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February 26, 2021 By Complete Financial Solutions

Australia remains one of only nine nations to hold a AAA credit rating

February 25, 2021

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

Global credit agency Fitch Ratings has affirmed Australia’s top-tier AAA rating, saying the economy has weathered the COVID-19 pandemic well, reflecting a successful virus containment.

Treasurer Josh Frydenberg jumped on the announcement, saying Australia remains one of only nine nations to hold a AAA credit rating.

“Fitch says we have ‘weathered the pandemic well compared with peers’ and ‘Australia’s labour market appears to be on a stable path to recovery, supported by the JobKeeper program’,” Mr Frydenberg tweeted.

However, Fitch has kept Australia’s rating on a negative outlook, reflecting uncertainty around the medium-term debt trajectory following the significant rise in public debt caused by the response to the pandemic.

“Policy settings are set to remain accommodative, although we project the bulk of fiscal stimulus has now passed,” Fitch said in a statement on Monday.

“Risks remain tilted to the downside, reflecting the possibility of additional and broader lockdown measures to contain any resurgence of the virus.”

However, the vaccine rollout should gradually ease these risks over the year and support domestic sentiment, it said.

Australia’s nationwide vaccine rollout started on Monday.

Shadow treasurer Jim Chalmers said by sticking with the negative outlook, Fitch is signalling there is still a long way to go in Australia’s recovery.

“The biggest threat to our recovery is Scott Morrison and Josh Frydenberg prematurely declaring victory,” Dr Chalmers told AAP. “(This ignores) the fact that over two million Australians still don’t have work or enough work, wages are stagnant, and our economy had become less dynamic and resilient well before the pandemic.

Filed Under: News Pages, Uncategorized

News Pages

January 28, 2021 By Complete Financial Solutions

A financial safety net through your superannuation

January 28, 2021

Moneysmart
(ASIC)

More than 70% of Australians that have life insurance hold it through super. Most super funds offer life, total and permanent disability (TPD) and income protection insurance for their members.

When reviewing your insurance, check if you’re covered through your super fund. Compare it with what’s available outside super to find the right policy for you.

Types of life insurance in super

Super funds typically offer three types of life insurance for their members:

  • life cover — also called death cover. This pays a lump sum or income stream to your beneficiaries when you die or if you have a terminal illness.
  • TPD insurance — pays you a benefit if you become seriously disabled and are unlikely to work again.
  • income protection insurance — also called salary continuance cover. This pays you a regular income for a specified period (this could be for 2 years, 5 years or up to a certain age) if you can’t work due to temporary disability or illness.

Most super funds will automatically provide you with life cover and TPD insurance. Some will also automatically provide income protection insurance. This insurance is for a specified amount and is generally available without medical checks.

Cancellation of insurance on inactive and low balance super accounts

Under the law, super funds will cancel insurance on inactive super accounts that haven’t received contributions for at least 16 months. In addition, super funds may have their own rules that require the cancellation of insurance on super accounts where balances are too low.

Your super fund will contact you if your insurance is about to end.

If you want to keep your insurance, you’ll need to tell your super fund or contribute to that super account.

You may want to keep your insurance if you:

  • don’t have insurance through another super fund or insurer
  • have a particular need for it, for example, you have children or dependants, or work in a high-risk job

Insurance for people under 25

Insurance will not be provided if you’re a new super fund member aged under 25 unless you:

  • write to your fund to request insurance through your super
  • work in a dangerous job – you can cancel this cover if you don’t want it.

Use our Life insurance calculator

Work out if you need life insurance through your super and how much cover you might need.

Superannuation and insurance can be complex. If you need help call your super fund or speak to a financial adviser.

Pros and cons of life insurance through super

Pros

  • Cheaper premiums — Premiums are often cheaper as the super fund buys insurance policies in bulk.
  • Easy to pay — insurance premiums are automatically deducted from your super balance.
  • Fewer health checks — Most super funds will accept you for a default level of cover without health checks. This can be useful if you work in a high-risk job or have health conditions that can make it difficult to get insurance outside super. Check the product disclosure statement (PDS) to see the exclusions and treatment of pre-existing conditions.
  • Increased cover — You can usually increase the amount of cover you have above the default level. But you’ll generally have to answer questions about your medical history and do a medical check.
  • Tax-effective payments — Your employer’s super contributions and salary sacrifice contributions are taxed at 15%. This is lower than the marginal tax rate for most people. This can make paying for insurance through super tax-effective.

