The federal parliament has approved two new tax incentives for businesses to train their staff and improve their digital capacity.

The Technology Investment Boost and the Skills and Training Boost are designed to make it easier for small and medium businesses to scale up and become more productive.

Under these incentives, which have been backdated to 29 March 2022, businesses with an annual turnover of less than $50 million will have access to:

These two incentives are worth more than $1.5 billion and will be accessible by 3.8 million businesses that employ nearly 8 million workers, according to government figures.

Treasurer Jim Chalmers said the government recognised the important role small businesses played in the economy.

“When small businesses invest in digital technologies and upskilling staff, it boosts their productivity and drives economic growth,” he said.

“That’s why we are making them law and backdating deductions so businesses are rewarded for the investments they’ve been making and can take advantage of this extra support.”

Minister for Financial Services Stephen Jones said these incentives would help small businesses remain competitive in a rapidly changing technological landscape.

“Millions of small businesses that have already invested in new technology this financial year will now be eligible to make deductions this tax time. It’s great news at a time where small businesses most need cash flow support,” he said.

Tax incentives aside, the new financial year is always a time when businesses make plans to increase their profitability and invest in future growth. Contact me if you’d like to organise a business loan so you can finance your investment plans.

 

Employers will have to pay higher wages to workers on award wages and the National Minimum Wage (NMW), following a review by the Fair Work Commission.

As of 1 July 2023, award wages will increase by 5.75%, while the NMW – which applies to employees who aren’t covered by an award or registered agreement – will increase by 8.6%, from $21.38 to $23.23 per hour.

Treasurer Jim Chalmers called this “a huge win” for Australia’s lowest-paid workers.

“People on low and modest wages have the least capacity to deal with rising cost of living. That’s why the government argued for a decent pay rise for these workers, and the government welcomes the decision from the independent Fair Work Commission,” he said.

“W believe the best way to ensure workers can deal with cost‑of‑living pressures is to ensure they earn enough to provide for their loved ones and get ahead.”

 

Will the wage rise be inflationary?

The Treasurer’s reference to high inflation was, ironically, one of the arguments against giving such a large raise to Australians on the award and minimum wages.

Inflation was 7.0% in the March quarter, according to the most recent quarterly data from the Australian Bureau of Statistics, and some people argue that it will be hard to crush inflation unless wages are restrained.

 

Employer association criticises decision

CEO of employer association Australian Industry Group, Innes Willox, called the wage decision “disappointing”.

Mr Willox recognised the “competing tensions” between addressing cost-of-living pressures on the one hand and forcing businesses to deal with a large wage increase in a weakening economy on the other.

“Nevertheless, at a time when the economy and the labour market are clearly under growing pressures and when productivity growth has flatlined, it is a decision that adds to the risks of an inflation blowout; is likely to see interest rates rise further than they would have otherwise; and raises the likelihood that households will face further cost-of-living pressures,” he said.

Australia is currently a landlord’s market, with rental conditions favouring investors over tenants in many parts of the country.

That’s explained by the very low vacancy rate (i.e. the share of vacant properties), which fell from 1.5% to 1.2% between May 2022 and May 2023, according to CoreLogic.

Investors in much of Australia are enjoying strong demand for their properties; conversely, tenants are being forced to compete hard. As a result, rents are continuing to rise.

Here are five key takeaways from CoreLogic’s May rental data:

 

  1. Rental growth has slowed

Rents are growing strongly, but the pace has slowed. The nation’s median rent increased by 0.8% in May, compared to 0.9% in April and 1.0% in March. As a result, rents rose by ‘only’ 9.9% over the year to May – a significant increase, but the first time in 10 months it had been less than 10%.

 

  1. Most markets are growing

Over the year to May, 93.3% of house and unit markets recorded a rental increase, while 6.7% recorded a decline. Most of those falling markets were in Canberra and regional Australia.

 

  1. Units are growing faster than houses

Unit rents recorded much stronger annual growth (14.8%) than house rents (8.1%). That reduced the gap between the median weekly unit rent ($558) and house rent ($594) to only $36.

 

  1. Metro locations are growing faster than regional

Capital city rents recorded much stronger annual growth (11.7%) than regional rents (5.4%).

