Now is the perfect time to take stock and set financial goals
My inbox was flooded "Should I sell everything? Will the markets collapse?"
But my answer never changed. If you hold a well-structured share portfolio, the smart play is to stay the course. Long-term investing means riding out the inevitable turbulence.
And we sure got some turbulence. In early April 2025, global markets took a dramatic turn. On 2 April, President Trump announced sweeping tariffs, triggering what's now called the "Trump Thump": a historic two-day plunge in which the S&P 500 fell 10.5 per cent, wiping out over $3 trillion in value.
But by 9 April, the US administration had paused the tariff rollout, sparking a powerful rebound. Major indices posted their biggest gains in years, with the S&P 500 back in positive territory by 13 May. That rollercoaster reminded us how sensitive markets are to political shocks.
There's no doubt markets - especially overseas - are volatile, with wild price swings now the norm. Two key drivers are behind it.
First, traders chasing quick profits jump in and out, fuelling the noise.
Second, investor psychology kicks in: people reacting emotionally to headlines.
One great benefit of shares is their liquidity; you can sell quickly if needed. But liquidity is a double-edged sword - it makes markets more jumpy. Traders play games, while mums and dads panic and bail out - often at the worst possible time.
The start of a new financial year is the perfect time to take stock and set goals for improvement. Start by listing your assets and liabilities, because the best map is useless if you don't know where you are. That simple exercise often shows exactly where to focus.
If you've got a housing loan, ask yourself: could you shop around for a better rate? It's worth doing, especially if you have strong equity in your home. But if your equity is under 20 per cent, don't bother; lender's mortgage insurance (which isn't transferable) will most likely kill the deal.
If you're 50 or over, your goal should be to have your mortgage paid off, or at least well under control, by the time you retire.
The most effective strategy is to maximise your concessional super contributions, now capped at $30,000 a year. That includes what your employer pays, so if they're putting in $12,000, you can top up with another $18,000. It's far better than making extra mortgage repayments, because those come from after-tax dollars, whereas super contributions are pre-tax and tax-deductible.
When you retire, you can pull a lump sum out of super, tax-free, to pay your mortgage out in full.
For senior Australians, an essential question is: "Where do I want to be living in a few years?" As we age, we're likely to need some help. Is your current home suitable if your health or mobility changes?
If you love the area, you might modify the home and stay put. But for many, especially those in big older houses with rising maintenance costs, downsizing may be the smarter long-term option.
Also, make sure you have an enduring power of attorney and, if needed, an advance health directive.
Many people never get around to completing or reviewing these documents, and the consequences can be dreadful if there have been major changes since they were last done.
Another key task is estate planning. When did you last check your will? Update it to reflect any births, deaths, marriages, separations, or changes in your assets.
Question: I refer to your response regarding the transfer of superannuation upon death. As I understand it, a dependant does not need to take a tax-free lump sum - they can instead be nominated as a reversionary beneficiary and continue receiving the super pension after the spouse's death. Would this have any impact on how Centrelink assesses the asset? If you nominate your estate (rather than a non-dependant individual) as the beneficiary, I understand the estate will pay the 15% tax, but no Medicare levy applies. The funds can then be distributed to non-dependants. Is this correct?
Answer: Usually, only a spouse will be eligible to receive a death benefit super pension following the death of their partner. Centrelink will assess the super pension received by the surviving spouse under the current rules, subject to the pension type.
You are correct that where the estate is nominated as a beneficiary, the estate will pay tax of 15% on the taxable component of the lump sum death benefit. No Medicare levy is payable. It can then be distributed to beneficiaries to non-dependants as stated in the Will.
Question: We are a block of four company-share flats in St Kilda. Three of us are owner-occupiers. We often wonder if there's a viable alternative to being tied to a strata management company. More often than not, we reject the tradies and builders they recommend because the quotes are excessive - instead, we source our own people and pay directly. The sticking point is building insurance. That's tough to arrange independently, as it seems the strata managers use brokers who can access deals the rest of us can't.We'd really appreciate any suggestions for alternatives - maybe retired accountants, or different insurance avenues?
Answer: Strata expert Frank Higginson tells me plenty of small blocks feel the same. The truth is, nobody's really lining up to manage the little ones.
Doing it yourselves might sound good in theory, but it can make life harder, especially when it comes to insurance and tradies. Most insurers prefer dealing with brokers, and many tradespeople are reluctant to take on jobs with small owner-run bodies corporate - it's often more hassle than it's worth for them.
And if it's true company title (rather than strata), that adds another layer of complexity - the compliance is usually even tougher. In short, no easy answers here. You can go it alone, but make sure everyone's ready to carry their share of the load - and the risks.
Question: I'm 57, mortgage-free, and have been a full-time carer for many years, living mainly on the Carer Pension. My super is modest - mostly built up in the early 90s before I had a family, with a few part-time jobs during school years adding to it. I now want to improve my dental health and am exploring ways to fund dental implants. Can I access my super to help pay for it? My husband isn't working - he's been building our home - and his super is minimal, as he's only been in Australia since 2004.
