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Thoughts on budget, business, super and career

01 June 2015

breath in and out

The budget had me holding my breath. I know I harp on about superannuation, but for a period there, with both the government and the opposition talking about different tax schemes around superannuation, I thought, are we as women going to be severely disadvantaged again?

Many of us are disadvantaged when it comes to our super because of time out of the work force, and for my generation, many of us missed getting the full benefit of compulsory super because it came to us later in our careers – making it hard for us to gather together what we need for retirement. It’s why pre-budget talk had me on tenterhooks. Were women who have worked hard to fill the gap to be slugged again?

Big breath out then when super remained unchanged.

I’ve been lucky – a few mentors and colleagues counselled me in my 40s to think about my retirement and what I would do. I took the advice, put it to work and it’s meant I have a reasonable plan for financial independence and quality of life. That is not the case for many women, as the statistics show us.

What upsets me is that a lot of the younger women I see are missing the significance of planning.

This is your future. If you’re lucky enough to be with a partner then it’s part of your future together, but remember, that can’t be relied on. It’s also a fact, women live longer than men, and ageing populations mean government pensions are receding further and further into the distance.

If you think you can look at it later – you’re wrong.

Nowadays we spend a lot of time on our careers planning and strategizing for them. In my opinion the new generations coming through will have to spend the same amount of time they spend planning their careers, planning their retirements.

You have to be prepared for whatever might eventuate, including forces over which you have no control, such as government legislation, because if you haven’t planned and you’re behind the eight ball already you’ll be knocked for six if the uncontrollable happens.

Not that I’m retiring yet. I am just entering a new phase in my life – one in which I will still be working but in different roles and different ways.

In fact, I recently took up a position on the board of Care Australia and I will also be an Ambassador for Westpac, fulfilling in that position various national and global tasks around women and finance. You would be forgiven for thinking that means you’ll hear more from me on superannuation and planning as well as another of my favourite messages – the importance of friends, family, relationships and networks.

I was reminded of these just the other day when Mrs Moneypenny, aka Heather McGregor, who writes for us on Ruby, spoke at a lunch. Some years ago, our new CEO Brian Hartzer introduced me to Heather, because he thought we were ‘twins separated at birth’. We have become firm friends, sharing a common goal to have women understand how vitally important it is to be in control of their own financial futures. We also share a love of Anya Hindmarsh handbags. Heather has come to Australia to set up a branch of her high end communications recruitment business in Melbourne and no doubt there will be plenty of opportunities in the future promoting women’s financial health together.

I am also looking forward to doing more work with ex Westpac CEO Gail Kelly in my role at Care Australia. Gail is an Ambassador for Care and I will continue to work with her in my board role. I was lucky enough to be recommended for the role and it’s already showing fantastic opportunities for new friends and networks.

Finally, I had a chance to catch-up with Julie Rynski, Westpac’s General Manager of Small Business, following the budget. She was excited about the new proposals it put forward and was telling me that so many of our SMEs have the ability to access pre-approved limits sans the red tape and hurdles they may normally have associated with the process.

When you think about the budget measures (below), it makes sense to have a look at the opportunities access to a loan may bring.

ACCELERATED DEPRECIATION

All small businesses will get an immediate tax deduction for any individual assets they buy costing less than $20,000. (Currently, the threshold sits at $1,000).

This $20,000 limit applies to each individual item. Small businesses can apply this $20,000 rule to as many individual items as they wish. These arrangements start from Budget night and continue until the end of June 2017.

Further information on accelerated depreciation is available on the ATO website.

TAX CUTS

The Government is reducing the tax rate for the more than 90 per cent of incorporated businesses with annual turnover less than $2 million. The company tax rate for these businesses will be reduced by 1.5 percentage points to 28.5 per cent.

To help all Australian small businesses grow, the Government will also provide a 5 per cent tax discount to unincorporated businesses with annual turnover less than $2 million from 1 July 2015. This delivers a tax cut of $1.8 billion over the next four years.

Further information on tax cuts for Small Business is available on the ATO website.

CUTTING RED TAPE

The Government will reduce red tape within the Fringe Benefits Tax (FBT) system by expanding the FBT exemption for work‑related portable electronic devices. This will help small business employees stay connected in the digital economy.

Small businesses will also benefit from Capital Gains Tax rollover relief when changing their legal structures but keeping the same owners.

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