Investment

Shorten's Tax Proposals

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Yesterday, the Opposition Leader revealed a new policy to abolish the ability for individuals to claim cash refunds on excess imputation credits that had not been applied to offset tax liabilities.

Mr Shorten said the abolition of the benefit would result in an additional $5.6 billion to the federal budget bottom line and reduce “unfair revenue leakage” that disadvantages voters in lower income brackets.

I believe the exact opposite would occur. 

By denying the lower income tax rate taxpayer a chance for a refund of the imputation credits, Mr Shorten is actually denying a low income person the tax credit whilst still taking more tax off the higher income taxpayer.  

In other words, Imputation tax credits on dividends actually redistribute wealth to lower income investors and take wealth off higher income investors.

Mr Shorten's proposal (and Industry Super Fund's David Whitely's enthusiastic support for it) is a cynical political calculation. They're essentially betting that their constituents will be so distracted with the usual class warfare sound bites that they'll forget to do the maths.

Rick Maggi

Markets sell-off, finally

The long overdue market correction in global equities seems to have finally become a reality. Over the last two days global (and local) sharemarkets have shed about 6%, wiping out all of January’s gains with possibly more short term pain to come over the next week.

However, despite the alarming news headlines, this wasn’t the “worst day on the Dow Jones”, not by a long shot - I think today’s article by Michael Collett explains it best (read here). In percentage terms (which is what really matters) last night’s 1000+ point fall translated into a fall of 4.6% - significant, but not in the Top 25 or worst Dow days. And on average, we usually experience a pull-back of 5% at least three times a year, so we were a little spoiled in 2017. 

So as we forward into a more turbulent period, my suggestion would be to not let short-term fluctuations distract or upset you too much (and consider taking advantage of cheaper prices) - market pull-backs are a natural part of the investment landscape.

As always, we'll continue to monitor to the situation and stay close to our clients.

Rick Maggi

Goals: A New Sense of Progress

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Chances are, you're thinking about 2018 - most of us do this time of year. It's a great time to regroup and hit the refresh button to get a clean start, especially if this year didn't quite work out how you thought it would.

Whether you're approaching retirement or just starting out, if you want 2018 to be the milestone year that moves you toward the life you've always dreamed of you really do need a plan - a plan uniquely your own and crystal clear in its purpose. 

Its important to wake up each day knowing where you're going, what you want to accomplish, and which direction you will take to get there. So if you've ever felt like there was something standing between you and the things you want most in life, call us today for an obligation-free meeting - and a more confident, new sense of progress.

Rick Maggi