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[av_heading heading=’The News Brief_20210310′ tag=’h1′ style=’blockquote modern-quote modern-centered’ subheading_active=’subheading_below’ show_icon=” icon=’ue800′ font=” size=’6vw’ av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’20’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=’custom-color-heading’ custom_font=’#000000′ icon_color=” margin=’0′ margin_sync=’true’ padding=’0′ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kagyk’ sc_version=’1.0′ admin_preview_bg=’rgb(34, 34, 34)’][/av_heading]

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[av_heading heading=’Post-JobKeeper support to be announced ‘within days’’ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kleh1′ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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Speaking from Cairns on a tour of Queensland to speak with tourism businesses, the Treasurer said the government will announce its plans to extend targeted support to select businesses once JobKeeper ends later this month.

“We’ve put in place the JobKeeper program,” Mr Frydenberg said. “That ends in March. We’ve got other programs continuing to roll out with support, but we’re also looking at other measures.

“We’re still finalising those details, but it’s a matter of days.”

The announcement follows an appeal last month to the federal government from the Australian Tourism Industry Council (ATIC), Australia’s peak tourism industry body, which called for the Morrison government to give cash flow boosts to businesses that have been worst hit by COVID-19, in lieu of further JobKeeper stimulus.

Australian Tourism Industry Council executive director Simon Westaway said targeted support was necessary for the sector’s post-pandemic survival at a time when much of the sector is preparing for mass redundancies.

“Timing around further support is now critical,” Mr Westaway said. “Labour and workplace agreements require minimum four-week notice periods and business needs to cover redundancy provisions ahead of March 2021.

“Tourism business operational and labour decisions are being made on the assumption of no new assistance when JobKeeper concludes and is a looming deadline.”

Mr Westaway, whose organisation represents the interests of more than 10,000 tourism businesses across the country, warned that the waning support wouldn’t just hurt tourism businesses, but the communities that rely on them, too.

“The damage to the economy, and tourism-reliant communities, from further tourism business closures and job losses should not be underestimated over this forthcoming period,” he said.

In place of JobKeeper, the Transport and Tourism Forum (TTF) in late February urged the federal government to roll out a $7.7 billion wage subsidy program, which would function as an extension of JobKeeper, exclusive to the tourism industry.

The program, like JobKeeper, would see businesses keep employees on the books, giving them up to $1,500 per fortnight, per employee, and be claimable by all businesses eligible for JobKeeper.

“The industry needs support for the next six to nine months while vaccinations kick in, while borders sort themselves out,” said Margy Osmon, CEO at TTF.

While a continued wage subsidy would be ideal for the sector, Mr Westaway said, cash flow boosts would be a workable alternative.
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[av_heading heading=’NAB predicts that house prices will rise by 7.9% in 2021 ‘ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kbbkp’ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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NAB predicts that 2021 is going to be an incredibly strong year for house prices, with all capital cities expected to see sharp gains.

According to NAB Economics, house prices will rise by 7.9% in 2021, while 2022 should see those gains continue, with prices rising by 6.0%.

Brisbane could be the strongest market in the country this year, with NAB expecting gains of 10.1%.


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[av_heading heading=’Can HECS hurt your borrowing capacity?’ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3khdcm’ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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The High Education Contribution Scheme (HECS) or Higher Education Loan Program (HELP) is effectively a Government loan that enables people to afford the costs of higher education.

The program works by allowing people to pay back their student loans at a time in the future when they are earning enough money to comfortably cover the payments.

In the last decade, the cost of higher education has skyrocketed, and this has forced many students to take up a program like HECS or HELP, so they can continue their education.

Once they have completed their education, most people never really think about the impact of HECS debts, as it is normally something that is taken care of at tax time. The repayment rates are generally quite low and not overly burdensome for most people.

However, what many people don’t realise is that these student debts will have an impact on your ability to borrow money when the time comes to buy a house.

This can be particularly impactful for people like first home buyers, or even those on high incomes, as the repayment rates increase sharply.

When banks and lenders assess your ability to service debt, what they are doing is determining your normal income and expenses, with the understanding that you will be able to service debt with spare income.

