Provision Newsletter

At its meeting today, the Board decided to leave the cash rate unchanged at 0.75 per cent.

The outlook for the global economy remains reasonable. While the risks are still tilted to the downside, some of these risks have lessened recently. The US–China trade and technology disputes continue to affect international trade flows and investment as businesses scale back spending plans because of the uncertainty. At the same time, in most advanced economies unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken steps to support the economy while continuing to address risks in the financial system.

Interest rates are very low around the world and a number of central banks have eased monetary policy over recent months in response to the downside risks and subdued inflation. Expectations of further monetary easing have generally been scaled back. Financial market sentiment has continued to improve and long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are at historically low levels. The Australian dollar is at the lower end of its range over recent times.

After a soft patch in the second half of last year, the Australian economy appears to have reached a gentle turning point. The central scenario is for growth to pick up gradually to around 3 per cent in 2021. The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, the upswing in housing prices and a brighter outlook for the resources sector should all support growth. The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending. Other sources of uncertainty include the effects of the drought and the evolution of the housing construction cycle.

The unemployment rate has been steady at around 5¼ per cent over recent months. It is expected to remain around this level for some time, before gradually declining to a little below 5 per cent in 2021. Wages growth is subdued and is expected to remain at around its current rate for some time yet. A further gradual lift in wages growth would be a welcome development and is needed for inflation to be sustainably within the 2–3 per cent target range. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

Inflation is expected to pick up, but to do so only gradually. In both headline and underlying terms, inflation is expected to be close to 2 per cent in 2020 and 2021.

There are further signs of a turnaround in established housing markets. This is especially so in Sydney and Melbourne, but prices in some other markets have also increased recently. In contrast, new dwelling activity is still declining and growth in housing credit remains low. Demand for credit by investors is subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

The easing of monetary policy this year is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. The lower cash rate has put downward pressure on the exchange rate, which is supporting activity across a range of industries. It has also boosted asset prices, which in time should lead to increased spending, including on residential construction. Lower mortgage rates are also boosting aggregate household disposable income, which, in time, will boost household spending.

Given these effects of lower interest rates and the long and variable lags in the transmission of monetary policy, the Board decided to hold the cash rate steady at this meeting while it continues to monitor developments, including in the labour market. The Board also agreed that due to both global and domestic factors, it was reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.

Source: Reserve Bank of Australia, December 3rd, 2019

Enquiries

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Secretary’s Department
Reserve Bank of Australia
SYDNEY

Phone: +61 2 9551 9720
Fax: +61 2 9551 8033

Email: rbainfo@rba.gov.au

Making an extra voluntary contribution now might improve your lifestyle once you retire.

A new year’s as good a time as any to make plans. How about a gift to your future self by maximising your retirement contributions?

It’s not as far-fetched or self-absorbed as it might seem.

If you think of this as investing in your future self or your loved ones, it could make good sense. We’re used to spending on education and training, which are also investments in tomorrow. And which really matters more, upgrading to a flashier car today, or buying a jetpack* a few years down the line?

There’s no time like tomorrow

There are a number of ways you can contribute more to your super, to take advantage of time and the magic of compound interest.

These include salary sacrificing, and a range of tax-deductible, spouse and downsizer contributions, as well as government co-contributions.

Things to keep in mind

What you do right now affects how well you can live in future. So, before you decide to gift your future self, think carefully about the right course for you.

If you’re thinking about making extra contributions towards your retirement, make sure you’re across the super contribution rules.

For instance, if you go over the super contribution limits, additional tax and penalties may apply.

Remember that the value of your investment in super can go up and down. Before making extra contributions, make sure you understand and are comfortable with any potential risks.

The government sets general rules about when you can access your super, which means you typically won’t be able to access your super until you retire. If you’re over 65 and making contributions, you generally need to satisfy work test requirements and be under age 75.

Extra contributions may also affect any rainy day savings you set aside for emergencies, so do your homework before you commit to your future self.

If you’re in a position to engage professional help, you might also talk to us on |PHONE| about what’s right for you.

The not-so-silly season

Many of the presents we buy for ourselves and loved ones date quickly – that new smartphone isn’t new for long. Increasing retirement contributions may delay gratification but pay dividends down the line.

If you have some years to go before you retire, you may even be able to retire sooner if you increase your contributions now.

