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Quarterly Market Update · She's On The Money

• 0:00
  Speaker 1: Hello.
• 0:01
  Speaker 2: My name's Santasha Nabananga Bamblet. I'm a proud yr the
• 0:05
  Speaker 2: Order Kerney Whoalbury and a waddery woman. And before we
• 0:08
  Speaker 2: get started on She's on the Money podcast, I would
• 0:11
  Speaker 2: like to acknowledge the traditional custodians of the land of
• 0:14
  Speaker 2: which this podcast is recorded on a wondery country, acknowledging
• 0:18
  Speaker 2: the elders, the ancestors and the next generation coming through
• 0:23
  Speaker 2: as this podcast is about connecting, empowering, knowledge sharing and
• 0:27
  Speaker 2: the storytelling of you to make a difference for today
• 0:31
  Speaker 2: and lasting impact for tomorrow.
• 0:33
  Speaker 1: Let's get into it.
• 0:34
  Speaker 3: She's on the Money. She's on the Money.
• 0:57
  Speaker 1: Hello, and welcome to She's on the Money podcast for
• 1:00
  Speaker 1: millennials who want financial freedom. Hello, Victoria Divine.
• 1:04
  Speaker 4: Oh that's so formal of you, because last week, what'd
• 1:07
  Speaker 4: you call me last week?
• 1:08
  Speaker 1: Vicky D No I knew you would calling onto that. Yeah,
• 1:13
  Speaker 1: I'm trying to think grudge.
• 1:14
  Speaker 4: If anybody has a good nickname that I can call beck,
• 1:17
  Speaker 4: that's like not rude, but also it's not that great.
• 1:19
  Speaker 1: Let me know, I'm very keen to see what people
• 1:21
  Speaker 1: come up. Am I really? Okay? So vickid Sorry, I'm
• 1:26
  Speaker 1: going to stop doing that. This is just the last
• 1:27
  Speaker 1: one I want to throw in there. But today we
• 1:29
  Speaker 1: are talking about the quarterly market update, which I'd be
• 1:31
  Speaker 1: very excited about it. I'm going to be. I'm so excited.
• 1:34
  Speaker 1: So I guess we'll find out what's on special at
• 1:38
  Speaker 1: the local stum. No, no, no, no.
• 1:40
  Speaker 4: We are going to be talking about something sadly far
• 1:44
  Speaker 4: more boring and farther reaching. I mean, it does affect
• 1:48
  Speaker 4: the cost of things in your basket at Audi, Like
• 1:50
  Speaker 4: Audi don't even have baskets, so that was a terrible analogy,
• 1:54
  Speaker 4: but it does affect the cost of food. We are
• 1:56
  Speaker 4: going to be discussing what's happening in the economy right now,
• 1:59
  Speaker 4: beck and what's going on in our community. Because I
• 2:02
  Speaker 4: sat back a couple of weeks ago and one of
• 2:04
  Speaker 4: my favorite emails to read as an ex financial advisor
• 2:08
  Speaker 4: are the market update emails. And I'm still subscribed to
• 2:11
  Speaker 4: all of these. If you are one of the research
• 2:13
  Speaker 4: houses that still sends me market updates, please don't stop
• 2:16
  Speaker 4: just because you heard that I wasn't an advisor anymore.
• 2:19
  Speaker 1: I get a lot out of them, but.
• 2:20
  Speaker 4: They are arguably some of the driest publications on the
• 2:24
  Speaker 4: entire planet, right, Like we're talking about share prices and
• 2:28
  Speaker 4: what's gone up and what's gone down, and what CEO
• 2:30
  Speaker 4: has switched with another CEO and the backgrounds of that
• 2:33
  Speaker 4: CEO and where they've come from. Like it's honestly, they're dry.
• 2:37
  Speaker 1: That's brutal.
• 2:37
  Speaker 4: I like it because it's kind of like I already
• 2:40
  Speaker 4: have that base understanding of what's going on with that company.
• 2:43
  Speaker 4: But anybody reading it would be like, what is this victorial?
• 2:46
  Speaker 1: Why are you excited about it?
• 2:48
  Speaker 4: But what I like about it is that it keeps
• 2:50
  Speaker 4: my finger on the pulse, Like I know what's going on,
• 2:51
  Speaker 4: I know how it's going to work, but I figured
• 2:53
  Speaker 4: what we can start doing on cheese on the money
• 2:56
  Speaker 4: is like a non boring version of a quarterly market update.
• 3:00
  Speaker 4: I tell you, like what's been going on in the
• 3:01
  Speaker 4: last few months when it comes to economics and politics
• 3:04
  Speaker 4: and how it all kind of impacts the bottom line.
• 3:07
  Speaker 1: So what does this mean for you? A lot of things.
• 3:10
  Speaker 4: So if you're a shareholder, it's going to be impacting
• 3:12
  Speaker 4: your share price. But if you're back and you're not
• 3:15
  Speaker 4: investing yet, it's going to impact how much your groceries are.
• 3:18
  Speaker 4: It's going to impact. You know what your community is saying.
• 3:21
  Speaker 4: It's going to be impacting political decisions that you make.
• 3:23
  Speaker 4: And I just think all of us need to be
• 3:25
  Speaker 4: more educated on this. But until now, the content has
• 3:29
  Speaker 4: been really dry and really boring. And to be honest,
• 3:31
  Speaker 4: I'm not going to wake up at six am to
• 3:33
  Speaker 4: get the market updates on ABC News. Love you ABC
• 3:38
  Speaker 4: probably the wrong demographic that we're speaking to, right.
• 3:40
  Speaker 1: M Absolutely, well, I'm interested to see how you make
• 3:43
  Speaker 1: this not boring. But it's just going to be the
• 3:46
  Speaker 1: tone of voice. It's just going to be tone of voice.
• 3:47
  Speaker 4: It's just going to be tone of voice around excited
• 3:50
  Speaker 4: about it and what happens when you're excited and also
• 3:54
  Speaker 4: really confident about something because people believe you.
• 3:56
  Speaker 1: Yeah, absolutely, she's going to trojanhorse us everyone.
• 3:59
  Speaker 4: It's basically like gas lighting people with tone of voice into.
• 4:02
  Speaker 1: Thinking finance and economics is cool. So I feel like
• 4:05
  Speaker 1: everyone has been pretty anxious in the community as interest
• 4:08
  Speaker 1: rates are so much higher, Inflation is hectic, and we
• 4:12
  Speaker 1: talk about it every week, so we do we do.
• 4:15
  Speaker 4: I feel like there's a vibe in the community that is,
• 4:19
  Speaker 4: you know, I love you all. Please don't take this negatively,
• 4:21
  Speaker 4: but I feel like everyone's being a little bit negative
• 4:23
  Speaker 4: at the moment, and I feel like that's being perpetuated
• 4:25
  Speaker 4: by media, and it does make you feel like trash
• 4:27
  Speaker 4: when every second day we're hearing that our mortgages are
• 4:30
  Speaker 4: going to cost us more and it's harder to get
• 4:32
  Speaker 4: into property because the cash rate has increased again, and
• 4:35
  Speaker 4: it just it feels bad when we hear the inflation
• 4:38
  Speaker 4: is at seven point one percent, and then you have
• 4:40
  Speaker 4: a chat with your employer and they're like, oh, bet,
• 4:42
  Speaker 4: here's it, and I mean, this hasn't actually happened to you,
• 4:44
  Speaker 4: so disclaimer, but like, oh bet, you're getting a two
• 4:47
  Speaker 4: percent pay rise and you should be grateful for that.
• 4:49
  Speaker 1: Like we're all just a little bit pissed right Like we're.
• 4:51
  Speaker 4: Not happy about the economic circumstances at the moment. But
• 4:55
  Speaker 4: I think something that can help us is understanding it.
• 4:58
  Speaker 4: I'm not saying don't be mad. You can add absolutely
• 5:00
  Speaker 4: be mad. But what we need to remember is the
• 5:03
  Speaker 4: economics goes in ebbs and flows. There are going to
• 5:05
  Speaker 4: be highs in economics and there are going to be
• 5:07
  Speaker 4: lows in economics, and right.
• 5:08
  Speaker 1: Now we're kind of going through a little bit of
• 5:09
  Speaker 1: a low.
• 5:10
  Speaker 4: It does feel a bit trashy, but there are also
• 5:12
  Speaker 4: going to be times where the economy is absolutely booming
• 5:14
  Speaker 4: and you're killing it. I'm killing it, and we're investing
• 5:17
  Speaker 4: well and we're just having the best time. But at
• 5:19
  Speaker 4: the moment, we're just in this circumstance where it is
• 5:22
  Speaker 4: on the downturn. We don't know when it's going to
• 5:24
  Speaker 4: turn back up. We can listen to a lot of
• 5:26
  Speaker 4: smart people talk a lot of smart junk about it,
• 5:29
  Speaker 4: but ultimately nobody can predict the future.
• 5:31
  Speaker 1: We do think it's.
• 5:32
  Speaker 4: Going to go up relatively soon, we do think, and
• 5:35
  Speaker 4: a lot of educated people say that, you know, the
• 5:37
  Speaker 4: recession is heading for us, but it's probably not going
• 5:40
  Speaker 4: to be as bad as we're anticipating. But what does
• 5:42
  Speaker 4: that all mean? And I guess that's why we're having
• 5:44
  Speaker 4: this conversation today, V.
