Tax Cuts – where it fits for you

Tax Cuts – where it fits for you

From July next year, most tax payers will be getting a bonus of $530 a year, which should help many Australians with rising energy bills in an economy starved of wage growth. The benefits will initially be small – but proportionally higher for low income earners – and will grow by 2028 to be twice the size of the next largest tax cut in Australian history. By 2022 many taxpayers will get a tax cut worth $1000 a year. As a reminder, these are the current tax bands and rates: Taxable Income Tax Payable (excl. Medicare Levy of 2%) $0 – $18,200 Nil $18,201 – $37,000 19% $37,001 – 87,000 32.5% $87,001 – 180,000 37% $180,001 + 45%   So who wins? Only workers earning more than $87,000 will benefit immediately – about $135 a year on average – when the 32.5% tax threshold is lifted to $90,000 from July 1, 2018 (currently $87,000). This is the first step in eliminating the 37% bracket altogether ($87 – 180,000 income range). Eventually – by 2028 – 90% of workers will only pay 32.5¢ for every dollar earned between $40,000 and $200,000. How generous it will be for you depends on how much you make each year. As a rule, the more tax you pay the larger the cut you will receive. To sweeten up the flat tax system for workers on lower incomes, the government has introduced a low-medium tax offset [‘LMTO’]. What do low-medium income earners get? From July next year (2019), Australians who earn up to $125,333 will get up to $530 cash-back when they lodge their tax...
Reserve Bank leaves official cash rate on hold in October

Reserve Bank leaves official cash rate on hold in October

The Reserve Bank has decided to again leave official interest rates on hold over October at the record low 1.5%. The Bank will continue to take a wait and see approach and assess the impact on the economy of the recent interest rate cut to determine if further are required. General comments Latest economic data remains mixed and largely directionless. The RBA is waiting for the September quarter inflation rate data, due to be released on October 26. Although the national seasonally-adjusted jobless rate fell to a new three-year low of 5.6%, the economy is still shedding full-time workers. Recent jobs growth has been restricted to part-time work. Home building approvals remain good despite recent signs that the peak of the residential planned construction boom may have passed. Recent retail sales activity is relatively flat. The Aussie dollar is still higher than desirable, although the share market appears to be consolidating recent gains. The Bank however will be increasingly alert to a resurgence in house prices growth generated by lower mortgage rates. Concerns remain over a resurgence in house prices, an overall steady economic performance, and reasonable inflation rates. The Reserve Bank therefore is now likely to leave official rates on hold until next...
Quarterly House & Property Price Report – June 2016

Quarterly House & Property Price Report – June 2016

Owning your own home is the dream for most Australians. Domain’s quarterly property report looks at each state and reports on property valuation movements for houses and apartments. Sydney  Prices dipped the previous quarter, but lower interest rates have bolstered buyer confidences and Aussies are getting back into the market, hunting for homes and investment properties. Apartments: ⇑ 0.6% to $669,830 Houses ⇑ 2.4% to $1,021,968 Melbourne  Melbourne’s market has the strongest annual growth of any capital city and, this quarter, the median house price has hit a record high of $740 995 Apartments: ⇑ 3.5% to $450,933 Houses ⇑ 1.5% to $740,995 Brisbane  The Brisbane house market has grown steadily in recent years and this quarter is no different, with the median price rising 1.2 per cent to $521,915 Apartments: ⇓ 1.8% to $370,251 Houses ⇑ 1.2% to $521,915 Adelaide There have been mixed results for Adelaide’s market this quarter, with investors and buyers reviving the house market while unit prices fall. Apartments: ⇓ 1.7% to $294,165 Houses ⇑ 0.9% to $498,927 Perth  While many capitals are on the rise, Perth’s market has taken another knock as the mining sector slows. Apartments: ⇓ 2.4% to $367,025 Houses ⇓ 1.7% to $568,132 Darwin Similar to the market conditions in Perth, decreasing mining activity has caused many temporary workers to leave Darwin, pushing house prices in the capital down. Apartments: ⇔ 0.0% to $448,417 Houses ⇓ 0.7% to $613,590 Canberra Canberra is the top market performer this quarter, with investor and seller activity invigorated by lower interest rates. Apartments: ⇓ 1.6% to $399,505 Houses ⇑ 3.1% to $654,306 Hobart Hobart is still the most affordable capital in the nation, especially...
NEWS FLASH: Official interest rates unchanged

NEWS FLASH: Official interest rates unchanged

The Reserve Bank of Australia left the cash interest rates on hold at 1.75 per cent on Tuesday, although governor Glenn Stevens hinted at cuts ahead if inflation remains low. With continuing signs of weakening local economic activity and growing concerns over the state of the international economy, the likelihood is increasing however of a cut in rates over coming months. Next month: Economists say the central bank’s focus remains weak inflation, leaving the second-quarter consumer price index, released at the end of July, central to its next move. A surprisingly low first-quarter inflation read-out forced a 25 basis point cut, to 1.75 per cent, in May. Most expect the June-quarter CPI to come in below the RBA’s 2 to 3 per cent target range....

KEY ALERT: INTEREST RATES ON HOLD

The Reserve Bank of Australia announced at 2:30pm (AEST) this afternoon that the cash rate will remain at 2.50%. RBA Governor Glen Stevens cited 4 key reasons behind their decision of continuing to keep interest rates at the same level since the last cut in August 2013: Global growth below trend, however an expectation this will increase over the course of the year. Unemployment has continued to edge higher Resources sector investment spending set to decline significantly Inflation in the December quarter was higher than expected. Looking forward: The Bank expects growth to remain below trend for a time yet however strengthening and; Unemployment to rise further before it peaks Expected further stability in interest rates (i.e. a ‘hold’ bias) The RBA’s next meeting will be on Tuesday 4th March. For more information...