Winter 2025 Newsletter
Winter 2025 @ Longreach Private Wealth
With Winter now upon us, it’s time to embrace the joys of the cooler months of the year.
Now that the federal election is out of the way, and another financial year is drawing to a close, it's a perfect time to look back at all you’ve achieved over the past 12 months and focus on a fresh start for the financial year to come.
While market volatility continued, markets largely recovered from April's losses in May. However, the legal and economic uncertainty of US tariffs remain a key concern for global and local markets.
The end of the month saw the S&P/ASX 200 react positively at first to the news that a US federal judge had blocked the tariffs. When an appeals court temporarily stayed the tariffs hours later, a mini sell-off followed. The index has jumpstarted its way to a three-month high, not quite back to its best in February.
There was a sigh of relief all round when the Reserve Bank lowered interest rates in May by 25 basis points to 3.85%. The RBA’s move came with a caveat that, while domestic demand “appears” to be recovering and real household incomes have picked up, the outlook is unclear because of both local and international developments.
Inflation was slightly higher than expected for the 12 months to April, but it remained within the RBA’s target range and many economists are predicting another rate cut in July.
Peter, Sharon & Wendy
Smart Moves Before the Financial Year Ends
The end of the financial year is an opportunity to optimise your financial strategy, take advantage of tax deductions, and set yourself up for the new financial year.
Whether you're looking to maximise tax benefits, rebalance your investment portfolio, or to simply ensure you’re ticking all the right boxes, smart end of financial year (EOFY) planning can make a big difference.
So, to finish the financial year on a high note, start by mapping out your finances and investment portfolio and collect all the relevant documents. It can be a tedious task if your filing isn’t up to scratch, so it can be useful to set up a system as you go to make it easier for the next financial year.
You will need your bank statements, superannuation fund statement, self- managed super fund (SMSF) paperwork if relevant, a record of any capital gains or losses from the sale of assets such as shares or property, details of share dividends including any dividends earned through a Distribution Reinvestment Plan, and records of any other investments or income received.
Looking for Deductions
On the other side of the ledger, there are limits on deductions for most categories of expenses but it’s a useful exercise to gather the evidence of all costs associated with employment and income-producing investments – whether or not they’re tax deductible.
For the most part at least, some deductions are allowed for certain work-related costs, donations over $2 to approved not-for-profits, the costs of managing your tax affairs, eligible investment property expenses, income protection insurance premiums (if the premiums are paid outside of your super fund), and expenses linked to a financial investment - such as attending a seminar directly related to the investment or the cost of account keeping fees on bank accounts used only for investment.i
The ATO is keeping a close eye on work-related expenses and working from home deductions this year, saying there must be “a close connection to your income earning activities, and you should be prepared to back it up with records like a receipt or invoice”.ii
Get ahead with Early Payments
One way of maximising deductions in this financial year is by paying early deductible expenses due next year such as insurance premiums, subscriptions, or business rent if applicable. But remember to check first to see which expenses may be eligible to prepay.
Small businesses also have access to an instant asset write-off for the business portion of assets under $20,000, that were purchased and used in this financial year. The instant asset write-off is available to businesses with an annual turnover of less than $10 million.iii
Review your Portfolio
At this stage of the year, it’s a good time to take stock of your investments including shares, superannuation and property. You may want to check that your investment strategy is still appropriate for your needs and expectations and review any underperforming assets.
The review will help you to decide whether you have an opportunity to top-up your super fund or SMSF. If you have funds to spare, making the most of the total contribution amount allowed both in this financial year and for the last five years, could give your retirement planning a serious boost.
It’s also a chance to review super indexation changes due from 1 July to see if there’s a need to take action before 30 June or to wait. For example, the amount that can be transferred into the retirement phase (known as the general transfer balance cap) will increase to $2 million on 1 July, up from $1.9 million this financial year. That might affect the decision to begin a pension this month as opposed to next.
There’s a lot to consider right now to make sure you’re optimising tax savings and that your planning today leads to a financial reward tomorrow. Give us a call if we can help.
i Deductions you can claim | Australian Taxation Office
ii ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
iii Instant asset write-off for eligible businesses | Australian Taxation Office
Volunteering in Retirement: Finding Purpose, Structure, and Joy
Retirement might be just around the corner, or maybe you’ve recently crossed that exciting threshold. You’ve worked hard for decades, and now ready to trade in the alarm clock for leisurely mornings and to-do lists that are actually fun. But as you move into the next phase of your life; a thought might cross your mind: What now?
While the idea of unlimited free time sounds wonderful at first, many people find that after the novelty wears off, there’s something important missing. Work often provides structure, purpose, and a sense of accomplishment. Without that, it’s easy to feel a little... adrift.