If you are carrying a large amount of student debt that you are required to pay back by law, it can weigh heavily on your ability to borrow.

For a lot of people, a few hundred dollars per week can be the difference between buying a home and not being able to get finance. For that reason, it is very important to understand what your student debt looks like and the level of repayments that you’re required to be making.

This is the current repayment table for the 19/20 financial year.

Taxable Income Repayment rate
Below $45,881 Nil
$45,881 – $52,973 1.0%
$52,974 – $56,151 2.0%
$56,152 – $59,521 2.5%
$59,522 – $ 63,092 3.0%
$63,093 – $66,877 3.5%
$66,878 – $70,890 4.0%
$70,891 – $75,144 4.5%
$75,145 – $79,652 5.0%
$79,653 – $84,432 5.5%
$84,433 – $89,498 6.0%
$89,499 – $94,868 6.5%
$94,869 – $100,560 7.0%
$100,561 – $106,593 7.5%
$106,594 – $112,989 8.0%
$112,990 – $119,769 8.5%
$119,770 – $126,955 9.0%
$126,956 – $134,572 9.5%
$134,573 and above 10%

If your income falls below $45,881, you’re not required to pay back any of your HECS debt. This is the category into which people who are new to the workforce will most likely fall. 

By the time you are earning around $100,000 per year, you will be required to pay back approximately 7.5% of the total outstanding student debt.

For a HECS debt of around $50,000, that could see your borrowing capacity reduced by anywhere from $75,000 – $100,000, which is quite significant if you’re looking at buying your first home.

The reality is that the majority of Australians will have some form of student debt that they are required to pay back.

The best option is to always speak to your mortgage broker and get a clear picture of your borrowing capacity well before you even look to put in an offer on a property. That way, regardless of your situation and current income and expenses, you will know where you stand.
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[av_heading heading=’Steer clear of ATO blunders in business digital push, government told’ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kcf91′ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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The advice from Chartered Accountants Australia and New Zealand and CPA Australia comes as the Treasury consults on modernising business communications by improving the technology neutrality of laws that fall within its portfolio.

Both bodies believe the government should look at the ATO’s clumsy handling of client and adviser communications as an example of why consultation with business intermediaries such as accountants and bookkeepers will be vital when developing digital communication processes.

Tax and BAS agent visibility over correspondence sent to clients was a sore point following the introduction of myGov, with the ATO eventually rolling out communication preferences after strong feedback from practitioners.

More recently, the Tax Office was forced to revert to issuing paper instalment notices for PAYG after failing to consult with the profession about the move to digital notices.

“As changes in the delivery of notices have been made, the intermediary experience has at times been negatively impacted due to unexpected or poorly understood alterations, often the result of poor consultation with the sector,” said CA ANZ and CPA Australia.

“This includes rules such as defaulting to digital communication after any form is lodged electronically with the ATO or not issuing notifications to intermediaries when a digital communication is sent to a taxpayer.

“Such communication breakdowns have led to missed notices, late payments, penalties and lost productivity.”

Consider small businesses first

The government has also been told that small businesses may find a shift to digital communications more challenging than their larger counterparts due to financial restraints and lower levels of digital literacy.

Both CA ANZ and CPA Australia believe a “one size fits all” digital approach will not be appropriate considering there are many small business owners who may be older, or based in remote areas where reliable internet connection is limited.

Instead, the government should actively support small businesses by improving their digital literacy and capabilities through increased funding, similar to other international jurisdictions like Singapore, Hong Kong, and Spain who have invested millions in helping their small business community adopt new technologies.

Both bodies have also urged the government to alert small businesses of any technological changes well ahead of time to allow them to grapple with the changes.

“Australia will only enjoy the full benefits of modernising business communications and other government-led digital initiatives where the digital literacy and capacity of small business is improved,” said CA ANZ and CPA Australia.

