As we step into a new financial year, a raft of changes will take effect, so consider the opportunities and challenges ahead.
June delivered a mixed picture for the Australian economy as the new financial year begins. Headline inflation eased, but underlying inflationary measures rose to their highest level in almost two years, reinforcing expectations that interest rates may remain higher for longer.
Domestic data highlighted ongoing structural pressures. Building approvals remained subdued, signalling persistent constraints on housing supply despite strong demand. Consumer confidence weakened, falling 2.9% to 80.6, returning to pessimistic levels after a brief improvement in May.
Australian share markets were volatile, with the ASX 200 moving within a narrow range as investors responded to shifting rate expectations and global uncertainty.
Globally, shares delivered strong gains, however, risks remain elevated. In the United States, concerns about policy direction and financial stability unsettled markets, while geopolitical tensions including the on-again off-again ceasefire in the Gulf continued to cause inflationary and supply risks.
The Australian dollar experienced modest fluctuations and finished July at a three-month low.
Market movements and review video – July 2026
Stay up to date with what’s happened in the Australian economy and markets over the past month.
June delivered a mixed picture for the Australian economy as the new financial year begins. Headline inflation eased, but underlying inflationary measures rose to their highest level in almost two years, reinforcing expectations that interest rates may remain higher for longer.
Domestic data highlighted ongoing structural pressures. Building approvals remained subdued, signalling persistent constraints on housing supply despite strong demand. Consumer confidence weakened, falling 2.9% to 80.6, returning to pessimistic levels after a brief improvement in May.
Australian share markets were volatile, with the ASX 200 moving within a narrow range as investors responded to shifting rate expectations and global uncertainty.
Globally, shares delivered strong gains, however, risks remain elevated. In the United States, concerns about policy direction and financial stability unsettled markets, while geopolitical tensions including the on-again off-again ceasefire in the Gulf continued to cause inflationary and supply risks.
Click the video below to view our update.
Please get in touch if you’d like assistance with your personal financial situation.
Superannuation: more relevant than ever
A range of superannuation changes that came into effect on 1 July 2026, are reinforcing the role of super as one of the most tax-effective investment structures available.
For many investors, it’s not simply that super remains attractive but that the rules continue to change. Understanding these changes can help ensure your strategy takes advantage of available opportunities while staying on track with your financial goals.
A changing tax environment
Outside of super, tighter rules around the use of discretionary trusts and closer scrutiny of income distributions have reduced some traditional tax planning flexibility. Combined with the ongoing treatment of capital gains, this has made tax outcomes in non-super structures less predictable for some investors.i In contrast, superannuation continues to provide favourable tax treatment. This is a key reason why super is becoming increasingly important in long-term financial planning.
Payday Super – boost your retirement savings
One of the more practical changes is the introduction of Payday Super, which requires employers to pay super contributions at the same time as wages rather than quarterly.ii While this is primarily an administrative shift, it can have a real impact on individuals’ super balance. More frequent contributions mean compounding begins earlier. Over time, this could lead to improved retirement outcomes.
Higher contribution caps create more opportunities
From 1 July 2026, the concessional superannuation contribution cap (including employer contributions and salary sacrifice) increased to $32,500 from $30,000 in the 2025-2026 financial year.
Non-concessional caps have also increased, from $120,000 in 2025-2026 to $130,000 in the 2026-2027 financial year, enabling larger after-tax contributions. This can be particularly relevant for individuals who have accumulated savings outside super and wish to transfer funds into a more tax-advantaged environment.iii
Carry-forward and bring-forward rules
Two existing rules continue to offer significant opportunities when used effectively.iv
The carry-forward rule allows those with a total super balance below $500,000 on 30 June in the previous financial year to use unused concessional cap amounts from previous years. This can be especially beneficial for those with irregular income patterns, such as business owners or individuals returning to work after a break.
The bring-forward rule allows you to make several years’ worth of non-concessional contributions in one year, subject to eligibility criteria. This can be particularly useful when receiving an inheritance, selling an asset or restructuring investments.
Parental leave contributions
Another important development is the extension of super contributions to government-funded parental leave, introduced last year. It recognises the long-term impact that time out of the workforce can have on retirement savings, particularly for women.v While the financial impact may appear modest in the short term, over time the effect of compounding can be meaningful.