Answer: Yes, it's possible - but only under strict rules. The ATO allows early access to super on compassionate grounds to pay for certain medical treatments, including dental work - but only if it's to treat a serious or chronic condition or relieve significant pain.
You'll need two medical reports (one can be from your dentist), a treatment plan, and a detailed quote. The application goes through the ATO via your myGov account. If approved, the ATO notifies your super fund and you arrange the release from there.
Just be aware - the payment is taxed like a normal withdrawal. So if you're approved to receive $10,000, you'll get that in your hand, but more is taken from your fund to cover the tax.
It's a good option for the right situation - just be sure you meet the medical criteria and have all your paperwork ready.
Welcome to a new financial year. Once again, we've lived through an eventful stretch, full of bold predictions about what might happen if Donald Trump returned to the White House.
My inbox was flooded "Should I sell everything? Will the markets collapse?"
But my answer never changed. If you hold a well-structured share portfolio, the smart play is to stay the course. Long-term investing means riding out the inevitable turbulence.
And we sure got some turbulence. In early April 2025, global markets took a dramatic turn. On 2 April, President Trump announced sweeping tariffs, triggering what's now called the "Trump Thump": a historic two-day plunge in which the S&P 500 fell 10.5 per cent, wiping out over $3 trillion in value.
But by 9 April, the US administration had paused the tariff rollout, sparking a powerful rebound. Major indices posted their biggest gains in years, with the S&P 500 back in positive territory by 13 May. That rollercoaster reminded us how sensitive markets are to political shocks.
There's no doubt markets - especially overseas - are volatile, with wild price swings now the norm. Two key drivers are behind it.
First, traders chasing quick profits jump in and out, fuelling the noise.
Second, investor psychology kicks in: people reacting emotionally to headlines.
One great benefit of shares is their liquidity; you can sell quickly if needed. But liquidity is a double-edged sword - it makes markets more jumpy. Traders play games, while mums and dads panic and bail out - often at the worst possible time.
The start of a new financial year is the perfect time to take stock and set goals for improvement. Start by listing your assets and liabilities, because the best map is useless if you don't know where you are. That simple exercise often shows exactly where to focus.
If you've got a housing loan, ask yourself: could you shop around for a better rate? It's worth doing, especially if you have strong equity in your home. But if your equity is under 20 per cent, don't bother; lender's mortgage insurance (which isn't transferable) will most likely kill the deal.
If you're 50 or over, your goal should be to have your mortgage paid off, or at least well under control, by the time you retire.
The most effective strategy is to maximise your concessional super contributions, now capped at $30,000 a year. That includes what your employer pays, so if they're putting in $12,000, you can top up with another $18,000. It's far better than making extra mortgage repayments, because those come from after-tax dollars, whereas super contributions are pre-tax and tax-deductible.
When you retire, you can pull a lump sum out of super, tax-free, to pay your mortgage out in full.
For senior Australians, an essential question is: "Where do I want to be living in a few years?" As we age, we're likely to need some help. Is your current home suitable if your health or mobility changes?
If you love the area, you might modify the home and stay put. But for many, especially those in big older houses with rising maintenance costs, downsizing may be the smarter long-term option.
Also, make sure you have an enduring power of attorney and, if needed, an advance health directive.
Many people never get around to completing or reviewing these documents, and the consequences can be dreadful if there have been major changes since they were last done.
Another key task is estate planning. When did you last check your will? Update it to reflect any births, deaths, marriages, separations, or changes in your assets.
Question: I refer to your response regarding the transfer of superannuation upon death. As I understand it, a dependant does not need to take a tax-free lump sum - they can instead be nominated as a reversionary beneficiary and continue receiving the super pension after the spouse's death. Would this have any impact on how Centrelink assesses the asset? If you nominate your estate (rather than a non-dependant individual) as the beneficiary, I understand the estate will pay the 15% tax, but no Medicare levy applies. The funds can then be distributed to non-dependants. Is this correct?
Answer: Usually, only a spouse will be eligible to receive a death benefit super pension following the death of their partner. Centrelink will assess the super pension received by the surviving spouse under the current rules, subject to the pension type.
You are correct that where the estate is nominated as a beneficiary, the estate will pay tax of 15% on the taxable component of the lump sum death benefit. No Medicare levy is payable. It can then be distributed to beneficiaries to non-dependants as stated in the Will.
Question: We are a block of four company-share flats in St Kilda. Three of us are owner-occupiers. We often wonder if there's a viable alternative to being tied to a strata management company. More often than not, we reject the tradies and builders they recommend because the quotes are excessive - instead, we source our own people and pay directly. The sticking point is building insurance. That's tough to arrange independently, as it seems the strata managers use brokers who can access deals the rest of us can't.We'd really appreciate any suggestions for alternatives - maybe retired accountants, or different insurance avenues?
Answer: Strata expert Frank Higginson tells me plenty of small blocks feel the same. The truth is, nobody's really lining up to manage the little ones.