• 5:46
  Speaker 1: When we talk about quarterly market update, I'm wondering what
• 5:49
  Speaker 1: is a quarter like? How does that work? And what
• 5:50
  Speaker 1: quarter are we in?
• 5:51
  Speaker 4: Good question, So when we say quarterly market update, the
• 5:55
  Speaker 4: twelve months of the year are broken down into four
• 5:58
  Speaker 4: segments of three months each, and there's a few different
• 6:01
  Speaker 4: ways of looking at it. We could either be in
• 6:03
  Speaker 4: Q two or Q four right now, So we're in
• 6:06
  Speaker 4: for a calendar year Q two, So quarter two we've
• 6:09
  Speaker 4: had January, February, March, so that was Q one. April
• 6:12
  Speaker 4: May and June is Q two. But in terms of
• 6:15
  Speaker 4: the financial year, which is what we're going to reference
• 6:17
  Speaker 4: right now, we're in Q four. So Q four is
• 6:20
  Speaker 4: because the end of financial year here in Australia ends
• 6:23
  Speaker 4: on the thirtieth of June, and so a lot of businesses,
• 6:26
  Speaker 4: a lot of economists, we're all working towards this end
• 6:29
  Speaker 4: of financial year. Also my birthday, so I like to
• 6:32
  Speaker 4: think that it's really fancy, but it's one of those
• 6:35
  Speaker 4: things where you might hear Q two or you might
• 6:37
  Speaker 4: hear Q four. But in the finance world, we're currently
• 6:39
  Speaker 4: in Q four because the end of financial year is
• 6:42
  Speaker 4: on June thirty, so we're currently in the.
• 6:44
  Speaker 1: Midst of that.
• 6:45
  Speaker 4: And that's why a lot of people right now are
• 6:47
  Speaker 4: talking about inflation because on the thirtieth of June, that's
• 6:51
  Speaker 4: when things are going to be locked in. We're talking
• 6:52
  Speaker 4: about HEX because the CPI and inflation on HEX is
• 6:56
  Speaker 4: going to be locked in before the end of the
• 6:58
  Speaker 4: financial year to make sure that the ATO calculates things. Well,
• 7:02
  Speaker 4: there's a lot of things that are going to be
• 7:03
  Speaker 4: wrapping up on June thirty, which means our community needs
• 7:06
  Speaker 4: to be privy to it.
• 7:07
  Speaker 1: But that's why I think we'll focus on Q four instead. Right, Okay,
• 7:11
  Speaker 1: so what is currently happening right now for our community?
• 7:15
  Speaker 4: First things first, let's talk about employment rates. I feel
• 7:18
  Speaker 4: like Korea is a topic that we need to be
• 7:19
  Speaker 4: really talking about, and I think it impacts most people
• 7:22
  Speaker 4: in our community because they are either employed, looking to
• 7:25
  Speaker 4: be employed, or are planning to be employed in the future.
• 7:28
  Speaker 4: So employment rates are at record lows. So this is
• 7:31
  Speaker 4: a good thing. Of three point five percent. This means
• 7:35
  Speaker 4: that it is a job seekers market. The need for
• 7:38
  Speaker 4: new staff and employees in areas like hospitality and tourism
• 7:42
  Speaker 4: and manufacturing and mining, healthcare, social work, trades and services
• 7:46
  Speaker 4: has increased, which is a really good thing for the
• 7:49
  Speaker 4: environment as a whole. As you can imagine if we
• 7:52
  Speaker 4: give as much context here as possible. We went through COVID, right,
• 7:56
  Speaker 4: and COVID was a period of significant economic downto our
• 8:00
  Speaker 4: government carried us for a serious period of time that
• 8:03
  Speaker 4: was really nice, so we didn't.
• 8:05
  Speaker 1: Feel the brunt of it.
• 8:06
  Speaker 4: While heaps of us weren't working but areas like hospitality, tourism,
• 8:11
  Speaker 4: mining health. Yet they were hit really hard by that
• 8:14
  Speaker 4: period of time, and then straight after COVID, like they
• 8:17
  Speaker 4: weren't recovering very quickly, like how many cafes did we
• 8:20
  Speaker 4: see closing down? And there weren't that many hostbow jobs
• 8:23
  Speaker 4: going around, And to be honest, after COVID, people were
• 8:26
  Speaker 4: really apprehensive about going back to roles that were quite
• 8:30
  Speaker 4: people facing, so they didn't really want to do them
• 8:32
  Speaker 4: because they thought that there was a lot of risk.
• 8:34
  Speaker 4: And now it has been announced by the WHO, So
• 8:36
  Speaker 4: the World Health Organization has announced that we're no longer
• 8:39
  Speaker 4: in a pandemic, which is really really cool, and I
• 8:41
  Speaker 4: think that a lot of us are feeling that pressure release.
• 8:45
  Speaker 4: I don't think that it was the announcement that felt
• 8:47
  Speaker 4: like the pressure was releasing. I think we just started
• 8:49
  Speaker 4: getting back to this new normal, you could say, and
• 8:52
  Speaker 4: now we're confident enough to take up hospbow jobs and
• 8:55
  Speaker 4: working tourism. All of that is starting to pick up,
• 8:58
  Speaker 4: which means that the economy is basically operating above its
• 9:02
  Speaker 4: full capacity and there's downwards pressure on inflation, which for
• 9:06
  Speaker 4: us is actually really good. So that cash rate is
• 9:09
  Speaker 4: going to come down because employment rates are at a
• 9:12
  Speaker 4: record low.
• 9:13
  Speaker 1: Okay, So is this amazing news or is there any downside?
• 9:16
  Speaker 4: Look, it's pretty good news. At the end of the day.
• 9:18
  Speaker 4: We actually want unemployment rates to be at a record
• 9:21
  Speaker 4: low because it basically means more people have more jobs,
• 9:23
  Speaker 4: and we want more people to be in more employment
• 9:25
  Speaker 4: because the more people that are working, the more money
• 9:28
  Speaker 4: is going through our economy, and the more money that
• 9:30
  Speaker 4: goes through our economy, the healthier we are. Right, So
• 9:33
  Speaker 4: is it a good thing?
• 9:34
  Speaker 1: Absolutely? It is. Beck.
• 9:35
  Speaker 4: There's never going to be a period of time where
• 9:37
  Speaker 4: it's a zero percent unemployment rate where absolutely everyone in
• 9:41
  Speaker 4: the economy has a job.
• 9:42
  Speaker 1: And that's okay.
• 9:44
  Speaker 4: But what you want to see is that on the
• 9:45
  Speaker 4: lower side during COVID that obviously peaked and that wasn't good,
• 9:49
  Speaker 4: which meant that we are now in the economic circumstances
• 9:52
  Speaker 4: that we are in today. Ultimately, we are in this
• 9:55
  Speaker 4: period right now where inflation is really high. So we
• 9:58
  Speaker 4: know that inflation is at seven point one percent and
• 10:01
  Speaker 4: everything is so much more expensive due to inflation. So
• 10:05
  Speaker 4: in regards to wages and income in the December quarter,
• 10:09
  Speaker 4: in twenty twenty two the seasonally adjusted WPI, which sounds
• 10:14
  Speaker 4: really fancy because beck, did you know if you use acronyms,
• 10:16
  Speaker 4: it actually makes you more intelligent?
• 10:18
  Speaker 1: I have heard, Yeah, I heard. So it's actually just
• 10:21
  Speaker 1: the wage price.
• 10:22
  Speaker 4: Index, so it's not that sexy, but finance bros will
• 10:25
  Speaker 4: throw around the acronyms to make you feel silly, and
• 10:27
  Speaker 4: then if you feel silly, you assume they're smarter than you.
• 10:30
  Speaker 1: Right, it's not the.
• 10:31
  Speaker 4: Case at all, but the WPI, so the wage price
• 10:34
  Speaker 4: index actually measures changes in the price of labor, so
• 10:37
  Speaker 4: whether labour's cheaper or more expensive. And we know because
• 10:41
  Speaker 4: of the conversations that our community has been having and
• 10:43
  Speaker 4: I've been having because as you guys know, I've been
• 10:45
  Speaker 4: renovating house. So this is probably a good example of
• 10:49
  Speaker 4: WPI being high. It was so expensive to get trade's
• 10:53
  Speaker 4: because they weren't that many of them, so they could
• 10:55
  Speaker 4: charge a premium, so the WPI in construction was much higher.
• 10:59
  Speaker 4: I think a lot of us can understand that, and
• 11:01
  Speaker 4: that makes a lot of sense. But in the December
• 11:03
  Speaker 4: quarter twenty twenty two, WPI rose by zero point eight
• 11:08
  Speaker 4: percent in this quarter and three point three percent over
• 11:11
  Speaker 4: this year that is actually relatively high the private sector,
• 11:15
  Speaker 4: so like private businesses rose zero point eight percent and
• 11:19
  Speaker 4: the public sector rose by zero point seven percent, so
• 11:23
  Speaker 4: relatively on par Australia's minimum wage for an adult is
• 11:26
  Speaker 4: currently sitting at twenty one dollars and thirty eight cents
• 11:30
  Speaker 4: per hour. This is before tax, or eight hundred and
• 11:33
  Speaker 4: twelve dollars and sixty cents for thirty eight hour work week.