That gift of time might be the biggest reward of all.

Source : AMP November 2019

Important:
This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling |PHONE|, before deciding what’s right for you.

All information in this article is subject to change without notice. Although the information is from sources considered reliable, AMP and our company do not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP and our company do not accept any liability for any resulting loss or damage of the reader or any other person.

If a reduction in income is on the cards and you’re starting to worry about your cash situation, you’re not alone. Here are some pointers to help you prepare.

One million employed Aussie families are expecting a child or have recently had a child, with almost all families taking some form of leave from employment during that time¹.

Meanwhile, findings from AMP’s Women, Parental Leave and Financial Stress Report revealed 71% of those expecting a baby were experiencing some level of financial stress².

According to those surveyed, this was largely due to expecting parents feeling uncertain around what was included in government-funded parental leave policies as well as parental leave policies that were offered by some employers³.

We take a look at what else came out of the report, while providing a few financial tips that could come in handy if you’re feeling a bit overwhelmed by what’s up ahead.

How expecting parents feel financially

Uncertainty around parental leave payments from the government and potentially employers impacted how expecting parents were able to budget for the gap in income while they were on leave⁴.

According to the research, one in five primary caregivers took employer-funded leave, but didn’t know the specifics of their benefits, with 68% of those adding that superannuation was the last thing on their mind when having a child⁵.
 

Another finding revealed that it could be a particularly stressful time for single-parent families as they were unable to rely on another income source during their time out of the workforce, which emphasised why it was important to try to plan ahead as much as possible⁶.

Some tips to stay on top of your money situation

Look into potential medical expenses sooner rather than later

Medical costs may include doctor and hospital bills, scans, birthing classes and special medical tests.

Regardless of whether you want to have your baby in a public or private hospital, there may still be out-of-pocket expenses with either option, even if you have Medicare or private health insurance.

Many private health funds also have waiting periods before you can claim on pregnancy and birth-related costs, so this is worth looking into if it’s something you’re thinking about.

Meanwhile, if you want your child to be covered under a health insurance policy, this is worth some investigation, as a single or couple policy may need to be extended to a family policy.

Start making a list of some of the upfront and ongoing costs you’re likely to come across

These might include things like:

• car seat and stroller

• cot and mattress

• change table and high chair

• baby clothes and nappy bag

• food, nappies, bottles and formula

• childcare (which may be worth looking into ahead of your baby’s arrival).

Also consider whether you could go without a few non-essential baby items, whether you can buy things second hand, or if you might be able to get a few items handed down from family or friends.

If you’re planning on having a baby shower, organising a gift registry might also be worthwhile so that your friends and family know what you don’t have but may need, which could help to ensure you don’t end up with multiple same-sized onesies that your baby may only fit into for a little while.

Look at whether you’re eligible for employer-funded incentives early on

Many organisations have their own parental leave policies, which may include various paid and unpaid parental leave entitlements for new mothers and fathers.

Check out whether your employer has such a scheme in place and what they offer. You may also want to find out if you’re eligible for any annual leave, long-service leave or regular unpaid leave if you’re planning to take time off work.

See what government assistance may be available to you

If you meet criteria, primary carers of newborn or adopted children can apply for parental leave payments from the government, which provide the national minimum wage for up to 18 weeks⁷.

These payments can be received in addition to any payments your employer pays under their own parental leave policy if you happen to be eligible.

You may be entitled to other assistance such as Dad and Partner Pay, which provides up to two weeks of government funded pay, and the Family Tax Benefit, which helps with the cost of raising children⁸.

There’s also a range of additional payments for families, such as assistance with child care fees that also may help.

Start creating a budget with the information you’ve collected

Once you’ve considered the costs, any entitlements you may be eligible for and how long you may take off work, it’s important to set up a budget and start putting money aside where you can.

When you do this, remember to account for existing day-to-day expenses, such as utility bills, groceries, petrol, insurance, rent or home loan repayments, and other debts you may be paying off.

Remember to also factor in any additional sources of income you could be receiving and whether you have family that may be able to assist in helping you minimise expenses, such as childcare.

Think about whether you have time to pay off any existing debts

If you do have existing debts—credit cards, personal loans or a home loan—it may be a good idea to reduce these debts as much as you can before the baby arrives, particularly as, like with most things, there may be additional unexpected expenses along the way.

