Finance & Investment

Building loans remain at 15 year low, HIA warns

NEW HOME construction loans are at similar low levels to those experienced during the onset of the Global Financial Crisis (GFC) in 2008, according to the Housing Industry Association of Australia. (HIA).

“Lending for the purchase or construction of a new home remains at its lowest level in 15 years,” HIA chief economist, Tim Reardon said this week.

The Australian Burean of Statistics (ABS) released the Lending to Households and Businesses data for March 2023 on Friday.

“The number of loans issued to purchase or construct a new home remained stable in March compared to the previous month, to be 30.7 percent lower than at the same time last year,” Mr Reardon said.

“The last time so few loans were issued for the purchase or construction of a new home was in November 2008, when the GFC caused a contraction in building.

“This data confirms that ongoing and significant declines in new home sales will see new home commencements slow significantly in the second half of 2023, under the weight of the higher cash rate. There are very long lags in this cycle and the full impact of the RBA’s rate increases are still to fully hit the housing market, let alone the broader economy.

“The weak lending figures observed by the ABS in March will not be apparent in other economic indicators until 2024, when the volume of homes under construction declines more markedly. Given these long lags, the RBA shouldn’t be waiting to see unemployment rising before pausing the increase in the cash rate. 

“This month’s data does show that the value of lending for renovations and to owner occupiers and investors increased marginally compared to the previous month, contrary to the trend of the past year," Mr Reardon said.

"“Total new lending increased in March 2023 compared to the previous month by 4.9 percent, to be 26.3 percent lower than at the same time last year. This pick up in lending is likely to be short lived as the weight of interest rate increases continues to constrain confidence,” Mr Reardon said.

In original terms, the total number of loans for the purchase of construction of new homes in March 2023 declined in almost all jurisdictions compared with the same month a year earlier, led the Australian Capital Territory (-37.3 percent), Ne w South Wales (-36.3 percent) and Tasmania (-33.0 percent), followed by Western Australia (-30.6 percent), South Australia (-29.7 percent), Victoria (-28.0 percent), and Queensland (-21.8 percent). The Northern Territory saw the only increase, up by 26.1 percent over the year.



AIST wants menopause impacts measured as estimated women’s retirement funds ‘below par’

THE Australian Institute of Superannuation Trustees (AIST) has lifted its estimate of the cost of menopause, and how it impacts women’s retirement incomes, to more than $112.2 billion workforce-wide.

AIST is urging the Federal Government to accurately measure and urgenly report on the costs to women of menopause on their careers and superannuation totals by retirement age.

AIST CEO Eva Scheerlinck said the peak superannuation trustee body’s previous estimate – of between $17 billion and $35 billion – had been found to be too conservative. Now AIST had adjusted its assumptions on the basis of new data and broader analysis of the impact on women.

Ms Scheerlinck said with the average age of menopause being 51 and many women experiencing symptoms for five to 10 years, the impact of this life change affecting all women needed to be quantified so that appropriate policy and public health interventions could be developed.  

In a pre-Budget submission, AIST recommended the Federal Government provide funding to the Office for Women to measure and report on the extent to which menopausal symptoms impact women’s employment and retirement decisions, super and retirement incomes.

“AIST bases its estimates on publicly available data sources but recommends that the government undertake its own comprehensive analysis of the heath and economic impacts of menopause on women’s workplace participation and retirement decisions,” Ms Scheerlinck said.

“This is a great time for this work to be done because women retire with 40 percent less superannuation than men and they live longer. If you can’t measure it, you can’t manage it.”

According to Australian Bureau of Statistics (ABS) data, the average retirement age is 52.1 for women and 59.5 for men.

A woman retiring at the average age for a man would accrue an additional 7.4 years of income and superannuation which, based on the average income for women aged 45-54 amounted to lost salary and wages and foregone superannuation of more than $577,512.

According to ABS data, 694,143 women were in the workforce in November 2022 and, by the government’s own estimates, 28 percent of menopausal women will have symptoms severe enough to impact their participation in the workforce.

This translates to a collective economic loss of $15.2 billion per year and more than $112.2 billion in foregone earnings and super over 7.4 years.