• 11:37
  Speaker 4: And to I guess put this into a little bit
• 11:40
  Speaker 4: of context, the wage price index actually defines an adult
• 11:44
  Speaker 4: as anyone over the age of twenty one, not eighteen,
• 11:47
  Speaker 4: So it's not taking into consideration those people who are
• 11:50
  Speaker 4: kind of like just settling into work. It's actually like
• 11:53
  Speaker 4: the more settled individuals in our community, which is just
• 11:56
  Speaker 4: interesting to know.
• 11:56
  Speaker 1: That is very interesting, And I think this is a
• 11:58
  Speaker 1: really good time to take it, quick break, absorb everything,
• 12:01
  Speaker 1: and come back on the other side. All right, let's
• 12:03
  Speaker 1: do it. Let's do it. All right, we are back, Beck,
• 12:10
  Speaker 1: Are you excited about this topic yet? Look, I'm getting there.
• 12:13
  Speaker 1: It's starting to make sense to me, so I'm slowly
• 12:15
  Speaker 1: getting excited. What is happening in the economy right now?
• 12:19
  Speaker 4: All right, I will answer that question, But how many
• 12:22
  Speaker 4: people do you think actually gave any care to what
• 12:27
  Speaker 4: the RBA was doing and what they did in their
• 12:30
  Speaker 4: meetings each and every single month until maybe like midyear
• 12:33
  Speaker 4: last year.
• 12:34
  Speaker 1: I know I didn't care.
• 12:35
  Speaker 4: You still probably don't care, to be honest, I know
• 12:38
  Speaker 4: you well enough now. But the RBA is the Reserve
• 12:41
  Speaker 4: Bank of Australia, right and their job is to make
• 12:43
  Speaker 4: sure that inflation doesn't spiral out of control for us,
• 12:46
  Speaker 4: to make sure that cash is always accessible and that
• 12:48
  Speaker 4: they're doing the right thing right. But essentially nobody cared
• 12:52
  Speaker 4: about it until it was really really impacting.
• 12:54
  Speaker 1: Our bottom lines.
• 12:55
  Speaker 4: They were just bobbing along having a good day. Like
• 12:57
  Speaker 4: they'd probably put their little press releases out and outlets
• 13:00
  Speaker 4: it'd be like, yeah, cool, thanks, but we have a
• 13:02
  Speaker 4: busy news day, like we're probably not going to be
• 13:04
  Speaker 4: able to talk about the RBA, and they're like, yeah, no,
• 13:06
  Speaker 4: where is Noorries? And then when stuff started to hit
• 13:08
  Speaker 4: the fan, they're putting out their press releases and every
• 13:11
  Speaker 4: single media outlet's.
• 13:12
  Speaker 1: Like, oh my god, can you get the RBA's media release.
• 13:15
  Speaker 1: Let's see what's going like we are watching it like hawks.
• 13:18
  Speaker 4: I have always watched it like a hawk because I'm
• 13:20
  Speaker 4: always interested in it. But now everybody kind of knows
• 13:22
  Speaker 4: that they meet at around eleven am every day, and
• 13:24
  Speaker 4: you know that there's going to be an announcement after that,
• 13:26
  Speaker 4: and I just wait for this, like I'm so excited
• 13:28
  Speaker 4: about it. Right, But so many people are now waiting
• 13:32
  Speaker 4: on the results of their monthly meetings with absolutely baited
• 13:35
  Speaker 4: breath to see how much they have increased interest rates
• 13:37
  Speaker 4: to counter inflation. Right, and we know that over time
• 13:41
  Speaker 4: this is actually going to start declining, which is really good.
• 13:44
  Speaker 4: I do foresee it going up a few more times.
• 13:47
  Speaker 4: I'm really sorry. It's not just me saying this, like
• 13:50
  Speaker 4: me saying this because it makes sense to me. But
• 13:52
  Speaker 4: also according to leading economists in Australia and the Central Bank,
• 13:56
  Speaker 4: inflation is expected to continue rising before the end of
• 14:00
  Speaker 4: the year and even further into twenty twenty three before
• 14:03
  Speaker 4: declining back down to target range. So target range is
• 14:06
  Speaker 4: between two and three percent. Context, we're currently at seven
• 14:09
  Speaker 4: point one percent by approximately twenty twenty four, so we'll
• 14:12
  Speaker 4: go back down. That's the purpose of increasing the cash
• 14:16
  Speaker 4: rate because that's what it kind of counters.
• 14:18
  Speaker 1: It's kind of like levers, right.
• 14:20
  Speaker 4: The RBA know that if they pulled the lever of saying,
• 14:22
  Speaker 4: all right, Beck, we're going to make cash a little
• 14:24
  Speaker 4: bit more expensive, it's actually going to stunt inflation.
• 14:27
  Speaker 1: And that's good for us.
• 14:29
  Speaker 4: So as much as it feels really trash, it's really
• 14:31
  Speaker 4: good for us in the long term that they're kind
• 14:34
  Speaker 4: of like putting the brakes on a little bit and
• 14:37
  Speaker 4: you know, making sure that as an economy we are
• 14:39
  Speaker 4: going to be okay, and we'll go back to a
• 14:41
  Speaker 4: more reasonable rate of inflation of between two and three percent.
• 14:45
  Speaker 4: And ultimately we don't want no inflation. That would be bad.
• 14:49
  Speaker 4: That would mean that our economy is not doing well enough,
• 14:51
  Speaker 4: it's not growing. We don't want too much inflation because
• 14:54
  Speaker 4: look what's happened. We are now at seven point one percent,
• 14:57
  Speaker 4: and bet everything's so expensive. It's growing too quickly. Our
• 15:00
  Speaker 4: wages aren't keeping up with it. The world is an
• 15:02
  Speaker 4: expensive place to live. Our mortgages are costing us an
• 15:05
  Speaker 4: armoral egg, like it's not a good place to live.
• 15:07
  Speaker 4: But at two to three percent, that's really healthy economic growth.
• 15:12
  Speaker 4: That is a good place to be to know that
• 15:14
  Speaker 4: wages are going to increase slowly over time. Our exports
• 15:17
  Speaker 4: are going out nicely, they're coming in nicely. We've got
• 15:20
  Speaker 4: some good jobs, we've got good job growth. Everything is
• 15:23
  Speaker 4: doing well. So we don't want no inflation because that
• 15:25
  Speaker 4: means no growth, but we want an amount of growth
• 15:28
  Speaker 4: that we can keep up with because we can't run
• 15:29
  Speaker 4: this fast. Beck like, I can't keep up with seven
• 15:31
  Speaker 4: percent two to three. Yeah, that seems like walking pace.
• 15:34
  Speaker 4: I could probably do that. Oh yeah, does that make sense?
• 15:36
  Speaker 1: Yeah, that does make sense.
• 15:37
  Speaker 4: So over the twelve months to the March quarter CPI,
• 15:41
  Speaker 4: so consumer price index rows to seven percent. We know
• 15:44
  Speaker 4: that already, but that is showing signs that interest rate
• 15:48
  Speaker 4: rises are flowing into households and actually dampening consumer demand.
• 15:52
  Speaker 4: So that basically means, as interest rates are increasing in households,
• 15:57
  Speaker 4: you're starting to make decisions about cutting back on non
• 16:00
  Speaker 4: discretionary items. So we're not really going to the movies
• 16:02
  Speaker 4: as much, we're not really buying that many discretionary items,
• 16:06
  Speaker 4: We're not buying things just because it's fun. We kind
• 16:08
  Speaker 4: of cut back and go back a bit to the basics.
• 16:11
  Speaker 4: The figure, so we're now at seven point one percent,
• 16:14
  Speaker 4: is actually slightly higher than the predicted six point nine
• 16:18
  Speaker 4: percent that analysts and economists were predicting beg but lower
• 16:22
  Speaker 4: than the thirty year high of seven point eight percent
• 16:26
  Speaker 4: from the December quarter.
• 16:27
  Speaker 1: That's a good thing.
• 16:28
  Speaker 4: Overall prices on average rows one point four percent over
• 16:32
  Speaker 4: the March quarter alone, and the Australian Bureau of Statistics
• 16:36
  Speaker 4: also released the monthly CPI figures, so Consumer Price Index
• 16:39
  Speaker 4: figures for March, which came in at six point three percent,
• 16:43
  Speaker 4: which is a fall. So it's dropped away a little
• 16:45
  Speaker 4: bit from the annual rises of six point eight percent
• 16:48
  Speaker 4: from February and seven point four percent for January.
• 16:52
  Speaker 1: So this is a good thing. We're seeing it kind
• 16:54
  Speaker 1: of starting to come back. We lack this. This is
• 16:57
  Speaker 1: good news. Are you keeping up, my friend. It's a
• 17:00
  Speaker 1: lot to take in, but I think we're getting there.
• 17:03
  Speaker 4: I don't expect you to get it immediately, by the way.
• 17:05
  Speaker 4: I know that I'm rattling off this stuff, but it's
• 17:08
  Speaker 4: one of those things where if this isn't your first language,
• 17:11
  Speaker 4: finance is my first language. This is going to go
• 17:14
  Speaker 4: straight over your head. Sometimes you just need to literally
• 17:17
  Speaker 4: go back a little bit and just listen to it again.
• 17:19
  Speaker 4: If it's not making sense to you, it's going to
• 17:21
  Speaker 4: be exposure that gets you there. It's not a lack
• 17:24
  Speaker 4: of education. You've just never had this language. You've just
• 17:27
  Speaker 4: never been communicated like this. It's like learning French and
• 17:30
  Speaker 4: you kind of pick up a few words and we're
• 17:32
  Speaker 4: talking about dogs and cats, and you might understand, Okay,
• 17:34
  Speaker 4: they're talking about a dog and a cat, because I
• 17:36
  Speaker 4: absolutely recognize those two words, but the stuff around it
• 17:39
  Speaker 4: didn't make sense. Context is going to be key here.
• 17:42
  Speaker 4: So if you didn't understand what I'm talking about thus far,
• 17:45
  Speaker 4: I get it, sis.
• 17:45
  Speaker 1: I really do.
• 17:46
  Speaker 4: Prior to me being a financial advisor, I would have
• 17:49
  Speaker 4: been like, I'm turning this podcast off.
• 17:50
  Speaker 1: It makes us no sense.
• 17:52
  Speaker 4: But I promise you all of that is going to
• 17:55
  Speaker 4: make sense once you go, Okay, I'm over it. I
• 17:57
  Speaker 4: do know what CPI is, Okay, I'm over it. I
• 17:59
  Speaker 4: know what the Central Bank is. Okay, the RBA makes sense.
• 18:02
  Speaker 1: Like all of this.
• 18:02
  Speaker 4: Stuff, it's just about exposure. Yeah, if you're not getting it,
• 18:05
  Speaker 4: it's not because you're silly. I promise you are such
• 18:07
  Speaker 4: a smart person. And while I say this isn't complicated stuff,
• 18:11
  Speaker 4: it genuinely can sometimes feel like I'm speaking another language.
• 18:16
  Speaker 1: Listen to it again.
• 18:17
  Speaker 4: I promise, And I just wanted to interject there because
• 18:20
  Speaker 4: I feel like, genuinely sometimes people are like, what the
• 18:22
  Speaker 4: hell am I an idiot for not understanding this?
• 18:25
  Speaker 1: No, Sis, you're not. You just never spoken French before.
• 18:28
  Speaker 4: How are you going to know how to speak French
• 18:30
  Speaker 4: if we don't practice it consistently?
• 18:32
  Speaker 1: Exactly?
• 18:32
  Speaker 4: All right back on track. The ABS, the Australian Bureau
• 18:35
  Speaker 4: of Statistics. You guys know, I am obsessed with them.
• 18:38
  Speaker 4: If I'm not obsessed with them enough, I'm obsessed with
• 18:40
  Speaker 4: their social media presence. Go follow them on Instagram. I'm
• 18:43
  Speaker 4: still trying to work out who's running their Instagram because
• 18:47
  Speaker 4: they are some of the wittiest people in the entire
• 18:49
  Speaker 4: world far out. I want to be you. I want
• 18:51
  Speaker 4: to know you. If you work at the ABS, and
• 18:53
  Speaker 4: you know you, let me know. I'll keep it a secret.
• 18:56
  Speaker 4: I just want to know, like, I'm not going to
• 18:57
  Speaker 4: try and steal those people from you. I might, like,
• 19:00
  Speaker 4: promise I won't if you're nice. But in its recent release,
• 19:04
  Speaker 4: the Australian Bureau of Statistics noted that the most significant
• 19:07
  Speaker 4: price rises were in a few things gas and other
• 19:11
  Speaker 4: household fuels. I don't think anyone's going to be surprised
• 19:13
  Speaker 4: about that, which soared by fourteen point three percent. Fourteen
• 19:18
  Speaker 4: point three percent more for gas, that is wild geez.
• 19:22
  Speaker 4: Medical and hospital services they rose by four point two percent.
• 19:27
  Speaker 4: Tertiary education costs rose by nine point seven percent.
• 19:33
  Speaker 1: Oh wow, discoo stent.
• 19:35
  Speaker 4: And domestic holiday travel and accommodation is up by four
• 19:39
  Speaker 4: point seven percent, which personally I found quite crazy because
• 19:43
  Speaker 4: I assumed that it would be much higher than that,
• 19:46
  Speaker 4: because obviously, during a period of time black we've just
• 19:48
  Speaker 4: gone through with COVID, I thought it would be with
• 19:51
  Speaker 4: so many international workers leaving our country and so many
• 19:56
  Speaker 4: Australian workers now taking those roles and arguably demand higher
• 20:00
  Speaker 4: incomes or less hours or like there's just been a
• 20:04
  Speaker 4: lot of change. I assumed that domestic holiday travel and
• 20:07
  Speaker 4: accommodation would be higher. But I think because a lot
• 20:11
  Speaker 4: of these places are just trying to keep people coming
• 20:13
  Speaker 4: in the door, they haven't raised prices as much, and
• 20:16
  Speaker 4: I would genuinely predict that in the future that is
• 20:19
  Speaker 4: going to go up even more because it's still expensive
• 20:22
  Speaker 4: to like run hotels and run resorts and run any
• 20:26
  Speaker 4: type of accommodation like that's expensive and the burden that
• 20:29
  Speaker 4: they carry of not being in business for such a
• 20:31
  Speaker 4: long period of time, I believe is still being carried.
• 20:35
  Speaker 4: So I would not be confused if you know, in
• 20:37
  Speaker 4: a couple of months the ABS releases data that says
• 20:40
  Speaker 4: domestic holiday travel and accommodation is much more expensive four
• 20:44
  Speaker 4: point seven. I was like, do you mean fourteen point seven?
• 20:46
  Speaker 4: But that's not the case. I did triple check it,
• 20:49
  Speaker 4: all right. The Reserve Bank have increased their interest rates.
• 20:52
  Speaker 4: So the cash rate we've talked about inflation obviously at
• 20:54
  Speaker 4: seven point one percent, but the cash rate that the
• 20:57
  Speaker 4: Reserve Bank have implemented try and battle that is now
• 21:00
  Speaker 4: at three point eighty six percent. So the Reserve Bank,
• 21:03
  Speaker 4: let's see the Reserve Bank. The RBA is the big dogs,
• 21:06
  Speaker 4: and they have all the money. They lend their money
• 21:10
  Speaker 4: to other banks, So like NAB and where's packing comback,
• 21:13
  Speaker 4: they all go to the RBA and they say, hello, sir,
• 21:15
  Speaker 4: we're a business and we offer mortgages, but we need
• 21:19
  Speaker 4: your money, so we will pay you a certain amount
• 21:22
  Speaker 4: of money to borrow your money and then we will
• 21:24
  Speaker 4: lend it to our consumers. So we'll lend it to
• 21:26
  Speaker 4: Beck if she wants to buy a house. The RBA
• 21:28
  Speaker 4: historically was like, yeah, let's make sure that housing is
• 21:31
  Speaker 4: really affordable. Let's drop the cash rate to one percent.
• 21:34
  Speaker 4: Banks will like, heck, yeah, that means that if we
• 21:37
  Speaker 4: are paying one percent to borrow the money from the
• 21:40
  Speaker 4: RBA to give to our customers, we could probably clip
• 21:43
  Speaker 4: the ticket by lacker point five percent. So if you
• 21:46
  Speaker 4: then bet go down the street and say, hey, nab
• 21:48
  Speaker 4: one alone, they'll go, we can give it to you
• 21:50
  Speaker 4: for one point five percent, because that means that they're
• 21:52
  Speaker 4: making back the one percent that they're paying the RBA,
• 21:54
  Speaker 4: and then they're making point five percent on your interest rate,
• 21:57
  Speaker 4: and you go, that's a good deal. That's cheap money.
• 22:00
  Speaker 4: Now the RBA is saying, oh, people are borrowing too
• 22:02
  Speaker 4: much money. Things are getting wild. We need to stop
• 22:05
  Speaker 4: people spending as much on discretionary items. You know what
• 22:08
  Speaker 4: we can do. We can tighten up the belts. We
• 22:10
  Speaker 4: can actually increase our cash rate to three point eight
• 22:13
  Speaker 4: six percent, which is going to mean Beck she can't
• 22:16
  Speaker 4: afford brunches easily. That means that Beck's not going to
• 22:20
  Speaker 4: be contributing to the economy, which is going to slow
• 22:22
  Speaker 4: down economic growth. So that our inflation rate goes down.
