Provision Newsletter

These free government grants for small businesses and startups are your first port of call in getting off to a flying start.

Cash has always been one of the most valuable assets for startups. Applying for free government grants for small businesses can be a great way of accessing sorely needed funding without having to give away equity.

At present, there are over 300 government grants and assistance opportunities available for Australian businesses, many of which can be extremely lucrative for small businesses operating in many different industry sectors.

READ: Top 5 mistakes startup owners make when applying for grants

Of all the different funding opportunities that the Australian government offers, there are some grants that are particularly lucrative for startups and small businesses. These opportunities exist on a federal, state and even city level and all are worth looking into.

Before outlining some of the more current and specific grants, let’s first look at the three overarching and industry-agnostic federal funding opportunities that can see an SME through some of its major early milestones.

1. The Research & Development (R&D) Tax Incentive

The R&D Tax Incentive was designed to assist businesses who are conducting innovative and experimental activities in order to create novel products and processes in the science and technology space.

In 2011, changes to this incentive saw SMEs being allowed to claim a refundable tax offset for the costs associated with their eligible R&D activities. This meant that if the business is running at a loss-making position, they would receive their tax offset as a cash rebate.

The current value of the tax offset for SMEs conducting eligible R&D activities is 43.5 per cent, which means if you’re running at a loss and have spent $100,000 on eligible activities, you could potentially receive $43,500 in cash.

The deadline for registering your eligible R&D is 10 months after the end of your income year and your eligibility is self-assessed. For further information on what you’ll need to register for the refund, visit the relevant Business.gov.au webpage.

2. Accelerating Commercialisation (AC) Grant

Once you’ve finished up with most of your R&D activities, the next big step in the startup journey is figuring out how to successfully get your product to market. That’s where the AC Grant fits in nicely.

This competitive grant offers up to $1,000,000 in matched funding to assist with the commercialisation of new products or processes into new markets.

The good news about this grant is that you can apply for it at any time and, should you be successful, you’ll receive guidance and network support as part of the grant’s ‘portfolio services’.

3. Export Market Development Grant (EMDG)

Many SMEs tend to look at the Australian market as a ‘pilot program’ where they test and refine their product or service before they ‘go global’. Once you’re ready to expand beyond the shores of Australia, you’ll be ready to take advantage of the EMDG.

READ: Here’s what you need to know about the Export Market Development Grant

The EMDG is designed to see businesses through their overseas market exploration phase. It offers a 50 per cent reimbursement (capped at $150,000 per application) for businesses who are spending money on activities that promote their product, good or service to the overseas market.

From the idea phase to the commercialisation phase, following on to overseas expansion, the federal government can play a large part in funding your business along the way.

State-based grants

Don’t forget that many state and local governments offer small business grants as well. We’ve listed some of the more prominent ones from Victoria, NSW and Queensland below.

Victorian government grants

Here are a couple of great opportunities that Victorian startups and small businesses should keep an eye on.

1. LaunchVic Funding Rounds – Over the last couple of years, LaunchVic has been offering various rounds of funding opportunities that are designed to support the Victorian startup ecosystem. Their current round (Round X) offers Victorian businesses with up to $250,000 to run initiatives that will help support Victoria based startup founders. The guidelines to this one have been designed to be as vague as possible in order to attract ‘out of the box’ ideas from a diverse range of providers. (UPDATE: This funding opportunity is currently closed.)

2. City of Melbourne Small Business Grants – Every year, the City of Melbourne runs a competitive grant program called the City of Melbourne Small Business Grant, which offers businesses located in the Melbourne CBD up to $30,000 to either launch, expand or export their business offering.

New South Wales government grants

There are a couple of government grants that are specifically offered to NSW startup and scale-up businesses. These grants are administered by Jobs for NSW.

1. MVP Grant – This competitive grant offers up to $25,000 to very early stage startups who are yet to generate revenue to assist them in putting together a minimum viable product (MVP). Grant applications are available online and all year round, with assessment generally taking eight weeks after the date of application.