What you really need to know about the 2023 tax year

By Sonia Gibson

THE 2023 TAX YEAR has just begun and it’s important to know what’s changing in the way of your personal and corporate liabilities – and also with respect to changes in superannuation and trust management. 

The good news is that there’s nothing truly shocking to take into account and most changes for this tax year aren’t going to leave you with a huge increase in your tax burden. However, you do need to be aware of these changes, if you want to be prepared for your return next June.

FOR INDIVIDUALS – a minor change

The only change for individuals is that the ‘home office short cut method’ which allowed somebody working from home to claim 80 cents an hour, has been cancelled.

This should come as no surprise as it was a measure meant to provide some relief during the lockdowns when people were being forced to work from home. 

It seems unlikely that lockdowns are going to return on a similar scale and thus, the tax relief provided for that scenario is no longer needed. 

FOR COMPANIES – some good news

The 2023 financial year sees that company tax rate drop from 26 percent to 25 percent for those companies that are ‘base rate entities’ (that is, they turn over less than $50 million a year). 

However, the super guarantee levy goes up to 10.5 percent and the $450 super guarantee threshold is being dropped for monthly wages.

That means you must pay 10.5 percent super on all payments to employees and eligible contractors no matter what the amount you’re paying them. 

It’s worth noting that this change also means that if you have to make super contributions for young workers (those under 18) you will no longer have to make such contributions unless the young person works more than 30 hours each week for you.

The shadow of Covid means that rapid antigen tests are still a useful tool and these tests have been deemed fully tax deductible if they are required in order for someone to attend a place of work. 

The loss carry back provision for 2022 applies again and finishes on June 30, 2023. This allows for a rebate up to the amount of tax paid between July 1, 2018, and June 30, 2022, if a tax loss has been incurred between July 1, 2019, and June 30, 2023.

Single touch payroll reporting is now mandatory for all business with employees on the payroll. This also incorporates a director taking periodic payments if an adjustment has been done for wages, director’s fees or a bonus at the end of the financial year.

ASSETS – full expensing

Assuming your business turns over less than $50m a year, then all business asset purchases installed and ready for use between October 6, 2020 and June 30, 2023 will be 100 percent tax deductible. 

The only exception to this rule is if you purchase a car for more than $60,733 where FBT (fringe benefits tax) may apply. 


The previous government had put forward a bill which would provide 120 percent deduction for investments in technology by businesses turning over less than $50m, though there would be an annual cap to this of $100,000 worth of qualifying income. 

The measure would cover expenditure and investment related to digital adoption (such as payments to cloud services, portable payment devices, etc.) 

However, this measure has not yet been made law. If it is made law, then it will apply to expenditures incurred between 7.30pm (AEDT) on March 29, 2022 and until June 30, 2023.

A similar measure for small business skills training has also been proposed but has not yet become law. If it does become law, eligible expenses for the 2022 financial year are to be claimed in the 2023 tax return along with any eligible expense from 2023.


There aren’t many changes to superannuation this year. The transfer balance cap has gone up from $1.6 million to $1.7 million. 

The work test has been discontinued for those aged between 67 and 74 when the individual makes personal non-concessional super contributions and salary sacrifice contributions. 

And the age threshold for downsizing contributions, when moving home after selling an original home, has decreased from 65 to 60. The maximum contribution that can be made is $300,000. 

FINAL THOUGHTS on the 2023 tax year

This is a brief overview of the major changes for the year ahead, it’s very important to get specific advice regarding your circumstances from an accountant.

This is doubly true if you are using a trust where the gifting back law change may affect you. This is a complex area and it’s impossible to do justice to it in a couple of paragraphs.

About the author                                  

Sonia Gibson, of Accounting Heart Chartered Accountants has always loved solving puzzles and empowering people to help themselves. Accounting Heart brings these two passions of hers – her head and heart – together. While figures might send you batty, to Sonia they tell the unique story of your business. It’s her role to translate that story into one you’ll understand, so you can then write it your own way. 



Lower quality advice for lower fees? No thanks, says Scott Phillips

By Scott Phillips

Really? 'Lowering standards to lower fees' is the proposed approach to reforming financial advice? That’s a strong 'hell to the no' from me.