Cons

  • Ends at age 65 or 70 — TPD insurance cover in super usually ends at age 65. Life cover usually ends at age 70. Outside of super, cover generally continues as long as you pay the premiums.
  • Limited cover — The amount of cover you can get in super is often lower than the cover you can get outside super. Default insurance through super isn’t specific to your circumstance and some eligibility requirements may apply.
  • Cover can end — If you change super funds, your contributions stop or your super account becomes inactive, your cover may end. You could end up with no insurance.
  • Reduces your super balance — Insurance premiums are deducted from your super balance. This reduces your savings for retirement.

Check your insurance before changing super funds. If you have a pre-existing medical condition or are over age 60, you may not be able to get the cover you want.

How to check your insurance through super

To find out what insurance you have in your super you can:

  • call your super fund
  • access your super account online
  • check your super fund’s annual statement and the PDS

You’ll be able to see:

  • what type of insurance you have
  • how much cover you have
  • how much you’re paying in premiums for the cover

Your super fund’s website will have a PDS that explains who the insurer is, details of the cover available and conditions to make a claim.

If you have more than one super account, you may be paying premiums on multiple insurance policies. This will reduce your retirement savings and you may not be able to claim on multiple policies. Consider whether you need more than one policy or whether you can get enough insurance through one super fund.

Before buying, renewing or switching insurance, check if the policy will cover you for claims associated with COVID-19.

When reviewing your insurance in super, see if there are any exclusions or if you’re paying a loading on your premiums. A loading is a percentage increase on the standard premium, charged to higher risk people. For example, if you have a high-risk job, a pre-existing medical condition or you’re classified as a smoker.

Filed Under: News Pages

News Pages

November 5, 2020 By Complete Financial Solutions

Jobs down but construction work improving 

November 4, 2020  

Colin Brinsden, AAP Economics and Business Correspondent 
(Australian Associated Press) 

Employment and wages growth continues to weaken despite some positive signs in the economy, with the construction sector expanding for the first time in two years. 

Payroll jobs fell 0.8 per cent in the fortnight ending October 17 following a 0.9 per cent drop in the previous two weeks. 

Compared to the beginning of the coronavirus pandemic in March, payroll jobs have fallen 4.4 per cent. 

Wages also fell by 2.1 per cent in the latest reported fortnight to be down 5.1 per cent since March. 

At the same time, retail trade fell 1.1 per cent in September, the Australian Bureau of Statistics has found. 

However, retail turnover jumped 6.5 per cent over the September quarter, a solid result for the economic growth calculation due in December. 

“This confirms that outside of Victoria, where volumes fell 4.2 per cent as a result of the lockdown, the recovery in household spending is well underway,” BIS Oxford Economics chief economist Sarah Hunter said. 

Cutting the cash rate to a record low 0.1 per cent on Tuesday, Reserve Bank governor Philip Lowe said the economic recovery is up and running and the September quarter national accounts will show positive growth. 

The construction industry is another sector that appears to have turned a corner, buoyed by house building and less pronounced declines in apartment and engineering works. 

The Australian Industry Group/Housing Industry Association performance of construction index rose 7.5 points in October to 52.7, indicating a mild expansion in the sector. 

The index has breached the 50-point mark for the first time since 2018. 

HIA executive director Geordan Murray said low interest rates, government grants and other fiscal stimulus measures were lifting demand for detached housing. 

“These are positive signs that policy settings are working to generate employment throughout the initial phase of the economic recovery,” Mr Murray said. 

Dr Lowe said with Australia facing a period of high unemployment, the central bank was committed to doing all that it could to support the creation of jobs. 

The cut in the RBA’s cash rate would save more than $30 a month on a $400,000 variable rate mortgage if passed on in full by retail banks. 

But the Commonwealth Bank, the nation’s largest retail lender, has instead cut its fixed-rate home loans and some business loan rates and left its variable rate unchanged. 

The other three major banks have remained silent. 

However, a handful of smaller banks have cut their variable rates from between 0.10 per cent and 0.20 per cent with immediate effect.

Filed Under: News Pages

News Pages

October 9, 2020 By Complete Financial Solutions

Big spend as Frydenberg goes for growth

October 7, 2020

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

Despite Josh Frydenberg’s gigantic spend-up, his second budget contained very few big surprises after the carefully crafted run-up to the treasurer’s big night.