Higher interest rates and added fees can also affect what you pay back on top of the principal amount, so consider shopping around to see if you can get a better deal.

You may want to look into whether consolidating your debts into one (if it means you’ll pay less in fees and interest charges) might be a good option for you.

Understand what impact there could be on your superannuation

Superannuation is generally not paid when you’re on parental leave, so you may want to consider whether you’ll make additional contributions while you’re still working.

There are more ways than one to boost your super savings, which you could start doing at any time. And, the good news is, there may be some financial benefits in doing so.

Please contact us on |PHONE|if you seek further information on this topic.

 1-6 AMP’s 2018 Women, Parental Leave and Financial Stress Report pages 5, 6
7 Department of Human Services – Parental Leave Pay
8 Department of Human Services – Parental Leave Pay – related payments and services  

Source : AMP November 2019

  Important:
This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling |PHONE|, before deciding what’s right for you.

All information in this article is subject to change without notice. Although the information is from sources considered reliable, AMP and our company do not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP and our company do not accept any liability for any resulting loss or damage of the reader or any other person.

When it comes to building our dream solo business, capital can be the one thing we can’t can’t always count on, but that doesn’t mean we can’t get started.

A friend recently told me the best part about having taken on some extra work at night was the way it was inspiring plans for her future business.

The two hours she spent on this project every week exposed her to an industry she’d always wanted to be part of. And while she couldn’t commit to spending more time on doing this project, and couldn’t afford to simply quit her day job and start her business idea, the investment in time was paying dividends for her future, because she was learning.

Research, learning and planning is absolutely key to the success of any business, Flying Solo founder Robert Gerrish told me recently.

“A good idea is not a viable business, it’s just a good idea. Most businesses fail because they haven’t been clear on their target market. No matter how good the product or service is in theory, they fall down when they haven’t spent time making sure there’s a market out there of potential customers who will actually buy it.”

“A good idea is not a viable business, it’s just a good idea”

With that in mind, Robert says there are six key things any budding soloist can start doing today, to set them on track for future business success, no matter how much money you’ve got in the bank.

1. Develop a pitch

Start by imagining you’re preparing to meet an investor (and in this case the investor happens to be you!) and slowly start putting together a pitch for your business. This takes the heat off you in terms of having to work out how you will afford to do everything, and will force you to get clear on the type of business you want to build and how to build it.

2. Make sure you can answer the following questions:

What’s the idea for your business? What challenges does the business address?

Why would anyone care that I start this business? Who does this business appeal to and what problem are you solving for them?

3. Talk to your prospective customer

This can’t be just family or friends because they will always tell you your business idea is great! Get specific about the market for your business, find ways to talk to those people and in doing so, find some proof that you’re selling they want to buy.

4. Acknowledge any gaps in your knowledge

If people were really honest with themselves they kind of know where their weaknesses are; we often don’t confront our weaknesses, because it’s a lot more fun to just to what we enjoy. My weakness was understanding finances, it never interested me and I would always push them away. Lucky my strength was marketing, so it made up for that. Start off by being clear about weaknesses and upskill.

5. Devote time every day for professional development (10 mins – 30 mins)

Listen to a business podcast, read a website, or visit a business just like the one you want to start and observe how things work. Whatever it is you choose to do to educate yourself, just make it consistent,  just 10-30 minutes a day for learning will help.

6. Find a buddy

Once you’re clear on the gaps in your skills and knowledge, hunt around for someone who is good at those aspects of the business. Post a note on the Flying Solo forums, ask around at networking events; simply by saying something like “I’m a great marketer but really terrible with finances. Is there anyone here that’s really great with money and a terrible marketer” You will be surprised at how readily people are willing to share their expertise.

Source : Flying Solo

This article by Lucy Kippist is reproduced with the permission of Flying Solo – Australia’s micro business community. Find out more and join over 100K others.

Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Any information provided by the author detailed above is separate and external to our business and our Licensee. Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee take any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

The end of the year is a great time for self-reflection. It’s a time when you can ask questions to help clarify and inform about your clients, profits, processes and more. But here are five unusual questions you’ve possibly never asked before; the answers to which might boost both your joy and sales in 2020.

Question 1: When did I laugh the most?