So, when you picture what your ideal retirement looks like, it can be a good time to think about what you still have to offer the world and consider volunteering. As well as helping others, you’ll also enrich your life in so many ways.
Enhance your Life
A study commissioned by Apia found that more than half (56 per cent) of Australians over 50 years of age, are currently engaged with community or volunteer work.i And the benefits are not just the recipient of their support - it’s been proven that volunteering can boost your own happiness, your mental health, and even your physical well-being.ii It’s like a secret ingredient for a fulfilling retirement.
Retirement Beyond the Finances
Planning your retirement is more than just numbers on a spreadsheet; it’s about creating a fulfilling, meaningful lifestyle. Volunteering can help restore that sense of purpose when you are no longer working, and add structure to your days, all while benefiting others. Thinking about volunteering before you leave the workforce can give you a head start in discovering what really lights you up, and it will give you a smooth transition into the next chapter of your life.
Here are a few tips on how to get started, make your time count, and make sure you’re doing something meaningful and truly brings you joy.
Consider your Skills
You have years of knowledge, skills and life experiences to draw upon and it can be enormously satisfying to use those to help others. Your contribution can reflect the skills you honed in the workplace or talents you developed along the way. Have you always been the go-to person for organising family events or helping friends with their tech problems? Think about how you can use your skills - whether that’s helping others, improving areas in your community - like gardening, or even just making someone smile.
Choose a Cause that Sparks your Passion
Think about what has always inspired you. Volunteering is most fulfilling when it aligns with your interests and values. So, take a moment to consider what causes excite you and look for organisations that align with your passions - maybe a local food bank, animal rescue, or environmental group. Your volunteering experience should feel like a rewarding activity, not an obligation.
Start Exploring Early
Ideally, don’t wait until your last day of work to decide how you’ll spend your free time. Start researching volunteering opportunities in your community or online. Many organisations offer flexible, part-time opportunities, so you don’t have to dive in full force right away. There are so many options out there that can fit into your schedule.
Volunteering, however, you approach it, can open up a whole new world. Once you look for opportunities to assist others, you also enhance your own well-being in a myriad of ways. Working with other like-minded people can give you an incredible sense of community and connection, developing fantastic friendships along the way. Not to mention the sense of satisfaction you’ll feel as you learn new things and are exposed to new ideas
Consider how you can weave volunteering into your new life. It can be a way to make your retirement truly extraordinary, while also making the world a better place.
Volunteering Ideas to Consider
Mentoring: Share your knowledge by helping someone in need of guidance - whether that’s through career coaching, tutoring, or life skills.
Local Charities: Get involved in your community by assisting with food banks, shelters, or organising fundraisers for causes you care about.
Animal Shelters: If you’re an animal lover, consider helping out at your local shelter, either by walking dogs or assisting with adoptions.
Environmental Causes: Join efforts to clean up parks, plant trees, or raise awareness about environmental issues.
The superannuation changes from 1 July
The Super Changes coming into Effect in the 2025-26 Financial Year
Australian superannuation laws are set to change once again in the 2025-26 financial year as the nation’s fast-growing retirement savings system continues to evolve.
Below is a summary of the changes that will come into effect from 1 July, 2025, as well as looming legislative changes.
Increased Super Guarantee (SG)
Millions of working Australians will receive a welcome superannuation boost from the start of July when the mandatory superannuation guarantee (SG) rate rises by 0.5% to 12%.
The SG is the percentage of your ordinary time earnings (in addition to wages) that is paid into your super fund account by your employer.
The 2025-26 rise marks the end of a series of five 0.5% SG rate increases since the start of the 2021-22 financial year, when the SG rate was lifted from 9.5% to 10%.
Higher Transfer Balance Cap
Individuals starting a pension for the first time on or after 1 July 2025 will be entitled to a personal transfer balance cap (TBC) of $2 million, which will be increased by $100,000 from the current level of $1.9 million.
The TBC is the maximum amount that an individual can transfer from their superannuation accumulation account into a tax-free pension account on their retirement. Any amount over the TBC must be retained in an accumulation account, where any contributions and investment earnings are still taxed at 15%.
Keep in mind that investment earnings within the pension account can increase the account balance above the $2 million transfer balance cap without any penalty.
Carry-Forward Concessional Contributions
Eligible workers can “carry forward” any of their unused annual concessional super contribution cap amounts from up to five financial years ago and add them to their concessional contribution cap in the current financial year.
That means it may be possible to contribute more than the current $30,000 concessionally taxed limit, subject to you having a total super balance of less than $500,000 at 30 June of the previous financial year and you having unused concessional contributions cap amounts available.