Division 296 tax
One of the more widely discussed measures is the Division 296 tax, which applies an additional tax on earnings associated with super balances above $3 million.vi
While this affects a relatively small proportion of investors, it represents an important shift in the superannuation landscape. The measure is designed to target very large balances, with the objective of limiting the extent of tax concessions at higher levels of wealth.
Transfer Balance Cap increase to $2.1 million
The increase in the Transfer Balance Cap to $2.1 million is another positive development, particularly for those approaching or entering retirement.
This cap determines how much can be transferred into the tax-free retirement phase. An increase allows more capital to benefit from a zero per cent tax rate on earnings, enhancing after-tax income in retirement.
Bringing it all together
Superannuation continues to offer a compelling tax environment, particularly when compared with other investment strategies that are facing increased complexity and scrutiny.
Contribution caps, along with carry forward and bring forward rules, provide multiple pathways to build super balances over time. Changes such as Payday Super and parental leave contributions highlight the benefits of regular, ongoing investment into super and the power of compounding. While new measures such as Division 296 introduce additional considerations, they do not diminish the overall value of super for most investors.
Please get in touch if you’d like to discuss any of these superannuation options.
i Capital Gains Tax and Discretionary Trusts Reform | Treasury.gov.au
ii Payday Super | Fair Work Ombudsman
iii Contributions caps | Australian Taxation Office
iv Carry forward and bring forward rules | ATO
v Paid Parental Leave Superannuation Contribution | ATO
vi Better Targeted Super Concessions is law | ATO
Perspective, not policy, drives long-term investment success
In the weeks after the Federal Budget’s announcement to change the rules for negative gearing and the reduction to Capital Gains Tax (CGT), headlines continue to spark debate, and a familiar question lingers: what does this mean for my investments?
With ongoing global developments layered on top, it can feel as though some form of action is required.
But for long-term investors, the Budget itself is rarely the greatest risk to financial success. More often, it’s how we respond to the surrounding commentary that has the bigger impact.
When dramatic Budget announcements coincide with global uncertainty such as economic shifts or geopolitical tensions, the pressure to act can build quickly. Yet, markets absorb new information fast and much of what is announced has already been anticipated and reflected in prices.
This is where discipline matters most. Reacting emotionally can lead to decisions that fall outside a well-considered plan, such as selling quality investments or adjusting strategies based on a single policy change rather than long-term fundamentals.
A useful example is the market reaction during the early stages of the COVID-19 pandemic in 2020. Global markets fell sharply as uncertainty surged and many investors were desperate to sell.
Yet those who stayed invested or continued regular contributions would likely have benefited from the strong recovery that followed over the next 12 to 18 months. In contrast, those who exited the market would probably have had to face the difficult decision of when to re-enter and risked missing a meaningful portion of the rebound.
A decade earlier during the Global Financial Crisis, the ASX 200 took a dive and investor confidence dropped significantly. Many investors chose to move to cash to protect themselves but the markets began recovering well before economic conditions fully stabilised.
Again, those who remained invested or continued adding to their portfolios, likely benefitted from the recovery while many of those who moved to the sidelines probably missed the rebound.
Chasing trends can undermine your strategy
Another common trap is chasing trends.
A sector highlighted by Budget incentives or a widely discussed ‘hot stock’ can seem compelling. But, by the time an opportunity becomes mainstream, it’s often fully valued or even overpriced. That can leave investors buying high and, after sentiment shifts, selling low.
Chasing trends can also erode diversification. Concentrating on a narrow set of opportunities may increase exposure to specific risks and possibly reduce the balance that a diversified portfolio is designed to provide, particularly during periods of volatility.
By contrast, a well-constructed portfolio takes a broader view. It reflects your goals, time horizon, risk tolerance and income needs, while recognising that markets move through cycles and leadership shifts over time. Not every asset performs well simultaneously, and that is a feature of diversification, not a flaw.
Importantly, a sound financial plan is designed with change in mind. Market fluctuations, policy adjustments and economic cycles are expected, not exceptional.
While regular reviews ensure your strategy stays aligned with your circumstances, these reviews typically lead to measured refinements rather than abrupt changes.
It’s also worth remembering that the Federal Budget mainly introduces fiscal measures affecting taxation, spending and incentives across different parts of the economy. These changes tend to play out gradually. Markets, on the other hand, are forward-looking and incorporate expectations well in advance, which reduces the impact of any single announcement.
