{"id":151276,"date":"2025-04-01T19:27:24","date_gmt":"2025-04-01T19:27:24","guid":{"rendered":"https:\/\/websitedesigns.com.au\/elankanew\/?p=151276"},"modified":"2025-04-01T19:28:09","modified_gmt":"2025-04-01T19:28:09","slug":"noel-news-72","status":"publish","type":"post","link":"https:\/\/websitedesigns.com.au\/elankanew\/noel-news-72\/","title":{"rendered":"Noel News"},"content":{"rendered":"

Noel News<\/span><\/h2>\n

\"Noel<\/p>\n

“We turn not older with years but newer every day.”<\/i><\/strong><\/u><\/u><\/span><\/p>\n

EMILY DICKINSON<\/span><\/p>\n

Welcome to our April newsletter<\/span><\/h3>\n

The budget has now been handled down and we are now in election mode.<\/span><\/p>\n

This is shaping up to be one of the most important elections in recent memory \u2014 yet the major coalitions have virtually no chance of governing on their own. The most likely outcome is a hung parliament, with power shared between the party that secures the most votes and a range of minor players.<\/span><\/p>\n

\"Noel<\/span><\/p>\n

When Bob Hawke was elected in 1983, the two major parties \u2014 Labor and the Coalition \u2014 commanded 90% of the primary vote. By the last election, that figure had dropped to 68%. Now, it’s roughly 30% for Labor, 30% for the Coalition, and the remaining 40% split among an assortment of minor parties, including the Greens, the Teals, One Nation, and various independents.<\/u><\/u><\/span><\/p>\n

To govern in its own right, Labor must secure 76 seats. But if it loses just three electorates, it will fall short of that number and be forced to negotiate with crossbenchers to form government. The challenge is even greater for Peter Dutton. To win government outright, the Coalition must pick up 22 seats \u2014 while holding onto every seat it already controls. It’s a Herculean task, one that would require a massive electoral swing.<\/u><\/u><\/span><\/p>\n

For voters, this means the power to shape the next government may lie not just with choosing between Labor or the Coalition, but also with deciding which minor parties or independents will hold the balance of power. In such a fragmented landscape, preferences matter more than ever \u2014 and so does understanding where every candidate stands. It’s no longer just about who leads; it’s about\u00a0who they\u2019ll need to work with<\/strong>.<\/span><\/p>\n

Watch for the rubbish<\/strong><\/span><\/p>\n

\"Noel<\/span><\/p>\n

Between now and polling day we\u2019ll be bombarded with the usual avalanche of sensational headlines, all designed to steer us one way or the other. They might grab attention, but scratch the surface and they often start to fall apart.<\/u><\/u><\/span><\/p>\n

Take this week\u2019s example:\u00a0\u201cTrue cost of super raids for deposits.\u201d<\/i>\u00a0The headline screams crisis. The claim? That letting first homebuyers access their super could cost taxpayers more than $1.4 billion a year by 2050 in extra age pension costs. It sounds dramatic, but dig deeper. The figure came from the Parliamentary Budget Office, theoretically independent, but hinges on a hypothetical 40-year-old pulling out $50,000 next year, then retiring at 67 with no further effort to rebuild their balance. That\u2019s a pretty shaky foundation. The calculation of the figure gives no credit for the upside of getting into a home sooner, or the long-term wealth that can come from owning property earlier. And there\u2019s not a word about the downsizer contribution \u2013 $300,000 into super after age 55 \u2013 which could more than make up the difference.<\/u><\/u><\/span><\/p>\n

Labor MP and Chair of the Parliamentary Standing Committee on Economics, Daniel Mulino, weighed in, warning that\u00a0\u201cPeter Dutton\u2019s reckless plan to raid super will push house prices up.\u201d\u00a0<\/i>\u00a0For starters, it\u2019s not a raid \u2013 it\u2019s an idea to enable first home buyers to use part of their super for a house deposit, on the condition it would be paid back, plus earnings.<\/u><\/u><\/span><\/p>\n

Yes, it may push house prices up, but so does every other strategy that helps home buyers into the market. These include stamp duty concessions, Labor\u2019s proposal to help homebuyers by using shared ownership, and even the recent reduction to interest rates.<\/u><\/u><\/span><\/p>\n

Let\u2019s take a closer look at what the Coalition is actually proposing under their Super Home Buyer Scheme.<\/u><\/u><\/span><\/p>\n

First homebuyers would be able to access up to $50,000 or 40% of their super \u2013 whichever is less \u2013 to help purchase a home. But here\u2019s the crucial detail: the money must be repaid when the property is sold, along with a proportionate share of any capital gain. In effect, the withdrawn amount is returned to super, along with its share of the home’s appreciation \u2013 similar to how an investment would have grown if it had stayed in the fund.<\/span>
\n<\/u><\/u><\/p>\n

