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.

When is cash not cash? Ensure your cash investment option is what you think.

If you have read a financial report or have done some bookkeeping you may find the account “Cash and cash equivalents” you may know it may not be actual cash but in simple terms behaves very similarly to money.

If you have some element of your superannuation or other managed investment monies allocated to the asset class “cash” you may be surprised that it is not actually “cash”.

APRA (Australian Prudential Regulatory Authority) has recently released information that some investments characterised asset-based and mortgage backed securities as cash. Additionally, commerical bonds, hybrid debit instruments, credit default swaps and loans to the mix and you arguable have a very different risk profile from cash.

If you are unsure you should check with provider or make an appointment with our financial advisors on +613 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.

 

 

Finance drives everything — including your insecurity at work

An excellent article by Professor David Peetz and puts in focus the need to find your financial journey in this world.

From the conversation:

There’s a common link between the many things that have promoted insecurity at work: the growth of franchising; labour hire; contracting out; spin-off firms; outsourcing; global supply chains; the gig economy; and so on. It’s money.

At first, that seems too obvious to say. But I’m talking about the way financial concerns have taken control of seemingly every aspect of organisational decision-making.

And behind that lies the rise and rise of finance capital.

Over the past three decades there has been a shift in resources from the rest of the economy to finance. Specifically, to finance capital.

One way to see this is in the chart below. It shows the income shares of labour and capital, and the breakdown for each between the finance and non-finance (“industrial”) sectors, in two four-year periods. They were 1990-91 to 1993-94 (when the ABS started publishing income by industry) and, most recently, 2013-14 to 2016-17. (I use four-year periods to reduce annual fluctuations and show the longer-term trends. Here is more detail and explanation of methods.)

Income shares of labour and capital

Factor shares by industry, 1990-94 and 2013-17. Source: ABS Cat No 5206.0

The key thing to notice in the chart is that finance capital’s share of national income doubled (it’s the dark red boxes in the lower right-hand side of the chart), while everyone else’s went down.

So, over that quarter-century, the share of labour income (wages, salaries and supplements) in national income fell. In the early 1990s it totalled 55.02% — that’s what you get when you add labour income in finance, 3.21%, to labour income in “industrial” sectors, 51.81%. In recent years this fell to 53.58%. There were falls in both finance labour income (from 3.81 to 2.83% of national income) and industrial labour income.

The total share of profits and “mixed income” accordingly rose from 44.99% to 46.42%. The thing is, all of that increase (and a bit more) went to finance capital. Profits in finance went from 3.16% to 6.16% of the economy.

At the same time there has been a large increase in the share of national income going to the very wealthy — the top 0.1% — in Australia and many other countries.

This shift in resources does not reflect more people being needed to do important finance jobs. Nor is it higher rewards for workers in finance. The portion of national income, and for that matter employment, devoted to labour in the financial sector actually fell from 3.21% to 2.83%.

The economy devotes proportionately no more labour time now to financial services than it did a quarter century ago. Yet rewards to finance have increased immensely. The share of national income going to “industrial” sector profits and “mixed income” has declined.

In short, the widely recognised shift in income from labour to capital is really a net shift in income from labour, and from capital (including unincorporated enterprises) in other industries, to finance capital.

Finance matters

You may have heard about “financialisation”. It’s not really about more financial activity. It is about the growth of finance capital and its impact on the behaviour of other actors.

Financialisation has led to finance capital taking the lead shareholdings in most large corporations, not just in Australia but in other major countries (to varying degrees) as well.

This role as main shareholder and, of course, chief lender to industrial capital has driven the corporate restructuring over the past three decades that has led to greater worker insecurity and low wages growth (as I recently discussed here).


Read more: Who owns the world? Tracing half the corporate giants’ shares to 30 owners


When “industrial capital” has been restructured over recent decades — to promote franchising, labour hire, contracting out, spin-off firms, outsourcing, global supply chains, and even the emergence of the gig economy — it has been driven by the demands of finance capital. Casualisation is just one manifestation of this.

Short-term logic

Now there’s no conspiracy here (or, at least, the system doesn’t rely on one). There is actually a lot of competitive mindset in the financial sector. This is just the logic of how the system increasingly has come to work. Financial returns, particularly over the short term, have become the principal (really, the only) fact driving corporate behaviour.

This has come at the expense of human considerations.

That same logic is behind resistance to action on climate change. Continuing carbon emissions are the perfect, and deadly, example of short-term profits overriding longer-term interests.

Yet even finance capital is not monolithic. There are parts of finance capital that have a longer-term perspective (“there’s no business on a dead planet”). So they are effectively in battle with those parts of finance capital for which the short term is everything. The former want governments to intervene in, for example, carbon pricing.


Read more: Class and climate: how financial warfare affects the air


Policy questions

All this leaves some big questions for policymakers about how to redress the new imbalance of power.

In part, it requires changing institutional arrangements (including industrial relations laws) that in recent years have made it much harder for workers to obtain a fair share of increases in national income. It requires rethinking of how we regulate work.

But it also requires rethinking of how we regulate product markets and financial markets.

The almost global reduction in regulation of the financial sector over three decades ago has ultimately led to this imbalance. It is time to rethink all of that.

Bitcoin, cryptos and your taxes

The central premise to be “outside of the central banking monetary system” and the “way of the future”. If you own or are thinking to own cryptocurrencies, you should not be confused with that those that disagree with Bitcoin being money and those people not understanding it. They do, especially the Australian Taxation Office (ATO)

Buying and selling Bitcoin or any other cryptocurrency may attract a capital gain event which is reportable on your tax return.

A capital gain is the difference between the purchase and sale price and a capital gain event with cryptocurrencies can be the following:

  • sell or gift cryptocurrency;
  • trade or exchange cryptocurrency (including the exchange of different currencies)
  • convert cryptocurrency to fiat currency such as AUD
  • use cryptocurrency to obtain goods or services (source: NTAA 2018)

However,  there are some provisions which may exempt a capital gain event.

To make an appointment with us please call or email our offices +613 9846 6542 or info@townshendassociates.com

 

 

Financial Elder Abuse: what it may look like and where to go

For many this is an incredibly difficult and sometimes embarrassing issue, here is some important information which may help:

From CPA Australia:

The World Health Organisation defines financial abuse of an older person as, “The illegal or improper exploitation or use of funds or other resources of the older person”. The definition includes acts with adverse outcomes committed not only by people known to and trusted by the victim, but also acts perpetrated by strangers and by institutions.

The following are given in the study as common examples of financial abuse:

  • theft
  • misappropriation or misuse of money, property or assets
  • exerting undue influence to give away assets or gifts
  • putting undue pressure on the older person to accept lower-cost or lower-quality services in order to preserve more financial resources to be passed to beneficiaries on death
  • carrying out unnecessary work or overcharging for a service
  • misuse of powers of attorney
  • denial to access funds
  • failure to repay loans
  • living with the older person and refusing to contribute money for expenses
  • forging or forcing an older person’s signature
  • promising long-term care in exchange for money or property and then not providing the promised care
  • getting an older person to sign a will, contract or power of attorney through deception, coercion or undue influence
  • abusing joint signatory authority on a blank form
  • getting an older person to be a guarantor for a loan where the benefit of the loan is for someone else without sufficient information or knowledge to make an informed decision.

The Victorian Department of Health and Human Services expands upon this, pointing out that financial abuse is often combined with other forms of abuse and neglect.

You can always speak with your Accountant or reach out to the following organisations: