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MoneyLink Financial Planning, 56 Hill Street, Orange (2026)

27/05/2026

Small Business Owners to be Stung

The proposed new capital gains tax rules have attracted a great deal of criticism about how they will affect new start-up tech companies and entrepreneurs. In fact, the new rules will affect all small business owners.

This is very important as small businesses are a major part of our economy, employing around forty per cent of Australian non-government workers.

All businesses will be affected – the coffee shop, hairdresser, mechanical workshop, restaurant, earth moving contractor – anyone who owns a business that can be sold.

Currently when the owner of any of these businesses sells, half the gain passes tax-free and they pay tax on the other half. Suppose someone buys a café paying $100,000 for the goodwill, the name and reputation. They work hard in it for ten years, then sell for $200,000.

Under the old rules half the gain, $50,000, would be taxed. Under the new rules, if inflation is three per cent per annum $34,392 will pass tax-free and the business owner will pay tax on $65,608 of their gain. That’s a big increase.

What if the café owner didn’t buy the business? What if they built it up from scratch? Suppose they rented a shop, bought catering equipment, tables and chairs, and all the other requirements. Through hard work they built the business up and sold it in ten years with $100,000 for goodwill.

What would the capital gains tax be? What did it cost to buy? There was no capital cost, none. All the purchases of equipment and furniture were depreciating items that will need to be replaced sooner or later.

You can index zero to inflation as much as you like and it will still be zero. So the whole sale price, one hundred per cent of it, $100,000, will be taxable. Talk about a killer of ambition and hard work!

This applies to all small business owners, especially those setting up new businesses. The only businesses that won’t be adversely affected will be those that don’t grow in value or increase very little.

We need aspirational, ambitious people who are keen to get ahead by working hard in their own businesses. They are the heartbeat of our economy, and the source of jobs and innovation.

It is clear that few if any Government MP’s have ever owned a business or even worked in a small business. They think starting a business and making a profit is as easy and risk-free as going to work and being paid a salary to do your job.

They have no idea of the long hours, hard work and sacrifices that go into building a business. We need to lobby our politicians to change the proposed laws, especially for those who start new businesses from scratch.

21/05/2026

Investor Responses to the Budget

Unusually this year the Federal Budget includes major changes for investors. Capital gains will be taxed more heavily in some cases and negative gearing of existing properties will be banned. How should they respond?

Currently half of capital gains pass tax free. Only half must be added to the investor’s taxable income with tax paid on that at their marginal rate. In future tax will have to be paid on all gains above inflation at personal marginal rates.

If investments grow slowly little tax will be payable, but if growth is strong, most of the gain will be taxable. Suppose inflation is a steady three per cent per annum. If a property, shares or managed funds grow at three per cent per annum the whole capital gain will be totally tax free.

If investments grow five per cent per annum for ten years $100 initially will be worth $162.88. Inflation will make up $34.39 of that growth. So $28.49 will be taxed. That is 45 per cent of the gain. Currently we pay tax on 50 per cent of gains. The new tax is lower.

What if an investment grows at ten per cent per annum for ten years? An initial $100 will then be worth $259.37. Taking off the inflation allowance will leave $124.98 that is taxable. In this case tax must be paid on over 78 per cent of the gain.

This suggests it will be more tax efficient to buy slower growing investments that pay higher tax-advantaged incomes, especially imputation credits. This will suit retirees.

Negative gearing of existing residential properties will be banned. Losses on those properties due to expenses such as interest will no longer be deductible against salaries and other income. They will continue to be deductible for all other investments, including new residential properties.

What is a new house? The investor can buy land and build it. They can buy it new from the builder. What if they buy an old house and knock it down and rebuild? If the number of dwellings on the site increases, negative gearing losses will be deductible. If there is no increase, they won’t.

Importantly this change only affects existing dwellings. Negative gearing continues as usual on all other investments. Wealth accumulators with equity in their own home and surplus income can gear managed funds and shares and claim any income losses against their other income.

Choosing shares with good growth potential can be very rewarding but isn’t easy. Inexperienced investors can access similar gains by investing in funds run by professional managers. They invest in property, shares and infrastructure in Australia and overseas. Financial advisers can assist.