For example, if a buyer withdrew $40,000 from their super and sold the house seven years later with a 10% increase in value, they would be required to repay $44,000 \u2013 the original $40,000 plus $4,000 representing their share of the capital gain.<\/u><\/u><\/span><\/p>\n

So it\u2019s not a raid: it\u2019s an investment, with a built-in mechanism to preserve<\/span>
\nlong-term retirement savings.<\/u><\/u><\/span><\/p>\n

Take a couple both 35, with $84,000 in super each and $85,000 saved. Without the scheme, they’d face $21,000 in mortgage insurance. But by withdrawing $36,000 each from super, they could reduce that cost to just $6,700 \u2013 saving over $14,000. This could help them reach a lower loan-to-valuation ratio sooner, when they could refinance at better rates. The scheme gives them a leg up today, without permanently sacrificing their retirement savings.<\/u><\/u><\/span><\/p>\n

Fix the mortgage insurance hurdle<\/strong><\/span><\/p>\n

\"Noel<\/span><\/p>\n

Image by storyset on Freepik<\/span><\/p>\n

Instead of trading scary numbers, all parties would do far better to focus on a problem that\u2019s hurting first-home buyers right now: mortgage insurance.<\/span><\/p>\n

It\u2019s compulsory if you\u2019ve got less than a 20% deposit. Fair enough. But the real sting? It\u2019s non-transferable. If you\u2019ve paid it once and want to refinance \u2013 even with the same property and the same loan amount \u2013 you have to pay it again. And it\u2019s not pocket change: that second hit could easily top $20,000.<\/span><\/p>\n

Time and time again we\u2019re told to shop around for a better rate. But for borrowers with smaller deposits, the cost of jumping ship to a new lender is a concrete wall. You\u2019re locked in, even if a cheaper deal is waiting next door.<\/span><\/p>\n

There\u2019s a simple fix: one that would cost the federal budget nothing. Legislate to make mortgage insurance portable. That alone would make first-home ownership more affordable, more flexible, and more competitive \u2013 without touching super or the pension system.<\/span><\/p>\n

Who are you?<\/strong><\/span><\/p>\n

\"Noel<\/span><\/p>\n

On the very day the election was called, I received a flurry of text messages from women who introduced themselves by name and praised the achievements of the Labor government. But when I replied and asked where they were from, it turned out they were Labor candidates. My response was If you\u2019re so embarrassed by the party you represent that you won\u2019t even mention its name to voters, why send a text at all?<\/span><\/p>\n

Then came the budget. The next morning, a headline $450 million bonus for pensioners. It gave me a jolt\u2014was there something new I hadn\u2019t seen? But on closer inspection, it was rubbish. There was no bonus. All the government had done was leave the deeming rates unchanged. Seriously, would any government dare to increase deeming rates and strip hundreds of thousands of pensioners of part of their income five weeks before an election?<\/span><\/p>\n

The Podcast<\/span><\/p>\n

Renowned broadcaster John Deeks and I discuss all the big topics covered in this newsletter in detail each month.<\/span><\/p>\n

\"Noel<\/span><\/p>\n

Listen Now on Spotify<\/a><\/span><\/p>\n

Budget Reflections<\/strong><\/span><\/p>\n

Last Tuesday was budget night \u2014 a budget the government hadn\u2019t expected to deliver \u2014 and by now, most of its contents have been widely publicised.<\/span><\/p>\n

From a financial planning perspective, one of the more significant changes is the reduction in the marginal tax rate on incomes between $18,200 and $45,000 from 16% to 15%. This aligns with the 15% tax already deducted from concessional contributions to super.<\/span><\/p>\n

As a result, for low-income earners, making deductible contributions to super may no longer make sense \u2014 there\u2019s no longer a tax advantage. In many cases, they may be better off making an after-tax (non-concessional) contribution and then claiming the government\u2019s superannuation co-contribution instead.<\/span><\/p>\n

Spreading the word!<\/strong><\/span><\/p>\n

I thoroughly enjoyed last week\u2019s events. Her’s a shot from Currumbin Friday 28 March:<\/span><\/p>\n

\"Noel<\/span><\/p>\n

It was so gratifying to mix with so many subscribers to this newsletter and hear their stories. The newsletter has now been running for over 25 years, and it\u2019s just wonderful to meet readers who\u2019ve been with me for that entire journey.<\/span><\/p>\n

We discussed a wide range of topics\u2014including capital gains tax, superannuation, downsizing, and aged care\u2014and one thing became crystal you need expert advice. It can cost you dearly if you don\u2019t get it.<\/span><\/p>\n

Rachel shared a great example involving a couple moving into a retirement village. They had to choose between paying a lower entry fee with a higher exit fee, or the reverse: a higher entry fee with a lower exit fee.<\/span><\/p>\n

