Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 254

Cuffelinks Newsletter Edition 254

  •   18 May 2018
  •      
  •   

A revealing aspect of sitting in the Budget Lockup for six hours, surrounded by dozens of journalists and reporters working diligently on their stories, was listening to what they were interested in. Lots of chat on income tax and surpluses, and searching through hundreds of pages for snippets of news nobody else had noticed.

One journalist was eager to find the revised rates for Newstart (Australia's unemployment payment), convinced a change would be announced. Even the Business Council of Australia was supporting a rise after a freeze at around $40 a day since 1994 (or up to $49 with rent assistance and energy supplements). Ex-PM John Howard said it was time for an increase, and Deloitte agreed and produced this chart. 


Average wages, the age pension and Newstart per week since 2000

   
Source: Department of Social Service; Deloitte Access Economics

While Cuffelinks rightly covers issues such as the $1.6 million transfer balance cap and loss of franking credits, these are good problems to have compared with living on $40 a day. The Prime Minister said there should be incentives to find work, but as Deloitte said:

"Yes, it would be nice if unemployment were temporary. But for many it isn't, and there are a range of reasons for this which have very little to do with welfare payments encouraging people to stay out of work ... increasing Newstart will cost the taxpayer but it is absolutely a choice we should make to allow unemployed people to live in a circumstance which actually allows them to be job ready as opportunities arise."

Staying on top of constant change

It is futile to expect investing rules not to change, requiring adjustment in financial plans according to new circumstances. Michael Hutton identifies four ways SMSF trustees might respond to Labor's proposed imputation changes. Gemma Dale gives a great reminder on tax deductible super by acting soon. Many people are missing this opportunity and it's not necessary to salary sacrifice to benefit. A few readers have asked for end-of-financial-year (EOFY) tips, and Bruce Brammall shares seven of his favourites.

Two opinion pieces, one from Paul Resnick on the need for financial advice 'suitability', while Patricia Pascuzzo draws out the retirement income implications in the Budget.

The biggest allocation decision for many Australian investors involves the banks, and Hugh Dive updates his regular scorecard based on the recent reporting season. On infrastructure, Nick Langley describes an unexpected consequence of Donald Trump's tariff impositions. At a Bloomberg Invest conference this week, Brett Himbury, the CEO of IFM Investors, said he had visited the US seven times in 2017 and already three times in 2018, so great does he see the infrastructure opportunities there.

A Cuffelinks reader sent in a detailed comment on my view that a majority of board members should have relevant industry experience, and we reproduce the emails.

This week's White Paper from UBS Asset Management on the future of real estate has some great examples of how the world is changing. The latest ETF update from BetaShares shows how the sector has renewed its growth after a rare dip last month.    

Finally, an apology for some recent technical problems caused by a rapid increase in traffic to our website. Last month, we had over 50,000 users for the first time, and we are changing servers to cope with the load while improving download speed. 


Graham Hand, Managing Editor

 

Edition 254 | 18 May 2018 | Editorial | Newsletter

 

  •   18 May 2018
  •      
  •   

 

Leave a Comment:

banner

Most viewed in recent weeks

The growing debt burden of retiring Australians

More Australians are retiring with larger mortgages and less super. This paper explores how unlocking housing wealth can help ease the nation’s growing retirement cashflow crunch.

Four best-ever charts for every adviser and investor

In any year since 1875, if you'd invested in the ASX, turned away and come back eight years later, your average return would be 120% with no negative periods. It's just one of the must-have stats that all investors should know.

Preparing for aged care

Whether for yourself or a family member, it’s never too early to start thinking about aged care. This looks at the best ways to plan ahead, as well as the changes coming to aged care from November 1 this year.

Our experts on Jim Chalmers' super tax backdown

Labor has caved to pressure on key parts of the Division 296 tax, though also added some important nuances. Here are six experts’ views on the changes and what they mean for you.        

LICs vs ETFs – which perform best?

With investor sentiment shifting and ETFs surging ahead, we pit Australia’s biggest LICs against their ETF rivals to see which delivers better returns over the short and long term. The results are revealing.

Family trusts: Are they still worth it?

Family trusts remain a core structure for wealth management, but rising ATO scrutiny and complex compliance raise questions about their ongoing value. Are the benefits still worth the administrative burden?

Latest Updates

Investment strategies

LICs vs ETFs – which perform best?

With investor sentiment shifting and ETFs surging ahead, we pit Australia’s biggest LICs against their ETF rivals to see which delivers better returns over the short and long term. The results are revealing.

Retirement

The growing debt burden of retiring Australians

More Australians are retiring with larger mortgages and less super. This paper explores how unlocking housing wealth can help ease the nation’s growing retirement cashflow crunch.

The ASX is full of broken blue chips

Investing in the ASX 20 or 200 requires vigilance. Blue chips aren’t immune to failure, and the old belief that you can simply hold them forever is outdated. 

Shares

Buying Guzman y Gomez, and not just for the burritos

Adding high-quality compounders at attractive valuations is difficult in an efficient market. However, during the volatile FY25 reporting season, an opportunity arose to increase a position in Mexican fast-food chain GYG.

Investment strategies

Factor investing and how to use ETFs to your advantage

Factor-based ETFs are bridging the gap between active and passive investing, giving investors low-cost access to proven drivers of long-term returns such as quality, value, momentum and dividend yield. 

Strategy

Engineers vs lawyers: the US-China divide that will shape this century

In Breakneck, Dan Wang contrasts China’s “engineering state” with America’s “lawyerly society,” showing how these mindsets drive innovation, dysfunction, and reshape global power amid rising rivalry. 

Retirement

18 rules for ageing well

The rules to age successfully include, 'the unexamined life lasts longer', 'change no more than one-eighth of your life at a time', 'nobody is thinking about you', and 'pursue virtue but don’t sweat it'.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.