• 22:26
  Speaker 4: And what that means is that these banks are now going, oh,
• 22:29
  Speaker 4: we used to be able to borrow money for one
• 22:31
  Speaker 4: percent from the RBA. Now we have to borrow at
• 22:34
  Speaker 4: three point eight six percent. We're not actually making money,
• 22:37
  Speaker 4: so we're going to have to pass that on to
• 22:39
  Speaker 4: our consumers. So, Beck, if you were able to get
• 22:41
  Speaker 4: money for one point five percent, now when you go
• 22:44
  Speaker 4: down to the bank and say, hey, need a home loan,
• 22:45
  Speaker 4: they're going to say, look, Beck, we borrow money for
• 22:48
  Speaker 4: three point eight six percent from the RBA. We still
• 22:51
  Speaker 4: want to make at least that point five percent. So
• 22:53
  Speaker 4: now when you get a home loan, the average is
• 22:56
  Speaker 4: looking more like four point two four point three percent.
• 22:58
  Speaker 4: A few of them are closer to five percent, because
• 23:01
  Speaker 4: those banks still need to make money, they still have
• 23:04
  Speaker 4: employees that they need to pay, they still have a
• 23:07
  Speaker 4: debt with the RBA. It's not banks trying to screw
• 23:09
  Speaker 4: us over. I promise like your bank is not trying
• 23:12
  Speaker 4: to put you.
• 23:12
  Speaker 1: In the worse off position.
• 23:14
  Speaker 4: In fact, a bank wants money to be as cheap
• 23:16
  Speaker 4: as possible, because do you know what happens when money
• 23:18
  Speaker 4: is as cheap as possible, People borrow more of it,
• 23:21
  Speaker 4: and I promise you if the cash rate was still
• 23:24
  Speaker 4: one percent, the bank would much prefer to lend you
• 23:27
  Speaker 4: money at one point five percent. So they're taking that
• 23:30
  Speaker 4: point five. Then what's going on now, Because even if
• 23:33
  Speaker 4: they're making point five and the cash rate right now
• 23:35
  Speaker 4: is three point eight six which means the bank is
• 23:37
  Speaker 4: now saying, look back the cash rates three point eight
• 23:40
  Speaker 4: six percent, I'm still going to tack that point five
• 23:42
  Speaker 4: percent on. So now it's four point three six percent.
• 23:45
  Speaker 4: So technically they profit margin identical, but you, as a
• 23:49
  Speaker 4: consumer can afford less, so you're borrowing less money. So
• 23:52
  Speaker 4: the bank is actually making less money in this current
• 23:55
  Speaker 4: economy than they were when cash was really really cheap.
• 23:58
  Speaker 4: So it's important to remember it's not the bank's trying
• 24:01
  Speaker 4: to get us. It's actually just the way of the
• 24:02
  Speaker 4: world and it's economics. It is not the bank trying
• 24:05
  Speaker 4: to absolutely screw you over and pass it on. If
• 24:08
  Speaker 4: the bank didn't pass on this three point eight percent
• 24:10
  Speaker 4: cash rate that the RBA set, they would go bankrupt
• 24:13
  Speaker 4: beck and that's worse for the economy, and we don't
• 24:16
  Speaker 4: actually want that to happen. So as much as that hurts,
• 24:19
  Speaker 4: and it's not a fun position to be in. We
• 24:22
  Speaker 4: actually want that because it tightens the squeeze. It makes sense.
• 24:26
  Speaker 4: It's not forever, though, so I think it's really important
• 24:28
  Speaker 4: to remember that nobody's out to get us. They're actually
• 24:32
  Speaker 4: trying to protect us by putting these rules in force,
• 24:34
  Speaker 4: and that's why the cash rate is sitting where it
• 24:36
  Speaker 4: is at the moment.
• 24:38
  Speaker 1: If you want to know more about that.
• 24:39
  Speaker 4: We actually did drop an entire episode on the third
• 24:42
  Speaker 4: of May about investing in a high inflation environment, which
• 24:45
  Speaker 4: I would recommend going back and listening to. But I
• 24:48
  Speaker 4: hope that makes sense as to why the world isn't
• 24:50
  Speaker 4: trying to screw us over. I know we're really negative
• 24:52
  Speaker 4: and it really sucks, but it would be much worse
• 24:55
  Speaker 4: if they let you keep your one point five percent
• 24:56
  Speaker 4: interest rate.
• 24:57
  Speaker 1: Yes, second, really it makes sense. Sor if it sounds
• 24:59
  Speaker 1: really silly, bit is that a good thing for my
• 25:01
  Speaker 1: savings account? In that case, why would that be a
• 25:04
  Speaker 1: silly thing? Beck, I feel like you've put two and
• 25:06
  Speaker 1: two together. Absolutely, As the cash rate increases, so is
• 25:11
  Speaker 1: your interest rate on your savings account. So now is
• 25:14
  Speaker 1: probably the time if you've been looking from high interest
• 25:16
  Speaker 1: savings account and you listened to content. Maybe eighteen months
• 25:19
  Speaker 1: ago from me, I'd be like, all right, Beck, high
• 25:22
  Speaker 1: interest savings accounts are dead, Like you're not even going
• 25:25
  Speaker 1: to get more than one percent. Now, there are savings
• 25:28
  Speaker 1: accounts that have four point five percent. That's really sexy.
• 25:32
  Speaker 1: So if you haven't looked at high interest.
• 25:34
  Speaker 4: Savings account in a while because you've been worried that,
• 25:37
  Speaker 4: you know, ah, they're not worth the time, maybe they
• 25:40
  Speaker 4: are now so it might be worth looking into. So
• 25:42
  Speaker 4: you are absolutely correct, because what happens over time is
• 25:45
  Speaker 4: as interest rates increase and you're paying more on your mortgage,
• 25:48
  Speaker 4: you actually get more return on your savings account. And
• 25:51
  Speaker 4: the inverse is true. When you have cheap interest rates
• 25:53
  Speaker 4: and your mortgagees are cheaper, it actually means that you're
• 25:56
  Speaker 4: not getting such a good savings rate.
• 25:57
  Speaker 1: So you're correct.
• 25:58
  Speaker 4: Right now is a good time to be re evaluating
• 26:00
  Speaker 4: your savings account, your bloody genius.
• 26:02
  Speaker 1: Oh thank you. Okay, here we go. I'm learning something.
• 26:05
  Speaker 1: So V I hear the banks are doing pretty well.
• 26:07
  Speaker 4: They are rolling in it, you could say, which is
• 26:11
  Speaker 4: surprising because everyone's complaining about how much more they're being
• 26:14
  Speaker 4: charged on their mortgages.
• 26:15
  Speaker 1: And we've talked about this before.
• 26:16
  Speaker 4: That's actually not got a lot to do with the
• 26:18
  Speaker 4: bank profits. Like, yes, it does in a way, but
• 26:22
  Speaker 4: at the end of the day, the RBA sets the
• 26:24
  Speaker 4: cash rate and then that's how much banks are borrowing
• 26:27
  Speaker 4: money for, so they're just passing it along to you,
• 26:29
  Speaker 4: so they're not actually making you know, three or four
• 26:31
  Speaker 4: percent more. And I think a lot of us have
• 26:33
  Speaker 4: in our heads, oh my gosh, my bank was charging
• 26:35
  Speaker 4: me one point five and now they're charging me five
• 26:37
  Speaker 4: percent on my mortgage.
• 26:39
  Speaker 1: They must be rolling in it, right, That's.
• 26:41
  Speaker 4: Not actually the case because they're actually having to borrow
• 26:44
  Speaker 4: the money at more, so they're kind of just passing
• 26:46
  Speaker 4: that fee to you, so that profit margin is not
• 26:49
  Speaker 4: coming from there, which I think is important to preface
• 26:51
  Speaker 4: before I give this number because it's insane. So the
• 26:54
  Speaker 4: big four banks, so when we say the big four
• 26:57
  Speaker 4: in Australia, we're talking about A and Z, NAB and
• 27:00
  Speaker 4: west Pac. They have reported are you ready, They've reported
• 27:04
  Speaker 4: a combined sixteen billion dollars worth of profit thanks to
• 27:09
  Speaker 4: raising the cash rate. So as much as they're passing
• 27:13
  Speaker 4: it along, it's still helping them. This might see the
• 27:17
  Speaker 4: budget return a surplus. According to Motley Fools. Scott Phillips though,
• 27:21
  Speaker 4: and I've been consuming a fair bit of his data
• 27:23
  Speaker 4: recently because he's got a partnership with our friends Chairsey's.
• 27:26
  Speaker 4: And this is not a sponsored mention at all. I
• 27:28
  Speaker 4: just really like it. But he's doing the market update
• 27:31
  Speaker 4: on the Chasea's Instagram and I'm just vibing it, Like, Scott,
• 27:34
  Speaker 4: if you want to come over and do one for
• 27:36
  Speaker 4: She's on the money, Like, I just think it's really
• 27:38
  Speaker 4: good content.
• 27:39
  Speaker 1: Or we could send the community over.
• 27:40
  Speaker 4: To the Chasea's Instagram and I guess they could get
• 27:43
  Speaker 4: it there without us having.
• 27:44
  Speaker 1: To talk to Scott. Pos we could be one or
• 27:46
  Speaker 1: the other.
• 27:46
  Speaker 4: I mean, it would be nice to talk to him
• 27:48
  Speaker 4: at some point, but I think it's really really interesting
• 27:50
  Speaker 4: just I guess having these conversations and what it means.