Doing it yourselves might sound good in theory, but it can make life harder, especially when it comes to insurance and tradies. Most insurers prefer dealing with brokers, and many tradespeople are reluctant to take on jobs with small owner-run bodies corporate - it's often more hassle than it's worth for them.
And if it's true company title (rather than strata), that adds another layer of complexity - the compliance is usually even tougher. In short, no easy answers here. You can go it alone, but make sure everyone's ready to carry their share of the load - and the risks.
Question: I'm 57, mortgage-free, and have been a full-time carer for many years, living mainly on the Carer Pension. My super is modest - mostly built up in the early 90s before I had a family, with a few part-time jobs during school years adding to it. I now want to improve my dental health and am exploring ways to fund dental implants. Can I access my super to help pay for it? My husband isn't working - he's been building our home - and his super is minimal, as he's only been in Australia since 2004.
Answer: Yes, it's possible - but only under strict rules. The ATO allows early access to super on compassionate grounds to pay for certain medical treatments, including dental work - but only if it's to treat a serious or chronic condition or relieve significant pain.
You'll need two medical reports (one can be from your dentist), a treatment plan, and a detailed quote. The application goes through the ATO via your myGov account. If approved, the ATO notifies your super fund and you arrange the release from there.
Just be aware - the payment is taxed like a normal withdrawal. So if you're approved to receive $10,000, you'll get that in your hand, but more is taken from your fund to cover the tax.
It's a good option for the right situation - just be sure you meet the medical criteria and have all your paperwork ready.
Welcome to a new financial year. Once again, we've lived through an eventful stretch, full of bold predictions about what might happen if Donald Trump returned to the White House.
My inbox was flooded "Should I sell everything? Will the markets collapse?"
But my answer never changed. If you hold a well-structured share portfolio, the smart play is to stay the course. Long-term investing means riding out the inevitable turbulence.
And we sure got some turbulence. In early April 2025, global markets took a dramatic turn. On 2 April, President Trump announced sweeping tariffs, triggering what's now called the "Trump Thump": a historic two-day plunge in which the S&P 500 fell 10.5 per cent, wiping out over $3 trillion in value.
But by 9 April, the US administration had paused the tariff rollout, sparking a powerful rebound. Major indices posted their biggest gains in years, with the S&P 500 back in positive territory by 13 May. That rollercoaster reminded us how sensitive markets are to political shocks.
There's no doubt markets - especially overseas - are volatile, with wild price swings now the norm. Two key drivers are behind it.
First, traders chasing quick profits jump in and out, fuelling the noise.
Second, investor psychology kicks in: people reacting emotionally to headlines.
One great benefit of shares is their liquidity; you can sell quickly if needed. But liquidity is a double-edged sword - it makes markets more jumpy. Traders play games, while mums and dads panic and bail out - often at the worst possible time.
The start of a new financial year is the perfect time to take stock and set goals for improvement. Start by listing your assets and liabilities, because the best map is useless if you don't know where you are. That simple exercise often shows exactly where to focus.
If you've got a housing loan, ask yourself: could you shop around for a better rate? It's worth doing, especially if you have strong equity in your home. But if your equity is under 20 per cent, don't bother; lender's mortgage insurance (which isn't transferable) will most likely kill the deal.
If you're 50 or over, your goal should be to have your mortgage paid off, or at least well under control, by the time you retire.
The most effective strategy is to maximise your concessional super contributions, now capped at $30,000 a year. That includes what your employer pays, so if they're putting in $12,000, you can top up with another $18,000. It's far better than making extra mortgage repayments, because those come from after-tax dollars, whereas super contributions are pre-tax and tax-deductible.
When you retire, you can pull a lump sum out of super, tax-free, to pay your mortgage out in full.
For senior Australians, an essential question is: "Where do I want to be living in a few years?" As we age, we're likely to need some help. Is your current home suitable if your health or mobility changes?
If you love the area, you might modify the home and stay put. But for many, especially those in big older houses with rising maintenance costs, downsizing may be the smarter long-term option.
Also, make sure you have an enduring power of attorney and, if needed, an advance health directive.
Many people never get around to completing or reviewing these documents, and the consequences can be dreadful if there have been major changes since they were last done.
Another key task is estate planning. When did you last check your will? Update it to reflect any births, deaths, marriages, separations, or changes in your assets.
Question: I refer to your response regarding the transfer of superannuation upon death. As I understand it, a dependant does not need to take a tax-free lump sum - they can instead be nominated as a reversionary beneficiary and continue receiving the super pension after the spouse's death. Would this have any impact on how Centrelink assesses the asset? If you nominate your estate (rather than a non-dependant individual) as the beneficiary, I understand the estate will pay the 15% tax, but no Medicare levy applies. The funds can then be distributed to non-dependants. Is this correct?
Answer: Usually, only a spouse will be eligible to receive a death benefit super pension following the death of their partner. Centrelink will assess the super pension received by the surviving spouse under the current rules, subject to the pension type.