In the past week or so, big, multi-billion dollar initiatives have been announced on a daily basis, from an apprenticeship initiative to giving the regions and tourism a cash injection.

The bringing forward of already legislated tax cuts, due in 2022, has been flagged for months.

Even so, the spend-a-thon that will see the budget deficit balloon to a record $213.7 billion and government debt exceed $1 trillion for the first time is aimed at digging the economy out of recession and getting people back into work.

The budget is forecasting a huge acceleration of economic growth in the next financial year, from a contraction of 1.5 per cent in 2020/21 to brisk 4.75 per cent expansion.

From there on growth is expected to hum at a rate of 2.75 per cent to three per cent, something that has not been seen for a while.

There is also hope that unemployment is not far from its peak, with Treasury now predicting a top of eight per cent later this year, rather than nine per cent, and by 2023/24 falling to 5.5 per cent.

But there is a big assumption to this somewhat healthier outlook, given how deep Australia’s first recession in three decades has been.

It relies on there being a COVID-19 vaccine by the end of 2021.

Mr Frydenberg explained if a vaccine is found six months earlier, that would give a $34 billion boost to the economy.

But he also warned if there was a second or third wave of virus cases in Australia, that could hurt the economy by $55 billion.

“There is a lot of uncertainty in this economic environment, it’s an unprecedented time,” he told reporters.

“We are leaving no stone unturned to get access to the vaccine.”

In the meantime, the government is racking up a huge bill trying to keep life on an even keel in these uncertain times.

Filed Under: News Pages

Connection Point

September 16, 2020 By Complete Financial Solutions

Filed Under: Uncategorized

News Pages

July 29, 2020 By Complete Financial Solutions



Retail spending climbs 2.4 pct in June

July 22, 2020

Derek Rose

(Australian Associated Press)

Retail sales in Australia rose a solid 2.4 per cent in June, as people flocked to reopened cafes and restaurants and spent more on clothing in the first full month of trade since the lockdowns ended.

Turnover for the month rose to $29.7 billion and was up 8.2 per cent from a year ago, according to preliminary figures released by the Australian Bureau of Statistics on Wednesday.

The overall rise in June comes on top of a huge 16.9 per cent jump in May, which followed a record 17.7 per cent fall in April.

“Households seem to be transitioning to a ‘new normal’ of spending, where elevated retail spending replaces expenditure on travel and entertainment,” ANZ economists Adelaide Timbrell and Catherine Birch wrote in a research note.

Cafe, restaurant, and takeaway food service spending jumped more than 20 per cent for the second consecutive month but was still 17 per cent below the level in June 2019.

Clothing, footwear, and personal accessory spending gained 19 per cent, but remained six per cent lower from a year ago.

Food retailing rose 0.9 per cent, as a rise in supermarkets and grocery stores spending was offset by a fall in liquor retailing, the ABS said.

There was some evidence of stockpiling at the very end of June, particularly in Victoria, which has reimposed lockdowns in parts of the state.

St George Banking Group chief economist Besa Deda says the figures are encouraging, as retail spending represents a large part of economic growth.

But she cautioned that “the recovery that is underway is fragile, it is vulnerable to further shocks, and that’s related to consumer confidence.”

There might be further falls in July as pent-up demand subsides, but overall household good spending was well above pre-COVID levels, Sarah Hunter, chief economist for BIS Oxford Economics, said.

Household goods retailing fell in June but remains 23 per cent above June 2019 levels, the ABS data showed.

This confirms that consumers are substituting spending on services – particularly travel – towards retail goods.

“Looking ahead, overall spending is likely to remain elevated in the very near term, with households likely to continue to substitute retail goods for services (conversely, spending in cafes and restaurants will remain subdued),” Ms Hunter wrote in research note.

But the longer term will be more challenging, with the tapering of the JobKeeper and JobSeeker schemes expected to weigh on household spending from October, she added.

Job losses recently materialising in the construction and professional services sectors are also likely to be a drag on retail spending, Ms Hunter said.

Filed Under: News Pages

NEWS PAGES

May 19, 2020 By Complete Financial Solutions


Making super and investment decisions: Four tips during COVID-19 and beyond

Money Smart (ASIC)

During these uncertain times, you might be nervous about your investments. It’s important to consider your long-term goals and make well-informed decisions.