14/05/2026

Investment Fundamentals Sound

If we made our investment decisions based on the headlines we would be unlikely to ever invest. Currently the media is highlighting the Iran War, the closure of a critical shipping route, higher oil prices, increasing inflation and rising interest rates, all meaning rapidly rising living costs.

The headlines say technology companies are over-priced and artificial intelligence programs will eliminate thousands of jobs. Office buildings will be half empty as a result. Young people can’t afford to buy a home. And someone said there could be a recession ahead.

Quick, let’s put our money in the bank and batten down the hatches. Don’t spend, invest, or take any risks. Perhaps we need to find a cave somewhere.

Experienced investors know to ignore sensational headlines when considering new investments or reviewing existing ones. They rarely have any long-term effect.

This is demonstrated by the Australian share market. Prices are down just 1.2 per cent this year. Dividends paid have been more than that so overall shares are ahead for the year. On Tuesday the MSCI Global share index closed at a record high, as did markets in the US, Japan and Korea.

Investors in those countries are looking at the real issues, particularly recent profits and expected future profits. Equity market fundamentals are strong in many countries and sound in Australia.

Australian companies’ half yearly reports to December were mostly good, better than expected. The labour market remains fairly tight with unemployment normal. Consumer spending is still sound despite the cost-of-living-crisis.

Geopolitical crises and conflicts don’t usually have much effect on share markets. In fact many have seen markets gain, perhaps due to extra spending on military equipment.

Investors need to apply logic. Buy what appears to have a growing future and sell what doesn’t.

Interestingly, the various sectors of the Australian share market have performed very differently this year. For example technology company shares have fallen 19 per cent on average in 2026 while metals and mining company shares have risen 18 per cent.

Investors haven’t been panic selling but they have been moving away from areas they see as having less potential towards those they see as having better growth prospects. Such significant moves also create the opportunity to look for oversold companies.

Investors who don’t wish to pick their own stocks can use funds run by professional managers who have shown an ability to make smart choices.

Ignore the headlines. Look for opportunities in all investment areas and move ahead as normal.

06/05/2026

Choosing Investments Now

The outlook for shares and other investments is always uncertain. It’s just that at present it seems much more uncertain than usual.

The Middle East conflict drags on. The Strait of Hormuz remains closed, so the world’s supply of oil, gas and fertilizer is sharply reduced. There doesn’t seem to be a resolution close.

The much higher oil prices are painful at the pump, but worse, they are having the flow on effect of raising the prices of most other things due to fuel being essential to their production and supply. That is adding to the inflation we already had from excessive Government spending.

Australian interest rates have now been raised three times, with more likely. Rates are also likely to rise in the UK and Europe soon, and in the US in time. That’s bad for share and property prices.

There is more geopolitical risk now. The Trump administration’s changes to the established way of doing things run the risk of destabilising the global order. This is reducing interdependence between countries and encouraging independence, which is less efficient.

Wars are terrible for humanity, tragic. However history shows they usually correspond with rising share markets. The outbreaks of the World Wars in 1914 and 1939 initially saw a sharp drop in prices, but thereafter rises. Increased spending on military equipment no doubt helped.

In the US, March Quarter company profits have been much better than expected. Over eighty per cent of companies have exceeded analysts’ forecasts. The AI revolution is raising productivity and reducing costs.

Companies are being affected differently by the range of negative and positive influences. Defence technology and equipment companies are benefiting from extra defence spending. Data centre builders and microchip manufacturers are booming. Travel and leisure companies are suffering.

Locally focused companies that neither import nor export are safer. Mining companies are up on expected strong demand ahead for manufacturing inputs. Share market listed property companies have nosedived due to interest rate rises making their rental yields less attractive.

The smartest approach now is to diversify. Have a mix of investments, not only within shares, but also other sectors – property, infrastructure, cash and fixed interest, both in Australia and overseas.

Diversifying means some money will always be in safer, less affected areas when things aren’t good. Managed funds are a great way to diversify.