2. Building Partnerships Grant – Once an MVP has been developed and the business is generating revenue, this competitive grant offers up to $100,000 to assist them with customer acquisition projects. (UPDATE: Jobs for NSW have paused accepting new applications for this grant for this financial year. Keep an eye on the website or send an enquiry if you’d like to know when they next open).

Queensland government grants

While there are several government funding opportunities that the Queensland government offer, one of the more popular ones has been the Ignite Ideas Fund – a competitive grant program administered by Advance Queensland.

This grant offers up to $200,000 and is designed to assist Queensland based SMEs who are ready to commercialise their innovative product or process. (UPDATE: Round 6 of this funding initiative closed on 14 October. Round 7 is expected to open in April 2020).

Industry-specific grants

When it comes to industry specific grants, the government tend to offer grants and assistance to businesses working within their five ‘growth sectors’ which are: energy, mining, advanced manufacturing, health and agribusiness.

For instance, businesses working within the energy industry sector can access very lucrative industry specific grants through the Australian Renewable Energy Agency (ARENA).

Another example would be for businesses working within the agribusiness sector. They can access grants like The Enterprise Solution Centre, which offers funding of up to $100,000 to support businesses working within that specific industry sector.

This all just the tip of the iceberg. For all the current information on the Australian government grants/assistance landscape, head over to www.business.gov.au/assistance and www.grants.gov.au and you’ll find hundreds of opportunities that your business could benefit from.

NB: This article was first published in March 2019 and has been updated to reflect changes to various industry grants and funding opportunities.

Source : MYOB October 2019 

Reproduced with the permission of MYOB. This article by Benjamin Kluwgant was originally published at https://www.myob.com/au/blog/government-grants-startups-small-businesses/

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.

As most of us would be aware, Australia is prone to experiencing bushfires. And as BIG4 has parks dotted all over the country, it’s a given that we have a presence in regions where bushfires can hit.

Whether you’re travelling to, from, or within your holiday destination, we want you to have fun and enjoy your travels but to be safe at the same time. And while the safety of our guests is paramount at any time of year, the need to stress vigilance is heightened during bushfire season.

Yet there’s no need to be alarmed; rather, it’s about preparation and education. So we’ve put together a list of essential bushfire safety tips for you to follow, with important input from fire authorities.

1. Pack essential items

While there’s a lot to think about when packing for your holidays, it’s important to spare a couple of minutes to throw in a few essential items if travelling in a bushfire-prone area. The Western Australia Department of Fire and Emergency Services (DFES) recommends that during bushfire season you pack a survival kit with the following items:

• AM/FM portable radio

• Spare batteries

• First aid kit

• Woollen blankets

• Drinking water

• Protective clothing (long-sleeved cotton tops, pants, hats, and sturdy shoes)

• A map of the local area

When checking the weather forecast, take a look for any fire warnings while you’re at it.

2. Monitor weather forecasts

Checking weather forecasts is something you’re likely to do in the lead up to and during your holiday anyway; probably to see if there’s any rain on the horizon that might jeopardise your outdoor plans. Yet in areas susceptible to bushfires, keeping an eye on weather forecasts takes on a more serious tone. Note any fire warnings, and be flexible with your travel plans if required.

Tasmania Fire Service spokesman Peter Middleton has some simple advice if you’re unsure what to do if you face a bushfire threat.

“Leaving early is always the safest option when a bushfire threatens. Fewer lives will be lost if people who choose to leave do so well before a bushfire threatens,” he said.

Make a note of the fire danger rating in the region or regions you are travelling in.

3. Be aware of fire danger ratings

Following the above point, it pays to know the fire danger rating in the region or regions you are travelling in.

Check the website of the country fire authority/service in the state or states applicable to your journey prior to and during travel, or watch for roadside signs. While the terminology of these fire danger ratings differs between states, generally there are six different ratings that range from ‘low moderate’ to ‘catastrophic’ or ‘code red’.