You are correct that where the estate is nominated as a beneficiary, the estate will pay tax of 15% on the taxable component of the lump sum death benefit. No Medicare levy is payable. It can then be distributed to beneficiaries to non-dependants as stated in the Will.
Question: We are a block of four company-share flats in St Kilda. Three of us are owner-occupiers. We often wonder if there's a viable alternative to being tied to a strata management company. More often than not, we reject the tradies and builders they recommend because the quotes are excessive - instead, we source our own people and pay directly. The sticking point is building insurance. That's tough to arrange independently, as it seems the strata managers use brokers who can access deals the rest of us can't.We'd really appreciate any suggestions for alternatives - maybe retired accountants, or different insurance avenues?
Answer: Strata expert Frank Higginson tells me plenty of small blocks feel the same. The truth is, nobody's really lining up to manage the little ones.
Doing it yourselves might sound good in theory, but it can make life harder, especially when it comes to insurance and tradies. Most insurers prefer dealing with brokers, and many tradespeople are reluctant to take on jobs with small owner-run bodies corporate - it's often more hassle than it's worth for them.
And if it's true company title (rather than strata), that adds another layer of complexity - the compliance is usually even tougher. In short, no easy answers here. You can go it alone, but make sure everyone's ready to carry their share of the load - and the risks.
Question: I'm 57, mortgage-free, and have been a full-time carer for many years, living mainly on the Carer Pension. My super is modest - mostly built up in the early 90s before I had a family, with a few part-time jobs during school years adding to it. I now want to improve my dental health and am exploring ways to fund dental implants. Can I access my super to help pay for it? My husband isn't working - he's been building our home - and his super is minimal, as he's only been in Australia since 2004.
Answer: Yes, it's possible - but only under strict rules. The ATO allows early access to super on compassionate grounds to pay for certain medical treatments, including dental work - but only if it's to treat a serious or chronic condition or relieve significant pain.
You'll need two medical reports (one can be from your dentist), a treatment plan, and a detailed quote. The application goes through the ATO via your myGov account. If approved, the ATO notifies your super fund and you arrange the release from there.
Just be aware - the payment is taxed like a normal withdrawal. So if you're approved to receive $10,000, you'll get that in your hand, but more is taken from your fund to cover the tax.
It's a good option for the right situation - just be sure you meet the medical criteria and have all your paperwork ready.
Welcome to a new financial year. Once again, we've lived through an eventful stretch, full of bold predictions about what might happen if Donald Trump returned to the White House.
My inbox was flooded "Should I sell everything? Will the markets collapse?"
But my answer never changed. If you hold a well-structured share portfolio, the smart play is to stay the course. Long-term investing means riding out the inevitable turbulence.
And we sure got some turbulence. In early April 2025, global markets took a dramatic turn. On 2 April, President Trump announced sweeping tariffs, triggering what's now called the "Trump Thump": a historic two-day plunge in which the S&P 500 fell 10.5 per cent, wiping out over $3 trillion in value.
But by 9 April, the US administration had paused the tariff rollout, sparking a powerful rebound. Major indices posted their biggest gains in years, with the S&P 500 back in positive territory by 13 May. That rollercoaster reminded us how sensitive markets are to political shocks.
There's no doubt markets - especially overseas - are volatile, with wild price swings now the norm. Two key drivers are behind it.
First, traders chasing quick profits jump in and out, fuelling the noise.
Second, investor psychology kicks in: people reacting emotionally to headlines.
One great benefit of shares is their liquidity; you can sell quickly if needed. But liquidity is a double-edged sword - it makes markets more jumpy. Traders play games, while mums and dads panic and bail out - often at the worst possible time.
The start of a new financial year is the perfect time to take stock and set goals for improvement. Start by listing your assets and liabilities, because the best map is useless if you don't know where you are. That simple exercise often shows exactly where to focus.
If you've got a housing loan, ask yourself: could you shop around for a better rate? It's worth doing, especially if you have strong equity in your home. But if your equity is under 20 per cent, don't bother; lender's mortgage insurance (which isn't transferable) will most likely kill the deal.
If you're 50 or over, your goal should be to have your mortgage paid off, or at least well under control, by the time you retire.
The most effective strategy is to maximise your concessional super contributions, now capped at $30,000 a year. That includes what your employer pays, so if they're putting in $12,000, you can top up with another $18,000. It's far better than making extra mortgage repayments, because those come from after-tax dollars, whereas super contributions are pre-tax and tax-deductible.
When you retire, you can pull a lump sum out of super, tax-free, to pay your mortgage out in full.
For senior Australians, an essential question is: "Where do I want to be living in a few years?" As we age, we're likely to need some help. Is your current home suitable if your health or mobility changes?
If you love the area, you might modify the home and stay put. But for many, especially those in big older houses with rising maintenance costs, downsizing may be the smarter long-term option.
Also, make sure you have an enduring power of attorney and, if needed, an advance health directive.
Many people never get around to completing or reviewing these documents, and the consequences can be dreadful if there have been major changes since they were last done.
