The coronavirus has been biting into global financial markets and in an effort to contain the fall-out to the local economy, the government has released a stimulus package worth $17.6bn targeted at businesses, pensioners, and those in impacted sectors, regions and communities. It is expected that the package will provide direct support for up to 6.5m individuals and 3.5m businesses. In addition, tax administrative relief will also be provided including deferring tax payments up to 4 months, which is similar to the relief provided following the 2019-20 bushfires. In an effort to combat the economic effects of the global coronavirus pandemic, the government has released an $17.6bn stimulus package which is expected to provide direct support for up to 6.5m individuals and 3.5m businesses. The package includes business investment initiatives, cash flow assistance payments to SMEs, household stimulus payments, support for impacted sectors, regions and communities, as well as tax administration relief.

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While many trustees will know that self-managed super funds (SMSFs) are required to prepare and implement an investment strategy, what they may not know is that specific factors have to be considered in forming the investment strategy including the risk of inadequate diversification. It is an area where the ATO has released further guidance on after finding that a significant proportion of SMSFs were holding 90% or more of their retirement savings in one asset or a single asset class (typically property). The ATO has released further guidance on investment strategy requirements for trustees of self-managed superannuation funds (SMSFs). The guidance comes on the heels of ATO contacting 17,700 SMSFs in late 2019 where the SMSF annual return data indicated that they may be holding 90% or more of their retirement savings in one asset or a single asset class.

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The Morrison Government has today announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the coronavirus.

Our targeted stimulus package is focused on keeping Australians in jobs and helping small and medium sized businesses to stay in business.

The package has four parts …

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Over the last few days we have seen a significant market sell-off – a degree not seen since the Global Financial Crisis of 2008. The core triggers for these event have been first and foremost the Corona virus (COVID-19) outbreak, and more recently the OPEC / Russian initiated oil ‘price war’ that has seen oil prices fall at a rate not seen since 2015.

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he Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 has now been passed and is awaiting royal assent. The SG amnesty provides for a one-off amnesty to encourage employers to self-correct historical SG non-compliance dating from 1 July 1992 to 31 March 2018. An employer will not be able to benefit from the amnesty for SG shortfall relating to the quarter starting on 1 April 2018 or subsequent quarters. It will allow employers to claim tax deductions for payments of SG charge or contributions made during the amnesty period to offset SG charge, as well as remove the administrative component and the Part 7 penalty that may otherwise apply in relation to SG non-compliance. The amnesty period will start from 24 May 2018 and end six months from the date it receives royal assent.

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Australia has been battered by a combination of fire and flooding in the past few months, it is little wonder then the topic insurance payouts are on everyone’s lips. What is perhaps most concerning is that not everyone knows insurance payments may have tax consequences. For example, if you rent out your home or a portion of your home on a short stay website, you may be subject to CGT if you receive an insurance payout in relation to that home. Businesses that receive an insurance payment may be subject to varying tax consequences depending on what the payment is designed to replace. In recent months, parts of Australia have been battered by a combination of fire and floods. As people try to piece their lives together in the aftermath, insurance payouts go a long way in helping rebuild homes and replace lost items. However, you’ll need to beware if you receive an insurance payout in relation to your business, home business or rental property, as there may be tax consequences.

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With the cost of studying at university going up every year, a new combined, renewable student loan limit has been implemented from 1 January 2020 to enable university students borrow more to cover the cost of tuition. For students studying medicine, dentistry, and veterinary science the new loan limit for 2020 is $152,700 and for all other students, the loan limit is $106,319 for 2020. The loans are indexed to increase with CPI every year, and any repayments you make increase your available balance. With the average annual cost of an undergraduate degree for Australian students hovering around the $10,000 mark, a 3-year degree could easily cost upwards of $30,000 depending on what you’re studying and where you’re studying. In the current employment market, rife with short-term employment and contracting whilst at the same time maintaining the requirement for higher qualifications, an average university student could easily end up with a much larger than average debt due to changing courses, units of study, or degrees.

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Today, we have consumer goods and services, both essential and desirable, that our ancestors could only have dreamt of in their lifetime. And yet, some of us are still driven to, or prompted to, purchase even more. This phenomenon can be due, in part, to the consumerism-focused society we live in where we are constantly bombarded by internal and external cues that nudge us to conform to a certain way of life and value system. The maintenance – and improvement – of our wellbeing and happiness is tied to the purchase of consumer goods and services. This can place us on a continuous and dissatisfying ‘consumption spiral/treadmill’. Consumption in itself is not a bad thing, however, reflexive and wasteful consumption can be. For example, we often use consumer goods only until newer or better versions arrive rather than when they physically wear out.

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Increasingly, older people (aged 65 and over) in Australia are choosing to remain living in their own homes for as long as possible. This is being facilitated by access to a combination of formal (paid) care, such as the Commonwealth Home Support Programme and the Home Care Package, as well as informal (unpaid) care. According to data from the Australian Bureau of Statistics, there are roughly 2.7 million informal carers (primary and non-primary carers) in Australia. Of those, roughly 420,700 are identified as primary carers to older people. Furthermore, in terms of the importance of informal care in the Australian aged care space, the replacement value of all informal care with formal care has been estimated to be roughly $60.3 billion per annum.

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