From 1 July the starting financial year for carry forward amounts will roll over to 2020-21. As such, the deadline for taking advantage of any unused entitlements you may have from the 2019-20 financial year will end on 30 June.
Proposed Higher Taxes on $3 Million-Plus Super Balances
Following its recent re-election, the federal government is likely to reintroduce its Division 296 tax bill to be passed as legislation.
The proposed Division 296 legislation would introduce an additional 15% tax on the earnings of super funds with balances above $3 million (which would apply to earnings on any amounts over $3 million). This would include any unrealised gains on assets held inside a super fund, such as shares and property, even if they had not been sold.
Important information and general advice warning
Vanguard Super Pty Ltd (ABN 73 643 614 386 / AFS Licence 526270) (the Trustee) is the trustee of Vanguard Super (ABN 27923449966) and the issuer of Vanguard Super products. The Trustee has contracted Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) (VIA) to provide some services to members of Vanguard Super. Any general advice is provided by VIA. The Trustee and VIA are both wholly owned subsidiaries of The Vanguard Group, Inc. (collectively, "Vanguard"). The retirement savings tips provided above are general in nature and don’t take into account your personal financial objectives, situation or needs. You should consider your objectives, financial situation or needs, and the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before making any decision about Vanguard Super. The PDS and TMD can also be accessed free of charge by calling 1300 655 101. Before you make any financial decision regarding Vanguard Super, you may wish to seek professional advice from a suitably qualified adviser. Any past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. The information above is current as at time of publication and was prepared in good faith and we accept no liability for any errors or omissions.
©2025 Vanguard Investments Australia Ltd. All rights reserved.
Why it’s Important to Stay the Course During Market Volatility - in Three Charts
Staying the course is sage advice for long-term investors anxious about market volatility — and for good reason.
By looking at how markets have performed over time, we can put current events into context and appreciate the benefits of a long-term and well diversified investing strategy.
The following three charts highlight the importance of staying invested and focusing on the long-term when markets are volatile.
Don’t Let Turbulence Distract You: Keep your Focus on the Longer Term
Volatility and index prices for the MSCI World Price Index (December 31, 1982, through December 31, 2024)
Short-term volatility has forever been part of investing. Extreme and extended cases of volatility have frequently coincided with market pullbacks.
But investors clearly would do well to focus on the long term as global equity returns as measured by the MSCI World Price Index would suggest.
This chart shows that, despite periods of high volatility that have coincided with market pullbacks, equity markets have climbed over the long term.
From December 31, 1982, through December 31, 2024, global equities faced several periods of extreme intraday volatility, most notably after the stock market crash of 1987, the global financial crisis in 2008, and the start of the COVID-19 pandemic in early 2020.
However, despite sharp market pullbacks that coincided with these periods of intraday volatility, global equities have produced strong results over the long term.
Downturns Aren’t Rare Events: Investors Will Endure Many of Them During Their Lifetime
Global stock prices (January 1, 1980, through December 31, 2024)
Bear markets and corrections are inevitable for investors. Maintaining a long-term focus is the best way to navigate these challenging periods.
From January 1, 1980, through December 31, 2024, the average length of a bull market in global equities has been nearly four times that of a bear market.
It's worth noting that although the downturns that began in August 1987 (related to Black Monday) and February 2020 (related to the start of the COVID-19 pandemic) don’t meet a widely accepted definition of a bear market because they lasted less than two months, we are counting them as bear markets and including them in our analysis because of their historic nature and the magnitudes of their declines.
Longer Holding Periods Reduce the Chances of a Negative Return
Historical probability of negative return for various holding periods
The longer you stay invested, the less the historical likelihood that you’ll earn a negative return.
Over a 10-year holding period, investors holding a portfolio of 60% US stocks and 40% high-grade US bonds haven’t had a negative nominal return (not accounting for inflation) and have had significantly less likelihood for negative real returns (accounting for inflation) compared with shorter holding periods. As always, past performance is no guarantee of future returns.
Many investors think of cash and equivalents like US Treasury bills as safer than equities.
But when adjusted for inflation, US Treasury bills have been more likely than stocks to have negative returns.
Focus on What You Can Control
We believe investors should focus on the things they can control.
That means setting clear investment goals, ensuring your investments are low-cost and diversified (both geographically and across asset classes), and staying focused on the long term.
Source: Vanguard April 2025
Reproduced with permission of Vanguard Investments Australia Ltd
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients' circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.
© 2025 Vanguard Investments Australia Ltd. All rights reserved.
Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.