Another key task is estate planning. When did you last check your will? Update it to reflect any births, deaths, marriages, separations, or changes in your assets.
Question: I refer to your response regarding the transfer of superannuation upon death. As I understand it, a dependant does not need to take a tax-free lump sum - they can instead be nominated as a reversionary beneficiary and continue receiving the super pension after the spouse's death. Would this have any impact on how Centrelink assesses the asset? If you nominate your estate (rather than a non-dependant individual) as the beneficiary, I understand the estate will pay the 15% tax, but no Medicare levy applies. The funds can then be distributed to non-dependants. Is this correct?
Answer: Usually, only a spouse will be eligible to receive a death benefit super pension following the death of their partner. Centrelink will assess the super pension received by the surviving spouse under the current rules, subject to the pension type.
You are correct that where the estate is nominated as a beneficiary, the estate will pay tax of 15% on the taxable component of the lump sum death benefit. No Medicare levy is payable. It can then be distributed to beneficiaries to non-dependants as stated in the Will.
Question: We are a block of four company-share flats in St Kilda. Three of us are owner-occupiers. We often wonder if there's a viable alternative to being tied to a strata management company. More often than not, we reject the tradies and builders they recommend because the quotes are excessive - instead, we source our own people and pay directly. The sticking point is building insurance. That's tough to arrange independently, as it seems the strata managers use brokers who can access deals the rest of us can't.We'd really appreciate any suggestions for alternatives - maybe retired accountants, or different insurance avenues?
Answer: Strata expert Frank Higginson tells me plenty of small blocks feel the same. The truth is, nobody's really lining up to manage the little ones.
Doing it yourselves might sound good in theory, but it can make life harder, especially when it comes to insurance and tradies. Most insurers prefer dealing with brokers, and many tradespeople are reluctant to take on jobs with small owner-run bodies corporate - it's often more hassle than it's worth for them.
And if it's true company title (rather than strata), that adds another layer of complexity - the compliance is usually even tougher. In short, no easy answers here. You can go it alone, but make sure everyone's ready to carry their share of the load - and the risks.
Question: I'm 57, mortgage-free, and have been a full-time carer for many years, living mainly on the Carer Pension. My super is modest - mostly built up in the early 90s before I had a family, with a few part-time jobs during school years adding to it. I now want to improve my dental health and am exploring ways to fund dental implants. Can I access my super to help pay for it? My husband isn't working - he's been building our home - and his super is minimal, as he's only been in Australia since 2004.
Answer: Yes, it's possible - but only under strict rules. The ATO allows early access to super on compassionate grounds to pay for certain medical treatments, including dental work - but only if it's to treat a serious or chronic condition or relieve significant pain.
You'll need two medical reports (one can be from your dentist), a treatment plan, and a detailed quote. The application goes through the ATO via your myGov account. If approved, the ATO notifies your super fund and you arrange the release from there.
Just be aware - the payment is taxed like a normal withdrawal. So if you're approved to receive $10,000, you'll get that in your hand, but more is taken from your fund to cover the tax.
It's a good option for the right situation - just be sure you meet the medical criteria and have all your paperwork ready.
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World stocks slip as US tariff threats heat up
World shares are ticking lower, with European shares slipping as the latest salvo of threats in the US President Donald Trump's tariff wars keep investors on edge. The pan-European STOXX 600 index was last down 0.3 per cent in morning trade on Monday. Other regional indices also declined, barring the UK's FTSE 100, which was up 0.4 per cent. MSCI's broadest index of world shares dipped 0.1 per cent. Trump on Saturday said he would impose a 30 per cent tariff on most imports from the European Union and Mexico from August 1, even as they are locked in long negotiations. The EU said it would extend a suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement, though Germany's finance minister called for firm action if the levies went ahead. German 10-year government bond yields briefly hit their highest since early April on Monday after settling back to 4.63 per cent. Yields move inversely to price. "To use the biggest cliche in the book, it continues to be a rollercoaster ride for all of us following the trade story, even if the market has increasingly overcome its queasiness and ensured it has been well stocked up on motion sickness tablets," said Deutsche Bank strategist Jim Reid in a note to clients. A rise in Japanese government bond yields also added to upward pressure on borrowing costs elsewhere, said Jens Peter Soerensen, chief analyst at Danske Bank. Japanese bond yields surged as concerns grew that an upcoming election could pave the way for increased fiscal spending. Chinese blue chips closed 0.1 per cent higher as data showed annual export growth topped forecasts at 5.8 per cent in June, even as exports to the US fell almost 10 per cent. Retail sales figures, industrial output and gross domestic product are due Tuesday. S&P 500 futures and Nasdaq futures both eased 0.4 per cent. Earnings season kicks off this week with the major banks leading the pack on Tuesday. In bond markets, Treasuries got a very marginal safety bid and 10-year yields held at 4.41 per cent. US consumer prices data for June are due on Tuesday and could finally start to show early upward pressure from tariffs, though retailers still have