See, there’s a review underway, covering financial advice. And boy… as you can tell, I have some thoughts. Strap yourselves in.

Apparently, if reports in the Australian Financial Review are to be believed (and there’s no reason not to) the review is going to recommend that financial advisors no longer have to apply the ‘best interest’ test, when giving financial advice.

Whoa! What the actual? 

If these changes go through, financial advisors would no longer have to ensure their advice was in the clients’ best interest? Think about that for a minute.

Imagine being a doctor, and not having your patients’ best interest as your number one obligation. Or a lawyer, and not having to act in the best interest of your client.

And yet this review is (apparently) about to let financial advisors act in some other way?

Apparently ‘good’ advice will now be enough. Bloody hell.

Maybe, after a decade or so, the industry is about to win, putting itself ahead of its clients again? Oh, they don’t actually say that. They say they’re worried that advice isn’t affordable enough.

See, having to act in clients’ best interest is apparently too expensive. And if they don’t have to do that any more, they can make advice cheaper.

Sure, it may not be in our best interest any more, but at least it’s affordable. If that sentence doesn’t strike you as completely absurd, you need to read it again.

Apparently the options are:

  • We’ll do what’s in your best interest, but it’ll be expensive; or
  • You can pay less, but we can’t promise the advice is in your best interest

Frankly, I’m not sure I have the words.

Some people will say the administrative burden of the ‘best interests test’ excludes those who can’t afford the fee. I’m sure that’s right. After all, most financial advisors are driving 15-year old Toyota Camrys, right?

A cheap shot? Maybe. And they're not bad guys and girls. Frankly, they're right -- the admin burden is a debacle.

They're not wrong about the problem. But it's the proposed solution that stinks.

See, there IS a problem.

But it’s not the one you think. It’s not the ‘best interests’ duty that’s the problem. It’s the fact our system is so bloody complex that so many of us need, or could possibly benefit from, financial advice in the first place.

Which, if you’re a financial planner, you’re not really going to complain about, are you? Because it’s that very patchwork of tax complexity that is your meal ticket.

I don’t blame those advisers for helping us navigate it, by the way.  But if they were honest with themselves, I’m pretty sure they’d admit that the complexity isn’t actually necessary for our society to function.

And many of their clients, if they were being honest, would suggest the same.

(Don’t believe me? Compare the number of people who want less red tape for business with the number of people who love it, when it helps them get one over the taxman. Ideology is kinda Swiss-cheesy like that – it gets very holey when you might benefit.)

So they’re right – much of the financial advice regulation requires lots of overheads to make sure its in the client’s best interest… which is as it should be. 

Who honestly thinks ‘Ah, close enough’ is okay? Financial advice should always be in the clients’ best interest.

So the answer isn’t to give advice which is okay-ish, to save a few bob. It’s to change the law so that the financial advice isn’t needed.

Seriously, when I can pay a financial adviser a few thousand dollars, and still make more than that based on the advice she gives me, the system is broken. 

Super, family trusts, company structures, negative gearing, estate planning, work deductions… the list goes on.

Why? Because the politicians and regulators have been captured by the industry and its wealthiest clients.

How many people got formal financial advice (other than an accountant helping them lodge their tax) a few decades ago? Probably a small fraction of the adult population.

These days?  The dog’s breakfast of loopholes and (legal) tax dodges gets bigger by the year. And it’s no wonder the industry keeps growing.

If the government is serious, and Treasury is fair dinkum, they won’t repeal the best interests test. They’ll change the law so that my financial adviser says ‘Sorry, mate. I can’t justify taking you on as a client. There’s nothing I can do for you’.

Or, ‘taking you on as a client is expensive, because my advice needs to be in your best interests, and I can save you enough to offset my fee’. 

The middle ground – slightly less expensive advice that isn’t in my best interest – is something only a government (or a financial advice industry looking for a payday) could love. 

I guess we’ll see who has the ear of those in power, and whether they’re truly trying to improve things.

Over to you, Prime Minister.

  • Scott Phillips is the chief investment officer for The Motley Fool and a regular financial issues commentator online, on radio and on television. He also produces podcasts and can be found on TwitterFacebook and Instagram. He also appears on The Motley Fool's subscription YouTube channel.