Why It's Never Too Early to Start Teaching Your Children About Money
Here’s How You Can Help your Children Build Financial Literacy
Australia is one of the wealthiest countries in the world, yet many Australians struggle with financial literacy.
Vanguard’s 2024 How Australia Retires report found that only one-third of Australians were very confident or extremely confident in making financial decisions.
While most Australians (56%) were very confident or extremely confident in their understanding of saving and deposit accounts, far fewer felt the same about other investment products.
Only 20% of Australians were very confident or extremely confident in their understanding of shares, 16% in managed funds, 13% in exchange-traded funds (ETFs), and 10% in bonds.
Even more concerning is that less than one-third of Australians are very confident or extremely confident in their understanding of superannuation products.
Research by ASIC has shown that families play a critical role in establishing and supporting financial attitudes and behaviours.
If you’re a parent, here’s how you can help your children build financial capability throughout their lives.
It’s Never Too Early to Start Teaching Children About Money
Most families leave financial discussions until later in a child’s life. But young children are learning about money by observing and participating in everyday activities like trips to the supermarket.
According to ASIC’s Young People and Money report, there is emerging evidence that children as young as five have an emotional response to spending and saving money.
“Very often money is an area that gets glossed over for young children; young children are assumed not to have agency or real input,” said Sue Dockett, an emeritus professor at Charles Sturt University who contributed to the report.
Truth is that children are living these experiences, and we shouldn’t assume children don’t have the ability to understand or comprehend some of what’s going on.
Why It’s Important to Talk to Your Children About Money
You don’t need to be an expert to teach your kids.
By involving them in conversations about money and encouraging them to make decisions about the trade-offs between saving, spending and investing, you can make the topic part of everyday life.
Here are some tips for talking to your kids about money:
Explain where money comes from: Describe how you earn the money you spend. Explain that you get a certain amount of money each time you get paid. Say how you use that money to cover the essentials, like food, clothes and housing.
Talk about needs and wants: Talk about how you prioritise what you spend your money on. Encourage your kids to think about needs and wants before spending money.
Track spending: Show your kids how to track their spending to see where their money is going.
How You can Teach Your Child About Investing
One simple way to teach your children about investing is to open a Vanguard Personal Investor Kids account.
You can start investing regularly today with as little as $25 per fortnight, month or quarter, to help grow your child’s wealth for the long term. As the parent or guardian, you have full control and responsibility for the Kids Account.
Personal Investor Kids provides access to Vanguard’s four ready-made diversified managed fund portfolios – the Vanguard High Growth Index Fund (Kangaroo), Vanguard Growth Index Fund (Emu), Vanguard Balanced Index Fund (Wombat) and Vanguard Conservative Index Fund (Koala).
How to Involve Your Children in Decisions About Money
Giving children some responsibility for small financial decisions is a great way for them to learn.
It can also be an opportunity to teach them important lessons about the value of money and the benefits of saving.
Here are some ideas for activities that you could do with your child to help them build financial capability:
Involve them in purchasing decisions: Work together to research online or shop around to find the best deal for something they want.
Do a family budget: This can help your children understand the value of money and making trade-offs.
Demonstrate the benefits of giving: You could encourage your children to choose a charity to regularly donate to and explain the benefits of helping others.
Pay pocket money for jobs: You could choose to pay for certain tasks, like mowing the lawn or washing cars. It’s a good way to teach children about the link between work and money.
Help them save for a goal: Use a piggy bank or savings account to help your children see their money grow as they save for a goal.
ASIC’s Young People and Money Survey found that young people have a strong desire to learn about topics like investing, managing money and filing a tax return.
The more learning experiences you can provide for them, the better prepared they will be when it comes time to manage their finances on their own.
Source: Vanguard April 2025
Reproduced with permission of Vanguard Investments Australia Ltd
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients' circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.
© 2025 Vanguard Investments Australia Ltd. All rights reserved.
Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.
Please Note:
Longreach Private Wealth is a Corporate Authorised Representative of John Cameron Financial Planning Pty. Ltd. (AFSL 515139) Please note that while Longreach has made every reasonable effort to ensure the reliability of the sources used in this document, neither Longreach nor the licensee makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or timeliness of any information disclosed, or represents that its use would not infringe on privately owned rights. The opinions of the authors expressed herein do not necessarily reflect those of John Cameron Financial Planning Pty. Ltd.
Please note that any recommendations do not take full account of all of your circumstances and you should decide whether or not they are appropriate for you before deciding to act. Any decision to act should only be made after reading the relevant Product Disclosure Statement (PDS). You can obtain copies of the PDS from us. Longreach Private Wealth is an authorised representative of John Cameron Financial Planning Pty. Ltd who hold AFS Licence 515139, issued by ASIC.