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Market Movements & Economic Review – May 2024

Posted by Greg Provians

Stay up to date with what’s happened in markets and the Australian economy over the past month.

The run of stronger-than-expected domestic inflation figures continued in May.

The higher-than-expected inflation figures saw Australian shares tumble after reaching a welcome high mid-month.

The ASX200 finished the month on a positive note, slightly higher for the month of May.

Click the video below to view our update.

Please get in touch if you’d like assistance with your personal financial situation.

How to end the Financial Year on a High Note

Posted by Greg Provians

As the financial year draws to a close, it’s the perfect time to review your financial affairs and set the stage for a successful new financial year. By taking care of essential tasks and implementing strategic planning, you can position yourself for a smooth transition and a strong start for the year to come.

Topping up super

One important item for the To Do list is to top up your super with either concessional (pre-tax) or non-concessional (post-tax) contributions. For example, you could make a voluntary concessional contribution up to the limit allowed and then claim a tax deduction on your personal assessable income for it. Consider making additional contributions to your own super account or your spouse’s account, to take advantage of tax concessions.

If you have unused concessional cap amounts from the previous five years and a super balance less than $500,000 on June 30 the previous year, you may be eligible to make a catch-up (or carry-forward) contribution greater than the annual limit.

Maximising contributions not only helps you build your retirement savings but can also provide valuable tax benefits. But it’s critical to be mindful of your caps and to ensure that you make any super contributions before the end of the financial year to meet the deadline.

Reviewing investments

Reviewing your investment portfolio is a valuable task at any time but particularly now.

For example, you could take a look for any capital gains or losses that could be used strategically to manage your tax liability.

Also, it is worth considering how your portfolio performed over the past 12 months against your goal of capital growth, income, or balance.

You may decide to readjust your goals or your investments to help steer performance in the right direction for the next 12 months.

Of course, if you’re planning any changes, it’s important to check in with us to ensure you’re making informed decisions about your investments.

Paying expenses early

Another useful strategy at tax time can be to bring forward any deductible expenses or interest payments before 30 June to reduce your taxable income.

That could include incurring expenses on an investment property, prepaying interest on investment loans, making charitable donations, or claiming eligible work-related expenses.

Make sure you keep detailed records and receipts to support your deductions.

The ATO’s myDeductions app is a great place to start for free record keeping and to assist you to be ready for tax time.

Setting up salary sacrifice

As you look ahead to the new financial year, consider whether a salary sacrifice arrangement might be right for you.

Salary sacrifice allows you to divert a portion of your pre-tax salary directly into your superannuation, which effectively reduces your taxable income and boosts your retirement savings.

You will need to think carefully about your living expenses to work out the amount you can afford to contribute to your super, and ensure you do not exceed your concessional (before-tax) contributions cap of $27,500, which will increase to $30,000 from July 1 2024 to avoid paying any extra tax.

Your employer or payroll department can help you set up a salary sacrifice arrangement.

Checking your budget

This is a good time to revisit your financial goals and how you’re tracking, and then put together a strong budget for the new financial year that will help get you further along the track.

Take the time to review your income and expenses and identify any areas where you can cut back spending or improve your income.

This exercise not only helps you understand your financial habits but also allows you to reallocate funds towards your goals, such as paying down debt, building an emergency fund, or increasing your investment contributions.

Consult with professionals

Don’t forget to check in with your trusted advisers – financial advisers, accountants, or tax professionals – to make sure you are making the most of any opportunities for financial growth and maximising tax savings.

Taking advantage of our expert advice to review your current financial situation and goals, and checking that you are making the best decisions for you can make a difference. It provides peace of mind, ensures that you are complying with any obligations and, importantly, puts you in the best position to achieve your financial goals.

Your financial To Do list

Being a good manager of your own financial life means being organised and keeping your eye on the ball.

Here are some tips to help you finish this financial year on top and prepare to take on the next one:

By addressing these essential tasks, you’ll be well on your way to starting the new financial year in a strong and organised position. Remember, the key is to take the initiative, seek professional advice when needed, and stay disciplined in your financial management. With a solid plan in place, you can confidently navigate the year ahead and work towards achieving your financial objectives.