Country Fire Authority Victoria best outlines what each rating means to you when on your travels.

In addition, Western Australia DFES spokesman, Mark Graham, offers further advice if the higher ratings are in place.

“On these days, it is better to visit safe places such as cities and towns,” he said.
“If you plan to visit a place that is in a bushfire risk area, be prepared to change your travel plans at short notice should a fire start. And always advise your family of your travel plans.”

4. Fire bans

In addition, be aware of any fire bans – including total fire bans – in areas you are travelling through or staying in. In the case of a total fire ban, there are important restrictions regarding lighting of fires in open areas, among other limitations.

The Western Australia DFES has a great FAQs section that details what you can and can’t do during a total fire ban, including restrictions around the use of barbecues. The South Australian Country Fire Service also offers easy-to-follow FAQs.

In addition, ask BIG4 staff if there are any restrictions that apply within the park you are staying at.

5. Jot down bushfire information line numbers

It’s also worth noting the bushfire information line phone number that is applicable to the state or states you are travelling in. A call to these numbers provides general bushfire advice.

VIC: 1800 240 667

WA: 13 3337

SA: 1300 362 361

TAS: 1800 000 699

QLD: ruralfire.qld.gov.au (no general information line available)

NSW: 1800 679 737

ACT: 13 22 81

NT: www.lrm.nt.gov.au/corporate/contacts (find the region relevant to you)

Of course, in emergency situations simply dial 000.

Fire crews do a great job combatting bushfires each summer.

6. Don’t panic

If you do find yourself driving within a bushfire-affected area, it’s important to be as calm as possible. Western Australia DFES’s Mark Graham has sound advice if you are on the road and in the vicinity of a bushfire.

“If you see smoke and flames you should leave the area immediately by driving away from the fire. Do not wait to see what happens,” he said.

“If there is a lot of smoke, slow down and be aware. There could be people, vehicles, and livestock on the road. Turn your car headlights on and close windows and outside vents.”

Remember that being prepared rather than alarmed is the key to enjoying your break. We wish all BIG4 guests a happy and safe time when on the road during the bushfire season.

Source : BIG4 Holiday Parks 

Reproduced with the permission of BIG4 Holiday Parks. This article first appeared on BIG4.com.au  and was republished with permission.

Important:
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

How to identify and avoid credit scams

Scammers have clever ways to get your banking, credit card or personal details, and to trick you out of your money by offering you a loan. 

Credit card scams

Scammers don’t need to steal your credit card to take your money – all they need are your card details. They can get these by: 

• contacting you online or by phone, pretending to be your bank or another company, and tricking you into giving them your credit card details

• accessing your information from unsecured websites you’ve visited

• installing spyware on your computer so they can see the files you use, websites you visit and information you store. Spyware can be installed remotely.

Some scammers also steal new cards from letterboxes, skim the details off cards to use later, or apply for cards using stolen identities. 

If scammers know your PIN, they can get cash advances from an ATM using a ‘cloned’ credit card (where your details have been copied onto the magnetic strip of another card). 

Warning signs of a credit card scam

Your credit card details may have been taken by a scammer if: 

• there are purchases on your credit card statement that you didn’t make

• you have accidently given your credit card details (on the phone or internet) to someone you later realise you should not have trusted

• your credit card is lost or stolen. 

Loan scams

Scammers will contact you via phone or email to offer you a loan or credit. They will say they are a registered Australian company or Australian credit licensee. They may even have an Australian phone number or address to appear legitimate. If you agree to the loan, they will ask you for upfront payments before you get access to the money. 

Signs of a loan scam

You might be at risk of falling victim to a loan scam if you’re:

• offered a loan by being contacted out of the blue

• asked to make upfront payments before you get the loan, to pay for things like insurance, tax or initial repayments

• told to deposit your upfront payment into a bank account, a cryptocurrency wallet or by buying a gift card for the scammer to redeem

• emailed from a generic email address (e.g. a gmail, hotmail or outlook account), or an email address that looks like it’s from a legitimate institution but is spelled incorrectly

• approved for a loan amount that is more than you require

• offered a very low interest rate.