• 27:53
  Speaker 4: And that's why I prefaced it back, because I was like, look,
• 27:55
  Speaker 4: they've you know, combined, they've got sixteen billion dollars worth
• 27:59
  Speaker 4: of and a lot of people might have jumped to
• 28:02
  Speaker 4: the conclusion that, oh my god, that's because the rates
• 28:04
  Speaker 4: have increased and you know, they're absolutely raiming us, and like, yeah, nah,
• 28:08
  Speaker 4: Like there's a balance there because if I just told
• 28:10
  Speaker 4: you that, you would have been like, yeah, because interest
• 28:12
  Speaker 4: rates went from one and a half up to like
• 28:14
  Speaker 4: four and a half. Well yeah, but they're also having
• 28:16
  Speaker 4: to borrow money at a higher percentage, so not all
• 28:19
  Speaker 4: of that is profit right, so.
• 28:21
  Speaker 1: They're kind of like making this every single year.
• 28:24
  Speaker 5: They're about yeah, like they areking bank every year, which
• 28:28
  Speaker 5: is why, honestly, when it goes back to it, it's
• 28:30
  Speaker 5: why so many people in the Australian share market like
• 28:34
  Speaker 5: owning banks, like people like going and buying blue chip
• 28:37
  Speaker 5: stocks in the Australian share market, which.
• 28:39
  Speaker 4: Are things like banks, because they're tried and they're true,
• 28:42
  Speaker 4: and they're tested, and they're relatively boring, but they have
• 28:45
  Speaker 4: consistent returns and they pay out dividends, which is like
• 28:48
  Speaker 4: paying out the profit to shareholders, and ultimately shareholders really
• 28:53
  Speaker 4: like that.
• 28:53
  Speaker 1: And I really like that. Yes, that's why I earned
• 28:56
  Speaker 1: some banks like portfolio sounds it pretty sweet. I'm assuming
• 29:00
  Speaker 1: we're happy about the banks reporting healthy profits.
• 29:03
  Speaker 4: We want that because it's a sign of a really
• 29:04
  Speaker 4: good economy. It means that the banks are doing really well.
• 29:08
  Speaker 4: We should be concerned when banks aren't churning a good
• 29:10
  Speaker 4: profit and at the end of the day, like, yes,
• 29:13
  Speaker 4: we don't want the banks to get rich rich, Like
• 29:15
  Speaker 4: the economy is really important, you know, community is really important.
• 29:19
  Speaker 4: But I think stepping away from that conversation about equality
• 29:23
  Speaker 4: and equity and all of that, because obviously a lot
• 29:26
  Speaker 4: of people are going to be quite opinionated. Beck they
• 29:28
  Speaker 4: can go, oh my god, but they should be passing
• 29:29
  Speaker 4: this on ra rah. They most often are, They're passing
• 29:33
  Speaker 4: that profit onto shareholders. So each and every single year
• 29:36
  Speaker 4: when they report a profit, or maybe it's every six months,
• 29:39
  Speaker 4: it depends on their reporting criteria, they pass it along
• 29:42
  Speaker 4: to shareholders, and they might reinvest some of that profit
• 29:45
  Speaker 4: back into building the business, but a lot of the
• 29:47
  Speaker 4: time it just goes directly to shareholders. And the reason
• 29:50
  Speaker 4: for that is the banks are already relatively well established
• 29:53
  Speaker 4: and they don't need to, you know, reinvest significant amounts
• 29:56
  Speaker 4: of their profit back into their business to grow it
• 29:59
  Speaker 4: again because they are already their back right.
• 30:01
  Speaker 1: I see, Okay, So I just want to talk about
• 30:03
  Speaker 1: the budget really quickly, because right now I don't actually.
• 30:06
  Speaker 4: Sell sexy, so sexy like what does what do you mean?
• 30:09
  Speaker 4: You don't know, didn't you on Tuesday night? Like a
• 30:13
  Speaker 4: couple of weeks ago, sit in front of the TV
• 30:15
  Speaker 4: with wine and you were like, well, sub.
• 30:17
  Speaker 1: Balbo, what's going on?
• 30:18
  Speaker 4: And then you were like watching it like the AFL
• 30:20
  Speaker 4: Grand Final.
• 30:21
  Speaker 1: Did people do that anywhere in the world? I did that?
• 30:24
  Speaker 3: You did? That's so sweet.
• 30:26
  Speaker 4: Yeah, my husband wasn't that impressed. He's recently got a
• 30:28
  Speaker 4: new PlayStation five and he would have preferred, absolutely, like
• 30:31
  Speaker 4: to play the golf game that he go, yeah, look
• 30:34
  Speaker 4: anything else, Like I thought a golf game was pretty bland,
• 30:36
  Speaker 4: but like he's been playing this golf game and yeah,
• 30:39
  Speaker 4: he kept asking me, can we.
• 30:40
  Speaker 1: Gn that on you? You can just read the.
• 30:42
  Speaker 4: Report like, no, sir, this is so exciting I need
• 30:44
  Speaker 4: to yell at the TV a little bit longer.
• 30:47
  Speaker 1: Yeah, it's like my sport. I really like it.
• 30:49
  Speaker 4: I think it tells you a lot about the government's priorities.
• 30:52
  Speaker 4: It was interesting because obviously the Albanezy government has prioritized
• 30:55
  Speaker 4: cost of living relief, which I think is really sexy.
• 30:58
  Speaker 4: So we're looking at things like housing and healthcare and
• 31:01
  Speaker 4: clean energy measures and the budget. Not everybody is happy
• 31:05
  Speaker 4: about the budget. I think a lot of people have
• 31:07
  Speaker 4: seen it as a bit of give and take, like
• 31:09
  Speaker 4: I've heard a lot of comments of people being like,
• 31:11
  Speaker 4: oh my gosh, they're investing in this.
• 31:13
  Speaker 1: But that's taken away from X. That's not how the
• 31:16
  Speaker 1: budget works.
• 31:17
  Speaker 4: You know, budget gets allocated in line with priorities of
• 31:20
  Speaker 4: the government but also the community and taking lots of
• 31:23
  Speaker 4: different factors into consideration.
• 31:25
  Speaker 1: They're not looking at it and going, oh.
• 31:26
  Speaker 4: Should we allocate to Beck or Victoria Like, they're not
• 31:29
  Speaker 4: comparing the two. They're looking at that situation and how
• 31:32
  Speaker 4: much funding it would need, and then looking at the
• 31:34
  Speaker 4: total budget and what they can allocate. They're not kind of,
• 31:37
  Speaker 4: you know, looking at it going let's take away from
• 31:39
  Speaker 4: Beck like and I think a lot of people when
• 31:42
  Speaker 4: the budget comes out feel really attacked. And that's not
• 31:46
  Speaker 4: necessarily what's happening, but it's to their own. We can
• 31:49
  Speaker 4: all have our own opinions. But essentially, the Albanese government
• 31:52
  Speaker 4: has said that they're going to deliver get this quote,
• 31:55
  Speaker 4: a stronger economy and a fairer society. Ah, I mean whatever.
• 32:00
  Speaker 4: That just feels very political and I'm very much of well,
• 32:03
  Speaker 4: put your money where your mouth is, mate, weal the walk.
• 32:05
  Speaker 4: I don't care about the talk, like, just show me
• 32:07
  Speaker 4: what you're going to do. So let's talk about the
• 32:10
  Speaker 4: budget a little bit more deeply. Do you want to
• 32:11
  Speaker 4: do that or is that too boring? Ah?
• 32:13
  Speaker 1: Look, I actually want to know. It probably will be boring,
• 32:16
  Speaker 1: but I really want to know.
• 32:17
  Speaker 4: Let's like pull out some headlines that I think we
• 32:19
  Speaker 4: should converse about. What do you recompects that. So recipients
• 32:24
  Speaker 4: of the Commonwealth Rent Assistant, So the CRA, which is
• 32:28
  Speaker 4: an existing program which about one point one million low
• 32:31
  Speaker 4: income Australians are eligible for, they're going to receive more
• 32:34
  Speaker 4: financial support. I think that's really important. So the CRA
• 32:37
  Speaker 4: payment is actually going to increase by fifteen percent, and
• 32:40
  Speaker 4: in a world where our inflation rate is sitting at
• 32:42
  Speaker 4: seven percent, like, that's probably pretty welcome.
• 32:46
  Speaker 1: Yeah, definitely, So that's good.
• 32:48
  Speaker 4: The government's also going to reward small business owners. They've
• 32:51
  Speaker 4: got a number of different financial measures that they're going
• 32:54
  Speaker 4: to introduce. So the instant Asset Right of threshold is
• 32:57
  Speaker 4: going to be temporarily increased to twenty one thousand dollars
• 33:00
  Speaker 4: from the first of July from this year. So that
• 33:03
  Speaker 4: means that if you have a small business which.
• 33:05
  Speaker 1: Get this peck. I think you'll laugh at this.
• 33:08
  Speaker 4: If you have an annual turnover of less than ten
• 33:10
  Speaker 4: million dollars. You're a small business, Like, so what what?
• 33:14
  Speaker 1: That's literally everyone?
• 33:15
  Speaker 4: Well, I just thought that small business would end it
• 33:17
  Speaker 4: like a million, but it doesn't. It ends at ten
• 33:20
  Speaker 4: million dollars, So twiggle room. Yeah, right, Like imagine being
• 33:23
  Speaker 4: like I'm a small business owner and you're earning like
• 33:25
  Speaker 4: nine million dollars.