Winter 2024

Posted by Greg Provians

Understanding the NEW $3 million Superannuation Tax

Posted by Greg Provians

The much debated tax on superannuation balances over $3 million is inching closer and those who may be affected should ensure they have considered the implications.

Although it is not yet law, the Division 296 tax should be taken into account when it comes to investment strategy and planning, particular in relation to any end-of-financial-year (EOFY) contributions into super.

Tax for higher account balances

The new tax follows a Federal Government announcement it intended to reduce the tax concessions provided to super fund members with account balances exceeding $3 million.

The draft Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 was introduced to Parliament on 30 November 2023.i

The legislation has been referred to the Senate Economics Legislation Committee, with its report due on 19 April 2024. Once it passes through Parliament and receives Royal Assent, Division 296 will take effect from 1 July 2025.

Who Division 296 applies to

Division 296 legislation imposes an additional 15 per cent tax (on top of the existing 15 per cent) on investment earnings of a super account where your total super balance (TSB) exceeds $3 million at the end of the financial year.ii

The extra 15 per cent is only applied to the amount that exceeds $3 million.

When law, Division 296 will represent a significant change to the super rules, particularly for fund members with significant account balances.

Given the complexity of the new rules, it will be important to seek professional advice so you can make informed decisions about your super and wealth creation strategies in coming years.

How the new rules work

A crucial part of the new legislation is the Adjusted Total Super Balance (ATSB), which determines whether you sit above or below the $3 million threshold.

When assessing your ATSB, the ATO will consider the market value of assets regardless of whether or not this value has been realised, creating a significant impact if your super fund holds property or speculative assets. The legislation also introduces a new formula for calculating your ATSB for Division 296 purposes.

The legislation outlines how deemed earnings will be apportioned and taxed, based on the amount of your account balance over the $3 million threshold.

Negative earnings in a year where your balance is greater than $3 million may be carried forward to a future financial year to reduce Division 296 liabilities at that time.

If you are liable for Division 296 tax, you can choose to pay the liability personally or request payment from your super fund.

Strategic rethink may be needed

For many fund members, superannuation remains an attractive investment strategy due to its favourable tax treatment.iii

But those with higher account balances need to understand the potential effect of the Division 296 tax and check their investment strategies offer the best possible outcomes.

For example, you may need to consider whether high-growth assets should automatically be held inside super given the new rules.

Holding long-term investments that may be more difficult to liquidate, such as property, within super may be less attractive in some cases, because the new rules create the potential to be taxed on a gain that is never realised. This could occur where the value of an asset increases during a financial year but drops in value by the time it is actually sold.

For some, holding large commercial property assets (such as your business premises) within your SMSF may be less attractive.

Reconsider your investment vehicles

If you are likely to be affected by Division 296, an important issue will be to review the most tax-effective investment structures in which to hold assets.

Super has been the clear winner in the past but, once the new rules are in place, other vehicles such as companies or discretionary trusts may also be useful options.

It will also be important to balance asset protection against tax effectiveness. For some people, the asset protection provided by the super system may outweigh the tax benefits of other investment vehicles, such as a family trust.

Division 296 will require more frequent and detailed asset valuations, so you will need to balance this administrative burden with the tax benefits provided by super.

Estate planning implications

Your estate planning and the succession plan for your SMSF will also need to be revisited once Division 296 is law.

The tax rules for super death benefits are complex and will need to be carefully reviewed to ensure you don’t leave an unnecessary tax bill for your beneficiaries.

If you still have many years to go before retirement and decide to hold high-growth assets in your fund, you will need to closely monitor your super balance.

If you want to learn more about how Division 296 tax could affect your super savings, contact our office today.

Quick ways to grow your super

If your super balance is under $3 million, you will be unaffected by Division 296 and the current concessional tax rates continue to apply.