Requests for account information (phishing)

Scammers may contact you via email, text message, social media, or phone call and pretend to be a bank, financial institution, phone company, or even a university or government agency. The aim of the scam is to get you to give them your personal details, bank account numbers, credit card numbers and most importantly, your passwords. 

For example, an email they send may say there has been a security breach and ask you to download their security software, which is really a trojan virus. The virus could infect your computer and give someone else control of it. It could also track your key strokes to get your user names and passwords. 

Signs of a phishing scam

The email or text message you receive is definitely a phishing scam if it:

• claims to be from a bank or company that you do not have an account with

• contains a link that leads you to a website where you are asked to enter your bank account details

• says your details are required for security and maintenance upgrades or to ‘verify’ your account

• says you are due to receive a refund for a fee that you were mistakenly charged.

The email or text message could also be a phishing scam if it:

• does not address you by your full name

• has spelling errors or grammatical mistakes

• is a survey that offers you a reward or prize for filling it in.

How to protect yourself from banking and credit scams

Scammers can be ruthless, so it’s important to be vigilant about protecting your information and know who you’re dealing with. Visit protect yourself from scams for more information. 

What to do if you’ve been scammed

If a scammer gets access to your credit card or bank account, call your bank immediately and ask them to freeze the account. See what to do if you’ve been scammed for more detailed information on what to do next. 

Scammers are skilled at finding ways to get their hands on your money. Always be vigilant about protecting your personal information and be suspicious of anyone offering you easy money – there is almost always a catch. 

Source : ASIC MoneySmart

Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at www.moneysmart.gov.au/scams/banking-and-credit-card-scams#phishing

Important note: 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.  Past performance is not a reliable guide to future returns.

Important
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

A fulfilling retirement isn’t just about money, it’s about staying healthy, active and connected

So much of preparing for retirement is about the dollars and cents.

• Working out whether a transition to retirement strategy works for you.

• Deciding which type of income stream is appropriate to deliver the right balance between income and capital gain.

• Making sure that you structure your finances to receive any government benefit that’s due.

Hopefully if you get the numbers right it means you wake up on day 1 of your retirement fully prepared to meet the financial challenges. But enjoying a fulfilling retirement isn’t just about money. It’s also about facing up to new social, physical and emotional challenges.

If you don’t think about cultivating a healthy body, healthy mind and healthy social network then all your good work may come to nothing.

Fortunately, there are plenty of ways to energise your daily life once you’ve left the workforce for good.

1. Get active! Walking, jogging, swimming, cycling…whatever your preference it’s great to get out there and shake off the cobwebs of a long career. If you haven’t exercised for a while, start with a modest target and work your way up. And if you’re already a MAMIL or gym bunny, set yourself a new target or event to train for.

2. Help others! You’ve got a lifetime of experience so why not use your skills. If you were a project manager, admin guru or design whizz in your previous life, then by helping others you’ll be helping yourself feel more connected.

3. Learn something new! There’s no better way to get the brain cells working than to learn a new task. Whether it’s conversational Spanish, spinning a pot or kayaking in the bay, you’ll be firing up the synapses and keeping your cognitive skills ticking over. And you’ll be meeting like-minded new friends to keep you on your toes.

4. See the world! The kids have flown the coop, the mortgage is paid off or substantially reduced and you suddenly have heaps of free time. So what are you waiting for? Now’s your chance to head off on that trip of a lifetime. It doesn’t matter whether it involves cruising along the Rhine enjoying a cold glass of local Riesling as another majestic fairytale castle comes into view or zigzagging up the east coast in your campervan on the grey nomad trail, you’ve now got the time to realise your travel dreams.