Here are some steps to take with your super or investments in shares to ride out ups and downs in the investment markets.

1. Avoid focusing on market volatility

When investment markets are volatile, it can be a good time to review your investment strategy. But don’t make any rash decisions based on recent market falls.

Some investors panic when markets fall and decide to convert all their investments to cash. However, this means you lock in your losses and you miss out on any investment market recovery. Markets typically recover over the long-term.

Diversification across a broad range of asset classes is the best defence to ride out the ups and downs in the markets at any time.

Super in an uncertain investment market

If you’re concerned about your super balance taking a hit, remember super is a long-term investment. Over time it will recover from the ups and downs in investment markets.

If you’re close (5 years or less) to retirement, understand your retirement income options, take your time and avoid hasty decisions.

Consider getting financial information and guidance from:

  • a licensed financial adviser
  • your super fund
  • a Services Australia Financial Information Service officer

2. Don’t try to time the market

It’s not a good idea to sell shares or other investments based on daily headlines.

Even the most skilled and experienced investors have difficulty predicting the best time to buy and sell. You might sell your investments only for markets to recover soon after.

Holding onto your investments, even during downturns, can be an effective strategy if your financial goals and situation haven’t changed.

3. Review your financial goals

Unexpected events can impact your financial goals

Talk it over with your family, consider your long-term goals and only make well-informed decisions

If you’ve become unemployed, for example, you might need to cash out some of your investments for short-term expenses. Only do this if you have no savings to draw on and have explored all other options such government support and applying for financial hardship.

If you do have to draw on your investments, only cash out some of them, if you can. That way you can minimise your losses and still have some money invested when the market begins to recover

4. Beware of investment scams

Beware of cold-calls and unsolicited investment offers and the promise of big returns. If it sounds too good to be true, it usually is.

Making hasty decisions, like panic selling or buying shares, can make you more vulnerable to investment scams.

Scammers exploit fear with fake investment offers promising to recover your losses.

Disclosure Statement: ClearView Financial Advice Pty Ltd ABN 89 133 593 012 AFSL No. 331367 | Matrix Planning Solutions Limited ABN 45 087 470 200 AFSL & ACL No. 238256. Head Office: Level 14, 20 Bond St, Sydney NSW 2000 General Advice Warning: This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication. You should read the Product Disclosure Statement (PDS) before making a decision about a product.

Filed Under: Uncategorized

Connection Point

February 28, 2020 By Complete Financial Solutions

Filed Under: Connection Point

For financial success, try to avoid these traps

June 10, 2019 By Complete Financial Solutions

Many aspects of financial success are about putting good habits in place early and avoiding traps that can damage your dollar value. Here are our top five traps to avoid.

1. Make minimum repayments

Whether we’re talking about high-interest debt such as credit cards or longer-term investment debt such as mortgages, making the minimum repayment is good, but not always great. On credit card debt you can end up paying interest of 20% or more, potentially adding thousands of dollars annually to your repayments. Even small increases in your regular mortgage repayments can cut years off the loan and save tens of thousands of dollars in interest along the way.

2. Leak money to businesses

Many businesses are now moving to a subscription or regular repayment model, whether it is for software, TV services or holiday packages, because it seems cheaper and causes less financial pain in the short term. Those businesses become wealthy over time and you do not. Being aware of these regular outgoings, living a leaner lifestyle and plugging these financial leaks can be the equivalent of adding several percentage points to your investment interest.

3. Spend your redraw/equity

Paying extra into your mortgage is an exceptionally good habit. Constantly redrawing the available funds, or borrowing on the equity for non-investment purposes, is not. Keeping all of your savings within your mortgage, or in an offset account, will likely save a considerable amount of interest over time. But be sure to set yourself a budget or savings goal to reap the full benefit of your discipline.

4. Lack familiarity with your finances

We are all guilty at some stage of being less familiar than we should be with the investment mix of our super fund, or the interest rate on our mortgage. But checking in with your finances on a regular basis – monthly, bi-annually or yearly – is a simple way to check things are moving in the right direction and to take action if they are not. This process should always involve all stakeholders, particularly both members of a couple.

