on the latest scams visit scamwatch.com.au




Crypto Record Keeping requirements

The Australian Tax Office (ATO) requires the following records to be kept in relation to cryptocurrencies.

  • the date of the transactions
  • the value of the cryptocurrency in Australian dollars at the time of the transaction (which can be taken from a reputable online exchange)
  • what the transaction was for and who the other party was (even if it’s just their cryptocurrency address).

The sorts of records you should keep include:

  • receipts of purchase or transfer of cryptocurrency
  • exchange records
  • records of agent, accountant and legal costs
  • digital wallet records and keys
  • software costs related to managing your tax affairs

Home attached to your business? Better read this

Cross-posted from mybusiness.com.au

An insolvency specialist is warning business owners to be alert to the risks associated with falling property prices, given the family home is often used as security for business finance.

Trent Devine, a partner at Jirsch Sutherland, suggested that the huge boom in values – particularly on Australia’s east coast – has helped many businesses stay afloat by dipping into equity. But this strategy may now come back to bite them, amid a backdrop of falling property prices and banks hiking interest rates.

“Any business that has used personal finances for business borrowings is at risk,” said Mr Devine.

“In the past, when times were tough, struggling businesses have been able to lean on the equity of their home. Now, with falling house prices and other factors, this can have a disastrous knock-on effect for businesses.

“As property prices continue to fall, there is reduced levels of equity with which to finance or prop up a business.”

According to Mr Devine, a key risk for business insolvency is an “ill-advised link” between personal and business finances. Yet this is often unavoidable for new businesses.

“SMBs often use the same bank for the business that they use for personal banking, therefore they’re likely cross-collateralised,” he said.

“They may have their mortgage and business loan with the same bank. They don’t separate one from the other.”

This situation makes it much easier for the bank to assess the health of the business owner’s finances and make much earlier decisions on whether to push for insolvency.

“Rises in interest rates and resulting mortgage stress can certainly flow onto businesses as we’ve witnessed over the past 12 months. If a business is struggling, banks might now note that there’s now no property to support that business because the mortgage is under stress. Clearly, this means that business insolvency becomes a strong possibility,” said Mr Devine.

He urged business leaders to protect themselves by separating business and personal finances.

“Use different banks for business and personal uses so that cross-collateralisation is not an issue. If you are utilising personal funds, perhaps a secured loan to the business rather than opting for a capital injection might also be an option,” he advised.

“Also, business owners who are looking to refinance to help fund their business’ cash flow might find this difficult because of falling house prices.

“When first setting up a business, money can be incredibly tight, but it’s important for business owners to take the time and speak to their accountant or adviser to get the most appropriate advice. Options do exist and it’s important to explore them or risk losing everything.”

Mr Devine’s comments come after property data firm CoreLogic suggested banks are only exacerbating the housing downturn by raiding home loan rates, meaning the current lull in most mainland capital cities will linger for longer.

Latest figures from the firm show that prices have fallen by 5.9 per cent in Sydney over the last 12 months, and by 2.5 per cent in both Melbourne and Perth. Melbourne has also overtaken Sydney as the city with the fastest falling home values, down by 3.8 per cent so far in 2018, compared with Sydney’s 2.7 per cent slump.

Hobart is currently the nation’s star performing market, posting double-digit price growth over the past year.

We believe that Accountants are central in advising people in making sound business decisions, if you would like to discuss this matter or any other matter please contact us on 03 9846 6542 or email info@townshendassociates.com


Lodged your tax return. How long will it take?

So you have lodged your tax return and expecting a refund, now when do you receive it?

Typically, if you have lodged your return electronically with your account details it should take around 12 business days (so exclude weekends), however it may take longer. Apart from any arrangements you may have with us the ATO gives the following events which may delay the assessment of your tax return:

  • The ATO identifies omitted income
  • They need to cross-check data with other government agencies, including Centrelink and Child Support
  • You have a debt obligation with the ATO
  • You are insolvent
  • Your tax file number (TFN) has been compromised
  • The ATO queries information provided in the return.

Its important that if you think any of the above applies to you, that you ensure you discuss this with us when completing your tax return.





Thoughts on stopping you from a business failure.

Martin North from Digital Finance Analytics posed the following insight over the weekend. After a loan is secured for a business venture we often feel vindication that because the bank gave us money our business shall be a success. The assertion is that you have just outsourced your due diligence. (Click to watch his video “The problem with small business lending)

An interesting observation and I sure it will illicit a wide range of responses, but lets start at the business plan stage (Although, this can be applied to other business stages).

For many the business plan, is a description of the “who, what, when and why” but has it been translated into a monetary value? If it hasn’t been translated its time to go and measure these activities.

Each industry will have a different approach to the way they measure their activities and it may also depend on how big the business is. Either way its important to become a expert at your costs and how they work.

For instance, a $3.50 takeaway cup of coffee may be costed as follows:

Total Cost of Coffee $2.50 = Cup and lid $1.50 + Coffee and Milk $1.00

Sale Price of Coffee $3.50 – Total Cost of Coffee $2.50 = Gross Profit $1.00

Giving costs more thought, you may consider the cost of a Barista, Electricity, Rent, Plastic Stirrer, Sugar, Flavoring etc.

The bigger your business the more affordable to measure many of these costs will be and the more accurate your forecasts will become.

scottish cod

Once you have all the costs and the price, the next step, is to say how many cups and when.

Be as honest and as detailed as possible for each activity and once completed start having conversations with your Accountant.

An Accountant will start to use their expertise to assist in developing cash flow budgets, discuss scenarios and look at payback time frames. They will also assist in bench-marking against the industry.

The outcome is that you will be clear and confident on the feasibility of your business, what you can afford (e.g. rent) and what to do if something (good or bad) happens.

It may ultimately save you from unnecessary costs, business failure or lend you to an alternative idea or direction.

More importantly, you start treating yourself as an investor and critical appraising of your time and money.

If you have found this of interest or need assistance with making a business decision please make an appointment with our office.









Get ready for Single Touch Payroll 19 employees or less

Call us to discuss how we can assist you in navigating the new payroll requirements

From the ATO

Find out how your payroll software provider will offer STP reporting – this may be through an update to your existing software, or an additional service. Also remember to:

  • check if they have a deferred start date for your product
  • find out what support they will offer to their clients to transition to STP
  • subscribe to their communications – this may be via email, newsletter or web updates.