Superannuation Update: 12% Employer Contribution and Super Tax Rebate

Financial planning and superannuation industry bodies have welcomed the Superannuation Guarantee (SG) Bill’s passage through Parliament.
On Wednesday (23 November) the House of Representatives passed legislation on the gradual increase of compulsory superannuation contributions from 9 per cent to 12 per cent.
The legislation includes measures to remove the age limit of the Superannuation Guarantee as well as removing superannuation contributions tax for people earning less than $37,000 per annum.
“The Financial Planning Association (FPA) welcomes the Government’s passing of the Superannuation Guarantee Bill and the measures incorporated to assist our aging population with the incentive to remain in the workforce as well as maximising the retirement benefits for low income earners in Australia,” said Mark Rantall, CEO of the FPA.
“This legislation better supports all workers without discriminating against age or wage. The FPA supports initiatives taken by Government to assist Australians in planning their financial futures and ensuring they are better prepared for retirement.
“An increase in the Superannuation Guarantee and encouragement to seek professional financial advice will enhance the quality of life during retirement, ensure income adequacy, reduce longevity risk and decrease reliance on the age pension for Australia’s ageing population. It is timely that the Government is addressing this national issue now.”
The majority of the reform measures are expected to take effect from 1 July 2013, with the low income rebate commencing from 1 July 2012.
The superannuation industry also welcomed the passage of the mining tax bills package.
The mining tax will support the increase in the SG to 12 per cent, as well as a low-income earners super tax rebate.

Source: http://www.professionalplanner.com.au/superannuation/thumbs-up-for-super-guarantee

Cheers,
Rashesh Bhavsar
Financial Planner


6 Steps to create secure financial future:

1. Secure your income and have provisions for ongoing income in the event of death or disability
2. Minimise your tax effectively
3. Build retirement savings by using superannuation entitlements
4. Have regular investment plan into diversified investments
5. Have Will & Enduring Power of Attorney and valid nominations on your super & insurance
6. Have ongoing review

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Call today on 03 9018 5534 or send an email to info@fortunewealth.com.au to book a free financial consultation and to find out your personal wealth creation and wealth protection plan using above 6 steps.

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Melbourne VIC 3004

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Australian economy update: Statement by Glenn Stevens, Governor

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 4.5 per cent, effective 2 November 2011.

Recent information is consistent with a moderation in the pace of global growth, though fears of a major downturn have not been borne out so far. The pace of US economic expansion picked up in the September quarter, but is still only moderate and leaves considerable spare capacity. China's growth has slowed, as policymakers there had intended. Output in Asia has now recovered from the effects of the Japanese earthquake, and domestic demand in the region is generally expanding. Trade performance, however, is starting to see some effects of a significant slowing in economic activity in Europe, where the prospects are for economic weakness to continue. Commodity prices, while still at high levels, have generally declined over recent months.

Financial markets have recovered somewhat from the turmoil of recent months, helped by stronger economic data in the United States and by signs that European governments are making progress in their efforts to deal with the sovereign debt and banking problems. Equity markets have gained ground and the Australian dollar has risen significantly as risk aversion has lessened. But it is likely to be some time yet before concerns about the European situation can definitively be laid to rest and the effects of the recent turmoil on confidence may result in a period of precautionary behaviour by firms and households.

Information about the Australian economy suggests moderate growth overall. The terms of trade have now peaked and will decline somewhat in the near term, but they remain very high. In response, investment in the resources sector is picking up very strongly, with much more to come. Some related service sectors are enjoying better-than-average conditions. In other sectors, cautious behaviour by households and the high exchange rate have had a noticeable dampening effect. The unemployment rate has increased a little over recent months, though it remains close to 5 per cent.

After underlying inflation started to pick up in the first half of the year, recent information suggests the subdued demand conditions and the high exchange rate have contained inflation more recently, notwithstanding continuing sizeable increases in utilities charges. CPI inflation on a year-ended basis remains above the target, due to the effects of weather events last summer, but is now starting to decline as production of key crops recovers. Moreover, with labour market conditions now softer, the likelihood of a significant acceleration in labour costs outside the resources and related sectors in the near term has lessened. Accordingly, the Bank's current judgement is that inflation is likely to be consistent with the 2–3 per cent target in 2012 and 2013, abstracting from the impact of the carbon pricing scheme.

Financial conditions have been easing somewhat recently, with market interest rates declining a little and competition to lend increasing.  But overall conditions have remained tighter than normal, with borrowing rates still a little higher than average, credit growth subdued and asset prices lower than earlier in the year. The exchange rate has been very variable over the past few months, but on the whole has remained at historically high levels.

Over the past year, the Board has maintained a mildly restrictive stance of monetary policy, in view of its concerns about inflation. With overall growth moderate, inflation now likely to be close to target and confidence subdued outside the resources sector, the Board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth and 2–3 per cent inflation over time.

Source: http://www.rba.gov.au/media-releases/2011/mr-11-24.html

Cheers,
Rashesh Bhavsar
Financial Planner

Fortune Wealth Creation Group
Ground Floor, 566 St. Kilda Road,
Melbourne VIC 3004

Free Consultation (valued over $660):
Call today on 03 9018 5534 or send an email to info@fortunewealth.com.au to book a free financial consultation to find out your personal wealth creation and wealth protection plan for you and your family.

Investment in Gold: Is it a good time to invest in Gold now?

In March 2008, the gold price exceeded US$1,000, achieving a nominal high of US$1,004.38. In real terms, actual value was still well below the US$599 peak in 1981 (equivalent to $1417 in U.S. 2008 dollar value).

Performance History: On August 22, 2011 gold reached a new record high of $1908.00 at the London Gold Fixing but it is still well below the 1981 CPI adjusted price of $2,395 in today's dollars. It means it even has not returned the rate of return to match inflation. Gold was also in major downtrend from 1981 to 2000 for 20 years!

Gold is now in strong uptrend from 2000 but the question is who knows that history is not going to be repeated  and we may be close to change in the trend! Please don't take me wrong. I am not telling you that Gold is bad investment but just want you to urge to have some precaution when you buy a gold. Remember, everything goes down which goes up.

I can still remember the greatest quote of Warren Buffet: Be greedy when everyone is fearful and be fearful when everyone is greedy. Today, everyone is talking about buying Gold!

Cheers,
Rashesh Bhavsar
Financial Planner Melbourne
566 St. Kilda Road, Melbourne.

Call today on 03 9018 5534 or send an email to info@fortunewealth.com.au to book a free financial consultation (valued over $660) to find out your personal wealth creation and wealth protection plan for you and your family.

Source: http://en.wikipedia.org/wiki/Gold_as_an_investment