This may seem like a light-hearted question but it’s surprisingly serious. The moments where you enjoyed a genuine, wholesome laugh were likely the moments where you felt a pure sense of joy.  This is a priceless mental health boost that benefits you in both work and play. 

So, can you pinpoint when you laughed the most? For example, if you laughed heartily and regularly with a particular peer or colleague, can you collaborate or interact with them more often? If you laughed most with a friend or family member, can you engineer your work-life balance to spend more time with them? 

“Two popular answers to the question about what you love most about being a business owner are ‘freedom’ and ‘flexibility’. However, many have been so busy and/or stressed that they enjoyed neither. “

Question 2: When did I feel the most excited during my workday ?

Have you ever wanted to jump out of bed to start the work day? If so, you know how invigorating it feels to be EXCITED! 

Did you get excited when delivering a presentation, attending networking events, working with a particular type of client, or doing a specific stream of work? 

Whatever made you excited, can you do that more often? For example, if you’re a graphic designer who absolutely loved creating logos for mechanics, but spent most of your year designing corporate annual reports, can you set aside time next year to attract more of your ideal logo-designing clients from the motor industry?

Question 3: In what clothes did I feel the most comfortable?

Some of us like to chill out in trakies while others like to dress to impress. Your preferred attire is generally (but not always) a good indicator of your preferred work style. For example, if you love getting dressed up, can you attend more events?  If you prefer wearing pyjamas all day, maybe less client meetings are the go? Wear more of what you love, and love the way you work.

Question 4:  What’s my reply to, “What do you love most about being a business owner?”

We all enjoy being business owners for different reasons, what’s your favourite reason? And, in the past year, did you get enough of that wondrous thing you love so much? 

Two popular answers to this question are “freedom” and “flexibility”. However, many have been so busy and/or stressed that they enjoyed neither.  If this is you, can you outsource some tasks, speak to a coach or fire some clients? Whatever you love most about being a micro business owner, can you get more of it in the New Year? 

Question 5: What food and drink did I enjoy the most?

Food and drink are a big, enjoyable part of our lives, so why not let some of that joy infiltrate into your workday? In offices there are Friday night drinks, working lunches, birthday cakes and more, but when working for yourself, food can become the stuff you shovel down your throat at the computer. 

So, what did you love eating and drinking the most in the past year? If you loved a particular dish at a local restaurant, can you have client lunches there? Can you create your own Friday night drinks with colleagues?  Can you meet with prospects at your favourite café, or have your very own brainstorming sessions there? Or, can you simply ensure you eat away from your desk/workspace more often? Your favourite food can certainly lift your mood, and perhaps increase productivity and sales too. 

Although these five questions are slightly different to the ones you usually read about, if you choose to ask them, the answers may provide useful insights to help boost business and happiness in 2020. I hope they do!

Source : Flying Solo

This article by Lucinda Lions  is reproduced with the permission of Flying Solo – Australia’s micro business community. Find out more and join over 100K others. 

Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Any information provided by the author detailed above is separate and external to our business and our Licensee. Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee take any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

As climate strikes continue to take place around the world, some small business owners are asking whether they can reduce their carbon footprint.

Climate change is being heralded as perhaps the most serious issue our generation faces, with many initiatives taking place around the world to raise awareness about its potential impacts.

Aside from being an issue discussed in government, homes and schools, climate change has moved to the top of the agenda for businesses as well.

In September, tens of thousands of businesses around the world (and many hundreds in Australia) participated in a climate strike, an event that was branded with the slogan ‘This is not business as usual’. The inference here is that business leaders can’t ignore how a climate change future might impact them.

If you’re one of the growing number of business leaders wondering what they can do to help address climate change through their operations, there are some simple first steps you can take.

ClimateClever: Helping people act on climate change

As society becomes more aware of climate change, it’s more important than ever for people to understand the impact their day-to-day activities may have on the environment.

There are many startups around the world that’ve been working tirelessly to develop technology-based solutions that help fight climate change, and one such business is ClimateClever.

Founded by Dr Vanessa Rauland in 2017, ClimateClever is an innovative software solution that allows people to calculate and track their carbon footprint, audit their buildings and create evidence-based (and achievable) action plans to reduce energy consumption levels.

Given her PhD in Low Carbon Cities (Philosophy) and her vast experience in helping people reduce the level of energy they consume, I spoke with Rauland to hear more about her ideas on the strategies that small business owners can use to play their part in addressing the negative effects climate change may pose.

