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Finance & Investment

Housing industry says ‘Stop taxing housing harder if you want more homes built’

THE Housing Industry Association (HIA) has called on the Australian Government to rule out any changes to negative gearing and capital gains tax in this year’s tax review. HIA warns that further tax instability would choke off new home building and deepen Australia’s housing shortage.

Releasing HIA’s new report, Taxation of Housing and its Impact on Supply, HIA chief economist, Tim Reardon said governments “cannot make homes cheaper by taking more from them”.

“You don’t fix a housing shortage by taxing housing harder,” Mr Reardon said. 

“And you certainly don’t make homes more affordable by destabilising the tax settings that support new home construction.”

The report found that housing was already one of the most heavily taxed sectors in the Australian economy, with taxes applied at every stage of the housing lifecycle. Many of these taxes fall most heavily on new housing, directly increasing costs and reducing the feasibility of new projects. 

“The political reflex has been the same for decades,” Mr Reardon said.

“First it was to blame investors. Then foreigners. Then foreign investors. Meanwhile governments quietly add more taxes, more charges and more costs to housing, and wonder why supply keeps falling short.”

HIA’s analysis shows that investors play a critical role in housing supply, commencing more than 40% of new homes built in Australia, and an even higher share of apartments and rental housing.

“When you discourage investors, you don’t free up housing, you stop it being built,” Mr Reardon said.

“Investors don’t neatly switch from established homes into new construction when taxes rise. They leave the housing market altogether.”

The report challenges claims that changes to negative gearing or capital gains tax would improve affordability or help first home buyers, noting that housing prices were determined by supply and demand, but housing shortages are only resolved by building more homes.

“New homes don’t exist in isolation,” Mr Reardon said.

“They become established homes. Taxing established housing more heavily reduces the value of new housing as well, which makes fewer projects stack up.”

HIA is urging the Australian Government to provide certainty to the housing market as part of this year’s tax review.

“If governments are serious about increasing housing supply, the first step is simple,” Mr Reardon said. “Commit to tax system stability for residential investment, rule out changes to negative gearing and capital gains tax, and stop layering new taxes onto new housing construction.

“More homes will only be built if governments stop treating housing as a revenue base and start treating it as essential infrastructure.”

CPAs say super tax overhaul would unfairly penalise retirement savings

PROPOSED changes to superannuation tax rules risk unfairly penalising Australians’ retirement savings by mishandling the treatment of franking credits, CPA Australia has warned.

CPA Australia superannuation lead, Richard Webb has raised serious concerns with the exposure draft legislation for the Treasury Laws Amendment (Better Targeted Superannuation Concessions) Bill 2025, arguing the current approach ignores the fundamental purpose of franking credits and could distort investment decisions. 

Mr Webb said the proposed framework would lead to inequitable outcomes for superannuation funds, particularly where franking credits were excluded from the calculation of fund earnings for Division 296 purposes.

“Franking credits exist to ensure income is taxed at the shareholder’s correct tax rate. Ignoring them in the new super tax framework produces an unfair and inconsistent result,” Mr Webb said.

“For many super funds, franking credits are effectively a refund of tax already paid. Treating those refunds as irrelevant when calculating earnings is at odds with how our tax system is designed to work.”

The submission warns that the draft legislation would penalise super funds holding assets that generate franked dividends, even where those dividends ultimately attract little or no tax due to superannuation’s concessional tax rates.

“In practice, the proposal could result in identical investment returns being taxed differently, simply because one includes franking credits and the other does not,” Mr Webb said.

“This creates artificial incentives that could push trustees away from Australian equities, potentially harming both retirement outcomes and capital markets more broadly.”

CPA Australia noted that franking credits and similar tax offsets should be treated as part of a super fund’s net income, reflecting their true economic value, rather than being excluded under the proposed Division 296 methodology.

The submission includes a detailed case study demonstrating how the current policy settings produce higher calculated ‘earnings’ for franked dividends compared with unfranked dividends, despite the cash received in the dividend being the same.

“This isn’t about gaining an advantage,” Mr Webb said. “It’s about fair and consistent taxation that reflects real income, avoids unintended consequences, and maintains confidence in Australia’s retirement income system.”

CPA Australia has urged the government to amend the legislation to ensure franking credits and other similar tax offsets would be properly recognised when calculating superannuation fund earnings.

“Given the complexity and long-term impacts of these reforms, it’s essential the final legislation gets the fundamentals right,” Mr Webb said.

The submission, produced jointly with Chartered Accountants Australia and the New Zealand and the Institute of Public Accountants, is available here.

www.cpaaustralia.com.au

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Experienced banker adapts loans to meet real business needs

By Leon Gettler, Talking Business >>

THERE ARE finance brokers everywhere. But a few stand out.