5. Go back to work! Seems crazy? More work after a lifetime of work? Maybe…but take a moment to think it through. It can be difficult to adjust after making a clean break between the world of work and the world of retirement. One day you’re surrounded by the support network of colleagues, valued for your expertise and experience, and the next you’re sitting at home wondering what to do. One answer is to keep your hand in at work. Whether it’s a day or two a week as a consultant in your old profession or something completely new in a local business, it can be hugely satisfying to keep working on your terms, not to mention beneficial to your hip pocket.

6. Be spontaneous! Don’t plan everything to the final degree. Remember when you went on that road trip across Tassie back in the day? Every morning you’d get up and decide what you’d do. Go for a swim. Cast your line to catch something for the BBQ. Head off on a bushwalk. Or simply pack up your things and drive up the coast. For a long time you’ve been at the beck and call of work hours, kids’ activities, mortgage repayments. Everything’s been super planned down to the finest detail. Now you’re free, why not go free range and do something different, whether it’s adopting a new pet or volunteering at the local op shop.

 So whatever your retirement plan, it’s a good idea to go beyond the spreadsheet and think more broadly about what makes up a comfortable retirement.

Source : AMP October 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

Binding death benefit nominations in an SMSF can provide useful direction to the trustee of a fund after death, for distribution of benefits. However, over the past six months, we have noticed some common issues arising that need attention.

1. Issue: ‘Everything will be OK, my family will look after it.’

Many members of SMSFs make the incorrect assumption that just because it was all peace and harmony while they were alive, this will continue on their demise.

While most disputes are settled prior to getting to a court hearing, there are enough cases where the apparent intention of the deceased made clear during their life was never reduced to writing. The result is that unintended family members may end up with superannuation to the detriment of others.

Make sure that your intention to pay super benefits to particular family members is put in writing, as a binding direction to the trustee of the fund.

2. Issue: Not understanding who can make a claim or receive a superannuation death benefit.

The superannuation laws have strict rules around who can receive your death benefit. The law limits your superannuation death benefit to your dependants, plus it can be paid to your estate via your legal personal representative. Your dependants for super purposes include your spouse, children, anyone dependant on you for support and anyone with whom you have an interdependency relationship.
Make sure you are clear about who should receive your superannuation after your death.

3. Issue: Not understanding the place of superannuation in your last will and testament.

One misunderstanding is that your last will and testament can decide how your superannuation is to be distributed amongst your beneficiaries. This is incorrect, as the rules of your super fund initially determine how your super is to be distributed.

Your fund may allow you to make a binding death benefit nomination, which directs the trustee as to who is to receive your superannuation. This includes your dependants, and you can have your super paid your legal personal representative who is responsible to distribute the amount received as instructed in your will. If you don’t have a binding death benefit nomination, then the rules of the fund may allow the trustee discretion to distribute your super benefit to your dependants including to your estate via your legal personal representative.

Make sure you have a clear direction for the distribution of your superannuation otherwise payment may be up to the trustees of your fund after your death.

4. Issue: Incorrect binding death benefit nominations.

Many SMSFs have trust deeds which include standard binding death benefit nominations or require that the nominations follow a set format. If they do, then make sure any nomination that you sign is consistent with that nomination. You may find a standard nomination from the web to use or be provided with one from an accountant or adviser.

Make sure you use a nomination that satisfies the trust deed or distribution of your death benefit may be at the discretion of the fund trustees.

5. Issue: Incorrectly completed death benefit nominations.

We often see binding death benefit nominations that are incomplete or are incorrect. The information required to be included in the nomination will depend on the particular form, but it will usually include:

• the member’s name

• who the member nominates to receive the death benefit

• how much of the death benefit is to be paid to the dependant or legal personal representative

• any other instructions concerning payment of the death benefit

• the member’s signature and dated

• witnesses including the witness signature and dated

The binding death benefit nominations we see have one or more of these bits of information missing, which may render the nomination invalid or limit who may be eligible to receive the death benefit. If the nomination is considered invalid it may then rely on the fund trustee discretion for distribution of the death benefit.

Make sure your death benefit nomination has been completed correctly or it may be up to the trustee to decide how your death benefit will be distributed.