pre-levy inventory to draw on and some companies are absorbing the costs into margins. The impact on supply chain costs could show in producer price and import price figures this week, while a reading on retail sales will indicate how consumers are faring. Among currencies, the euro dipped 0.1 per cent to $US1.1684, edging away from its recent four-year top of $US1.1830. The dollar lost 0.1 per cent on the yen to 147.29 while the dollar index was little changed about 97.89. Bitcoin crossed the $US120,000 level for the first time to reach a top around $US123,153. Gold picked up a modest safe-haven bid and rose 0.1 per cent to $US3,359 an ounce. Oil prices rose more than one per cent on speculation Trump could announce stiffer sanctions on Russia later on Monday, including levies on major customers buying Russian oil. Brent jumped 67 cents to $US71.03 a barrel, while US crude added 70 cents to $US69.15 per barrel. World shares are ticking lower, with European shares slipping as the latest salvo of threats in the US President Donald Trump's tariff wars keep investors on edge. The pan-European STOXX 600 index was last down 0.3 per cent in morning trade on Monday. Other regional indices also declined, barring the UK's FTSE 100, which was up 0.4 per cent. MSCI's broadest index of world shares dipped 0.1 per cent. Trump on Saturday said he would impose a 30 per cent tariff on most imports from the European Union and Mexico from August 1, even as they are locked in long negotiations. The EU said it would extend a suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement, though Germany's finance minister called for firm action if the levies went ahead. German 10-year government bond yields briefly hit their highest since early April on Monday after settling back to 4.63 per cent. Yields move inversely to price. "To use the biggest cliche in the book, it continues to be a rollercoaster ride for all of us following the trade story, even if the market has increasingly overcome its queasiness and ensured it has been well stocked up on motion sickness tablets," said Deutsche Bank strategist Jim Reid in a note to clients. A rise in Japanese government bond yields also added to upward pressure on borrowing costs elsewhere, said Jens Peter Soerensen, chief analyst at Danske Bank. Japanese bond yields surged as concerns grew that an upcoming election could pave the way for increased fiscal spending. Chinese blue chips closed 0.1 per cent higher as data showed annual export growth topped forecasts at 5.8 per cent in June, even as exports to the US fell almost 10 per cent. Retail sales figures, industrial output and gross domestic product are due Tuesday. S&P 500 futures and Nasdaq futures both eased 0.4 per cent. Earnings season kicks off this week with the major banks leading the pack on Tuesday. In bond markets, Treasuries got a very marginal safety bid and 10-year yields held at 4.41 per cent. US consumer prices data for June are due on Tuesday and could finally start to show early upward pressure from tariffs, though retailers still have pre-levy inventory to draw on and some companies are absorbing the costs into margins. The impact on supply chain costs could show in producer price and import price figures this week, while a reading on retail sales will indicate how consumers are faring. Among currencies, the euro dipped 0.1 per cent to $US1.1684, edging away from its recent four-year top of $US1.1830. The dollar lost 0.1 per cent on the yen to 147.29 while the dollar index was little changed about 97.89. Bitcoin crossed the $US120,000 level for the first time to reach a top around $US123,153. Gold picked up a modest safe-haven bid and rose 0.1 per cent to $US3,359 an ounce. Oil prices rose more than one per cent on speculation Trump could announce stiffer sanctions on Russia later on Monday, including levies on major customers buying Russian oil. Brent jumped 67 cents to $US71.03 a barrel, while US crude added 70 cents to $US69.15 per barrel. World shares are ticking lower, with European shares slipping as the latest salvo of threats in the US President Donald Trump's tariff wars keep investors on edge. The pan-European STOXX 600 index was last down 0.3 per cent in morning trade on Monday. Other regional indices also declined, barring the UK's FTSE 100, which was up 0.4 per cent. MSCI's broadest index of world shares dipped 0.1 per cent. Trump on Saturday said he would impose a 30 per cent tariff on most imports from the European Union and Mexico from August 1, even as they are locked in long negotiations. The EU said it would extend a suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement, though Germany's finance minister called for firm action if the levies went ahead. German 10-year government bond yields briefly hit their highest since early April on Monday after settling back to 4.63 per cent. Yields move inversely to price. "To use the biggest cliche in the book, it continues to be a rollercoaster ride for all of us following the trade story, even if the market has increasingly overcome its queasiness and ensured it has been well stocked up on motion sickness tablets," said Deutsche Bank strategist Jim Reid in a note to clients. A rise in Japanese government bond yields also added to upward pressure on borrowing costs elsewhere, said Jens Peter Soerensen, chief analyst at Danske Bank. Japanese bond yields surged as concerns grew that an upcoming election could pave the way for increased fiscal spending. Chinese blue chips closed 0.1 per cent higher as data showed annual export growth topped forecasts at 5.8 per cent in June, even as exports to the US fell almost 10 per cent. Retail sales figures, industrial output and gross domestic product are due Tuesday. S&P 500 futures and Nasdaq futures both eased 0.4 per cent. Earnings season kicks off this week with the major banks leading the pack on Tuesday. In bond markets, Treasuries got a very marginal safety bid and 10-year yields held at 4.41 per cent. US consumer prices data for June are due on Tuesday and could finally start to show early upward pressure from tariffs, though retailers still have pre-levy inventory to draw on and some companies are absorbing the costs into