Rauland’s advice takes shape as four simple steps. And it turns out following these steps can actually save your business money.

1. Measure your carbon footprint

The first thing Rauland highlighted the first challenge to be addressed when considering how to reduce a business’s carbon footprint, and that’s how to measure it.

“Knowing how to measure carbon consumption is one of the hardest things for businesses to do,” Rauland told The Pulse.

“Existing energy meters are not particularly transparent, and businesses don’t have a frame of reference as to what the energy consumption benchmark is supposed to be.

“You can’t set targets if you don’t have visibility.”

According to Rauland, another big part of the issue is that the accounts team of a business often develop the habit of paying energy bills without looking out for anomalies that may indicate where emission reductions might take place (and perhaps even save you money).

“If you aren’t looking at the numbers, you tend to miss big ticket items.”

But, if business owners can increase their efforts in measuring their carbon consumption, the ability to reduce their impact becomes much more realistic.

Rauland encouraged business owners to “start the conversation” by reaching out to colleagues from businesses of a similar size to their own and ask about their energy consumption and “compare numbers”.

“This will help businesses create that frame of reference about where they fit into the climate change story.

“Training the accounts staff to mindfully pay company energy and other utility bills and to flag large changes in energy consumption patterns to upper management can also create more of a climate-change-conscious environment at work.”

2. Start with the big-ticket items

Have you ever walked into the kitchen after you’ve hosted a dinner party at your house, looked at the huge pile of dishes, overflowing rubbish bags and dirty countertops, and felt too overwhelmed to know how or where to start the cleanup?

If so, you know exactly how many business owners feel about addressing climate change at work.

Between changing old, inefficient lightbulbs to LEDs, composting, recycling and keeping track of energy consumption across the entire business, not knowing where to start is a very common barrier between the business owner and the concept of reducing their carbon footprint.

In order to break down this barrier, Rauland encouraged business owners to go right back to basics and look to address the big-ticket items first.

“Big appliances like air conditioning systems and fridges are a great place to start, as they consume enormous amounts of energy.

“During the summer months, set the temperature on the air-conditioning system to 22-24 degrees and encourage people to dress for the weather.

“Workplaces that have their thermostats on 17-18 degrees don’t realise that they’re increasing their energy consumption by 10 percent with every degree.”

Similarly, you may find there are other large appliances needlessly chewing up your power bill and increasing your carbon footprint.

“As for fridges, try and use them efficiently by filling them up as much as possible before turning on a second one.

“Aside from being better for the environment, fridges work more effectively that way as well.”

3. Make sustainability part of your business culture

Being conscious of a company’s energy consumption levels can’t just be the passion of the business owner.

Rauland explained that if a small business owner truly wants to make a difference, they need understand that reducing their business’s carbon footprint has to be a group effort whereby everyone within the organisation has a role to play.

“Spread the roles across the entire company and encourage everybody takes part in reducing the organisation’s impact on the environment.

“Talk about it in meetings, send out emails about it, write climate change policies collaboratively and make everyone in the organisation part of the climate change conversation.

“The key is to bring everyone on board.”

4. Use your energy savings wisely

Aside from the direct benefits that being environment-conscious at work can bring to the global climate change issue, when businesses put effort into finding more efficient ways to consume energy, they can end up saving the business (a lot of) money.

As part of her advice to small businesses, Rauland recommended that business owners consider to donating part or all of their savings to a cause that their employees collectively decide on.

“It puts a deeper level of meaning and impact into the businesses climate change narrative.”

According to Rauland, allocating part of those savings to incentives that encourage staff to be conscious of climate change outside of the office as well is also a great way to add another dimension to a business’ efforts to reduce its impact.

“Taking the money saved from your overuse of electricity and giving it back to the employees in ways like paying for their train or bus tickets to work, can be a great way to offer a financial incentive to employees, while encouraging them to think more about their own personal carbon footprint outside of the office as well.”

Rauland’s advice indicates that just about any business can find ways to reduce their carbon footprint while also increasing efficiencies and save money.

Source : MYOB

Reproduced with the permission of MYOB. This article by Benjamin Kluwgant was originally published at https://www.myob.com/au/blog/reduce-small-businesss-carbon-footprint/

Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page