Dear Friends
Yes, it was a ‘Nothing Burger’
The Federal Government’s August round table delivered very little hard and fast economic change, which was widely signalled in advance.
As described by one, it was a ‘nothing-burger’.
What I did pick up as a long term-watcher of government messaging, was the inkling that Labor is moving away from what has been described as ‘middle-class welfare’.
We see it with the pending Division 296 tax on super balances over $3m, and with the recent increase in Centrelink deeming rates for the first time in four years. Essentially, there is the growing attitude in Canberra that Boomers have ‘got it too good.’ And to be honest, there may be some truth in that – but that doesn’t mean anyone should have to give up what they already have.
The fundamental issue for the Australian economy is productivity. In other words, workers, and the economy, need to be producing more with less. This can be achieved by investing in better technology, being ‘smarter’ and more efficient. If we grow the economy, there is more tax to redistribute from a larger pie, rather than imposing new legislation that financially impacts Boomers.
Having been born in 1962, perhaps it’s my age – but as an economist, I find myself craving for the days of Hawke and Keating. In my observation, Albanese and Chalmers (like other previous governments) don’t like imposing brave, but necessary reform. Their policy decisions are short-sighted at a time when government leadership on productivity is urgently needed. We might need a little short-term pain for longer term gain.
Of course, we live in internationally uncertain times. Right now, we have a time of considerable global geopolitical unrest, ongoing warfare, and an unpredictable ‘Leader of the Free World.’ The Australian share of the ‘world pie’ is just two per cent, and in the majority of situations we are price takers, not price makers. Take as a case in point, Australia’s vulnerability to the global flow-on effects of the current US policy on trade tariffs.
At the recent Jackson Hole Economic Policy Symposium in the US (which aims to bring together central bankers, policymakers, economists, and academics from across the globe to discuss and share insights on important economic issues and long-term policy challenges) Jerome Powell, Chair of the US Federal Reserve said: “There is significant uncertainty about where all of these policies will eventually settle.”
Powell's speech outlined the core dilemma facing the Fed: Inflation and employment—the objectives of its dual mandate of price stability and full employment—are poised to move in opposite directions. This divergence will likely make it more difficult for the Fed to steer the right course.
At the same meeting in August, Japanese economist Ueda suggested three alternatives for improving productivity in his nation:
- encourage more women and seniors to work
- bring in more young migrants, and/or
- deploy more AI/robots.
I think it is most likely that this third alternative will be the most successful in boosting productivity.
What should clients of Marinis Financial Group do? The answer is simple: nothing.
You have a conservative strategy which will help you ride out the down times. It is designed to preserve and grow your wealth. I recommend that clients base their expectations on a five per cent return per annum over the long-term. There will be boom and bust times, but in the long run, this is a reasonable expectation (and for those in the draw-down phase, your Marinis Buffer is your shock absorber when everything really goes south).
Please take a look at this very comforting article from Firstlinks. It will help you understand the rationale behind my approach.
Upcoming changes to Asgard Infinity eWrap accounts
If your super or pension is currently invested via the Asgard investment platform, you may have recently received a letter from BT Funds Management Limited advising that your Asgard Infinity eWrap account will soon be moving to the BT Panorama platform.
We are fully aware of this change (which will take place in the first half of 2026); there is nothing you need to do, or be alarmed about.
Where appropriate, at Marinis we have been recommending the BT Panorama platform (which has a slightly higher price point than the Asgard platform) for approximately 10 years. Your transitioned super and/or pension accounts will now have more features and greater cyber security.
As part of our advice relationship, we will continue to review your situation to ensure that you are paying the most competitive product fees. In the meantime, if you have any concerns or queries regarding your Asgard Infinity eWrap account, don’t hesitate to get in touch via phone or email.
Another thing – ASIC needs to go hard on super fraudsters
I am exasperated by the ongoing superannuation fraud that we are constantly seeing committed. There are safeguards in our super system designed to protect against this appalling breach of trust, and the regulators need to step up. For my full thoughts on this subject, see my Media Release on the subject here.
Remember to stay cyber safe
Follow the Federal Government’s scam watch: http://www.cyber.gov.au/protect-yourself. If something, or someone, seems too good to be true, it probably is. We are constantly seeing via our news media, honest, hardworking, people who have been scammed, so please keep your guard up. If you are not sure, ask a family member or trusted friend – but don’t be rushed by anyone.
One of the layers of security of which I am very proud, is that our clients all have a personal relationship with their adviser and our team. We recognise voices, we know each individual, we are business ‘friends.’ So, do contact us about any super or investment related matter.
One final thing
You may recall that a decade or so ago we used to produce this newsletter on paper and post it out. Following client feedback, we went digital and at the time were excited to call it ‘eGrow.’ The world has caught up, so going forward, we’ve dropped the ‘e’.
As always, if I or any of our team can be of assistance, please don’t hesitate to get in touch by either calling (08) 8130 5130 or email admin@marinisgroup.com.au
Yours sincerely
Theo Marinis CFP®, B.A., B.Ec., CPA., MCIFAA
Financial Strategist
Authorised Representative