Move to monthly inflation data gets thumbs-up from CPA Australia

CPA AUSTRALIA has welcomed the Australian Bureau of Statistics’ (ABS) decision to commence providing a new monthly Consumer Price Index (CPI) indicator.

“This change will deliver more timely information into the hands of businesses and others who rely on economic data,” CPA Australia general manager for media and content, Jane Rennie said

“In June we raised the alarm that Australian governments, businesses and others were reliant on out-of-date inflation data. This is due to Australia’s practice of reporting CPI data quarterly, unlike other advanced economies such as the United States, United Kingdom, Europe and Japan.

“Quarterly CPI reporting puts Australian governments, regulators and businesses at a distinct disadvantage, especially in economically uncertain times like now. Using quarterly CPI data when the majority of the world receives it monthly is like waiting for a letter in the post when neighbours are receiving updates by phone,” Dr Rennie said. 

“We’re very pleased CPA Australia’s call for more timely inflation data has been heard. Access to a monthly CPI indicator will close the information gap and help organisations make better financial decisions.

“A monthly CPI indicator will enable a clearer understanding of the effects of monetary policy, geo-political tensions, supply chain disruptions and local interventions on prices across the Australian economy. Australia’s economy will benefit as a result.

“In a high inflation environment, we need our institutions to be agile and innovative. With this announcement, the ABS has demonstrated its willingness to be responsive to the needs of the community and embrace new lower cost data sources to deliver monthly updates.”


Master Builders say first home buyers' access to superannuation 'will work'

THE COALITION GOVERNMENT'S proposed home ownership policy will help to keep the dream of homeownership within reach of Australians while maintaining the integrity of the country's world class superannuation system, according to Master Builders Australia.

“The success of this policy is that it is aligned with the intent of superannuation which is to provide sufficient retirement income,” Master Builders Australia CEO Denita Wawn said.

“People who own their home, particularly in retirement, are significantly more secure financially than those who do not. They enjoy a higher standard of living.

“This policy will mean that many Australians who do not currently own a home will not have to choose between the benefits of home ownership and an adequate super balance in retirement,” Ms Wawn said. 

“It will be a step up for all the aspirational people on middle incomes who yearn to own their own home but need to overcome the deposit gap and who are not eligible for current schemes.

“Master Builders also commends the Coalition on its policy to assist seniors to ‘right size’ into more suitable housing for their stage of life,” Ms Wawn said.

“Senior Australian’s want to remain in their own home as long as possible and they will welcome the Coalition’s policy to support them in achieving that aspiration,” she said.

“Master Builders has been calling for policies to help address the lack of supply of housing for families and we commend the Coalition’s move to address this issue in its policy,” Ms Wawn said.


Releasing super for first home buyer deposits can only work if supply is increased says FSC

PRIME MINISTER Scott Morrison's announcement to allow access to superannuation, for first home buyers to fund a deposit, will undermine the purpose of the superannuation system and could force up to 5.3 million young Australians to decide between owning a home or their retirement savings, the Financial Services Council (FSC) has warned.

FSC CEO Blake Briggs said,  “The FSC is concerned the (Federal) Government’s proposal weakens the sole purpose of superannuation, which is to provide higher standards of living in retirement. 

“The FSC recognises there is a correlation between renting in retirement and poverty amongst older Australians, but Australians should not have to choose between a home and their retirement savings. 

“The government’s own majority report into Housing Affordability and Supply in Australia concluded that superannuation should only ever be used for housing if there were commensurate measures to increase supply. 

“The government’s supply measure only extends downsizing to 1.3 million households, whilst potentially allowing approximately 5.3 million under 35-year-old Australians that do not yet own a home access their superannuation to buy a first home.

“The government has an obligation to do more to boost supply, otherwise unleashing superannuation savings on the housing market risks driving prices higher still.”

The FSC is a peak financial services industry body which sets mandatory standards and develops policy for more than 100 member companies. FSC's  full members  represent Australia’s retail and wholesale funds management businesses, superannuation funds, life insurers and financial advice licensees. Supporting members represent professional services firms such as ICT, consulting, accounting, legal, recruitment, actuarial and research houses in the financial sector.


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