Consistency is key
For most investors, success is more about maintaining consistency through varying conditions rather than predicting policy outcomes. This includes continuing regular contributions, staying diversified and resisting the urge to make unnecessary changes driven by short-term sentiment.
Periods of heightened uncertainty can be where professional advice helps to keep you focused on your long-term goals. We can interpret any market changes or developments that have occurred and you may be unsure about, assess what is genuinely relevant to your situation and, importantly, provide a steadying influence when noise and emotion begin to creep in.
Ultimately, the Federal Budget is only one of many factors that influence markets. Decisions driven by emotion, loss of diversification or departure from a disciplined strategy tend to have a far more lasting effect.
By keeping your focus on long-term objectives and maintaining a consistent approach, you can navigate uncertainty with greater confidence.
Contact us to discuss how current events affect your plan and keep your investment strategy aligned with your long-term objectives.
The art of leaning into winter
As the days grow shorter and the mornings a little crisper, winter is quietly making its entrance. In some places it brings frosty weather and extra layers, while in others it is a gentle shift with cooler evenings and a respite from the heat. Either way, the change in season often brings a noticeable difference in mood, energy, and overall health.
If you are already feeling a bit flat, tired, or more prone to the sniffles, you are not imagining it. The combination of less daylight, cooler weather, and more time indoors can have a real impact so let’s look at some ways to make winter a little more bearable.
Responding to the change
Our bodies are more in tune with the seasons than we often realise. Shorter days affect our internal clock and can lead to lower energy or a dip in mood. Around one in three people report feeling more down or low during winter, and many notice reduced energy and enjoyment in daily life.i
Lifestyle changes add to the effect. Nearly half of people say they become less social as winter begins, quietly deepening the sense of disconnection.ii Even cravings shift, with many leaning toward comfort foods like carbs and sweets. These habits are common and natural, reflecting how our bodies respond to the changing season.
Keeping healthy and dodging the lurgies
Starting winter with a few simple habits can help you feel your best.
Colds and viruses are more prevalent in cooler months so stay on top of hygiene by washing your hands regularly, covering coughs, and taking care when unwell.
Eat nourishing, warming food. Soups, stews, roasted vegetables, and slow-cooked meals are ideal. While many people say they reach for comfort foods more often in winter, balancing them with fresh produce supports both mood and immunity.
Keep moving even when it is tempting to slow down. Regular movement helps counter winter sluggishness and supports overall physical and mental health.
Prioritise rest. The longer nights invite more sleep, but maintaining a steady routine with good-quality rest helps keep energy levels and immunity up.
Lifting your mood
If your energy dips or your mood feels a little off, gentle adjustments can help.
Catch the daylight whenever you can. Even a short walk outdoors during daylight hours helps regulate your mood and energy.
Stay connected. Social energy naturally dips for many, with over forty per cent of people saying they pull back from social interactions in winter.iii However, making the effort to check in with friends or family can brighten your day and even small gestures matter.
Leaning into winter
If you really want to lean into the cooler weather, you can seek out experiences that celebrate the season. Winter festivals turn the long nights into something to celebrate. Events such as Vivid Sydney fill the evenings with vibrant light, music, and art, while the more edgy Dark Mofo in Tasmania is an arts and culture festival that celebrates darkness.
Seasonal food celebrations add another layer of enjoyment. Yulefest in the Blue Mountains brings ‘Christmas in July’ to life with roaring fires and hearty feasts. Truffle season in Margaret River invites indulgence with truffle-based cuisine paired with exquisite local wines. If you want to keep it close to home, check out what’s on in your neighbourhood. You might find a winter market to explore or eat at a restaurant that’s featuring fantastic seasonal produce.
The winter solstice, marking the shortest day of the year, also serves as a gentle reminder that longer, brighter days are on the way. Pausing to reflect or creating a small tradition, like lighting a candle or sharing a meal or some mulled wine, can bring a sense of warmth and celebration to chilly days.
You don’t have to go to too much effort. There is something special about enjoying simple comforts, whether it is snuggling on the couch with a cosy blanket, relaxing in front of a crackling fire, or putting your feet up with a warm drink.
