After an eventful summer of weather extremes, on-again off-again lockdowns and the swearing in of a new US President, many will be hoping that Autumn ushers in a change of more than the season. As the vaccine rollout begins, there are also promising signs that economic recovery may be earlier than expected.
Australia’s economy has improved and the downturn was not as deep as feared. That was the message Reserve Bank Governor Philip Lowe delivered to Parliament on February 5, citing strong employment growth, retail spending and housing. Unemployment fell from 6.6% to 6.4% in January, although annual wage growth remains steady at a record low of 1.4% after a 0.6% increase in the December quarter. Retail trade rose 0.6% in January, 10.7% higher than a year ago. While home lending jumped 8.6% in December. This helped fuel the 3% rise in national home values in the year to January, led by a 7.9% increase in in regional prices.
Business and consumer sentiment is also improving. The NAB Business Confidence Index was up from 4.7 points to 10.0 points in January, although 60% of businesses say they are not interested in borrowing to invest. Halfway through the corporate reporting season, 87% of ASX200 companies reported a profit in the December half year, although earnings were 14% lower in aggregate while dividends were 4% higher. The ANZ-Roy Morgan Consumer Confidence rating eased slightly in February but is still up 67% since last March’s low.
Higher commodity prices lifted the Aussie dollar to a three-year high. It closed the month around US78.7c, on the back of a 31% rise in crude oil prices and an 8.5% lift in iron ore prices in 2021 to date.
Positivity all round it seems, and we at King & Whittle are keen to embrace this by expanding and promoting our team. We are delighted to announce the promotion of Milan Do to Senior Accountant and the hiring of Jia Gao as Intermediate Accountant. This will allow us to reach our Income Tax Return deadline of 15 May 2021 (yes, that is a gentle reminder to you if you are yet to lodge).
As ever, if you know of anyone that could benefit from our superior Taxation, Accounting or Wealth Management advice we would be honoured if you referred them to us.
Further, if you are happy with our service, the best recognition is to leave us a review by clicking here for Melbourne or here for Gisborne.
Until next month,
Your King & Whittle Team
Tax Alert March 2021
Individuals and small business owners who have taken advantage of the government’s COVID-19 support programs will find themselves increasingly under the tax man’s microscope in coming months. This is just one of the key developments occurring in the world of tax at the moment.
Data matching program expanded
The Tax Commissioner has applied for additional data from Services Australia to allow the ATO to verify the eligibility of applicants for the government’s key COVID-19 support schemes.
The ATO will begin matching the data against eligibility criteria for the JobKeeper, temporary early access to superannuation, Temporary Cash Flow Boost and JobMaker Hiring Credit schemes.
As the economy begins to get back on its feet, it’s time to get your business back on track and start preparing for this year’s tax time.
Although 30 June may seem a long way off, there have been so many changes and government initiatives announced during the current financial year, you are likely to need extra information and paperwork to lodge your business’ return.
Here’s a list of things to consider and/or seek advice on.