margins. The impact on supply chain costs could show in producer price and import price figures this week, while a reading on retail sales will indicate how consumers are faring. Among currencies, the euro dipped 0.1 per cent to $US1.1684, edging away from its recent four-year top of $US1.1830. The dollar lost 0.1 per cent on the yen to 147.29 while the dollar index was little changed about 97.89. Bitcoin crossed the $US120,000 level for the first time to reach a top around $US123,153. Gold picked up a modest safe-haven bid and rose 0.1 per cent to $US3,359 an ounce. Oil prices rose more than one per cent on speculation Trump could announce stiffer sanctions on Russia later on Monday, including levies on major customers buying Russian oil. Brent jumped 67 cents to $US71.03 a barrel, while US crude added 70 cents to $US69.15 per barrel. World shares are ticking lower, with European shares slipping as the latest salvo of threats in the US President Donald Trump's tariff wars keep investors on edge. The pan-European STOXX 600 index was last down 0.3 per cent in morning trade on Monday. Other regional indices also declined, barring the UK's FTSE 100, which was up 0.4 per cent. MSCI's broadest index of world shares dipped 0.1 per cent. Trump on Saturday said he would impose a 30 per cent tariff on most imports from the European Union and Mexico from August 1, even as they are locked in long negotiations. The EU said it would extend a suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement, though Germany's finance minister called for firm action if the levies went ahead. German 10-year government bond yields briefly hit their highest since early April on Monday after settling back to 4.63 per cent. Yields move inversely to price. "To use the biggest cliche in the book, it continues to be a rollercoaster ride for all of us following the trade story, even if the market has increasingly overcome its queasiness and ensured it has been well stocked up on motion sickness tablets," said Deutsche Bank strategist Jim Reid in a note to clients. A rise in Japanese government bond yields also added to upward pressure on borrowing costs elsewhere, said Jens Peter Soerensen, chief analyst at Danske Bank. Japanese bond yields surged as concerns grew that an upcoming election could pave the way for increased fiscal spending. Chinese blue chips closed 0.1 per cent higher as data showed annual export growth topped forecasts at 5.8 per cent in June, even as exports to the US fell almost 10 per cent. Retail sales figures, industrial output and gross domestic product are due Tuesday. S&P 500 futures and Nasdaq futures both eased 0.4 per cent. Earnings season kicks off this week with the major banks leading the pack on Tuesday. In bond markets, Treasuries got a very marginal safety bid and 10-year yields held at 4.41 per cent. US consumer prices data for June are due on Tuesday and could finally start to show early upward pressure from tariffs, though retailers still have pre-levy inventory to draw on and some companies are absorbing the costs into margins. The impact on supply chain costs could show in producer price and import price figures this week, while a reading on retail sales will indicate how consumers are faring. Among currencies, the euro dipped 0.1 per cent to $US1.1684, edging away from its recent four-year top of $US1.1830. The dollar lost 0.1 per cent on the yen to 147.29 while the dollar index was little changed about 97.89. Bitcoin crossed the $US120,000 level for the first time to reach a top around $US123,153. Gold picked up a modest safe-haven bid and rose 0.1 per cent to $US3,359 an ounce. Oil prices rose more than one per cent on speculation Trump could announce stiffer sanctions on Russia later on Monday, including levies on major customers buying Russian oil. Brent jumped 67 cents to $US71.03 a barrel, while US crude added 70 cents to $US69.15 per barrel.
West Australian
an hour ago
- West Australian
Tax reform: Commonwealth Bank says Australia must stop relying so heavily on income tax
The nation's biggest bank says Australia must break its addiction to taxing income and rein in 'unsustainable' government spending growth. The Commonwealth Bank warned that future generations would be left to pick up the bills as the country ages — unless the system is fixed — in a submission to a Productivity Commission reform inquiry. It comes amid growing debate about how to revitalise the country's economy ahead of a summit planned by Treasurer Jim Chalmers next month. Taxes have surged to be almost 30 per cent of the national economy thanks to booming company payments and ongoing bracket creep, where inflation pushes workers into higher-paying brackets. 'It will not be sustainable for the tax receipts from a proportionately smaller workforce to pay for the level of public services Australians demand, particularly as the population ages,' the $299 billion company said. 'Similarly, simply running structural budget deficits only passes the problem to future generations. 'Australia needs to find a way to lower its dependence on income taxes.' While the big four bank stopped short of recommending changes to the GST, the submission said there should be debate about 'appropriate levels and role' for taxes on consumption and wealth. But the bank did say that uncapped concessions for superannuation were unsustainable. Company tax cuts would not be a priority, the submission said, while cracking down on multinational tax avoidance should remain on the agenda. It pointed to research showing that about 80 per cent of household income growth over the past 30 years came from improved productivity — doing things smarter and better. The Master Builders Association wants the company tax rate cut from 25 to 20 per cent for small businesses and urged governments to help keep inflation under control. 'Company tax settings need to be competitive to support economic growth,' the lobby group said in its submission. 'The proposal would provide instant respite to Australian small businesses and let them focus on what they do best. 'Investment growth has been lacklustre in Australia, leading to reduced competition,higher prices and lower living standards.'