One is Charles Zerafa, a senior finance broker with Integrity Finance Australia. He has decades of experience in corporate and business banking.

How long? Well, 35 years in business banking – including almost a decade at the Commonwealth Bank of Australia.

Mr Zerafa’s clients include commercial construction builders, manufacturing companies, retailers, investors and syndicates of families or people buying property together. He specialises in doing commercial lending with properties of up to $50 million. 

He said banks don’t have time or skills – and they are too conservative – to delve into people’s finances to help them and lend them at a higher rate. As a result, business owners will come to him,

“Business owners that have been around for a long time know whether it’s a good deal or not and they and will seek me out say ‘Can you do me a better deal than what the banks are offering me?’” Mr Zerafa told Talking Business.

“And I’m saving clients just by restructuring finances, I’m saving them tens of thousands of dollars a month.”

Banks find client prospecting difficulties

The banks, Mr Zerafa said, have difficulty building relationships with prospective clients.

“Maybe it’s clients I’m seeing, but a lot of them have complex corporate structures,” he said. “Every director’s got personal debts, they’ve got an investment trust where they’ve got some investment loans, their operating business has got funding requirements and they’re often doing a little side project like a subdivision or investments in other small areas as well.

“So when they’re trying to assess their borrowing capacity, they’re taking such a conservative approach with everything – by the time you desensitise their income – there’s not a lot left and the bankers don’t have the experience to get their heads around what’s happening … and they always take that conservative approach.

“They (some clients) can’t meet it on paper according to the bank’s facilities, but that’s because they don’t know how to structure the loans properly.

“Sometimes you’ve got to start from scratch and restructure all the client’s loans in order to increase their borrowing capacity as well. So there are things I would do differently to how a bank would approach things.”

Banking experience drives innovation

Mr Zerafa said his big challenge is getting people to understand how his experience in banking makes him different from other brokers.

“I’m using my banking and corporate finance training in the banking industry to help clients,” he said.

“The best way I explain it is the banks want to out you in a better position so they have less risk on their side. And now where I’m working for myself, I’m helping business owners increase their profitability so they can continue to grow and achieve their financial goals.

“So it’s loan structuring, loan negotiation, understanding the client’s position and finding a solution that maximises their position.”

Mr Zerafa said his experience over 35 years in banking has seen him work with every sized business and lifecycle, from startups to succession planning and buyouts.

“It’s a skill set that you don’t acquire over five years in banking,” he said. “You don’t acquire that sort of skill set in such a short time.

“It takes a while to go through so many loan applications,” Mr Zerafa said. 

www.integrityfinanceaustralia.com.au

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

https://shows.acast.com/talkingbusiness/episodes/talking-business-25-interview-with-charles-zerafa-from-integ

 

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Beating NFT fraud using blockchain tech

By Leon Gettler, Talking Business >>

ONE OF THE BIG PROBLEMS now facing NFTs – or non-fungible tokens – is fraud. This is happening world-wide.

NFTs are unique digital assets that represent ownership of the brand. NFTs are virtual records of ownership of either physical assets or digital assets, such as digital artwork, concert tickets, or access to games. The value of NFTs differs based on the unique characteristics of the underlying asset.  

Now a lot of NFTs have drawn large amounts of fraudulent criminal activity. The impact of NFT fraud for individual buyers can be significant, as criminals take an average of $300,000 per fraud event. These fraud instances also cause reputational damage to the NFT industry.

Enter Paiverse, a Dubai-based platform that uses blockchain to ensure the NFTs have a provable provenance and are free of fraud. Now these NFTs seek to be the primary destination for luxury brands to market and for consumers to buy and sell their luxury goods via blockchain technology, in a secure and transparent manner.

“We are quite unique in our solution in that we’re giving an asset-backed NFTs,” Tim Bhatnagar, co-founder of Dubai-based Paiverse told Talking Business.  

“We work directly with the brand-owner. We take possession of the asset, we transfer it into a digital form.

“So now you are trading an NFT but it’s always being backed by something physical. So yes, you can buy and sell and trade it. We insure it, we ship it, but technically you are always connected with the brand and you are trading their asset rather than something I created on my computer.”

Fraud is a major issue

Mr Bhatnagar said fraud has become a huge issue with NFTs.

“To create a company in this environment has been a real challenge,” he said.

“What we are trying to assert it is the individuals understand the brand. What we are doing on our platform is giving a digital title to a physical asset. So you know the brand has released a luxury item, you are trading its digital title and you can redeem your digital title at any given time.”

Paiverse operates in 37 countries but it relocated from the Bahamas to Dubai for regulatory reasons

“We decided to move to Dubai because the regulator here is putting a lot of precedence on getting the right kind of ecosystem developed because so many people have been burnt of late and lost their savings,” Mr Bhatnagar said.