• 33:27
  Speaker 1: Like what wow?
• 33:28
  Speaker 4: Anyway, unrelatable, But they will be able to instantly deduct
• 33:32
  Speaker 4: the entire cost for certain assets that cost less than
• 33:35
  Speaker 4: twenty thousand dollars which are first used between the first
• 33:38
  Speaker 4: of June twenty twenty three and the thirtieth of June
• 33:40
  Speaker 4: twenty twenty four. So the twenty thousand dollars threshold applies
• 33:44
  Speaker 4: to each asset. So small businesses can take advantage of
• 33:46
  Speaker 4: this measure to buy multiple assets, which is kind of good. Beck,
• 33:50
  Speaker 4: and I guess to put that into a little bit
• 33:52
  Speaker 4: of perspective for you, Like, let's say you have a
• 33:55
  Speaker 4: beauty business and you want to start doing laser Like,
• 33:58
  Speaker 4: this will increase my revenue, right, Like having a laser machine.
• 34:01
  Speaker 4: If you buy that, you're going to get an instant
• 34:04
  Speaker 4: asset right off on that. So like the tax comes
• 34:06
  Speaker 4: back to you. So it's actually relatively sexy and can
• 34:09
  Speaker 4: be for a lot of businesses worth up to like
• 34:11
  Speaker 4: thirty percent of the value.
• 34:12
  Speaker 1: Of that item. So that's actually very good.
• 34:16
  Speaker 4: So it's not like, oh yeah, instant asset right off
• 34:18
  Speaker 4: when you're kind of like, well, what does that mean.
• 34:20
  Speaker 4: It means that, like you can write off the tax
• 34:22
  Speaker 4: on that item. It doesn't mean you get that whole
• 34:24
  Speaker 4: item for free, but like you can write off that
• 34:26
  Speaker 4: tax and it's going to put you in a better
• 34:29
  Speaker 4: financial position. So instead of, you know, as a business owner,
• 34:32
  Speaker 4: we pay thirty percent on tax as a general kind
• 34:35
  Speaker 4: of blanket rule. Obviously, there's lots to it, and you
• 34:37
  Speaker 4: need to talk to your account and if you're going to,
• 34:39
  Speaker 4: you know, take this on, but it's important to understand
• 34:41
  Speaker 4: the instant asset right off means you are kind of,
• 34:45
  Speaker 4: let's call it, like, in a very basic way, getting
• 34:47
  Speaker 4: a really big discount on an asset that you need
• 34:50
  Speaker 4: to purchase for your business to grow.
• 34:51
  Speaker 1: Gotcha, And you can purchase as many of those under
• 34:55
  Speaker 1: twenty thousand dollars assets. Yeah, which is kind of sexy.
• 34:59
  Speaker 4: I mean, Okay, there are a lot of people in
• 35:01
  Speaker 4: our community who aren't so excited about the instant asset
• 35:04
  Speaker 4: right off because this year they're scrapping the instant asset
• 35:08
  Speaker 4: right off for cars, So a lot of small business Yeah,
• 35:12
  Speaker 4: so it's not completely scrapped, but it goes back down
• 35:14
  Speaker 4: to that twenty thousand dollar mark, Whereas right now you
• 35:18
  Speaker 4: can ride off a car for up to fifty nine
• 35:21
  Speaker 4: thousand dollars each financial year. So that's going to be,
• 35:23
  Speaker 4: you know, scrapped on the thirtieth of June. So, I
• 35:25
  Speaker 4: mean you're probably not always looking at carsales dot com
• 35:29
  Speaker 4: dot U. I'm not either, huh. But it's just an
• 35:31
  Speaker 4: interesting thing to talk about because at the moment, lots
• 35:34
  Speaker 4: of cars are hard to come by because it's in
• 35:36
  Speaker 4: the lead up to June thirty, and lots of small
• 35:39
  Speaker 4: business owners are kind of like snapping up the SUV
• 35:41
  Speaker 4: they've always wanted to buy, or like snapping up a
• 35:43
  Speaker 4: car for their business because their accountant has called them
• 35:46
  Speaker 4: and said, hey, Beck, like, if you were planning on
• 35:48
  Speaker 4: buying a car, now would be a great time because
• 35:51
  Speaker 4: if you buy it after the first of July, like,
• 35:54
  Speaker 4: you're not going to get basically sixty thousand dollars tax
• 35:57
  Speaker 4: right off. It's going to drop back down to twenty
• 35:59
  Speaker 4: and obviously that's pretty attractive. So lots of cars are
• 36:03
  Speaker 4: off the market. So I don't know what you'd call him,
• 36:06
  Speaker 4: my brother in law. Like my sister's partner's currently looking
• 36:09
  Speaker 4: for a car, let's.
• 36:10
  Speaker 1: Call him brother in law.
• 36:11
  Speaker 4: He's probably not rather alike, but sorry, Alex, like they're
• 36:13
  Speaker 4: not married, but that's okay, Like I'm manifesting and manifesting anyway.
• 36:17
  Speaker 4: They were looking for an amok, which is like a
• 36:20
  Speaker 4: big training car, not one left in the country. Really
• 36:23
  Speaker 4: not why you can't get it before June thirty. It's
• 36:27
  Speaker 4: just interesting to see how those things work because you
• 36:29
  Speaker 4: wouldn't think about it. But if you've been looking for
• 36:31
  Speaker 4: a family car and you just can't seem to find one,
• 36:33
  Speaker 4: my friends, that's because all the small business owners have
• 36:36
  Speaker 4: already gotten on it.
• 36:37
  Speaker 1: I think this is probably like a tax question, but
• 36:39
  Speaker 1: one for the taxman. I should say a tax woman.
• 36:41
  Speaker 1: If you tax persons, I'm sorry, I should say a
• 36:44
  Speaker 1: tax person. So if it's under twenty thousand dollars, I'm
• 36:46
  Speaker 1: assuming because it has to be like new from the
• 36:49
  Speaker 1: first of July. You can't get a secondhand car. I'm
• 36:52
  Speaker 1: assuming is that right.
• 36:53
  Speaker 4: You need to talk to the taxman, because I think
• 36:55
  Speaker 4: it depends on that, yeah, or the person or whatever
• 36:57
  Speaker 4: we're doing.
• 36:58
  Speaker 1: Like, I'm just trying to do the right thing.
• 37:00
  Speaker 4: I'm just trying to answer the question exactly the same.
• 37:03
  Speaker 4: Oh my gosh, I just doing my best, okay, and
• 37:05
  Speaker 4: so even it's my best should be enough.
• 37:08
  Speaker 1: Like oh if I talk to the tax people, Yes.
• 37:11
  Speaker 4: It depends because I think that there's a lot of
• 37:13
  Speaker 4: semantics in it about you know, how old it is
• 37:15
  Speaker 4: and what that means and how that works. Because I
• 37:18
  Speaker 4: have bought a car before in our business and been
• 37:20
  Speaker 4: able to write it. Often it was secondhand, and I'm
• 37:22
  Speaker 4: very big as an advocate I suppose of buying secondhand
• 37:25
  Speaker 4: cars because like brand new cars lose a lot of
• 37:27
  Speaker 4: their value. And I'm you know, I'm a money gal.
• 37:30
  Speaker 4: So I think have a chat with your accountant and
• 37:32
  Speaker 4: they can give you the specifics. Obviously this is not
• 37:35
  Speaker 4: a tax planning episode. I just think it fits into
• 37:37
  Speaker 4: this conversation nicely. And as you guys know, I love
• 37:40
  Speaker 4: a bit of context, like I love being able to go, oh,
• 37:42
  Speaker 4: did you know this?
• 37:43
  Speaker 1: This and this? And there's no I'm a Rocks.
• 37:45
  Speaker 4: Left I have no intention of ever buying an Ammarok,
• 37:48
  Speaker 4: but I feel smart at knowing that.
• 37:49
  Speaker 1: You know, yeah, same.
• 37:51
  Speaker 4: We're going to stop talking about the tax side of
• 37:53
  Speaker 4: things very shortly because I actually am planning to do
• 37:55
  Speaker 4: an entire tax planning episode really soon, because it's coming
• 37:58
  Speaker 4: up to tax time and I want to make sure
• 38:00
  Speaker 4: that we're in the.
• 38:00
  Speaker 1: Best possible position.
• 38:01
  Speaker 2: Beck.
• 38:02
  Speaker 4: Yes, small to medium sized businesses, so obviously medium are
• 38:06
  Speaker 4: going to be more than ten million dollars worth of turnover.
• 38:09
  Speaker 4: Wild congratulations. But these businesses and I like this are
• 38:13
  Speaker 4: going to be encouraged to buy energy efficient fridges, electric
• 38:16
  Speaker 4: cooling systems, batteries and other assets that to quote, support
• 38:20
  Speaker 4: electrification and more efficient use of energy.
• 38:23
  Speaker 1: Very good.