Winter has its own quiet charm if you let it. By employing a little self-care and being open to the quieter pleasures of the season, it can be a time to savour.
i https://www.mhfa.org.au/understanding-seasonal-affective-disorder-sad
ii,iii https://mccrindle.com.au/article/winter-blues-having-real-impact-in-australia/
Protecting family ties in a growing business
Around 70 per cent of small businesses are family enterprises. That is a powerful reminder of how much trust, shared values and long-term commitment drives the small business sector. Family businesses often benefit from loyalty, resilience and a strong sense of purpose.
At the same time, mixing family and business can be complicated. Personal history, sibling dynamics and unspoken expectations can influence decisions in subtle ways and can create conflict. When you work with relatives, you are managing more than a business. You are managing relationships that matter deeply outside the workplace too.
The good news is that harmony is possible with the right structure.
Know the risks
In family businesses, emotions tend to sit closer to the surface than in a purely professional environment. A disagreement about strategy can quickly feel personal. Long standing family roles can quietly shape behaviour at work.
Confusion about responsibilities is also common. A spouse may help with the business, without the benefit of a clearly defined position. A child may assume leadership will automatically pass to them one day. Without clarity, assumptions grow and resentment can follow.
Recognising these risks early allows you to address them before they damage both the business and family relationships.
Set the rules
A Family Charter or Constitution is one of the most useful tools a family enterprise can create. This is a non-binding written agreement that sets out how the family, and the business, will work together.
It can define roles, ownership structures, and expectations for family members who join the company. It should also clarify how decisions are made and how disputes are handled. Agreeing in advance which decisions require consensus and who has final authority reduces power struggles and conflict down the track.
When emotions rise, you can refer to agreed processes rather than arguing about personalities.
Clarify roles
As well as defining how the family works together in the business, it can also help to have clarity around individual roles and responsibilities within the company, as unclear roles can be a major source of tension.
Ensure you have documented job descriptions, set performance guidelines and make reporting hierarchy obvious. Scheduling regular, formal reviews can be useful to set expectations and provide feedback in a professional setting.
It is also important to separate ownership from employment. Being a shareholder does not automatically qualify someone for a management role they may not be suited for. Setting fair entry requirements and standards protects both the business and the credibility of family members within it.
Professional conduct is also important, even if you have worked together for years, it helps to treat family members as colleagues, which can be challenging at times.
Talk it through
Healthy communication is essential and regular, structured meetings can help keep business discussions focused and productive.
Encourage neutral language in disagreements. Saying, “I disagree with this approach because…” keeps the focus on strategy. Phrases like “You always…” quickly turns discussions into personal attacks.
It also helps to stay in the present. Old family grievances rarely improve today’s business decisions.
Get outside help
When tensions run high, external support can make a significant difference. A mediator, consultant or advisory board can provide objectivity and guide difficult conversations, particularly around governance or succession.
Seeking outside help shows commitment to the long-term health of both the company and the family.
Plan ahead
Succession is one of the most sensitive issues in family businesses. If it is not discussed openly, it can create anxiety and competition.
Start conversations early. Be transparent about what leadership requires and how decisions will be made. In some cases, professional managers may lead the business while ownership remains in the family.
Clarity builds trust and reduces misunderstandings.
Set boundaries
Clear boundaries between work and home life are essential. Try to protect family time from constant business discussions and create moments where relationships come first.
If conflict escalates, temporary changes in responsibilities or reporting lines can help ease pressure. Preserving the relationship should always be a priority.
A strong future
Family businesses have unique strengths, including long term thinking and shared commitment. But harmony does not happen by chance. It comes from clear rules, defined roles, open communication and healthy boundaries.
By managing both the personal and professional relationships with care, you give your business the best chance to thrive for generations to come.
Australian vs international shares – finding the right balance
Balancing Australian and global shares means weighing growth, income & currency risk
Getting investment exposure to global companies through share markets makes sense, but weighing up risks such as currency fluctuations is important.
Many Australians have a justified love affair with the domestic share market.
The Australian share market has delivered solid long‑term returns for investors, underpinned by strong performance across sectors such as financials and resources. However as part of a diversified portfolio and to minimise risk, investors could also look to global shares.
Yes, the ASX offers a strong mix of well-established companies, but international shares open the door to world-leading businesses that are not represented locally. By holding diversified, index‑based portfolios that include both Australian and international shares, investors can participate in the growth of global markets without needing to pick winners.
Aussie, Aussie, Aussie
First, let’s consider the strengths of Australian shares. Many investors value Australia’s dividend imputation system, which provides eligible investors with franking credits and can potentially improve tax efficiency.