For long term investors holding cash, this is a buying opportunity. Five plus years from now markets will be well ahead of current levels.

29/04/2026

Building Future Retirement Income

If concessional (tax-deductible) super contributions are the ideal way for people to boost their tax refunds, non-concessional (non-tax-deductible) contributions are the ideal way for people to boost their future retirement incomes.

Concessional contributions include employer super guarantee contributions, and any voluntary salary sacrifice amounts. Working people can top these up to the limit of $30,000 by putting in a lump sum in the next two months, by June 30. That is likely to result in a very handy tax refund.

Non concessional contributions don’t give a tax deduction, but their limits are much higher, enabling the rapid buildup of total super balances and thus future retirement incomes. The more money we have in super when we retire usually the higher our retirement income, and the more options to enjoy life.

The limit on non-concessionals is $120,000 per year. So if we have significant savings in the bank and are in the latter part of our working career, a healthy non-concessional contribution could be a very smart move.

An extra $100,000 in super that is paying us five per cent per annum income will mean an extra $5,000 a year to live on, or $416 per month, almost $100 per week. Obviously an extra $50,000 will mean almost $50 per week more retirement income.

If the $50,000 is invested ten years before retirement it should grow very nicely with compound interest in the lowly taxed super environment over that time. In fact it should double, so $50,000 put in now should mean an extra $100 per week of retirement income in ten years’ time.

The money to make non-concessional contributions can come from any source. It could be an inheritance, a property sale, downsizing, a work bonus, an unused leave payout, or just regular savings. As an aside, it might be best to do a concessional contribution in some of those circumstances.

However, sticking with non-concessional contributions, there are no entry taxes reducing our balance when we make them, unlike concessional contributions. All the money we put in remains in the super fund to grow for our future benefit.

The “bring forward rule” also allows us to bring forward two future years of non-concessionals and do three years’ worth immediately, $360,000, provided we make no more such contributions for three financial years.

So if we have a large sum available such as from an inheritance or property sale, we may be able to put $360,000 in super in a single amount. That should boost our retirement income by $18,000 per year or $350 per week. Of course professional advice can help choose the best move.

22/04/2026

Plan Now Before July Retirement

July is the most popular time of year to retire as new retirees can receive their unused leave payout in a new financial year in which they may have little other income, and so pay less tax on that leave pay.

Whether people are considering retiring this July or next, there are steps they should take now to optimise their retirement position. It’s important to get all their proverbial ducks lined up.

Perhaps the first step is to finalise all loans involving non-tax-deductible debt. Car loans, personal loans and credit card debts should all be paid off. The interest rates are usually higher and the lack of a tax benefit means they are a cost to avoid in retirement. Home loans are best gone too.

It may pay to finalise tax-deductible loans as well, as there is little or no tax saving when income is low. Investment loans can be retained if strong capital growth is likely fairly soon.

Retirees who plan to continue earning an income as consultants, casual workers or company directors may also find it worthwhile to retain deductible debts on growing assets as the interest deduction will still be valuable to them.

If an intending retiree’s car is old and needs upgrading it is usually best to do that before retiring. If their home needs repairs and maintenance they may prefer to get that done and paid for while they are working too. However some people make it a retirement project.

It is very important to maximise our superannuation before retiring. Contributions over the last year or two can provide a significant boost. A bigger super balance means more income for the rest of our lives.

It is often smart to top up tax-deductible contributions to the $30,000 limit including employer super guarantee amounts. This can bring tax refunds. People whose super balance is under $500,000 may also be eligible to catch up past contributions they missed.

Non-deductible super contributions can provide a big lift for balances. Their limit is much higher at $120,000 per year. If intending retirees have funds available, they can bring forward two future years’ contributions for a total of $360,000 immediately.

Retirees could also contribute their leave payouts to super after retiring if they are under age 75.

Age pension qualification is at 67, so for some it will be important to plan around that. Younger retirees will require a self-funding income plan until then.

If these ducks aren’t yet in a row, it may be best to work a little longer, especially for those happy at work. Whether finishing this July, next, or the one after, planning now will improve retirement outcomes.