6. Issue: Not keeping the death benefit nomination up to date.

As things change during your life, you may wish to direct the payment of your superannuation to someone else. This may occur if you have children, change relationships or someone becomes dependent upon you for support.

Each time your family or relationship circumstances change review your death benefit nomination to see whether any change is required.

7. Issue: Failure to finalise a marriage breakdown.

Superannuation splitting usually is included as part of a marriage or relationship settlement. However, any binding death benefit nomination you have in place at the time of the settlement may still be valid and it is possible for benefits to be paid to your ex-partner.

As part of the settlement be sure to review your binding death benefit nomination and make any amendments necessary to take into account your changed circumstances.

8. Issue: Not addressing the legal competency of fund members.

Whether a trustee of an SMSF is competent to act in the interests of a deceased member is something that should be under consideration at all times. If the trustee is unable to act in that capacity, then who would take over the running of the fund?

To cater for this situation the trust deed of the fund or constitution of the corporate trustee should provide an alternative if the trustee or director of the corporate trustee become legally incompetent due to disability. Another option could be for the trustee to grant an enduring power of attorney to another person who could take over when they are unable to act.

Being prepared when a trustee is unable to act by using an ensuring power of attorney may allow an SMSF to continue in difficult times.

9. Issue: Not taking the specific makeup of an SMSF into consideration.

SMSFs operate in a unique way and may have investments which can be retained in the fund or transferred to the beneficiary as part of the payment of a death benefit. It is possible for a binding death benefit nomination to direct particular assets to one or more beneficiary.

Consideration needs to be taken of the fund’s assets in satisfaction of the payment of a death benefit. This may involve taxation issues, including income tax and stamp duty in relation to the transfer

10. Issue: Taking estate planning considerations into account.

Estate planning has become more important since the commencement of the transfer balance cap from 1 July 2017. The cap restricts the amount that can be used to start an income stream(s) in a superannuation fund, including death benefit pensions.

If a person becomes entitled to a reversionary or death benefit pension there is potential that their transfer balance cap of $1.6 million has been exceeded. This may require the transfer of part of the death benefit out of the fund as a lump sum. Depending on the wishes of the deceased it may be paid to a dependant or to their estate and have different tax consequences.

As part of deciding what is to happen with your death benefit the estate planning issues should be taken into account.

There’s a lot to think about…

It doesn’t matter whether you have an SMSF or belong to one of the larger super funds, the distribution of your death benefit should be made by the fund trustees as you want it. Any directions or instructions provided to the trustee must be clear and as required by the fund’s trust deed. Otherwise payment of your death benefit may be up to the trustee’s discretion and end up in the hands of someone you never intended.

By Graeme Colley
Executive Manager, SMSF Technical and Private Wealth – SuperConceptsSydney, Australia

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

Source : AMP CAPITAL October  2019 

Important notes: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455)  (AMP Capital) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided and must not be provided to any other person or entity without the express written consent of AMP Capital.

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

While the outlook for the global economy remains reasonable, the risks are tilted to the downside. 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 in response to the persistent downside risks and subdued inflation. Expectations of further monetary easing have generally been scaled back over the past month and financial market sentiment has improved a little. Even so, long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are also at historically low levels. The Australian dollar is at the lower end of its range over recent times.

The outlook for the Australian economy is little changed from three months ago. After a soft patch in the second half of last year, a gentle turning point appears to have been reached. The central scenario is for the Australian economy to grow by around 2¼ per cent this year and then for growth gradually to pick up 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 in some markets 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.

Employment has continued to grow strongly and has been matched by strong growth in labour supply, with labour force participation at a record high. The unemployment rate has remained 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 remains 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.

The recent inflation data were broadly as expected, with headline inflation at 1.7 per cent over the year to the September quarter. The central scenario remains for inflation 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, especially in Sydney and Melbourne. 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 since June is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. Given global developments and the evidence of the spare capacity in the Australian economy, it is 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 will continue to monitor developments, including in the labour market, and 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, November 5th, 2019

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