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Cost of living and persistent inflationary pressures look to continue. If so, this will lead to continued cautious monetary policy and sustained ‘higher’ interest rates in Australia (despite expert predictions rates were going to be cut in early 2024). Will big spending government programs continue with additional giveaways in the upcoming election due by May 2025? Will “temporary” cost of living rebates on electricity and registration be extended? Can we turn falling economic productivity around? Will changes to the RBA Board structure in March 2025 impact on setting future Monetary Policy? The unfortunate reality is Australia’s economic report card shows significant increases in household debt and the largest yearly decline in disposable income compared to other nations which means declining Australian living standards.

What does this suggest? The possibility of continued relative underperformance in Australia with a widening of the gap between those with assets and those without. To manage inflation, we need aligned monetary (interest rate) AND fiscal (Government budget) policy settings.

Topical conversations we are having include funding higher living costs, portfolio rebalancing, increased diligence around family trust distributions/Div7A, ensuring loans between entities are professionally documented and a myriad of issues with the rise of the Bank of Mum and Dad financially assisting adult children. Strict ongoing bank lending criteria and high immigration has put significant upward pressure on house prices (despite low-wage growth). That all said our focus is ensuring you are living your best life and to this point we hope you enjoy the article over the page – Maximising Life’s Returns. 😊