08/04/2026

Tax Efficient Investments

What are the most tax efficient investments for wealthier people? The best answers to that question have changed with rule changes in recent years. They will change again from July with the new taxes on large superannuation balances.

Returns on investments held in personal names are taxed at 39 per cent including Medicare Levy from $135,000 per annum and 47 per cent above $190,000 annually. Half of realised capital gains on investments held more for than a year pass tax free.

Super pensions are the most tax efficient structure with zero tax rate. However they are subject to a personal limit of $1.6 to $2 million. Also many people are unable to maximise their balances due to contribution and age limits. They may sell businesses or properties after age 75 for example.

Super balances above $2 million can stay in accumulation phase paying15 per cent tax on income and 10 per cent on realised capital gains. However the earnings on balances over $3 million will be taxed an extra 15 per cent from July for a total of 30 per cent.

Family discretionary trusts were a popular, tax-efficient option for wealthier people until a few years ago. The taxable income generated by money invested in the trust could be distributed selectively to family members who were in low tax brackets.

The beneficiary reported the tax liability and paid the tax but did not have to be paid the cash distribution. It could be retained in the trust for ongoing investment.

However around 2021 the Australian Tax Office changed its policy and now requires the cash to be paid to the low-income beneficiaries. That does not suit some investors. Family trusts are also of little use if there are no low-income family members.

Some people set up companies to hold their investments. These pay tax at a fixed 30 per cent on all earnings, including capital gains. They receive no CGT discount.

Insurance or investment bonds used to be a popular vehicle before the current super system was developed. Now they are regaining popularity. They pay tax at 30 per cent if held for ten years. They receive no CGT discount. However the manager can deduct capital losses against income, a valuable advantage.

Some bond managers make a special effort to reduce the net tax rate they pay by using franking credits and careful management of buy and sell transactions of their underlying assets as investors deposit and withdraw amounts. Some say their effective net tax rate is often below 20 per cent.

So the most tax efficient structure for well-off investors varies depending on personal circumstances. Individual planning is needed.

25/03/2026

The Iran War has some investors worrying whether they should switch to be more defensive. Since their October peak share markets have seen losses in November due to fears technology stocks were overvalued, then a recovery, then falls in January on fears of mass retrenchments due to AI, then a recovery.

Now we have the Iran War. It has caused the biggest fall. The All Ordinaries index is down 8.6 per cent since 27th February, but interestingly, only 4.3 per cent since the start of the year. The losses have not been uniform across all business sectors. Some have fallen while others have risen.

Technology companies have lost 26 per cent since this year. Mining companies are down around 3 per cent, banks have risen 4 per cent and consumer staples companies are up by 8 per cent. While the overall market is down, some have gained.

This demonstrates that investors aren’t panic selling. Rather they are selectively exiting some types of businesses and buying others. They are moving out of growth stocks where the future is uncertain into companies that are more predictable with more reliable cashflows, profits and dividends.

Investors have been selling freight software company Wisetech Global and accounting technology business Xero, and buying Woolworths and Coles. They have been selling electronic payment company Zip to buy Telstra. These buys are seen as better wartime investments.

The big question is how long the war will last. A short war will see limited damage to economies and companies’ progress, as businesses are quite resilient. We saw that during Covid. However a long war causing elevated energy prices to persist and supply shortages would have a major impact.

The high fuel prices would push up inflation all around the world requiring higher interest rates to control it. In Australia this would add to the already increasing inflation due to excessive Government spending. Higher rates would slow global economic activity.

The trouble with oil is that demand for it is very inelastic. The quantity demanded changes very little regardless of the price. When the price of fruit doubles few shoppers buy it. When the price halves they all rush to buy. That’s not the case with oil. It is essential to so many.

Let’s hope President Trump can find an off ramp from the Iran War soon. The danger to the world of a nuclear arsenal in the hands of religious fanatics has been eliminated. Trump needs to find a way to de-escalate the conflict that will allow both sides to claim they won.

If that can happen the global economy will return to normal quickly and investments will recover.

