Simon Says – what to watch out for in 2019
The year ahead looks to be a period of mixed news with unemployment low, continued low interest rates and the government closing in on a budget surplus. But that is combined with political uncertainty around the world, particularly in the US and UK, falling house prices and the ambiguity around what a change of federal government will mean for us all.
As clients of Highview, know that we will always do our best to guide you through this uncertainty. To provide some insight, I’ve outlined 4 key issues below that we at Highview feel will have the biggest effect on businesses and individuals in Australia during 2019. Be aware and take each of these into consideration when making financial decisions this year.
1. Getting a loan – it’s only going to get harder.
Any one that has looked to get anything from a home loan to a credit card recently would be aware of the policy tightening on behalf of the banks. February will see findings from the banking Royal Commission be handed down, so you can only expect an even tighter finance landscape.
Finance needs to be considered well in advance as even the most perfect of applications takes months in todays environment. Add the difficulty of self-employment or business purposes and you are looking at 3-6 month waits on approvals. Speak to a broker as early as possible and plan ahead.
2. A Federal Labour Government
All signs are pointing to a win for Labour in this year’s election so putting political persuasions aside, it is smart to plan for the proposed changes already announced to the public. The major tax related announcements are:
• Limiting negative gearing to new housing;
• Reducing the capital gains discount from 50% to 25%;
• Introducing a minimum 30% tax rate on trust distributions; and
• Removing the ability to have excess franking credits refunded.
The first two changes look to have ‘grandfather’ provisions included, meaning assets purchased before the chosen date won’t be affected by the new legislation. These are still significant changes that can have large impacts on your financial plans, so we encourage you to touch base with your Accountant or Financial Adviser promptly if you think you may be affected.
3. Further Decrease in Property Values
We are not property experts, but all signs point to further decreases in the local property market over the next 6 months (at least!). This presents worries for some but opportunities for others. No one knows how far or when it will finish but it is important to consider what, if any, effect it will have on you.
If you are in the market to buy and have your finance sorted, you are in the box seat. So negotiate hard and make those real estate agents work for every single penny!
4. Single Touch Payroll Expansion
From 1 July 2018 employers with 20 or more employees have had to report their payroll information electronically to the ATO. Legislation has passed the Senate and is in the House of Representatives to finalise the rollout for all remaining employers. Therefore, it is a must for all businesses to use a cloud based bookkeeping program that can handle STP, for example Xero, MYOB, Quickbooks etc. and enjoy the other benefits a cloud based program can bring. Evolving with technology on this front is no longer avoidable.
We encourage you to chat with your Highview Accountant regarding any of the above points – we are here to help, and to provide clarity around changes that may affect you or concerns you may have.
Chat to us today!
Prahran: 03 9529 1566
Cranbourne: 03 5990 1000
Mornington: 03 5911 2100
Ringwood: 03 8899 9797
Article written by Simon Byers, CPA & Director of Highview Accounting & Financial Prahran.