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Economic Update – July 2020

Economic Update – July 2020

After 28 years Australia’s record economic expansion ended due to the COVID shutdowns, below is a video to assist you to stay up to date with the latest indicators.

Our economy contracted by 0.3% in the March quarter, with an estimated 8% contraction in the June quarter, confirmation that we are officially in recession.

Yet Australia is weathering the COVID storm better than most nations, with signs of building business and consumer confidence.

In the year to June, Australian shares trimmed their losses to 10.8% after a partial rebound in the last quarter. US shares rose 4.6% over the same period.

The current cash target rate of 0.25% has been left unchanged and is expected to remain at its current level for the foreseeable future.

After 28 years Australia’s record economic expansion ended due to the COVID shutdowns, below is a video to assist you to stay up to date with the latest indicators.

Posted by SHB Wealth Advisers on Tuesday, 7 July 2020

Please get in touch if you’d like assistance with your personal financial situation.

Newsletter – July 2020

Newsletter – July 2020

July is here along with the winter chill. But July also signals the start of a new financial year and chances are most Australians are happy to say goodbye to the last one. This year more than ever it’s a great time to plan your finances for the year ahead, to rebuild or make the most of savings you have made during months of social isolation.


With an extraordinary financial year behind us, it’s a good time to take stock. After 28 years Australia’s record economic expansion ended due to the COVID shutdowns. Our economy contracted by 0.3% in the March quarter and looks set to contract 8% in the June quarter, confirmation that we are officially in recession. The Budget deficit for the 12 months to May was a record $65.5 billion or 3.3% of GDP, $61 billion higher than
predicted just last December. Unemployment rose to 7.1% in May, the highest since 2001, with another 1.6 million Australians on JobKeeper payments.


Yet Australia is weathering the COVID storm better than most nations, with signs of building business and consumer confidence. Retail sales rose a record 16.3% in May, after a record 17.7% fall in April, while new vehicle sales fell 35% in the year to May. The ANZ/ Roy Morgan consumer confidence index is up 42% on its record lows in March, while the NAB business confidence index rebounded to -20 points in May, up from a record low of -65 points in April.


Financial markets finished the financial year mixed, but in better shape than many feared. In the year to June, US shares rose 4.6% while Australian shares trimmed their losses to 10.8% after a partial rebound in the last quarter. Falling global demand hit crude oil prices (down 33%) and iron ore (down 14%). The Aussie dollar firmed 3.7% in June to finish the year at US69c as a mark of Australia’s sure handling of the COVID crisis.

This newsletter will cover:

  • The Housing Market: Shaken not Stirred    
  • Making Your Wishes Known  
  • New Financial Year, New Perspective

Making Your Wishes Known

Making Your Wishes Known

While Australia’s handling of the COVID-19 pandemic was among the best in the world, the speed and spread of the illness underlined just how fragile life can be.

It was also a solemn reminder of the importance of ensuring your affairs are in order, so your wishes are met – in life and death. 

The centrepiece of any estate planning is your Will, which sets out who you would like to receive your assets when you die, and how they are to be distributed. But you also need to consider what will happen to your superannuation as well as who will act on your behalf if you are unable to make decisions about your finances, health or wellbeing. 

Expressing your Will

Despite the importance of a Will, it’s estimated that nearly half of Australians don’t have one.i If you die intestate (without a Will), your assets will be distributed according to a legal formula within each State, which may not be in line with your wishes. In an era where complex family situations and blended families are common, this can create unnecessary conflict at what is already a difficult time. 

Even if you have a Will, it’s not a set-and-forget document. You must make sure it is up to date and reflects major changes in your life, such as marriage, divorce, the birth of a child or the purchase of a home. 

Super is not part of your Will

It is not widely understood that superannuation is not covered by your Will unless you specifically direct it to be by nominating a legal personal representative (LPR) as your beneficiary. 

Unless you nominate a valid beneficiary, the fund’s trustees will determine who receives your super. Even if you don’t have much money in super yet, chances are you have life insurance with your super which is paid out to your beneficiaries on your death. 

To be valid, a beneficiary must be your LPR or a dependent, defined under super legislation as your spouse, child, someone in an interdependency relationship with you or a financial dependent. If you don’t nominate anyone, or your nomination is not valid, generally the money will go to your dependants or your LPR – but it’s always good to make sure. 

The best way to ensure your super and any insurance payout ends up with the people you want to receive it is to make a binding death benefit nomination. There may be a small charge and you need to renew it every three years to remain valid. A non-binding nomination is only a guide so the trustees can overrule your nomination. 

It is also worth remembering that if your beneficiaries are adult children, there may be tax implications for them. 

Living Wills

Estate planning isn’t just about planning who gets what when you are gone. You should also consider putting in place directives to let your family and others know how you want to see out your days. 

An enduring power of attorney will allow you to nominate somebody to act on your behalf if you are no longer capable of conducting your own financial matters. A general power of attorney is not sufficient as it is usually for a set period and becomes invalid once you can no longer make your own decisions. 

You should also organise enduring guardianship to appoint somebody to take control of any lifestyle or medical issues should you become incapacitated. And it is worthwhile introducing an advance care directive which states exactly what medical treatment you do and don’t want to receive towards the end of your life. 

Spread the word

Once you have prepared an estate plan, it’s a good idea to gather all your documentation in one place and tell your family and legal representative where they are. Also, consider giving someone you trust your online passwords to avoid complications down the track. 

Getting your affairs in order can provide great peace of mind for you and your family, now and in the future and we are here to assist.

https://www.contestingwills.com.au/how-many-people-die-without-writing-a-will/

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