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

Why spending more in early retirement can improve lifetime income

Conventional wisdom encourages retirees to preserve superannuation. But if those likely to qualify for the Age Pension later in life spend a little more today, it may deliver higher lifetime income and a more stable retirement.

Is it time to bail on Australian stocks?

For generations, Australian investors have backed banks, miners and dividends. But has that loyalty come at a cost? A look at the numbers raises an uncomfortable question about where future returns will come from.

Testamentary trusts survived the trust tax. The drafting battle has just begun.

The fight over testamentary trusts looked settled. Then the draft legislation arrived. Hidden in a technical detail is a question that could force many families to rethink wills they thought were already future-proof.

Meg on SMSFs: What do we think about reversionary pensions these days?

Reversionary pensions have long been a staple of SMSF estate planning, but are they still the best option? Meg Heffron revisits a once-clear favourite and asks whether changing super rules have shifted the balance.

How does the 4% rule stack up?

The 4% rule has long been retirement's gold standard. But after a difficult period for investors, fresh analysis suggests a more conservative approach may significantly improve the chances of making savings last.

The new capital gains tax trap for your portfolio

Investors have long accepted one portfolio rule without much question. A major tax shift could change that calculation entirely, forcing difficult trade-offs between risk, discipline and an overlooked cost lurking beneath.

Latest Updates

Exchange traded products

It’s time for LICs to die

A high-profile dividend cut and a prominent fund manager’s apology have reignited a long-running debate. If investors can access similar exposures more cheaply and efficiently elsewhere, what exactly is keeping LICs alive?

Taxation

Will investors be better or worse off under new housing tax changes?

Housing tax reforms have sparked warnings of market turmoil and promises of greater fairness. But after modelling nearly two decades of property data, the results suggest winners and losers may not be who many investors expect.

Retirement

Three considerations before reshaping your legacy plan

Many retirees hope to leave a legacy. Proposed trust tax reforms could force families to rethink. The question is not how much to leave behind, but whether today's inheritance plans will still make sense as circumstances change.

Investment strategies

Why experienced investors still get markets wrong

Retirement is approaching. Markets are noisy. And every headline seems to demand action. The biggest investment risk isn't fear, greed or market volatility, it often arrives disguised as research and sensible risk management.

Shares

Why pay more for less?

Conditions were stacked in favour of professional investors in 2026. Most still fell short, raising questions about where investors should look for value. Meanwhile, an alternative strategy continued to make its case.

Investment strategies

Bleeding air out of the bubble

Equity valuations have fallen sharply over the past year, yet investors have largely been spared the volatility and losses that typically accompany a de-rating. What explains this unusually orderly reset? Here are five key drivers.

Strategy

Has AI gone rogue?

We worry about AI becoming conscious. But what if consciousness isn't the issue? The more unsettling possibility is a machine capable of pursuing objectives relentlessly, without motives, emotions, or awareness of any kind.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 2026 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.