For most people, super remains the most attractive place to save for retirement and making additional contributions prior to EOFY is a sensible idea. Options to consider include:

Most contributions have eligibility criteria and annual caps you must not exceed, so talk to us before you make any contributions.

Market Movements & Economic Review – May 2024

Posted by Greg Provians

Stay up to date with what’s happened in markets and the Australian economy over the past month.

As eyes turn to the 2024-25 Federal Budget, stronger-than-expected domestic inflation was recorded for April.

The markets have been subdued due to geopolitical instability and uncertainty around cash rates both in Australia and the US.

The S&P/ASX 200 was down by about 2.5% for April.

Click the video on the right to view our update.

Please get in touch if you’d like assistance with your personal financial situation.

2024-2025 Federal Budget Analysis

Posted by Greg Provians

What does the Federal Budget mean for me?

Treasurer Jim Chalmers has high hopes that his 2024 Federal Budget will rein in inflation earlier than expected, ease cost-of-living pressures and build a stronger economy in the future.

It’s a Budget for the here and now, he says, but also for the decades to come.

More than $8.4 billion has been allocated to quick-fix cost-of-living adjustments along with the previously announced Stage 3 tax cuts and the waiving of $3 billion in student debt.

With a federal election due next year, the Federal Government has announced spending of almost $83 billion on housing, infrastructure, health and a Future Made in Australia project to build a more resilient economy for the future.

The big picture

While Treasury is forecasting a $9.3 billion surplus for 2023-24 after the previous year’s $22.1 billion surplus, the books will look considerably different the following year with a $28.3 billion forecast deficit expected.

That’s against a backdrop of an uncertain global economic outlook with wars in the Middle East and Ukraine as well as slowing growth in China and elsewhere.

“Most advanced economies recorded subdued outcomes during 2023, with around a third of OECD nations recording a technical recession,” notes Treasury in the Budget papers.

“Global inflation has moderated but remains too high, and there are risks it will persist. Tackling inflation remains the primary focus but, as inflationary pressures abate and labour markets soften, the global policy focus will increasingly shift to managing risks to growth.”

There are some bright spots for Australia though.

Treasury is forecasting inflation could return to the target rate of between 2 and 3 per cent earlier, perhaps by the end of the year, the Treasurer says.

Jobs growth is stronger here than in any major advanced economy and real wages are growing again for the first time in almost three years.

Cost of living

This year’s Budget aims to help out those struggling to pay the bills with a range of tax cuts and subsidies.

Every taxpayer will pay less tax as part of the Stage 3 tax cuts announced earlier this year. The average tax cut is $36 a week or an annual $1,888.

More than 10 million households will receive a total rebate of $300 on their electricity bills and eligible businesses will receive $325.

The government says its Energy Bill Relief Plan has kept electricity price increases to two per cent through the year to the March quarter this year. Without it, prices would have increased by 14.9 per cent.

While it won’t provide immediate relief, the government has grocery prices in its sights. It’s taking steps to make a Food and Grocery Code mandatory with penalties up to 10 per cent of turnover for major breaches. It also directed the Australian Competition and Consumer Commission to investigate pricing and competition in the supermarket sector.

Commonwealth Rent Assistance has been increased by a further 10 per cent, there is a $138 million boost to emergency relief funding and financial support services, and the freeze on the deeming rate for income support recipients has been extended. The deeming rates are used by Centrelink to predict earnings from super and investments over the 12 months ahead. The lower deeming rate will remain at 0.25 per cent and the upper rate will remain at 2.25 per cent until 30 June 2025.

Anyone with a student debt will welcome a change to the indexation rate for the Higher Education Loan Program (HELP). The government says it will cut $3 billion in student debt for more than three million Australians.


Medicines can be a big cost for many people and a new $3 billion agreement with community pharmacies is expected to help. The government is expecting the deal to deliver cheaper medicines and better patient health.

There will be a one-year freeze on the maximum patient co-payment and a five-year freeze for pensioners and other concession cardholders. This change means that no pensioner or concession card holder will pay more than $7.70 (plus any applicable manufacturer premiums) for up to five years.