• 38:24
  Speaker 4: So companies with a turnover of less than fifty million
• 38:27
  Speaker 4: dollars unrelatable content will be able to deduct an additional
• 38:31
  Speaker 4: twenty percent of the cost of depreciating assets that are
• 38:34
  Speaker 4: eligible under the Small Business Energy Incentive measure. That's a mouthful.
• 38:39
  Speaker 1: That is a mouthful. What is a depreciating asset an
• 38:43
  Speaker 1: asset that you buy and then immediately it loses value?
• 38:47
  Speaker 1: Amazing and that happens over time. Check it out? Are
• 38:50
  Speaker 1: youshes on the money. Oh my goodness, to me, I
• 38:53
  Speaker 1: could pretty much just take over from this point.
• 38:54
  Speaker 4: But I think it's important to talk about that, right
• 38:56
  Speaker 4: because when we talk about instant asset ride offs, that
• 38:59
  Speaker 4: means that you're claiming one hundred percent of that depreciation
• 39:03
  Speaker 4: in one financial year. If you do that, you can't
• 39:06
  Speaker 4: claim it over subsequent years. But each and every single year,
• 39:09
  Speaker 4: your asset will decrease in value and at some point
• 39:12
  Speaker 4: it kind of becomes zero and you can no longer
• 39:15
  Speaker 4: claim it because it's not endless, and that asset essentially
• 39:18
  Speaker 4: isn't worth much anymore. Right, So it's important to understand
• 39:22
  Speaker 4: that over time. If you, as a business buy an
• 39:24
  Speaker 4: air conditioner, it's a two thousand dollar air conditioner. Next year,
• 39:28
  Speaker 4: technically to the business it might be worth eighteen hundred dollars,
• 39:30
  Speaker 4: and the year after that and the year after that
• 39:32
  Speaker 4: just decreases and decreases, and then it might be worth
• 39:34
  Speaker 4: absolutely nothing because it's a thirty year old air conditioner.
• 39:37
  Speaker 4: You know, no one's going to pay full price for that,
• 39:40
  Speaker 4: So the taxman builds that in because otherwise, if your
• 39:43
  Speaker 4: assets didn't depreciate over time, beck you'd end up buying
• 39:46
  Speaker 4: a two thousand dollar air conditioner, and then that adds
• 39:49
  Speaker 4: two thousand dollars to the value of your business. And
• 39:52
  Speaker 4: then in a couple of years you might buy a
• 39:53
  Speaker 4: few more things, and then you have this business that's
• 39:56
  Speaker 4: valued at like, you know, one hundred thousand dollars when
• 39:59
  Speaker 4: you I don't actually have one hundred thousand dollars worth
• 40:01
  Speaker 4: of assets you could recover. Does that make sense? So,
• 40:04
  Speaker 4: like I couldn't sell those things for one hundred grand.
• 40:07
  Speaker 4: So the taxman's like, let's just be reasonable about this
• 40:10
  Speaker 4: and actually claim what you're losing on those assets, which
• 40:13
  Speaker 4: is quite helpful.
• 40:14
  Speaker 1: Yes, okay, that is helpful and very kind. You should
• 40:17
  Speaker 1: just call the tax people kind. Okay, weird.
• 40:21
  Speaker 4: Look, I love the tax people. Let's leave it there.
• 40:24
  Speaker 4: Ok Let's leave it just in case they come for us.
• 40:26
  Speaker 1: All right, let's move on from small businesses.
• 40:28
  Speaker 4: So base rates of supportive payments, so things like job
• 40:31
  Speaker 4: seeker and Youth Allowance and the Partnered Parenting payment and
• 40:34
  Speaker 4: OZ study is going to rise by forty dollars a
• 40:37
  Speaker 4: fortnite from the twentieth of September. So there's been a
• 40:40
  Speaker 4: bit of, like, I guess, backlash from that because forty bucks.
• 40:44
  Speaker 1: Beec it's not really going to get you much.
• 40:46
  Speaker 4: Yeah, I feel like on job seeker or youth allowance
• 40:49
  Speaker 4: or your parent or like you're doing or study, Like
• 40:52
  Speaker 4: forty bucks, what's that going to get you nowadays?
• 40:54
  Speaker 1: Literally? Not that much? Not that much.
• 40:56
  Speaker 4: Like I feel like nowadays, you go to the supermarket
• 40:59
  Speaker 4: with a fifty dollars crisp note and you're like, that's
• 41:01
  Speaker 4: so much money, and then you get like two things
• 41:03
  Speaker 4: and you're like, where did this money go? So I
• 41:06
  Speaker 4: feel like that was a bit low. Obviously there's lots
• 41:09
  Speaker 4: of like maths and analysis behind this, and they feel
• 41:12
  Speaker 4: like that's sufficient, but there's obviously a fair bit of
• 41:14
  Speaker 4: backlash because they do deserve more. Like, if you're in
• 41:17
  Speaker 4: that situation, forty bucks in a rising inflation environment, not
• 41:21
  Speaker 4: going to do all that much, mate, not enough exactly.
• 41:24
  Speaker 4: So the government will spend three billion dollars on direct
• 41:28
  Speaker 4: bill relief, So that's quite sexy, co funded with state
• 41:31
  Speaker 4: governments to eligible households including pensioners, senior healthcare card holders,
• 41:35
  Speaker 4: and family Tax Benefit A and B recipients. So the
• 41:39
  Speaker 4: government claims more than five million households are going to
• 41:42
  Speaker 4: have up to five hundred dollars deducted from their power
• 41:45
  Speaker 4: bill next financial year. Oh that's a big deal. I
• 41:48
  Speaker 4: think that's pretty good, especially for people who you know,
• 41:52
  Speaker 4: if you're a pensioner or you have a senior healthcare
• 41:54
  Speaker 4: card holder, like you're going to need that type of relief,
• 41:57
  Speaker 4: and I'm sure that that will take a bit of
• 41:58
  Speaker 4: pressure off. Like energy these days is so expensive, and
• 42:02
  Speaker 4: we already know that, Like, let's be honest, let's stereotype
• 42:05
  Speaker 4: for a hot second here, my nanna never turns her
• 42:07
  Speaker 4: heater on, like she wants to be warm all the time.
• 42:10
  Speaker 4: I sear only one room in her house is ever heated,
• 42:13
  Speaker 4: and they're already so careful about these things. So I
• 42:16
  Speaker 4: think that that might take a little bit of pressure
• 42:17
  Speaker 4: off the people who you know, aren't doing incredibly financially
• 42:21
  Speaker 4: but still deserve to have that relief because look, honestly,
• 42:24
  Speaker 4: it's a basic human rash.
• 42:26
  Speaker 1: Yeah, all right.
• 42:27
  Speaker 4: Next up, we have single parents. They're going to be
• 42:29
  Speaker 4: able to claim the single parenting payment until their youngest.
• 42:33
  Speaker 1: Child turns fourteen.
• 42:35
  Speaker 4: Whereas the old age used to be eight years old.
• 42:37
  Speaker 4: So that's a significant jump in age, and I think
• 42:40
  Speaker 4: that that.
• 42:40
  Speaker 1: Will be really helpful.
• 42:42
  Speaker 4: And they plan to triple the bulk billing incentive that
• 42:45
  Speaker 4: GPS receive, meaning it there'll be more common consultation types
• 42:49
  Speaker 4: which doctors can choose to bulk bill for, which I
• 42:52
  Speaker 4: think is really sexy. I know doctors and I've been
• 42:54
  Speaker 4: having this conversation recently, and they're like, look, that's not
• 42:57
  Speaker 4: actually going to do as much as you think it is.
• 42:59
  Speaker 4: And I think, you know, let's take all of that
• 43:01
  Speaker 4: with a grain of salt. I think that the government
• 43:03
  Speaker 4: stepping in to kind of triple the bulk billing incentive
• 43:06
  Speaker 4: is good, but there's obviously a lot of other pressures
• 43:09
  Speaker 4: on doctors to be able to bulk bill and actually
• 43:12
  Speaker 4: be able to afford it, because they're paying like rent,
• 43:14
  Speaker 4: and they're paying you know, their nurses, and they're paying
• 43:17
  Speaker 4: everything else, and they're in the firing line for the
• 43:19
  Speaker 4: cost of living crisis as much as we are. And
• 43:21
  Speaker 4: I'm not saying that they're not doing well financially, like
• 43:23
  Speaker 4: if you're a doctor, you probably have a relatively good income.
• 43:26
  Speaker 4: As a stereotyping thing, but I think it's worthy of
• 43:29
  Speaker 4: mention because I think a lot of gps are going
• 43:32
  Speaker 4: to go v like, that's not going to fix it.
• 43:34
  Speaker 4: Like everything's not going to go back to being bulk billed.
• 43:36
  Speaker 4: But that's how government trying to take a little bit
• 43:39
  Speaker 4: of pressure off that system. So hopefully things can be
• 43:43
  Speaker 4: a bit easier for the people who need it to
• 43:45
  Speaker 4: be easier. And I think that that's yeah, probably a
• 43:47
  Speaker 4: good place to leave it.
• 43:48
  Speaker 1: My friend, sounds pretty good. You reckon, Let's go absorb
• 43:53
  Speaker 1: it and see you guys soon, See you guys next week.
• 44:03
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• 44:05
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• 44:09
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• 44:13
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• 44:16
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