 

  1. Yields are rising

Yields rose from 3.28% to 3.88% over the year to May. Units recorded higher yields than houses (4.64% v 3.64%) and stronger annual growth (0.82 v 0.52 percentage points).

 

Want to become a property investor?

Property investment can be a great way to build long-term wealth – especially when rents and yields are rising.

Get in touch if you’d like to buy an investment property. I’ll research your borrowing capacity, provide you with different loan options and model different repayment scenarios. If you decide to proceed, I’ll manage the loan application process from beginning to end.

The federal government’s Home Guarantee Scheme (HGS) has now helped 100,000 people buy or build their own home since being launched in 2020.

The National Housing Finance and Investment Corporation, which administers the HGS, said 34% of the 100,000 people who’d been supported had been regional Australians, while 20% had been key workers such as teachers, nurses and social workers.

 

The HGS includes three programs:

 

First Home Guarantee

Under the First Home Guarantee, eligible first home buyers can purchase a new or existing home with a 5% deposit without having to pay lenders mortgage insurance (LMI). 

Income restrictions apply – you can’t earn more than $125,000 if you’re buying as an individual or $200,000 as a couple. Price caps also apply, which range from $400,000 on Christmas Island and Cocos (Keeling) Islands to $900,000 in Sydney.

 

Regional First Home Buyer Guarantee

The Regional First Home Buyer Guarantee is very similar to the First Home Guarantee with one key difference – applicants must buy in a regional area and must have lived there (or in an adjacent regional area) for the previous 12 months. 

The same income restrictions apply. There are also price caps, which range from $400,000 on Christmas Island and Cocos (Keeling) Islands to $900,000 in regional New South Wales.

 

Family Home Guarantee

Under the Family Home Guarantee, eligible single parents with at least one dependent child can buy a new or existing home with a 2% deposit without paying LMI. 

You don’t need to be a first home buyer to participate in this program. But there is an income cap of $125,000 and the same property price caps mentioned earlier.

 

Proposed changes

The government recently announced it would expand the eligibility criteria of the HGS from 1 July 2023, although these changes had not been legislated at the time of publication.

Under the proposed changes, all three programs would become available to permanent residents.

 

For the First Home Guarantee and Regional First Home Buyer Guarantee:

 

For the Family Home Guarantee:

 

Want to know if you’re eligible?

I can explain whether you’re eligible for government support and help you apply if you are.

Reach out if you’d like to get the ball rolling.

One of the most crucial property indicators is days on market, or the average time it takes properties to sell, and the way this indicator has bounced around over the past year reflects the ups and downs of the housing market.

As noted by Ray White Group Chief Economist Nerida Conisbee, days on market across Australia fell to an historical low of just 22 days in June 2022, reflecting positive market conditions in many parts of the country. In the following months, as housing sentiment declined, days on market increased, and recently reached 31 days.

“With price growth back on the move, it’s likely that this will soon start to decline again. In the meantime, there are many suburbs that have homes already selling a lot quicker than last year,” Ms Conisbee said.

 

Sydney

Two suburbs where properties are selling a lot faster than last year are the neighbouring suburbs of Blakehurst and Penshurst in the south, according to Ms Conisbee. Not coincidentally, prices have also risen in both suburbs: Blakehurst’s median price is up 15.0% year-on-year and Penshurt’s 1.7%.

 

Melbourne

Days on market have fallen by 35 days in the premium beachside suburb of Albert Park. Prices are only marginally higher than the year before, but are expected to rise further.

 

Brisbane

Ms Conisbee said Brisbane’s more affordable suburbs are enjoying the lowest days on market. In Ipswich, properties are selling 14 days faster than the year before.

 

Perth

Midvale and Hillman are two suburbs where days on market have significantly fallen over the past year, and both are “very affordable” locations with median prices “well below $400,000”.

 

Adelaide

“Adelaide house prices are almost back to where they were at the peak last year and two premium suburbs [Walkerville and Unley] are now selling a lot quicker already,” Ms Conisbee said. In more affordable Plympton, homes are selling 22 days faster than the year before.

 

Hobart

Hobart is the exception to the rule, as there are no suburbs where properties are selling faster than the same time in 2022. “However with price growth again occurring in this city, homes will start to sell a lot quicker for the remainder of the year,” Ms Conisbee said.