After obtaining an Age Guru Report, the couple chose to increase their initial entry fee by $200,000. That decision meant they converted assessable assets into exempt ones, which increased their age pension by $15,600 a year. Over 10 years, that meant a $156,000 boost to their pension\u2014and they also saved $150,000 on the exit fee. In total, they were $306,000 better off.<\/span><\/p>\n

Our final seminars will be held this week in Sydney at two wonderful venues. Details are below. I\u2019d love to see you there and have a chat – it\u2019s always a pleasure to connect in person.<\/span><\/p>\n

Upcoming Events<\/strong><\/span><\/p>\n

This Week in Sydney<\/strong><\/span><\/p>\n

\"\"<\/span><\/p>\n

There are only 2 opportunities left to join us for one of our Sydney high tea events this week.<\/span><\/p>\n

Rachel Lane and I will share the dos, the don\u2019ts, and the most important factors you should consider before downsizing.\u200b<\/span><\/p>\n

Brought to you by RSL LifeCare – committed to creating a new benchmark of community for veterans and seniors in the Northern Beaches.<\/span><\/p>\n

Register below:<\/span><\/p>\n

\"Noel<\/span><\/p>\n

2 April Wednesday<\/span>
\n\u00ad<\/span><\/p>\n

From 10am, for a 10:30am start till 1pm<\/span><\/p>\n

Killara Golf Club<\/span><\/p>\n

The Dining Room<\/span><\/p>\n

556 Pacific Highway, Killara<\/span><\/p>\n

3 April Thursday<\/span>
\n\u00ad<\/span><\/p>\n

From 10am, for a 10:30am start till 1pm<\/span><\/p>\n

Manly Golf Club<\/span><\/p>\n

The Apperly Room<\/span><\/p>\n

38-40 Balgowlah Rd, Balgowlah<\/span><\/p>\n

Gold Coast<\/strong><\/span><\/p>\n

\"Noel<\/span><\/p>\n

On Wednesday 16 April Rachel Lane (my co-author on Downsizing Made Simple) will be giving a presentation on the Gold Coast.<\/span><\/p>\n

She will be talking about:<\/span><\/p>\n

The legal and financial implications of moving into a retirement village<\/span>
\nHow to crunch the numbers on different payment options villages offer<\/span>
\nThe rules for making a downsizer contribution to your superannuation<\/span>
\nHow downsizing can affect your pension and other entitlements<\/span>
\nAnd what happens if you need aged care in the future.<\/span><\/p>\n

If you are thinking about downsizing this is a seminar you don\u2019t want to miss!<\/span><\/p>\n

Details:<\/span>
\nDate: Wednesday 16 April<\/span><\/p>\n

Time: 10.15am \u2013 1.00pm (a light lunch will be served)<\/span>
\nWhere: Pine Lake Village Community Centre \u2013 11 Aracuria Way, Elanora<\/span><\/p>\n

Numbers are limited and RSVP\u2019s are essential, to book your place:<\/span><\/p>\n

RSVP Here<\/a><\/span><\/p>\n

Super strategies<\/strong><\/span><\/p>\n

June 30 is getting close, and as I reminded my audiences last week, there are important steps to take if you think you\u2019ll be making a taxable capital gain in the next year or so.<\/span><\/p>\n

\"Noel<\/span><\/p>\n

Image by rawpixel.com on Freepik<\/span><\/p>\n

Capital gains tax is calculated by adding the discounted gain to your taxable income in the year the sales contract is signed. One strategy is to delay signing the contract until you’re in a lower tax bracket – but the most common (and often most effective) strategy is to make a tax-deductible superannuation contribution.<\/span><\/p>\n

That contribution must be made in the same financial year the contract is signed. A reader recently emailed me asking what kind of deductible contribution they could make. But when they mentioned the contract had been signed in March last year, I had to give them the bad news: they\u2019d missed the opportunity, because any contribution had to be made by June 30 of that year.<\/span><\/p>\n

The good news? If you’re a senior, you can still contribute to super up to age 75\u2014provided you meet the work test, which simply involves working 40 hours in any 30 consecutive days during the year you make the contribution. That shouldn’t be hard for any resourceful retiree.<\/span><\/p>\n

And here’s the real opportunity: if your total super balance at last June 30 was under $500,000, you may be able to carry forward unused concessional contributions and put in up to $160,000 this year. That could wipe out your capital gains tax entirely.<\/span><\/p>\n

Of course, you must take advice\u2014but simply knowing this strategy exists might be the incentive you need to act now.<\/span><\/p>\n

I go into full detail on these and many other strategies in my books Retirement Made Simple, Wills, Death & Taxes Made Simple, and Super Made Simple. They\u2019re available from my bookshop and could make a big difference to your financial future.<\/span><\/p>\n