Almost half of Australians live with a chronic health condition and the Budget provides more than $141 million for research and services for conditions including bowel and skin cancer, diabetes and dementia.

The government is also providing an extra $411 million to the Medical Research Fund to continue research for low-survival cancers.

And, in a strengthened mental health package, the government has committed more than $888 million over eight years to improve access to services and support.

Aged care

Providing further support for the recommendations of the Royal Commission into Aged Care Quality and Safety, the Budget allocates $2.2 million to develop a new Aged Care Act. The Act is expected to establish a new Support at Home program and improve the standard of in-home aged care.

An extra 24,100 Home Care Packages will also be made available to reduce waiting times and wait times for the My Aged Care Contact Centre will be reduced.

Meanwhile, the government has allocated funding to beef up the regulatory capabilities of the Aged Care Quality and Safety Commission.

To support fair wages for care workers, the government has committed to fund a further increase in the award wage for direct and indirect aged care workers. The government is also providing $87.2 million for initiatives to attract nurses and other workers into aged care.


With housing affordability affecting millions of Australians, the government has allocated $6.2 billion in the Budget on a range of initiatives.

There’s a further $1 billion for states and territories to deliver new housing, more student accommodation, an increase in funds for homelessness services and more concessional loans for community housing providers.

The Build to Rent market will receive a boost with a plan to allow foreign investors to purchase developments with a lower foreign investment fee.

The government is also supporting 20,000 new fee-free TAFE places for courses in the construction sector.


The government aims to stimulate the economies of the states and territories with funding for a number of major infrastructure projects.

There’s $21.6 billion for Queensland over 10 years for projects including the Sunshine Coast rail line and Bruce Highway works; $20.8 billion over 10 years for NSW for various road upgrades; $19.2 million in Victoria for the North East Link and other projects.

Attracting investment

Aiming to shore up Australia’s economic fortunes, the government has created a comprehensive package of projects to lift our manufacturing industry and position us to take advantage of net zero.

The Treasurer says the world’s commitment to net zero by 2050 will demand “the biggest transformation in the global economy since the industrial revolution”.

He believes Australia’s energy, resources, regions, researchers and workers can all play a part in creating a “renewable energy superpower”.

To that end, the Budget includes $13.7 billion in production tax incentives for green hydrogen and processed critical minerals, $1.7 billion to develop new industries using green metals and low carbon fuels and $566 million to map the geological potential of the entire country to get a better picture of our critical minerals and groundwater.

There will be major work on attracting new investment by reforming investment settings and regulatory processes.

The government says it will make it simpler to invest in Australia to entice more capital both from overseas and at home. It will work with business, governments, unions, communities and other experts during 2024 to come up with the best approach.

Supporting women and families

With escalating rates of family violence and an alarming increase in the incidence of violence against women, the Budget includes funding to support a range of programs.

More than $925 million will be spent over five years to provide support for victim survivors leaving a violent intimate partner relationship and a program to strengthen accountability for systemic gender-based violence in higher education.

The government will invest more than $56 million over four years to improve access to sexual and reproductive healthcare for women including training GPs to provide better menopause care.

A newly released national gender equality strategy will drive government action on women’s safety, sharing, economic equality, health, leadership and representation.

In a move to take the pressure off parents, superannuation will be paid on government funded Paid Parental Leave (PPL) for parents of babies born or adopted on or after 1 July 2025.

Looking ahead

The stimulus provided by this Budget will bring some relief in the short term, but our economy will be relying on the big ideas, such as the Future Made in Australia project, to provide the resilience we need in an uncertain global economy.

Treasury is forecasting slow global growth and only 1.75 per cent growth in Australia this financial year and 2 per cent next year along with a significant deficit.

But the Treasurer is confident he has delivered “an inflation-fighting and future-making Budget” with “responsible relief that eases pressure on people and directly reduces inflation”.

It’s one that will “forge a new economy and a new generation of prosperity”, he says.

If you have any questions about the Budget measures announced, please don’t hesitate to contact us.