“A lot of regulatory agencies globally have seen this as a negative thing.”

Why the blockchain works

Mr Bhatnagar said one of the key ways Paiverse addresses this problem was through the use of blockchain because it offered full provenance and traceability.

“It’s about due diligence and I think the regulators are starting to catch up and we are trying to help as many regulatory agencies due to our background and to understand how to develop these kinds of regulations,” he said.

“There have been mainstream companies that have been doing this for decades and for generations, like Christies.

“What we are mirroring now is and trying to do exactly the same thing but on blockchain.”

Mr Bhatnagar said blockchain allowed people to do due diligence to ensure there would be no fraud.

“By its very nature, you can go an trace everything,” Mr Bhatnagar said. 

“It’s one of the most remarkable technologies.” 

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

https://shows.acast.com/talkingbusiness/episodes/talking-business-26-interview-with-tim-bhatnagar-from-paiver

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Boomers deliberate over their (total) $4 trillion legacies

By Leon Gettler, Talking Business >>

OVER the next 20 years, $4 trillion will be transferred from baby boomers to their children and grandchildren as inheritance.

And Australians reliant on their compulsory super savings now need to ensure they can extend their savings for the duration of their retirement.

It’s a complex issue and Nexia’s head of financial planning, Craig Wilford says it will depend on a whole lot of unknown variables – such as lifestyle choices, and the preparedness of boomers to do estate planning in their wills.

The question of how much super boomers need to retire comfortably “depends on the person and their aspirations of what they’re looking to achieve in retirement,” Mr Wilford told Talking Business. 

“Fundamentally that issue of not just what sort of lifestyle they want to live at different stages of their retirement, but also how long they want that capital to last for and the sort of legacy and estate planning position they would like to leave for family or loved ones,” he said.

“And of course, along the way the level of comfort they’ve got with different risk profiles or investment strategies in order to achieve those outcomes is also another variable.”

Legacy decision are hard for Boomers

Mr Wilford said the issue for Boomers in sorting out the tax issues, their investment strategies and the legacy they want to leave in their wills is complex.

Since the early 90s, he said, Boomers have now become the primary arbiters “of whether our retirement is a good one or not”.

“With that complexity, there hasn’t been a real solution to those key issues of allowing each person to make an informed decision about what are my options for making the capital last as long as possible for the amount of income that I want,” Mr Wilford said.

“(Something) that’s tax-efficient, that’s CentreLink efficient, that’s flexible, that allows me capital access within my risk profile and leaves an estate,” he said.

Mr Wilford said many Boomers have not looked at these issues in their wills, especially with $4 trillion (in total) to go to their children and grandchildren.

“You’d be surprised with the number of people that aren’t prepared to broach the issue of having their estate planning instructions in place is still. Surprisingly low,” he said.

“That sigma that goes along with anything to do with mortality unfortunately still seems to be a stumbling block.”

Take all variables into account

Mr Wilford said Boomers needing to extend their retirement savings need to look at a range of variables. 

“Firstly, it’s to look at the lifestyle itself,” he said.

“First, you’ve got the base, the staples that you can’t do without – your groceries, your utilities, your cost of shelter insurances, etcetera.

“At the other end, there are the full discretionary expenditures such as travel and how often and what sort of level of comfort one is enjoying in travel and recreation, and going out and enjoying restaurants theatre etcetera.

“And in the middle, there are the partial discretionary items. And that’s a variable in itself,” Mr Wilford said.

“That issue is how much we’re prepared to adjust up and down those discretionary expenditures in order to help the sustainability of a given income stream for as long as possible.”

www.nexia.com

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

https://shows.acast.com/talkingbusiness/episodes/talking-business-16-interview-with-craig-wilford-from-nexia

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Ktti Pay solves the ‘divvy up’ payment problem

By Leon Gettler, Talking Business >>

THE DATA shows that Aussies aged between 18 and 53 are owed $1.5 billion each month due to splitting expenses.

The hard part is divvying it up. The system for exchanging cash is imperfect with friends constantly having to remind each other to settle up accounts and check the money has actually hit the accounts. Then again, there are times when someone ends up a few bucks short every time group expenses are supposedly settled.

To save young Aussies time on the arithmetic, entrepreneur Iain Salteri has developed the KttiPay app to handle all that. It lets participants pre-pay directly into the app before an event. Like for example, group dining, sharing a taxi or Uber, event tickets, lending a friend some dough or even having a holiday together. 

It saves people from a heap of relationship trouble.  And with cost pressures, money disputes have the potential to tip relationships over the edge.