Sydney Morning Herald
an hour ago
- Sydney Morning Herald
Trump wants Europe to surrender to him
It will take years before their commitments to increase their own defence spending might wean them off their reliance on the US for protection from an aggressively expansionist Russia. However, with Trump also announcing at the weekend that he is considering raising the baseline tariff rate to 15 to 20 per cent, they have to take his threat of a 30 per cent tariff – and additional tariffs to match any retaliatory measures they might take – seriously. Trump appears impatient that he hasn't delivered the '90 deals in 90 days' the administration boasted it would deliver, let alone the 200 deals he once said were virtually done. He's also been boosted by the successful passage through Congress of his One Big Beautiful Bill Act and by the buoyancy of US financial markets, which have rebounded from their sell-offs in April, when Trump first unveiled his 'reciprocal' tariffs. In April, he deferred imposition of the tariffs until July (and subsequently deferred them again until next month) because the bond market was 'getting a little queasy.' Now markets have settled, with the sharemarket posting record highs. That may be because investors don't believe he will follow through with the reciprocal tariffs he has threatened – the 'Trump Always Chickens Out' or TACO trade – or because any ill effects from tariffs, most notably increased inflation, have yet to show up in economic data. Loading No one, including Trump himself, it seems, knows what he might post next on his Truth Social, so markets are behaving as if nothing has happened until something actually happens. August 1 – the new deadline for his reciprocal tariffs – could be a wake-up moment for markets. The apparent complacency in markets, in the meantime, is encouraging Trump to be more aggressive and more impatient. There is a risk that, rather than heed, as he has until now, the urgings of calmer voices in his cabinet to negotiate deals, he will follow his personal preference and unilaterally present trade partners with 'take it or leave it' ultimatums. While the EU still appears to believe that Trump's latest threat is a negotiating ploy, they have prepared countermeasures in case it isn't. The EU had drawn up a list of US exports that it could target in response to the baseline tariff and the sectoral tariffs on steel, aluminium and autos, covering about €21 billion ($37 billion) of US exports. Items on that list included chicken, motorcycles and clothing. It has another list, targeting another €72 billion of products, ranging from aircraft to alcohol, with which it could respond to Trump's reciprocal tariffs. It also has what it calls its 'anti-coercion instrument,' or actions that could hit the trade in services, although it is reluctant to deploy that instrument, which it devised in response to a deluge of cheap imports from China. The total trade between the US and EU is worth about $US1 trillion ($1.5 trillion), with the EU enjoying a trade surplus in goods of $US235 billion, but a trade deficit in services of about $US75 billion. The EU, in its negotiations with the US, had sought exemptions from Trump's tariffs for key sectors, such as aircraft and alcohol, in exchange for a promise to buy more US goods, particularly weapons and LNG, that would narrow the US goods trade deficit. Von der Leyen said on Saturday that the EU was ready to continue negotiating but prepared to consider retaliation. Imposing 30 per cent tariffs on EU exports would disrupt essential transatlantic supply chains, harming businesses and consumers on both sides of the Atlantic, she said. The dilemma for the EU is that Trump's view of its non-tariff policies and trade barriers includes its value-added tax and its regulation of digital activity to protect competition and consumers. No nation state – or, in the EU's case, collection of 27 nation states – would surrender its sovereignty and allow Trump to dictate its domestic policy settings. Having seen what Trump has done to Brazil, threatening a 50 per cent tariff rate in response to unfair trade barriers (even though the US has a trade surplus with Brazil) and its trial of former president Jair Bolsonaro – an enthusiastic Trump supporter – for allegedly plotting a coup, the EU would be conscious of the risk that Trump's demands may not be confined to its goods trade. The potential for a trade confrontation is, therefore, quite significant. The EU will have to decide whether it should roll over and accede to Trump's demands, damaging its industries and the sovereignty of its states. Alternatively, it could emulate China and allow the confrontation to escalate to the point where it threatens a trade embargo, which would, as China's tot-for-tat tariffs did, scare the bejesus out of financial market participants and unnerve the White House. Loading Trump's indiscriminate threats of trade sanctions against America's friends and foes alike have ignited a scramble by the EU and others to secure new markets. There is potential for a new trading bloc, spanning Europe, the non-Chinese Asia Pacific and Latin America, to emerge. Trump and much of his hand-picked cabinet are protectionists and isolationists. At the conclusion of his trade wars on everyone, if much of the rest of the world decides to trade freely among themselves, he might get what he wished for.