Information in this article has been sourced from the Budget Speech 2024-25 and Federal Budget Support documents.

It is important to note that the policies outlined in this article are yet to be passed as legislation and therefore may be subject to change. 

New Increased Super Contribution Caps

Posted by Greg Provians

As the end of financial year gets closer, some investors are thinking about the most effective ways to boost their super balance, particularly with an increase in the caps on contributions from 1 July.

The concessional contributions cap, which is the maximum in before-tax contributions you can add to your super each year without paying extra tax, is increasing to $30,000 from $27,500 in the new financial year.i

The cap increases in line with average weekly ordinary earnings (AWOTE).

It’s a good idea to keep track of your concessional contributions – which include any compulsory contributions made by your employer as well as salary sacrifice contributions – so that you don’t unintentionally exceed the cap. It is particularly important for those with more than one job or super fund because all of the contributions are added together and must not exceed the cap.

You can check your current balance at ATO online services. Log into your myGov account and link to the ATO to see all your details.

It is also useful to be aware of payment and reporting timelines. For example, your employer can make super guarantee contributions up until 28 July for the final quarter of the financial year and salary sacrifice contributions up until 30 June.

Any amounts showing on the ATO website for your account are based on when your fund reports to the ATO.

Carry forward unused amounts

If you haven’t made extra contributions in past years, you may have unused concessional cap amounts.

These can be carried forward, allowing you to contribute more as long as your super balance is less than $500,000 at 30 June of the previous financial year.

You can carry forward up to five years of concessional contributions cap amounts.

Getting close to exceeding the cap?

If you’re worried about going over the cap, you may wish to stop any further voluntary contributions based on an assessment of the extra tax you will pay.

For those with two or more employers, you may opt out of receiving the super guarantee from one of the employers.

Meanwhile, if special circumstances have caused you to exceed your cap, it’s possible to apply to the ATO for some or all of the contributions to be disregarded or allocated to the next financial year.

But, if all else fails and you have exceeded the cap, the excess contributions will be included in your assessable income and taxed at your marginal rate less a 15 per cent tax offset. The good news is that you can withdraw up to 85 per cent of the excess contributions from your super fund to pay your tax bill. Any excess contributions left in the fund will be counted towards your non-concessional contributions cap.

Timing is everything

The upcoming Stage 3 tax cuts, which commence on 1 July 2024, may affect the value of your concessional contributions. For some, tax benefits may be greater if contributions are made before the tax cuts begin. Please check with us about your circumstances to make sure you make the most effective move.

Non-concessional cap also increased

The non-concessional contributions cap is the maximum of after-tax contributions you can make to your super each year without paying extra tax.ii

The non-concessional cap is exactly four times the amount of the concessional cap so it increases from $110,000 to $120,000.

If you exceed the cap, you may be eligible to use the ‘bring forward rule’, which allows you to use caps from future years and possibly avoid paying extra tax. It means you can make contributions of up to two or three times the annual cap amount in the first year of the bring forward period. iii

If your total super balance is equal to or more than the general transfer balance cap ($1.9 million from 2023–24 and 2024-25) at the end of the previous financial year, your non-concessional contributions cap is zero for the current financial year.

We’d be happy to help with advice about how the changes in contribution caps might affect you and whether you are eligible for the bring forward rule.

Non-concessional contributions

Bring-forward cap first year (applying to 2023–24 and later years)
Total super balance on 30 June of previous yearNon-concessional contributions cap for the first yearBring-forward period
Less than $1.68 million$330,0003 years
$1.68 million to less than $1.79 million$220,0002 years
$1.79 million to less than $1.9 million$110,000No bring-forward period, general non-concessional contributions cap applies
$1.9 million or morenilNot applicable

i, ii Understanding concessional and non-concessional contributions | Australian Taxation Office (
iii Non-concessional contributions cap | Australian Taxation Office (

Newsletter – March 2024

Posted by Greg Provians

Investing Mistakes to Avoid

Posted by Greg Provians

Newsletter – February 2024

Posted by Greg Provians

Coral Coast Financial Services