Ktti allows separate kitties

The app allows separate Ktties to be set up for different purposes. KtiiPay Visa issues debti cards linked to that Ktti.

“What we’re trying to do is solve the problem of expense splitting for young people, 18 to 30 year olds,” Mr Salteri told Talking Business.

“The problem is that people are out of pocket for expenses that aren’t necessarily theirs.

“So if we went away for a weekend, I might book the accommodation using my own personal debit or credit card and would ask you to pay me back, and through no fault of your own, you may have forgotten,” he said. “It may have been a busy week, you may not have sent me your portion of the accommodation for some time. And as an 18 or 20-year-old, where income is an issue, that’s an experience that isn’t particularly fair.”

Mr Salteri said the company is putting a fair bit of money into the app. 

“We’re on our journey. We’re aiming for 30,000 downloads in our first year and we’re well on our way there,” he said.

“We’re purely domestic in Australia at the moment but we obviously have ambitions to take this overseas and help solve this problem for young people globally.

“Top of mind comes to young people in the UK or Europe who might be travelling around. We know how accessible that is for someone in London to go to Italy or France with their friends. KttiPay is the perfect tool to help them manage that expense splitting.”

Setting up the ‘share-pay’ market

Mr Salteri said there were no direct competitors to KittiPay anywhere in the world. While some have the technology to help people work out how much they are owed, or how much they owe others, none actually facilitate the transfer of the money.

“That’s the problem we’re trying to solve,” he said.

“It’s trying to make sure that no one is left out of pocket and that the funds are there up front.

“It’s the complete opposite of an after-pay model where you get the product today and pay it off in the future,” Mr Salteri said.

“We think being able to pay up front and split the bill evenly is a huge selling point.” 

www.kttipay.com

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

https://shows.acast.com/talkingbusiness/episodes/talking-business-15-interview-with-ian-salteri-from-kttipay

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Wu designs Australia’s ‘Google or ChatGPT for investments’

By Leon Gettler, Talking Business >>

IMAGINE coming across something like the ‘Google’ for all investments. Or maybe something like ChatGPT?

That describes investmentmarkets.com.au, a company set up by Angelina Wu. Her background includes money markets, wealth advisory and media, including stints with Commonwealth Bank, UniSuper, Trustees Australian and Guangzhou TV in China – and the last 4.5 years with Investment Markets.

Ms Wu and her co-founder Chris Morton launched the service after years of testing and refining its functionality.     

She said the business plans to dominate all Australian investments.

“We have all the asset classes, all the industries, all the liquidities,” Ms Wu told Talking Business. 

“The idea is to cover anything, like shares in a company or units in a trust.

“We’ve got pretty much every asset class. We’ve got shares in equity, we’ve got property, we’ve got fixed interest, we’ve got cash, we’ve got term deposits, we’ve got everything. We’ve got alternatives as well and we cover all the industries.

“We’re starting to grow more of the alternative assets and the start-ups are coming on board as well.

Broadening investment choices

Ms Wu said the company seeks to “make it broad” for all investors.

“The idea is to make it brand agnostic and broad and a level playing field for everyone and to democratise this place,” Ms Wu said. “And that goes back to the idea of having investmentmarkets.com.au being a place for every product issuer for their books.

“It’s a marketing tool for our product issuers.

“We are brand agnostic. We treat everyone exactly the same and the commercials of the platform is we don’t charge investors. We charge the product issuers by listing on the platform.”

“We don’t charge a percentage of the capital raised. It’s not commission-based, it’s a level playing field.”

As a result, it’s a flat fee for all product issuers, she said.

“It can’t be a percentage of their earnings because that would require investmentmarkets.com.au to endorse them. That can’t happen in a system that has been deliberately set up a level playing field.

”We don’t vet our dues,” Ms Wu said

“We believe that the investors, which is the target audience of this platform, would like to make their own decisions. They do their own analysis and search.

“It’s a discovery tool for them. We don’t want to insult their intelligence so we let them go and make their own decisions.”

Shifting investment preferences

Ms Wu said in the last 6-12 months, property and income had been popular among investors.

“While this has been understandable, it would be interesting to see what will happen with interest rates tipped to come down.”

Investmentarkets.com.au doesn’t guide investors to physical properties. Instead, they are directed to property funds

“What we’re trying to build is a realestate.com for investments,” Ms Wu said.

“Our intention and ambition is to be a dominating platform for any investors who come from Australia. It’s to be the Investments Central to find any investment in one place.

“It’s the education element as well. We run investor seminars every year and we have smaller events as well,” she said.

“We want to get more than 1200 people registered for it and the number is growing about 20% each time.” 

www.investmentmarkets.com.au

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

https://shows.acast.com/talkingbusiness/episodes/talking-business-7-interview-with-angelina-wu-from-investmen

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