18/03/2026

Relieving Financial Pressure and Saving

A quick online search for information about the savings Australians hold produces some alarming figures. Approximately 8 per cent of adults have no savings whatsoever. About 15 per cent have less than $100 in the bank. A total of 40 per cent of people have less than $1,000 in savings, it is suggested.

That’s a lot of people under constant financial duress. It’s difficult to enjoy life when subject to money pressures. There are several steps that can be taken to save more and build financial reserves for greater security.

The first step is to have a close look at our budget, what we earn and what we spend. Does it show a deficit that matches our money reality? Doing a budget review can be confronting, but it will also highlight patterns of habitual spending. Many of those will be essential but some may be unnecessary.

Once we have the budget information it may be possible to find ways we can reduce costs. Budgeting can be boring but it can also become exciting if we can use it to create surpluses.

Reviewing our spending is very important. The cost of living continues to rise. Housing, electricity and petrol prices are all increasing faster than inflation. Incomes have only been rising at about the inflation rate. We must identify what we can cut back on or do without.

Next, open a separate bank account for saving, one only for saving, and harder to access. Then commit to putting a small amount of money into that account every payday. An automatic debit from our pay account into our savings account is best.

If the debit happens automatically each payday we probably won’t even miss the money. Once we see the savings account growing we will be motivated to add more to it.

As cash has been replaced by debit and credit cards, we now have less control over what we spend. We swipe our cards with little attention to the actual amount we are paying out. Back when cash prevailed, if the cash ran out there was no more to spend.

Credit cards make it easy to spend money we don’t have, the interest on which is very high. There are also retailer driven buy-now-pay-later schemes that make buying things extremely tempting. These schemes are expensive money traps when our finances are already tight.

It is best to use only debit cards, not credit cards. If a credit card must be retained, cut the limit on it down to a low level, no more than one month’s purchases.

For long-term saving, especially retirement, superannuation is the best option. Reviewing our super account is very important to choose the best investment option and maximise eventual end benefits.

11/03/2026

The Best Use of Surplus Income

At some stage in life most people experience the relief of having surplus income, that is, income not needed to pay rent or mortgage, buy groceries, raise children or pay for essentials. It can come about due to pay rises, paying off a credit card or personal loan, or a child getting a first job.

Splurging on personal desires is one way to use surplus income, though perhaps not the smartest. Wealth accumulators who aren’t close to financial independence or retirement should think carefully about the options they have, and which will be the best application of that income.

One option is to pay extra on the home loan. Another may be to start a savings plan that can be used to pay for major costs in the future. A third option would be to pay extra into superannuation. A fourth could be to borrow to buy investments, using the surplus income to pay loan interest.

Each option has its benefits. Paying extra on the home loan reduces the debt more quickly, saves interest and builds equity in the home faster. It also gives a guaranteed return, at a lower rate – the interest you don’t have to pay on the loan amount repaid early.

Paying extra into superannuation has the big appeal of saving tax for medium and higher income earners. Contributions are tax deductible but incur a 15 per cent entry tax. So workers save 32, 39 or 47 per cent tax, less a cost of 15 per cent.

Ongoing extra super contributions over a long time benefit from the power of compound interest. If earning rates are good, a large extra super balance will result. However super is inaccessible until at least age 60.

A regular non-super savings plan can also build up remarkably with compounding interest. Contributions into a managed fund investing in shares or property in Australia or overseas usually earn high returns long term.

The savings can be used for any large future cost, such as to fund children’s education costs including private school fees. Other uses could be for a major overseas trip, or a new car.

Using surplus income to service a loan taken for investment purposes should be carefully planned but can earn high returns and be very tax-effective. The loan interest is tax-deductible, unlike home loan interest.

The investment loan can be taken to buy a property. The surplus income can be used to meet the shortfall between the net rental income and the loan payments. Property loans need to be large.

An investment loan can also be used to buy a portfolio of managed funds or shares. The loan size can be varied to suit the investor. Imputation tax credits can make the plan very tax effective.

MoneyLink Financial Planning

27/05/2026

21/05/2026

14/05/2026

06/05/2026

29/04/2026

22/04/2026

08/04/2026

25/03/2026

18/03/2026

11/03/2026

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