 

Canberra

Strathnairn, Coombs and Throsby have all experienced sharp declines in days on market over the past year.

 

Darwin

Ms Conisbee said Darwin was the first capital city to return to its 2022 price peak during the 2023 recovery. “Houses in Woodroffe are now selling 32 days quicker than last year, while Rapid Creek houses are selling 18 days quicker,” she added.

 

Considering pre-approval?

In an increasingly competitive market, it’s a good idea to get a pre-approval before you start searching for a property. This can help you to bid with confidence and show vendors you are a serious buyer.

 

If you’re looking to buy in 2023, contact me now so I can organise a pre-approval and increase your chances of securing your dream home.

Australia needs to increase its electric vehicle (EV) charging stock to prepare for an expected influx of EVs in coming years, according to new research from property group CBRE.

To gauge infrastructure readiness, CBRE conducted a stocktake of EV charging stations in Sydney, Melbourne, Brisbane and Perth by analysing:

CBRE found an EV charging station penetration rate of 78% for shopping centres and 20% for office towers.

“There has been exponential growth in the electric vehicle market over the past five years, with 6.8% (23,967) of new vehicles purchased in the year to April 2023 being EVs. However, Australia is still behind the global growth rate average of 12-14%, with the Electric Vehicle Council estimating that Australia will need to support an EV fleet of 1 million vehicles by 2027 – up from the current total of 83,000 – to achieve 2050 net zero targets,” CBRE said.

“Charging station infrastructure will be key to supporting the market’s expansion, but even at current levels office landlords have their work cut out for them according to CBRE’s analysis.”

That said, office landlords may be forced to invest in EV charging infrastructure if they want to fill their buildings.

CBRE has noticed “a sharp increase” from office tenants, particularly government ones, for EV chargers.

 

How to finance an EV purchase

There are 70 different EV models available for purchase and nearly 5,000 public charging sites in Australia, according to the Electric Vehicle Council.

“State and territory governments are now actively supporting the adoption of EVs, recognising they’re critical in achieving emission reduction targets.”

Contact me if you’d like to buy an EV. I’ll compare loans on your behalf and manage your finance application.

This afternoon the Reserve Bank of Australia (RBA) chose to move the cash rate to 4.10%. With the cash rate increasing by 4 percentage points since the start of 2022, many households have felt the pinch of rising interest rates. On top of that, many fixed-rate loans are due to expire in the second half of this year, which could double (or more) the amount of interest those households pay in interest.

If this is you, did you know you might be able to get a lower interest rate? There are a number of things that lenders look at when considering your interest rate. If these have changed since you took out your home loan, it is possible you could get a more competitive interest rate.

Whether your loan is a variable rate or your fixed rate is due to expire, speak to our team to  see if we can help negotiate a better interest rate with your current lender or another.

Some reasons you may be able to get a better interest rate include:

1. You’ve been meeting or exceeding your repayments. Not only does this show the lender you are a reliable borrower, but if you are paying principal and interest, it will also bring your LVR down (the ratio of how much of your home you own vs the loan). A lower LVR could get you a more competitive rate.

2. You’ve paid off other credit. If you previously had a credit card, other loans or a HELP debt that you have since paid down or got rid of, the lender could view you as less risky.

3. You’ve cleaned your credit file. Improving your credit report could build a stronger case for a better interest rate. You could do this by meeting repayments on time, closing any old transaction accounts that could be charging fees, reporting any errors in your credit file or time passing since any damaging credit problems.

4. You’ve had a pay rise or gained full-time employment. If your employment has changed to be more permanent or you have received a pay rise, you could look more favourable to a lender.

5. You find a lower interest rate with another lender. This could provide better footing to negotiate with your current lender, or you could consider refinancing to the other lender. Keep in mind there could be costs involved in refinancing, so it is a good idea to ask your broker to run the numbers for you to determine if this is in your best interest.

If your situation changes – whether you pay off debt, get a pay rise or have been paying off your loan, it pays to review your home loan. You may be in a better position to get a more favourable interest rate or be able to structure the loan to better suit your circumstances.