5. Prioritise spending rather than investing

All great plans begin with a goal. Wealth planning usually begins with a retirement lifestyle goal. A strategy is then set to achieve that goal – perhaps the diversified investment of $100 every week for the next 20 years – and that becomes the absolute priority. Households often prioritise and plan for holidays, new cars, furniture updates and wide-screen TVs. The fact that a plan is in place means they will likely have those things. But such purchases should only be allowed after the real priority has been taken care of.

 

General information only: The information in this message is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. It should not be construed as financial, taxation or legal advice. Before acting on the basis of this information, you should consider its appropriateness to your own objectives, financial situation and needs. Individual advice can be provided by contacting our office at admin@completefinsol.com or by phone (08) 9330 8886.

 

IMPORTANT INFORMATION

This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, non‑guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Mark Giles of Complete Financial Solutions (WA) – Financial Planning (ABN26 050 157 938) is an authorised representative of Financial Wisdom Limited (ABN) 70 006 646 108 AFSL 231138).

Information in this document is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Financial Wisdom, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. Taxation considerations are general and based on present taxation laws and their interpretation and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information

Filed Under: Informing You

Winning the money mind games

June 10, 2019 By Complete Financial Solutions

Success in generating long-term wealth has a lot to do with awareness of the tricks money can play on your mind. How many of these do you recognise?

Money and emotion are strongly connected. Purchases often mean something to us personally. They broadcast our identity. They make us feel special. They reward us for hard work. But in the background, behind our most basic reasons for spending or saving, our mind plays further tricks. If you become aware of these tricks then the added clarity will benefit your wealth generation.

1. Bigger is better

Consider the purchase of a new car. You have just spent $35,000, so when the salesperson offers you a special deal – a $700 upgrade pack including a towbar, carpet mats and alloy wheels – it seems like a bargain. But would you happily go out today and spend $700 elsewhere? How many grocery trips does that represent? And many of us will grab the opportunity to buy a $100 item that has had its price slashed to $50. But if a $5000 item is discounted to $4950, then the $50 saving is not nearly as attractive. Remember that a dollar is always worth a dollar, no matter how much or how little the related purchase happens to be.

2. Discounted = good value

It is increasingly rare to see a price ticket that is not marked down. But is the $130 jacket, marked down from $210, actually better value or better quality than the $100 jacket in the shop next door? Ignore the higher price (known as an ‘anchor’, intended to make the discounted price seem cheap) and consider the actual value. This works in several other situations. For instance, many restaurant menus offer a high-priced entrée and main to make the other options seem cheap. And in your local electronics store, the fancy $500 toaster is only really there to make the $140 toaster seem like a bargain.

3. Gifted money is not worth investing

You receive money as a gift so instead of adding it to savings, investment or retirement funds, you put it straight into the spending budget. Your mind is de-valuing the money, because it was a gift. In other words, you didn’t have to work for it, so it is somehow of less value or not worthy of investment. But if you regularly invest a specific percentage of your income, then consider investing the same percentage (or more) of gifted money.

 

 

 

4. Small change is of little value

How much small change do we leave lying around, or in a container, or in the glove box, then happily spend it on little things without a second thought? But consider that a small money box for children can easily hold $400 in gold coins, and suddenly that small change becomes a very real driver of financial change. The same goes for small pay rises, which may not seem to make any difference right now but can make a very real difference over the long term.

5. Money buys happiness now

Buying something today produces a very measurable result. Saving for the future and putting money into superannuation or investments is difficult to quantify in terms of lifestyle. So make it quantifiable. Figure out your average monthly expenditure and buy future months of happiness with your savings and investments.

6. Reduced mortgage repayments represent a saving

In an environment of low interest rates, many home owners have been offered a drop in mortgage repayments. That is great for our household budgets, right? But consider that if you drop your repayments, you will spend more on the mortgage in the long run and will lose more money in interest, as you take longer paying off the mortgage compared to keeping your repayments at the same level.

Changing your money mindset

If you want to know more about how to separate money from emotion, your financial adviser should be the first person you speak to. They will help you change your money mindset so you can recognise traps and win the money mind games.

 

 

General information only: The information in this message is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. It should not be construed as financial, taxation or legal advice. Before acting on the basis of this information, you should consider its appropriateness to your own objectives, financial situation and needs. Individual advice can be provided by contacting our office at admin@completefinsol.com or by phone (08) 9330 8886

Filed Under: Informing You

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