“We recommend the development of a roadmap which guides business on digital transformation. This roadmap should outline what adopters can expect, the issues they are likely to face and how to overcome them.”
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[av_heading heading=’Timing strategies to navigate risky thresholds in contribution cap changes’ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kcf91′ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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With the super contribution caps set to change on 1 July, a technical specialist has provided some deeper insight into how best SMSFs can navigate risk areas and time strategies across the key thresholds.

Previously, Heffron outlined key cumulative effects that will need to be considered in the changes that will affect SMSF strategy.

BT head of technical services Bryan Ashenden said that this would be a perfect opportunity for advisers to work with clients to retune strategic considerations in terms of managing different thresholds during the changes.

“If you have clients who have the ability to maximise their contributions to the current cap, it is worth having the conversation to say, from 1 July, should we look at increasing that and particularly if they’re doing it through salary sacrifice as opposed to the personal deductible contribution,” Mr Ashenden said.

“Ask them if we want to look to make changes to those salary sacrifice arrangements to lift it together to the $27,500 rather than retaining it at the $25,000 level.”

Mr Ashenden also recommended to begin setting up a strategy on timing the contributions.

“This is particularly an issue for people who are getting close to the cap but also getting close to age 67 where the work test comes into play,” he said in the webinar. 

“The question is, do we make contributions this financial year or do we wait until next financial year and what does that look like in terms of the best aspect for clients?

“Often, the strategy we always talk about is bringing things forward and getting in there now, but again, this might be a reason why for clients that are a certain age and how close they are close to that total super balance, maybe waiting would be better to consider.”

Strategic thresholds to consider  

Along with the interplay between the indexation of the transfer balance cap and contribution caps, there are a whole range of other contribution thresholds that come into play for strategy when looking from a superannuation perspective, according to Mr Ashenden.

“Things to consider include the downsizer amounts; they’re not indexed and still sit at $300,000,” he said.

“The $500,000 cap to access the carry forward of concessional contributions where you got to have your total super balance below $500,000, that cap doesn’t get indexed; yes, the amount of carry-forward concessional contributions might increase because you’ve got a higher limit, but it still stays at the $500,000 cap.

“Furthermore, considerations for the $300,000 threshold limitation that comes into play where, for 12 months after you have ceased working, you actually have a one-off opportunity to put in a contribution without the need to meet the work test also doesn’t get indexed.”

In terms of bring-forward provisions, Mr Ashenden recommended to hold steady for the time being until the new parliament sittings in order to ascertain additional strategic considerations.

“Remember, if you wanted to trigger the bring-forward provisions this year and wanted to do the full $300,000, the client would have to have less than $1.4 million inside super as of 30 June 2020,” he said.

“So, you just have to make sure you recognise the changes that are going to come through because of the total super balance change and then also it now becomes 3 x $110 000.”

For existing clients who are already in a bring forward, Mr Ashenden noted there is essentially no change, so if they are currently working their way through year one or year two in consideration of the bring-forward rules.

“The fact that the non-concessional cap indexes at 1 July mean they don’t get any benefit from it because the amount of your total contributions for that bring-forward period is three times or two times if it’s a two-year period, but it’s three times what the non-concessional cap was for the first year,” he said.

“So, it’ll be 3 x $100,000 where you get no benefit from that indexation; however, the one bit of benefit you do get is when you get to those subsequent years to be able to use the bring forward, you still have to assess your account balance on what is that total super balance threshold for that particular year.

“So, you can be in a position where a client was able to trigger the bring forward but you find out that is at 30 June, they were above the $1.6 million, which means in the next financial year even though they have some bring-forward capability left, you can’t actually do it because you’re going to exceed the $1.6 million threshold.

“You will get the benefit in your future to use though about moving to the $1.7 million threshold, so it may create opportunities and openings to potentially consider.”
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Sources: Accountants Daily, SMSF Adviser and CFH Partners
Disclaimer: This is general information only and is subject to change at any time. Your complete financial situation will need to be assessed before acceptance of any proposal or product. The Content provided herein has been prepared for informational purposes only. The Content does not constitute tax, legal or accounting advice and should not be relied upon as such. You should seek tax, legal or accounting advice before acting or relying on any Content.

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