Lenders often offer lower interest rates to new customers, so regularly checking the competitiveness of your loan compared to others in the market could help prevent you from paying more than you need to. Our team regularly reviews our clients’ loans on their behalf and if they could be getting a better deal elsewhere, we do the legwork to negotiate with their existing lender, or move them to one that better suits their needs.

The federal government delivered a range of small business-friendly programs and incentives in its recent budget.

Under the Energy Bill Relief Fund, eligible small businesses will receive up to $650 in electricity bill relief.

Under the Small Business Energy Incentive, businesses with aggregated annual turnover of less than $50 million will be able to deduct an additional 20% of the cost of eligible depreciating assets that support electrification and more efficient use of energy.

The incentive will cover a range of depreciating assets, as well as upgrades to existing assets, such as:

Businesses will be able to claim up to $100,000 of total expenditure under the Small Business Energy Incentive, with the maximum bonus deduction being $20,000

Eligible assets will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. Eligible upgrades will also need to be made in this period. Certain exclusions will apply such as electric vehicles, renewable electricity generation assets, capital works and assets that are not connected to the electricity grid and use fossil fuels.

The instant asset write‑off will allow small businesses with turnover of less than $10 million to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use in the 2023-24 financial year. This $20,000 threshold will apply on a per-asset basis, so businesses can instantly write off multiple assets.

The Industry Growth Program will support SMEs and startups to commercialise their ideas and grow their operations. Support will be targeted towards businesses operating in the priority areas of the National Reconstruction Fund.

Under the Cyber Wardens program, small business employees will be able to train as in‑house cyber wardens to learn how to protect their business from cyber security attacks.

Finally, the government will give cashflow relief to about 2.1 million eligible small businesses by reducing the increase in their quarterly tax instalments for GST and income tax in the 2023‑24 financial year, from 12% to 6%. 

If you want to invest in an asset as part of the Small Business Energy Incentive or instant asset write‑off, I can help you finance the purchase.

Scamwatch has urged businesses and consumers to be on the lookout for increased scam activity and to take steps to protect themselves.

Criminals use data breaches, such as the 2022 Optus data breach, to target people through phishing emails, phone calls, and SMS or social media messages, according to Scamwatch.

To protect yourself, don’t click any links or open any attachments; check the login activity for your accounts and sign out of unrecognised devices; and check your social media accounts, update passwords and do privacy and security checks.

Never provide anyone with your personal or banking information or grant remote access to your device.

Also, be wary of new communications and don’t just accept what you’re being told. Take your time and independently contact the purported organisation using contact details you have sourced yourself, for example through searching for the business or agency online.

What to do if your data gets exposed

Scamwatch has said businesses and consumers should take a range of preventive measures when their information gets exposed in a data breach:

If you’ve been a victim of cybercrime or identity fraud, you should contact your bank or financial institution immediately, according to Scamwatch.

You can report the incident to the police via Reportcyber and contact IDCARE, which is a free service that can help people recover from a cybercrime or stolen identity.

Small businesses are suffering harm from Facebook, LinkedIn and other social media platforms, according to a new report from the Australian Competition & Consumer Commission (ACCC).

The report, which examined how consumers and businesses interact with social media services, found evidence of:

 

ACCC Chair Gina Cass-Gottlieb said the consumer watchdog was concerned about the level of influence social media platforms held over users and their position as critical intermediaries for businesses to reach customers.

“Limited competition in these services can lead to poorer outcomes for consumers and small businesses,” she said

“Where there are few comparable alternatives available, consumers feel compelled to use a service because their social, family or work networks are on them. This creates a ‘take-it-or-leave-it’ situation which can result in consumers accepting unwanted collection and use of their data.”

 

As a result, the ACCC has recommended establishing:

 

Ombudsman calls for reform

Australia’s Small Business and Family Enterprise Ombudsman, Bruce Billson, echoed the call for social media platforms to dramatically improve their dispute resolution processes for small business.

“We’re arguing for a policy change and for dispute resolution agency support like what we provide, to equip small and family businesses with the tools to protect themselves,” he said.

“When small businesses turn to us for assistance, our contact with the digital platforms is generally constructive and most have provided us with a direct human contact to enable these disputes to be escalated and a satisfactory outcome achieved quickly.

“However, the need for a government body to step in to resolve every small business dispute is not the answer and should be the exception.”