“IN TIMES of financial crisis such as now, retirees need more flexibility in the minimum amount there are required to draw from their superannuation,  Association of Independent Retirees president, Wayne Strandquist said this week.

“Retirees living off their superannuation usually have some investments in shares and they have experienced a dramatic fall in their account balances due to the current share market collapse," he said.

Legislation requires retirees to draw a minimum percentage from their superannuation pension account, usually drawn monthly. Being forced to withdraw from superannuation when the value of the account is substantially diminished will have long term impacts on how long superannuation lasts in retirement.

Currently, retirees do not have the option to preserve their account balance by stopping the minimum superannuation drawdown amount.
 
“The Association of Independent Retirees seeks government intervention to give immediate relief to the current age-based drawdown percentages for account-based pension income streams and allow greater flexibility for retirees to vary the amount they can draw from their superannuation account," Mr Strandquist said.
 
“The Association has previously called on the government for greater flexibility by broadening of the age ranges and a lowering of the minimum drawdown percentages, but with the current investment market crisis, the Association seeks immediate options for retirees to lower or cease withdrawals from their superannuation account and resume their usual drawdowns when the investment markets improve."

www.independentretirees.com.au

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THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell has praised the banks, which have on March 20 announced a significant relief package for COVID-19 impacted small businesses.

The Australian Banking Association said banks would defer loan repayments for small businesses affected by COVID-19 for six months

“This is a welcome initiative that will help many struggling small businesses keep their doors open during these extraordinarily challenging times,” Ms Carnell said.

“I would encourage all small business owners who are experiencing financial difficulties, to call their banks now, to make the necessary arrangements.

“Banks are promising to fast-track the approval process to ensure small businesses get the support they need as soon as possible.

The assistance package will apply to more than $100 billion of existing small business loans and put up to $8 billion back into the hands of small businesses.

“As we navigate this unprecedented crisis, it’s encouraging to see our banks are taking this proactive approach and leading by example,” Ms Carnell said.

“Our small business sector is the engine room of the economy and it urgently needs support.

“In the meantime, my office will continue to advocate for additional measures to help small and family businesses stay afloat in this difficult period.”

www.asbfeo.gov.au

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SELF MANAGED superannuation funds (SMSFs) could avoid the full brunt of COVID-19’s impact on financial markets, thanks to higher than average exposures to cash and other low-volatility assets.

One quarter of the SMSF sector is held in cash and about 45 percent is held in shares, compared to other super funds that hold 10 percent in cash and 60 percent in shares on average.

Self managed superannuation funds (SMSFs) could avoid the full brunt of COVID-19’s impact on financial markets, thanks to higher than average exposures to cash and other low-volatility assets.

One quarter of the SMSF sector is held in cash and about 45 percent is held in shares, compared to other super funds that hold 10 percent in cash and 60 percent in shares on average.

“This heavy exposure to low risk assets like cash may prove to be fruitful in the current COVID-19 climate as they may be better protected than the average not-for-profit and retail fund,” said executive director of research at Rainmaker Information, Alex Dunnin.

“Some super funds’ diversified default investment options have fallen 10-15 percent as a result of the current market conditions.”

Despite their potential strength in the current climate, contributions into SMSFs and small APRA funds fell by 60 percent over the last two years, according to research from Rainmaker Information, published in their Advantage Report.

SMSFs reached a peak of 33 percent of all superannuation funds under management (FUM) in 2012, though this has since dropped to 26 percent, which is around $750 billion.

“A higher than average exposure to cash previously dampened the returns of the average SMSF when compared to a retail or not-for-profit fund, so perhaps it also damaged their appeal.”

Interest in SMSFs has slowed in recent times, with the number of SMSFs being started each year falling almost 75 percent from their peak.

Ten years ago there were a net 40,000 SMSFs started each year, though only 12,000 were started in 2019.