\"\"<\/span><\/p>\n

Go to Book Shop<\/a><\/span><\/p>\n

Pension changes<\/strong><\/span><\/p>\n

The quarterly age pension adjustments have been announced, and thanks to inflation, all pensioners will receive an income boost. The pension system can be confusing because there are three changes each year: in July the asset and income thresholds are adjusted, while in September and March the pension payment amounts are updated.<\/span><\/p>\n

\"Noel<\/span><\/p>\n

Image by Drazen Zigic on Freepik<\/span><\/p>\n

You can download the latest pension charts and use the updated age pension calculator and deeming calculator on my website:<\/span><\/p>\n

Latest pension charts available on my Free Downloads page<\/span><\/p>\n

Go to updated age pension calculator<\/span><\/p>\n

Go to deeming calculator<\/span><\/p>\n

The single pension has increased by $4.60 a fortnight and the couples pension by $3.50 per fortnight each.<\/span><\/p>\n

When the pension rate increases, the upper threshold for eligibility rises as well. The new cut-off point for a homeowner couple is $1,047,500 and for a single homeowner it\u2019s now $697,000.<\/span><\/p>\n

Most wealthier pensioners are asset-tested, yet I keep receiving emails from them asking if they\u2019re allowed to earn extra income. The answer is yes; if you’re asset-tested, the income test does not apply. A single pensioner with $560,000 in assets, who will now receive $411 a fortnight could earn up to $43,000 a year, including deemed and employment income, without affecting their pension, because they remain asset-tested.<\/span><\/p>\n

Your home is not assessable, but your furniture, fittings and vehicles are. Many pensioners mistakenly value these at replacement cost, which can be costly. Every $10,000 in excess assets reduces the pension by $780 per year, so it\u2019s important to value these items at garage sale prices, not replacement cost.<\/span><\/p>\n

\"Noel<\/span><\/p>\n

Image by Freepik<\/span><\/p>\n

There is no penalty for spending money on holidays, living expenses or home renovations. However, doing so purely to increase your pension is not a smart financial strategy. For example, if you spend $100,000 on renovations, your pension may increase by just $7,800 per year, meaning it would take nearly 13 years to recover the cost. That said, the benefits of improving your home or travelling should also be considered. The key is to spend wisely, rather than simply trying to boost your age pension.<\/span><\/p>\n

Each year on 20 March and 20 September, Centrelink revalues market-linked investments, such as shares and managed funds, based on the latest unit prices. These investments are also revalued when you report a portfolio change or request a revaluation. If the value of your investments falls, your pension may increase, whereas if the value rises, your pension may decrease.<\/span><\/p>\n

The rules are in favour of pensioners. If your portfolio increases due to market movements, you don\u2019t need to notify Centrelink \u2013 it will be adjusted at the next six-monthly revaluation. However, if your portfolio falls, you can notify Centrelink immediately, which may result in an increase in your pension sooner.<\/span><\/p>\n

The devil is in the detail. If one member of a couple has not yet reached pension age, it can be prudent \u2013 where appropriate \u2013 to keep as much superannuation as possible in the younger person’s name. Superannuation in accumulation mode is exempt from Centrelink\u2019s asset test until the account holder reaches pension age. However, the moment it moves into pension mode, it becomes assessable, regardless of age.<\/span><\/p>\n

A common trap arises when a loan is used to buy an investment property, but the mortgage is secured against the pensioner\u2019s own home. Centrelink does not deduct the debt from the investment property\u2019s value unless the mortgage is held against that property. If the mortgage is secured against another asset, such as the family home, the full gross value of the investment is assessed for the assets test, while the loan is not deducted. This can have a severe impact on pension entitlements.<\/span><\/p>\n

Centrelink also limits gifting to $30,000 over a rolling five-year period, in conjunction with the $10,000 per year allowable limit. Any excess is treated as a deprived asset for five years. Time and again, we hear of pensioners in failing health giving away assets to family, hoping to experience the joy of generosity while still alive, only to later realise this act has cost them much of their pension.<\/span><\/p>\n

Unfortunately, space constraints mean we can only scratch the surface today, but these examples highlight the importance of seeking expert advice before making major financial decisions. As the saying goes, \u201cBirth is easier than resurrection\u201d \u2013 it\u2019s far less costly to get it right from the start than to try and fix mistakes later.<\/span><\/p>\n

The Trump administration<\/strong><\/span><\/p>\n

Donald Trump is a controversial figure but so much goes on behind the scenes that the media never tell us. Below there is a link to an extraordinary video interview with Howard Lutnick, best known as the CEO who rebuilt Cantor Fitzgerald after 9\/11, who is now the 41st United States Secretary of Commerce in the Trump administration.<\/span><\/p>\n