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November 5, 2020 By Complete Financial Solutions

Jobs down but construction work improving 

November 4, 2020  

Colin Brinsden, AAP Economics and Business Correspondent 
(Australian Associated Press) 

Employment and wages growth continues to weaken despite some positive signs in the economy, with the construction sector expanding for the first time in two years. 

Payroll jobs fell 0.8 per cent in the fortnight ending October 17 following a 0.9 per cent drop in the previous two weeks. 

Compared to the beginning of the coronavirus pandemic in March, payroll jobs have fallen 4.4 per cent. 

Wages also fell by 2.1 per cent in the latest reported fortnight to be down 5.1 per cent since March. 

At the same time, retail trade fell 1.1 per cent in September, the Australian Bureau of Statistics has found. 

However, retail turnover jumped 6.5 per cent over the September quarter, a solid result for the economic growth calculation due in December. 

“This confirms that outside of Victoria, where volumes fell 4.2 per cent as a result of the lockdown, the recovery in household spending is well underway,” BIS Oxford Economics chief economist Sarah Hunter said. 

Cutting the cash rate to a record low 0.1 per cent on Tuesday, Reserve Bank governor Philip Lowe said the economic recovery is up and running and the September quarter national accounts will show positive growth. 

The construction industry is another sector that appears to have turned a corner, buoyed by house building and less pronounced declines in apartment and engineering works. 

The Australian Industry Group/Housing Industry Association performance of construction index rose 7.5 points in October to 52.7, indicating a mild expansion in the sector. 

The index has breached the 50-point mark for the first time since 2018. 

HIA executive director Geordan Murray said low interest rates, government grants and other fiscal stimulus measures were lifting demand for detached housing. 

“These are positive signs that policy settings are working to generate employment throughout the initial phase of the economic recovery,” Mr Murray said. 

Dr Lowe said with Australia facing a period of high unemployment, the central bank was committed to doing all that it could to support the creation of jobs. 

The cut in the RBA’s cash rate would save more than $30 a month on a $400,000 variable rate mortgage if passed on in full by retail banks. 

But the Commonwealth Bank, the nation’s largest retail lender, has instead cut its fixed-rate home loans and some business loan rates and left its variable rate unchanged. 

The other three major banks have remained silent. 

However, a handful of smaller banks have cut their variable rates from between 0.10 per cent and 0.20 per cent with immediate effect. 

Filed Under: News Pages

News Pages

October 9, 2020 By Complete Financial Solutions

Big spend as Frydenberg goes for growth

October 7, 2020

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

Despite Josh Frydenberg’s gigantic spend-up, his second budget contained very few big surprises after the carefully crafted run-up to the treasurer’s big night.

In the past week or so, big, multi-billion dollar initiatives have been announced on a daily basis, from an apprenticeship initiative to giving the regions and tourism a cash injection.

The bringing forward of already legislated tax cuts, due in 2022, has been flagged for months.

Even so, the spend-a-thon that will see the budget deficit balloon to a record $213.7 billion and government debt exceed $1 trillion for the first time is aimed at digging the economy out of recession and getting people back into work.

The budget is forecasting a huge acceleration of economic growth in the next financial year, from a contraction of 1.5 per cent in 2020/21 to brisk 4.75 per cent expansion.

From there on growth is expected to hum at a rate of 2.75 per cent to three per cent, something that has not been seen for a while.

There is also hope that unemployment is not far from its peak, with Treasury now predicting a top of eight per cent later this year, rather than nine per cent, and by 2023/24 falling to 5.5 per cent.

But there is a big assumption to this somewhat healthier outlook, given how deep Australia’s first recession in three decades has been.

It relies on there being a COVID-19 vaccine by the end of 2021.

Mr Frydenberg explained if a vaccine is found six months earlier, that would give a $34 billion boost to the economy.

But he also warned if there was a second or third wave of virus cases in Australia, that could hurt the economy by $55 billion.

“There is a lot of uncertainty in this economic environment, it’s an unprecedented time,” he told reporters.

“We are leaving no stone unturned to get access to the vaccine.”

In the meantime, the government is racking up a huge bill trying to keep life on an even keel in these uncertain times.

Filed Under: News Pages

Connection Point

September 16, 2020 By Complete Financial Solutions

Filed Under: Uncategorized

News Pages

July 29, 2020 By Complete Financial Solutions

Retail spending climbs 2.4 pct in June

July 22, 2020

Derek Rose

(Australian Associated Press)

Retail sales in Australia rose a solid 2.4 per cent in June, as people flocked to reopened cafes and restaurants and spent more on clothing in the first full month of trade since the lockdowns ended.

Turnover for the month rose to $29.7 billion and was up 8.2 per cent from a year ago, according to preliminary figures released by the Australian Bureau of Statistics on Wednesday.