Another major benefit of investing through the ASX is income generation, with Australian companies having a strong history of paying dividends. For investors seeking regular income, including retirees, this can be a real plus.
On the flip side, the ASX’s heavy focus on mining and commodities can mean that your portfolio is top heavy in the resources sector, creating potential volatility. It is worth remembering, too, that Australian-listed companies by total market capitalisation represent only about 2% by value of the global equities market.
Global bang for buck
International shares can complement your Australian investments, providing exposure to the big tech, consumer and healthcare giants.
For example, markets such as the S&P 500 in the United States feature tech stocks such as Apple, Nvidia and Amazon, global leaders that have served investors well in the past decade or so.
One of the key benefits of getting a mix of Australian and international shares is diversification. Spreading your investments across multiple regions, industries and companies can mitigate risks associated with reliance on any single market or economy.
There is no single ‘right’ mix
What percentage of Australian shares should you have versus global stocks? That is a discussion for you and us, and any decision should be based on your risk profile and long-term investment goals.
In practice, many diversified portfolios include exposure to both Australian and international shares. For example, Vanguard’s Diversified All Growth Index ETF allocates around 60% to international shares and 40% to Australian shares, illustrating how diversified investment options can spread exposure across global and domestic markets. Other investors may choose to hold different allocations depending on their individual circumstances.
Managing currency risk
You will have to navigate some specific risks with international investments, such as currency fluctuations. The value of overseas investments can rise or fall due to exchange rate movements, regardless of the underlying investment performance. While a weakening Australian dollar can boost overseas returns, a stronger dollar can erode them.
Some investors choose currency-hedged investment options to manage this risk. Currency hedging involves using financial contracts to reduce the impact of exchange‑rate movements on international investments.
Hedged options typically come with slightly higher costs, reflecting the additional management involved, but they can help smooth returns. Whether hedging is appropriate depends on your risk tolerance, time horizon and overall portfolio — something many investors choose to consider when they meet with us to discuss their portfolio.
All investing is subject to risk, including the possible loss of the money you invest.
Actual results could differ materially from those referred to in the article statements. In particular, distributions and capital growth are not guaranteed. An investment in shares is subject to investment and other known and unknown risks, some of which are beyond the control of Vanguard, including possible delays in repayment and loss of income and principal invested. Neither Vanguard Investments Australia Ltd (ABN 72 072 881 086 AFSL 227263) nor its related entities, directors or officers give any guarantee as to the success of investments, amount or timing of distributions, capital growth or taxation consequences of investing in equities.
Source: Vanguard
This article has been reprinted with the permission of Vanguard Investments Australia Ltd. Copyright Smart Investing™
GENERAL ADVICE WARNING
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) (VIA) is the product issuer and operator of Vanguard Personal Investor. Vanguard Super Pty Ltd (ABN 73 643 614 386 / AFS Licence 526270) (the Trustee) is the trustee and product issuer of Vanguard Super (ABN 27 923 449 966).
The Trustee has contracted with VIA to provide some services for Vanguard Super. Any general advice is provided by VIA. The Trustee and VIA are both wholly owned subsidiaries of The Vanguard Group, Inc (collectively, “Vanguard”).
We have not taken your or your clients’ objectives, financial situation or needs into account when preparing our website content so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the disclosure documents for the product before making any investment decision. Before you make any financial decision regarding the product, you should seek professional advice from a suitably qualified adviser. A copy of the Target Market Determinations (TMD) for Vanguard’s financial products can be obtained on our website free of charge, which includes a description of who the financial product is appropriate for. You should refer to the TMD of the product before making any investment decisions. You can access our Investor Directed Portfolio Service (IDPS) Guide, Product Disclosure Statements (PDS), Prospectus and TMD at vanguard.com.au and Vanguard Super SaveSmart and TMD at vanguard.com.au/super or by calling 1300 655 101. Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. This website was prepared in good faith and we accept no liability for any errors or omissions.
Important Legal Notice – Offer not to persons outside Australia
The PDS, IDPS Guide or Prospectus does not constitute an offer or invitation in any jurisdiction other than in Australia. Applications from outside Australia will not be accepted. For the avoidance of doubt, these products are not intended to be sold to US Persons as defined under Regulation S of the US federal securities laws.
© 2026 Vanguard Investments Australia Ltd. All rights reserved.
207 Bunda Street, Cairns QLD 4870
