Geopolitics and defence spending high on agenda as Australians head to polls Saturday
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
6 days ago
- Business Times
Wealth firms are preparing richest Australians for pension tax fallout
[MELBOURNE] A looming pensions tax on rich Australians is sparking a flurry of behind-the-scenes planning by the nation's wealth managers, who say clients are actively exploring strategies to shield multi-million dollar balances. Under legislation set to reach the Senate in the coming weeks, pension balances of A$3 million (S$2.5 million) and above would face an additional 15 per cent tax on top of the current 15 per cent rate. The proposal, set to affect about 80,000 people, has triggered a wave of interest from affluent savers looking to use trusts, insurance bonds and other strategies to shift funds. 'People are definitely spooked,' said Tim Cudlipp, a partner and investment advisor at Sydney-based Escala Partners, which serves high-net-worth and family office clients. Some of the options Australians are considering include company structures that face corporate tax rates on earnings, instead of higher personal rates, and family trusts where levies are imposed on beneficiaries, not balances. 'People use a trust to distribute to their kids, for example, to reduce the income tax that they are paying,' Cudlipp said. The anticipated change has also reignited the appeal of insurance bonds, which can offer preferential tax treatment after a long lock-up period. While those products have grown in popularity in the past couple of years, the new tax proposal 'has shifted more and more focus there,' said Singapore-based financial adviser Jarrad Brown, who works with Australian clients in the city-state. Others are looking at moving retirement assets into low-risk fixed income investments to avoid short-term gains that would lead to a higher tax bill. 'That's definitely something that we are starting to discuss with clients,' Cudlipp said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Clients are mostly being advised to wait until there's clarity on the outcome of the legislation, while they explore the options available to them. 'We are not entirely sure of exactly where it's going to land,' Peter Nevill, a Sydney-based partner at Viola Wealth, said of the legislation. 'The treatment of unrealised capital gains is a big sticking point for a lot of people.' Another point of contention is that the A$3 million threshold is not indexed, meaning its real value will erode over time as inflation rises. With Australia's pension system now more than three decades old, a growing number of workers are saving consistently throughout their entire careers. That increases the likelihood that more people will eventually be caught by the tax. 'Within 15 to 20 years, it will be pulling a decent chunk of Australians into it,' said Sarah Abood, chief executive officer of the Financial Advice Association Australia. She added that taxing unrealised capital gains could force some individuals to sell assets in order to meet tax liabilities. Australia's A$4.1 trillion pension industry has become the envy of the world and grown into a global powerhouse. But critics argue its tax settings have rendered the system a high-wealth accumulation vehicle. Treasurer Jim Chalmers, who first unveiled the tax in 2023, said in June the measure would make the system more equitable and financially sustainable. To pass the legislation, the government must secure support from Senate crossbenchers, creating a potential roadblock. Labour has accused the opposition Liberal-National coalition of refusing to negotiate, while the Greens say they are open to talks with the Treasurer. Meanwhile, wealthy Australians are also considering accelerating intergenerational gifting to reduce balances, Nevill said. 'One of the easiest solutions is just pull it out and give it to the kids,' he said. BLOOMBERG
AsiaOne
31-07-2025
- AsiaOne
Australia wipes $13b off student loans, targeting cost of living relief, World News
SYDNEY — Australia's parliament on Thursday (July 31) passed a law to cut student loans by 20 per cent, wiping more than A$16 billion (S$13.37 billion) in debt for three million people, and fulfilling a key election promise to help mitigate the rising cost of living. The law is the first passed by Prime Minister Anthony Albanese's centre-left Labour Party since being re-elected in May with one of the country's largest-ever majorities. "We promised cutting student debt would be the first thing we did back in parliament — and that's exactly what we've done," Albanese said in a statement. "Getting an education shouldn't mean a lifetime of debt." Education Minister Jason Clare said the measure would help "take a weight" off the backs of young people. "Young Australians don't always see something for them on the ballot paper, but they did this year and they voted for it in their millions," he said at a press conference. "And we're repaying now the trust that these young Australians have placed in us." Millennials and Generation Z made up 43 per cent of the 18 million people enrolled to vote in Australia's May general election, outnumbering Baby Boomers. Seizing on the generational shift, Labour made cutting student debt a key election promise, framing it as a measure to ease living costs and tackle intergenerational inequality. The government said reducing student loans by one-fifth was equivalent to more than A$16 billion in debt relief for three million Australians. It would mean a university graduate with an average loan of A$27,600 would have A$5,520 wiped, the government said, adding the changes would be backdated from June 1, 2025, before the loans were indexed 3.2 per cent for inflation. The law would also raise the minimum repayment threshold from an income of A$54,435 to A$67,000, reducing the amount low-income earners would have to pay. [[nid:715800]]
Straits Times
31-07-2025
- Straits Times
Australia wipes $13 billion off student loans, targeting cost of living relief
Sign up now: Get ST's newsletters delivered to your inbox Millennials and Generation Z made up 43 per cent of the 18 million people enrolled to vote in Australia's May general election. SYDNEY - Australia's parliament on July 31 passed a law to cut student loans by 20 per cent, wiping more than A$16 billion (S$13.3 billion) in debt for 3 million people, and fulfilling a key election promise to help mitigate the rising cost of living. The law is the first passed by Prime Minister Anthony Albanese's centre-left L abour Party since being re-elected in May with one of the country's largest-ever majorities. 'We promised cutting student debt would be the first thing we did back in parliament – and that's exactly what we've done,' Mr Albanese said in a statement. 'Getting an education shouldn't mean a lifetime of debt.' Education Minister Jason Clare said the measure would help 'take a weight' off the backs of young people. 'Young Australians don't always see something for them on the ballot paper, but they did this year and they voted for it in their millions,' he said at a press conference. 'And we're repaying now the trust that these young Australians have placed in us.' Top stories Swipe. Select. Stay informed. Asia Trump says US will set 15% tariff on South Korean imports under new deal Business US Fed holds rates steady despite Trump's pressure, with two governors dissenting Singapore Driver in 2024 Tampines crash that killed 2 set to plead guilty in October Multimedia 60 years, 60 items: A National Day game challenge Singapore $10 million Toto results to be announced on July 31, after no winners in last 3 draws Sport Ainslee Kwang, 14, becomes first Singaporean diver to qualify for World Aquatics C'ships semi-finals Multimedia Firefly-inspired light show at Gardens By The Bay's Supertree Grove Singapore Escape, discover, connect: Where new memories are made Millennials and Generation Z made up 43 per cent of the 18 million people enrolled to vote in Australia's May general election, outnumbering Baby Boomers. Seizing on the generational shift, Labour made cutting student debt a key election promise, framing it as a measure to ease living costs and tackle intergenerational inequality. The government said reducing student loans by one-fifth was equivalent to more than A$16 billion in debt relief for three million Australians. It would mean a university graduate with an average loan of A$27,600 would have A$5,520 wiped, the government said, adding the changes would be backdated from June 1, 2025, before the loans were indexed 3.2 per cent for inflation. The law would also raise the minimum repayment threshold from an income of A$54,435 to A$67,000, reducing the amount low-income earners would have to pay. REUTERS
