Lisa is an experienced financial planner with 5+ years helping SMSF's, investors and ordinary Aussies in Sydney take care of their money matters. When she is not changing lives she is a passionate singer and song writer.
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If amidst all the Christmas madness – Star Wars themed decorations, family visits and another helping of the rum pudding- you forgot about falling commodity prices, volatile markets and terrorist threats, well done you!
Now it’s time to re-focus and plan ahead. One thing we can be certain about is that uncertainty is here to stay.
These are some of the things you should probably be aware of going into 2016:
- From 1 January 2016, if you are receiving a defined benefit pension the deductible amount for income streams will be capped (at 10% if you have a tax free component that is greater than 10% of the gross income you receive) which ultimately means your Centrelink benefits may decrease;
- Also from 1 January 2016, new Residential Care recipients will have the rental income from their former principal home included in their aged care means test – this may trigger an increase in aged care fees;
- Small businesses will get several tax exemptions from April and July 2016;
- Individuals who temporarily reside in Australia for working holidays will be taxed at the higher foreign resident tax rates;
- Deutsche Bank predicts that the ASX may rally 15% if Australian economy avoids recession in 2016, whereas UBS believes the positive earnings impact from further falls in the Australian dollar will remain the key potential positive in the earnings cycle;
- Turnbull government continues to keep “all issues on the table” and is yet to provide their White Paper proposing either an increase in GST or a change in superannuation taxation or both;
- After the Fed’s rate increase of 25 basis points, CBA’s head of international economics Richard Grace predicts there may be up to three more interest hikes over the next 12 months with the Australian dollar falling further;
- Australia committed to take 12,000 Syrian and Iraqi refugees in addition to Australia’s existing humanitarian intake for 2015-16 of 13,750, most of the refugees will be resettled in Sydney and Melbourne;
- Federal election is expected in September-November 2016 with Malcolm Turnbull still leading in the polls; the US election is also underway and it might be another first for the US if Hillary Clinton wins – either way change breeds change so brace yourselves for more uncertainty to come.
The low level of financial literacy is a continuous issue for most Australians being the lowest amongst females, retirees and the unemployed. The political and legislative environment is becoming more and more complex and often by the time the average person finds out about the implications these changes may have on their situation, it is too late. This is why it is imperative that you seek advice – whether it is about your property, finances, estate planning or medical issues – get a professional to look after you. Have a wonderful 2016!
2016, 2016 financial advice, ASX rally, Bridges Financial Solutions, centrelink benefits, financial literacy, Lisa Scott, Rate Increase