Simultaneously overall annual superannuation contributions have fallen from $157 billion to $130 billion, and SMSFs made up 90 percent of the reductions.

This number is even more significant given that SMSFs only make up 9 percent of all superannuation members in Australia.

A key cause of the reduction in contributions into SMSFs appears to have been the introduction of the Transfer Balance Cap (TBC) in 2017. 

The TBC removed unlimited tax concessions for retirees with large account balances.

Following its introduction retirees with large balances, many of whom were likely members of small funds, appear to have responded by significantly reducing their contributions.

“The drop in contributions has been so extreme that SMSFs are only marginally ahead of the retail fund segment, which fell out of favour with Australians after the global financial crisis,” Mr Dunnin said.

Other determining factors contributing to a decline in contributions are increased regulatory scrutiny, reductions in their taxation advantages and persistent attention on the segment’s low benchmark investment returns.

About Rainmaker Information
Rainmaker Information is a privately held Australian company founded in 1992. The company has established a reputation as a leading financial services information publishing house in Australia providing marketing intelligence, research and consulting services on the wealth management industry and forms part of the Rainmaker Group of companies.
www.rainmaker.com.au

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Palace Cinemas has reviewed advice from The Australian Government, delivered on Wednesday, March 18, regarding non-essential services and public gathering mandates, as well as examined safety concerns for our patrons and staff. 

A spokesperson said, "From this review, we’ve made the difficult decision to temporarily close all Palace Cinema locations from Thursday March 19 for an indefinite period to protect both our staff and patrons.

"We intend to re-open as soon as circumstances allow, with the usual rich selection of quality cinema and our much-loved international festivals. Watch for further announcements.

"Patrons who have booked online for future sessions will be contacted shortly and offered a returnable form to receive a full-refund. Any patrons seeking refunds for in-person bookings can email their relevant Palace Cinema location with images of their tickets, and a refund form will be provided to be completed and returned, which will be processed as soon as possible. 

"Refund forms are being utilised to ensure correct information is being processed, and to keep things running as smoothly as possible both for our customers and for  cinema staff during this time," the spokesperson said.

"We sincerely thank you all for your patronage and support during this unprecedented time and our excellent staff for their efforts and dedication under challenging circumstances.

"Rest assured we will be back offering sublime entertainment and a place to indulge and escape when it is safe to do so.

If you wish to continue supporting Palace Cinemas during this time, consider purchasing a premium Palace Movie Club membership or online gift card.  But most importantly, stay safe and look after each other, we can’t wait to welcome you back."

https://www.palacecinemas.com.au/palace-cinemas-response-to-coronavirus/

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THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell said small businesses impacted by bushfires can now call a hotline for financial support.

The Federal Government-established Small Business Bushfire Financial Support Line 1800 413 828 (website: www.smallbusinessbushfire.org.au) is now taking calls, with trained financial counsellors ready to provide much-needed assistance to small business operators.

“Small businesses in bushfire affected areas can now access free financial counselling and critical information on the assistance and funding programs available to them,” Ms Carnell said.

“If they haven’t made contact with their trusted financial adviser already, I would encourage small business owners to make the most of these free services that are now available.

“The Small Business Bushfire Financial Support Line is a dedicated, single contact point for small businesses. It’s a good starting point for those who may be feeling overwhelmed as they begin the process of getting back on their feet.

“While the support line will be helpful in providing important basic information, small businesses really need a tailored financial recovery plan to survive and thrive.

“That customised strategy should ideally come from a trusted advisor that has existing knowledge of the small business and the environment it operates in.

“A tailored recovery plan should be the top priority - especially for any small business in receipt of the recently announced new $10,000 grant - to help them stay afloat in the next six to 12 months.

“In time, we hope this financial support hotline will be extended to all Australian small businesses as so many are facing extraordinary challenges right now.”

Support Line 1800 413 828.

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THE Joint Committee of Public Accounts and Audit has postponed several scheduled public hearings.