The overall rise in June comes on top of a huge 16.9 per cent jump in May, which followed a record 17.7 per cent fall in April.

“Households seem to be transitioning to a ‘new normal’ of spending, where elevated retail spending replaces expenditure on travel and entertainment,” ANZ economists Adelaide Timbrell and Catherine Birch wrote in a research note.

Cafe, restaurant, and takeaway food service spending jumped more than 20 per cent for the second consecutive month but was still 17 per cent below the level in June 2019.

Clothing, footwear, and personal accessory spending gained 19 per cent, but remained six per cent lower from a year ago.

Food retailing rose 0.9 per cent, as a rise in supermarkets and grocery stores spending was offset by a fall in liquor retailing, the ABS said.

There was some evidence of stockpiling at the very end of June, particularly in Victoria, which has reimposed lockdowns in parts of the state.

St George Banking Group chief economist Besa Deda says the figures are encouraging, as retail spending represents a large part of economic growth.

But she cautioned that “the recovery that is underway is fragile, it is vulnerable to further shocks, and that’s related to consumer confidence.”

There might be further falls in July as pent-up demand subsides, but overall household good spending was well above pre-COVID levels, Sarah Hunter, chief economist for BIS Oxford Economics, said.

Household goods retailing fell in June but remains 23 per cent above June 2019 levels, the ABS data showed.

This confirms that consumers are substituting spending on services – particularly travel – towards retail goods.

“Looking ahead, overall spending is likely to remain elevated in the very near term, with households likely to continue to substitute retail goods for services (conversely, spending in cafes and restaurants will remain subdued),” Ms Hunter wrote in research note.

But the longer term will be more challenging, with the tapering of the JobKeeper and JobSeeker schemes expected to weigh on household spending from October, she added. Job losses recently materialising in the construction and professional services sectors are also likely to be a drag on retail spending, Ms Hunter said

Filed Under: News Pages

NEWS PAGES

May 19, 2020 By Complete Financial Solutions

Making super and investment decisions: Four tips during COVID-19 and beyond

Money Smart (ASIC)

During these uncertain times, you might be nervous about your investments. It’s important to consider your long-term goals and make well-informed decisions.

Here are some steps to take with your super or investments in shares to ride out ups and downs in the investment markets.

1. Avoid focusing on market volatility

When investment markets are volatile, it can be a good time to review your investment strategy. But don’t make any rash decisions based on recent market falls.

Some investors panic when markets fall and decide to convert all their investments to cash. However, this means you lock in your losses and you miss out on any investment market recovery. Markets typically recover over the long-term.

Diversification across a broad range of asset classes is the best defence to ride out the ups and downs in the markets at any time.

Super in an uncertain investment market

If you’re concerned about your super balance taking a hit, remember super is a long-term investment. Over time it will recover from the ups and downs in investment markets.

If you’re close (5 years or less) to retirement, understand your retirement income options, take your time and avoid hasty decisions.

Consider getting financial information and guidance from:

  • a licensed financial adviser
  • your super fund
  • a Services Australia Financial Information Service officer

2. Don’t try to time the market

It’s not a good idea to sell shares or other investments based on daily headlines.

Even the most skilled and experienced investors have difficulty predicting the best time to buy and sell. You might sell your investments only for markets to recover soon after.

Holding onto your investments, even during downturns, can be an effective strategy if your financial goals and situation haven’t changed.

3. Review your financial goals

Unexpected events can impact your financial goals.

Talk it over with your family, consider your long-term goals and only make well-informed decisions.

If you’ve become unemployed, for example, you might need to cash out some of your investments for short-term expenses. Only do this if you have no savings to draw on and have explored all other options such government support and applying for financial hardship.

If you do have to draw on your investments, only cash out some of them, if you can. That way you can minimise your losses and still have some money invested when the market begins to recover.

If you’re using a financial adviser, now is a good time to ask them to review your financial plan.

4. Beware of investment scams

Beware of cold-calls and unsolicited investment offers and the promise of big returns. If it sounds too good to be true, it usually is.

Making hasty decisions, like panic selling or buying shares, can make you more vulnerable to investment scams.

Scammers exploit fear with fake investment offers promising to recover your losses.

Disclosure Statement: ClearView Financial Advice Pty Ltd ABN 89 133 593 012 AFSL No. 331367 | Matrix Planning Solutions Limited ABN 45 087 470 200 AFSL & ACL No. 238256. Head Office: Level 14, 20 Bond St, Sydney NSW 2000 General Advice Warning: This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication. You should read the Product Disclosure Statement (PDS) before making a decision about a product.

Filed Under: Uncategorized

Connection Point

February 28, 2020 By Complete Financial Solutions

Filed Under: Connection Point

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