Hearings postponed are:

• Cyber Resilience: Inquiry into Auditor-General’s Reports 1 and 13 (2019-20) on Wednesday, March 25, 2020;
• The Administration of Government Grants: Inquiry into Auditor-General's Reports 5, 12 and 23 (2019-20) on Friday, March 27,  2020; and
• Inquiry into the 2018-19 Defence Major Projects Report and the Future Submarine Project - Transition to Design (Auditor-General’s Reports 19 and 22 (2019-20)) on Friday, March 27, 2020.

The Committee will resume usual activities, including public hearings in due course.

Further information about the inquiries is available on the Committee’s website.

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THE National Aboriginal and Torres Strait Islander Housing Authority (NATSIHA) cautiously supports the safety measures put into place recently by the Northern Territory government regarding the deadly coronavirus.

The restrictions relate to travel to Aboriginal communities unless providing essential services with similar measures planned for APY lands in South Australia.
 
NATSIHA co-chair, Ivan Simon said, “These restrictions are in place to protect Aboriginal people who already face chronic health conditions, lack of resources and overcrowding and in many cases severe overcrowding.

"The issue with overcrowding is that many people are in close proximity to each other and any disease can spread unabated as we have seen in the past with such ailments as diarrhoea and scabies.

"Overcrowding also places a severe strain on the housing functionality which will affect basic hygiene practices due to the bathroom and toilet not working properly which adds to the likelihood of diseases spreading rapidly in these houses.
 
“NATSIHA is disappointed on many levels with Commonwealth, State and Territory governments because of inaction regarding the Closing the Gap Refresh which identified housing as an essential target because it will increase the chance of success of the current seven targets," Mr Simon said.

"Indigenous housing has been ’grossly’ underfunded and its importance in the debate around improved Indigenous health and well-being and participation on a holistic level is under-estimated. A house in not the solution in itself, however it provides a stable base to enable other services and support to be delivered to the doorstep and the chance of success is greatly improved," he said.

NATSIHA is urging the Australian and State/Territory governments to activate the Closing the Gap Refresh results and include Indigenous housing in its targets and provide ongoing funding for increased Indigenous housing and services to be delivered efficiently and effectively with direct input from the Aboriginal and Torres Strait Islander community and organisations.

"A long term bi-partisan approach by both major political parties would also enhance the success of programs and NATSIHA looks forward to continued discussions with government and bureaucracies to that end."

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THE Palaszczuk Government’s decision to allow all Queensland companies to defer payroll tax payments for six months, in response to novel coronavirus (COVID-19), will boost much needed cash flow to thousands of companies across the state, according tot he Queendsland Resources Council.

Queensland Resources Council chief executive Ian Macfarlane said the payroll tax deferral would benefit mining companies and the sector's 14,400 suppliers, who combined employ more than 372,000 Queenslanders or one in seven jobs.

Mr Macfarlane said mining companies paid a combined $6.1 billion – or almost $120 million every week – in wages last financial year, and they spent more than $22 billion with small-to-medium business suppliers. 

“The government’s deferral of payroll tax will benefit mining companies and thousands of those supplier companies across Queensland, whether they are in Moranbah in central Queensland, Morningside in Brisbane or Mount Isa,” Mr Macfarlane said.

“It will mean payroll tax payments would not be due until 31 July.

“Our industry welcomes the government’s efforts to support business in response to COVID-19.  More measures will be needed.  One of the most important forms of support will be the government’s continued commitment to stability on royalties, taxes, fees and charges.

“At uncertain times when confidence is low, it’s critical that the government commits to stability, providing greater certainty and improve confidence," Mr Macfarlane said.

“In addition to $6.1 billion in wages, the mining companies contributed another $5 billion in royalties and other taxes to the Queensland Government.”

Information on payroll tax deferral can be found at www.osr.qld.gov.au

www.qrc.org.au

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